Registration
Statement No. 333-148982
The
report as to the status of the business operations presented by the Chief
Executive Officer at the 2008 annual meeting of the stockholders held on June
23, 2008 is reprinted below.
CEO
REPORT TO THE 2008 ANNUAL MEETING
Ladies
and Gentlemen
This
is
the second
Annual
Meeting of 'Zion Oil & Gas' as a publicly listed company and, as you will
hear today, we are now making real progress with our business.
It
has
been well documented how Zion's Founder and Chairman, John Brown, followed
his
calling and, after years of preparatory work, established Zion Oil & Gas in
April 2000, in order to find and recover oil and gas in Israel, for the benefit
of Israel. He is an inspiration to all who meet him and his vision provides
the
driving force behind Zion's business.
John
provides the inspiration and we, the management and staff, provide the
perspiration. Oil and gas exploration requires a high level of resolve,
commitment and effort and the application of professional skills for an extended
period.
We
have
an exceptional team of people who are dedicated to this very special task and
I
pay tribute to everyone who works for Zion, both the wonderful internal staff
and our exceptional consultants and advisors.
I
also
want to thank the members of our Board for their wise counsel and support.
The
Board committees function quietly and efficiently, which is just as it should
be.
We
often
use the phrase: A
special company with a special task in a special country. We
use
that phrase, because we believe it to be true. Zion is a special company, our
task is special and Israel is certainly unique.
Two
of
the most talked about subjects in the world today are Israel and Oil. Zion
Oil
brings both those subjects together.
Today,
it
is hard to believe that in January 1999, about 15 months before Zion was founded
by John, the price of a barrel of oil hit a low of just $8
per
barrel. In January 2002 oil was trading at $20
per
barrel and today, the price is over $130
per
barrel.
Let
me
put it this way. In the event of success, we are unlikely to be concerned
regarding Zion's profitability.
It
is now
almost 18 months since Zion stock began trading on the American Stock Exchange,
on January 3rd, 2007.
In
our
successful Initial Public Offering, Zion issued just over 1.8 million shares
at
$7 per share. The funds raised enabled us to carry out detailed scientific
work
on our license areas and to test our first well, the Ma'anit #1 which we drilled
to a depth of close to 16,000 feet.
Almost
exactly one year ago, Zion's geological and engineering team completed its
'test
and analysis' of just the first of four zones in the Triassic, that had been
identified as potentially productive. During the drilling of the Ma'anit #1,
drilling breaks and shows of hydrocarbons were recorded from 12,000 feet to
15,500 feet.
As
it
turned out, the first of the four zones was not productive and, even worse,
the
well's mechanical condition was problematic. So, we never got to test the other
three zones and had to discontinue further work on the Ma'anit #1
well.
When
we
discontinued operations, we were legally required to surrender the Ma'anit
license. We did this and immediately applied for a new license.
In
October 2007 we were granted the 83,000 acre Joseph License immediately south
of
Zion's 79,000 acre Asher-Menashe License and Zion now has a total license area
of 162,000 acres.
I
will
leave it to Glen Perry to give you an update regarding Zion's operations during
the past year and our preparations for our next well, the Ma'anit-Rehoboth
#2.
But I would like to mention that, last week, we signed a protocol with Aladdin
Middle East Ltd regarding a drilling rig to be imported into
Israel.
I
would
like to warmly welcome Aladdin's representatives who are here today, Aladdin's
General Manager, Huseyin Cetin Mumcuoglu and Aladdin's Business Development
Coordinator, Halil Aktas.
At
this
stage of Zion's business, all our plans cause us to expend money, so in order
to
raise the funds we need, we have put in place a follow-on public offering,
so
called because it follows-on after our Initial Public Offering. A successful
follow-on offering will enable us to fund our planned further work.
The
recent history of our current offering is that on May 14th, 2008 the SEC
declared effective the registration statement for Zion’s follow-on public
offering of a minimum of 325,000
units
up to a
maximum of 2,500,000
units
at
$10.00
a unit.
Each
unit
consists of one
share
of
Zion's common stock and one
warrant
to
purchase a share of Zion's common stock at $7.00 per share.
The
warrant will give the right (but not the obligation) to buy an additional share
of stock at $7 per share until January 31, 2012.
That $7
price remains fixed, no matter what the price of Zion stock in the stock
market.
If
you
are interested in the full details, our website www.zionoil.com
has a
section called 'Investor Relations', that describes Zion's current unit offering
in a clear and understandable manner. Or you can just call our office for
information.
Finally,
you should know that Zion's Management have a significant stake in Zion stock.
That ensures that your interests, as shareholders, and ours, as people who
work
for Zion on a daily basis, are aligned.
We
have a
very clear goal - to
find and recover oil and gas onshore in Israel.
Step
by
step we are moving towards that goal.
And
with
that goal in mind, I will now ask Glen Perry, Zion's President and Chief
Operating Officer to present his report to you, regarding our operations during
the past 12 months.
Thank
you.
Richard
Rinberg
NOTICE:
Zion Oil & Gas has filed a registration statement (including a prospectus)
with the SEC for the offering of its securities. Before you invest, you should
read the prospectus in that registration statement and other documents Zion
has
filed with the SEC for more complete information about Zion Oil & Gas and
its offering. You may get these documents free by visiting EDGAR on the SEC
website at www.sec.gov. Alternatively, Zion Oil & Gas or its underwriter
will arrange to send you the prospectus if you request it by calling toll free
1-888-TX1-ZION (1-888--891-9466). A direct link to the prospectus in PDF format
may be found on the Zion Oil & Gas, Inc. website at
http://www.zionoil.com/investor-center/investor-relations.html.