Filed
pursuant to Rule 433
Registration
Statement No. 333-160871
Zion Oil
& Gas Newsletter
July 31,
2009
Dr.
Eliezer Kashai - Zion's Vice President - Israeli Exploration
Dear
Shareholder and/or Friend of Zion...
Some of
Zion's greatest assets do not appear on our balance sheet at all.
One
example of this is Zion's Vice President, Israeli Exploration - Dr. Eliezer
Kashai - who has more than fifty years of geological experience in
Israel.
He began
consulting for John Brown, in connection with the Joseph Project, in late 1999
and has been helping Zion ever since.
Dr.
Kashai studied geology at the University of Sciences, Budapest, Hungary, holds
Masters and Ph.D. degrees from the Hebrew University in Jerusalem and is a
widely recognized authority on the Triassic formation of Israel.
During
his career, he worked for the national petroleum companies of Israel, including
16 years for
Lapidoth Israel Oil Prospectors Company Ltd and 12 years for Oil Exploration
(Investments) Ltd.
Dr.
Kashai has also served as President of the Israel Geological
Society.
To quote
from American author Clarence Day's 1921 book, 'The Crow's Nest':
"Information's pretty thin stuff
unless mixed with experience."
Well, Dr.
Kashai has plenty of experience and Zion has been lucky to have the benefit of
that experience.
Zion's
Glen Perry (President and Chief Operating Officer), Stephen Pierce (Exploration
Manager) and Dr. Eliezer Kashai were the authors of Zion's 'Permian Report' that
was filed with the Israeli Petroleum Commissioner late in 2007. To quote from
the Permian Report Summary that Zion subsequently released to our shareholders
and the public:
'Zion’s
acreage position, located in north-western Israel, provides the Company an
excellent opportunity to test the Permian. Zion’s Joseph License and the
Asher-Menashe License areas are positioned above major paleo-topographic highs
on the western edge of the Arabian Plate. The geology of Zion’s area appears to
be analogous to that on the productive northeastern margin of the peninsula
(Kuwait, Iran, Saudi Arabia, Qatar and on to Oman).
Zion’s
favorable position permits the drilling of wells that can reach the Permian with
available drilling equipment and offers large areas of enclosure for migration
and entrapment of hydrocarbons. The license areas are consistent with the full
development of the petroleum system model for a Permian prospect comprised of a
hydrocarbon source, reservoir, seal, timing of migration and the entrapment of
hydrocarbons.
Zion is now confident that with the
relatively shallow depths of the Permian, it can drill through all three members
of the Arqov formation and most likely into the lower Sa’ad formation, the two
formations which comprise the Permian section in Northern Israel, and still
retain sufficient porosity to produce commercial hydrocarbons.'
As you
can read below, we are approaching our ultimate target depth and expect, soon
after, to be able to begin logging the Permian and evaluating the drilling
results from the Permian.
The
sooner, the better...
The
Ma'anit-Rehoboth #2 Well - 'Climbing the Rig'
Drilling Operations on the
Ma'anit-Rehoboth #2 Well
This past
week, we continued to make drilling progress and, as I write, we are drilling
through a shaley siltstone (a hardened fine-grained sedimentary rock) at a depth
of approximately 16,400 feet (5,000 meters) and are again making progress
towards our final target of approximately 18,040 feet (5,500
meters).
(New) Rights
Offering
On
Wednesday, July 29, 2009, Zion filed a registration statement with the
Securities and Exchange Commission with respect to a proposed Rights Offering to
its common stockholders of up to two (2) million shares of common stock. Each
whole subscription right will entitle the holder to purchase one share of common
stock for $5.00.
Under the
proposed rights offering, stockholders have the right to purchase thirteen (13)
shares of stock for every one hundred (100) shares of common stock owned on the
record date. This is identical to 0.13 subscription rights for
each share of common stock owned on the record date.
Should
the rights offering be fully subscribed, the company expects to receive gross
proceeds of $10 million, to be used for Zion’s multi-well drilling
plan.
As I
noted in the Press Release (see below):
"Although
it is not usual to engage in a rights offering immediately following a rights
offering, Zion's Board of Directors have decided to do exactly
that.
In June
2009, we raised gross proceeds of $21 million from a rights offering to common
stockholders, but as the rights offering was over-subscribed, we returned
approximately $1.1 million in over-subscriptions.
Due to
the very positive reception that our shareholders gave to the completed rights
offering and in order
to afford an opportunity to shareholders who were not able to exercise
subscription rights to the extent that they desired, our Board of
Directors decided to commence a new rights offering to our stockholders at the
same per share subscription price as the offering completed in June
2009.
Our
drilling program is expensive and we need additional capital in order to fully
execute our business plan. So, prior to accessing other sources of capital, we
want to give existing shareholders the opportunity to participate in our
capital-raising efforts in a manner that allows them to maintain their
proportional ownership interest in us."
So, if
you were among the many hundreds of our stockholders who did not receive as many
$5 shares as you subscribed for, this is your 'second chance' opportunity.
Obviously, this offer is open to everyone who is a stockholder of record on the
(as yet undetermined) record date.
Israel's
Channel 2 TV Visits Zion
Visit by Israel's Channel 2
TV and French TV
As I
mentioned last week, Israel's 'Channel 2 TV' company sent a team to interview
Zion's Founder, John Brown and film our work, on Wednesday, July 22, 2009.
Channel 2 is the most popular channel in Israel and attracts millions of viewers
every week.
The
seven-minute news documentary film about Zion Oil was not aired last week as
planned. We have been advised that the film is now scheduled to be shown on
Israeli TV - Channel 2 at 8:15 p.m. this Saturday night (August 1st). After the
piece has aired on Israeli TV, we will try and obtain a digital copy to post on
our website.
French
Press Agency AFP Visits Zion
On
Wednesday, July 29, 2009, Agence France-Presse (AFP) sent a team to interview
Zion's Founder, John Brown and film our work for French TV.
I was
interested to learn that AFP traces its history back to 1835 and Agence Havas,
the world’s first international news agency. In August 1944, as France was being
liberated from Nazi occupation, journalists in the resistance seized the Paris
headquarters of the news agency and renamed the agency Agence
France-Presse.
The AFP
team was clearly fascinated, not only by John and his words of deep faith, but
also by all the activity at the drill site.
We are
clearly attracting a lot of media interest.
Hopefully,
we will have to get used to that, whether we like it or not...
"May
the Lord be gracious to us and bless us
and
make his face shine upon us...
...Then
shall the earth yield its increase
and
the Lord will bless us."
Psalm
67:1, 6
Thank you
for your continued support of Zion
Shalom
from Israel
Richard
Rinberg
CEO of
Zion Oil & Gas, Inc.
www.zionoil.com
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
FORWARD
LOOKING STATEMENTS: Statements in this communication that are not historical
fact, including statements regarding Zion's planned operations, geophysical and
geological data and interpretation, anticipated attributes of geological strata
being drilled, drilling efforts and locations, timing and potential results
thereof and plans contingent thereon, are forward-looking statements as defined
in the "Safe Harbor" provisions of the Private Securities Litigation Reform Act
of 1995. These forward looking statements are based on assumptions that are
subject to significant known and unknown risks, uncertainties and other
unpredictable factors, many of which are described in Zion's periodic reports
filed with the SEC and are beyond Zion's control. These risks could cause Zion's
actual performance to differ materially from the results predicted by these
forward-looking statements. Zion can give no assurance that the expectations
reflected in these statements will prove to be correct and assumes no
responsibility to update these statements.
NOTICE
Zion Oil
& Gas, Inc. has filed a registration statement (including a prospectus) with
the SEC for the offering to which this communication relates. Before you invest,
you should read the prospectus in that registration statement and other
documents the issuer has filed with the SEC for more complete information about
Zion Oil & Gas and its offering. You may get these documents for free by
visiting EDGAR on the SEC website at www.sec.gov. Alternatively, Zion Oil &
Gas will send you the prospectus if you request it by calling toll free
1-888-TX1-ZION ( 1-888-891-9466 ).
More
information about Zion is available at www.zionoil.com or by contacting Kim
Kaylor at Zion Oil & Gas, Inc., 6510 Abrams Rd., Suite 300, Dallas, TX
75231; telephone 1-214-221-4610; email: dallas@zionoil.com