Filed
pursuant to Rule 433
Registration
Statement No. 333-160871
Zion Oil
& Gas Newsletter
August
14, 2009
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
The City
of David, Jerusalem
Dear
Shareholder and/or Friend of Zion...
With our
drilling operations at the Ma'anit-Rehoboth #2 well nearing completion (although
logging the deeper section of the well is still to come), our site preparations
for the planned Elijah #3 well now beginning and all the normal administrative
work requiring detailed attention, it is too easy to forget that some time-off
to recharge one's personal batteries is an absolute must.
So,
earlier this week I took a morning and visited 'the place where it all began'...
the City of David in Jerusalem.
Some
3,000 years ago, King David left the city of Hebron for a small hilltop city
known as Jerusalem, establishing it as the capital of the tribes of
Israel.
Later,
King David's son, King Solomon, built the First Temple next to the City of David
on top of Mount Moriah, the site of the binding of Isaac, and with it, this
hilltop became one of the most important sites in the world.
The
photograph (above left) shows a current-day view of the site of the City of
David and the other photograph (above right) shows the entrance to King
Hezekiah's 2,700 year old water tunnel, one of the wonders of early engineering.
It was hewn in bedrock for approximately 500 meters, about 40 meters beneath the
city of David, between the Gihon spring and the Siloam pool. The tunnel was
discovered by the American biblical archeologist Edward Robinson in
1838.
Hezekiah's
tunnel is mentioned both in the book of II Kings (20:20) and in the book of II
Chronicles (32:2-4 and 32:30). Wading through the water in the 2,700 year old
tunnel with a flashlight in one hand and a Bible in the other certainly cleared
my mind.
Engineering
has advanced tremendously in the last 3,000 years, so as I splashed through the
dark tunnel, I contrasted Hezekiah's works with Zion's operations on the
Ma'anit-Rehoboth #2 well; we have drilled ten times the distance and, rather
than horizontally, vertically downwards.
Of
course, Hezekiah was looking to deny water to Sennacherib, King of Assyria,
whereas Zion is looking to find and recover hydrocarbons hidden beneath the land
in rock almost 250 million years old.
If he
were alive today, I would like to think that King Hezekiah would have been a
great supporter of our work.
The
Ma'anit-Rehoboth #2 Well
Drilling Operations on the
Ma'anit-Rehoboth #2 Well
This past
week has been frustrating. The week started with very slow drilling into very
hard formation rock. The formation was so hard that one of the drill bits was
literally 'worn to
bits'; when we pulled the drill bit out of the hole, it was missing all
three of its cones.
The
photograph (above right) three of our (old and used) tricone drill bits. As
you can see (in the lower photograph) some of the tungsten carbide insert teeth
have been completely worn away. However, it seems that our latest drill bit
wasn't just worn down. Possibly, it first lost one cone and then, as the
remaining two cones of the bit tried to drill through the broken cone, the
remaining two cones just broke apart.
So, we
tried to 'fish' for the missing parts with a 'junk basket'. As the fishing
procedure didn't retrieve the missing metal parts from the hole, we went back
into the hole with a rock bit (a drill bit with milled teeth designed to flake
the rock) and a junk basket. However, if the missing parts were forced into the
formation, then most likely they will not be recovered and will not cause us any
further problem.
To add to
our delay, we also suffered some down-time as the rig required some maintenance
and repair.
So, this
past week, we have made approximately 328 feet (100 meters) in drilling progress
and, as I write, we are drilling through shale and dolomite at a depth of
approximately 17,470 feet (5,325 meters)
towards our final target of approximately 18,040 feet (5,500
meters).
The site
of the Elijah #3 Well
Operations on the site of
the proposed Elijah #3 Well
As I
mentioned last week, we have signed an agreement with Kibbutz Ein Carmel
regarding our planned Elijah #3 well.
The
photograph above was taken on Friday, August 7, 2009, at the proposed new drill
site and shows Zion's Drilling Manager, Jerry Carlisle, pointing to the exact
location of the Elijah #3 well.
As you
can see, the Kibbutz has removed its equipment from the area and this past week
we have finished measuring and surveying and begun preparing the site, so that,
when appropriate, the drilling rig will be able to move directly from Kibbutz
Ma'anit to Kibbutz Ein Carmel.
You may
be interested to know that the trees in the background are banana
trees.
In any
event, we are making good progress with preparations for drilling the Elijah #3
well.
(New) Rights
Offering
On
Wednesday, July 29, 2009, Zion filed a registration statement with the
Securities and Exchange Commission (SEC) 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. The registration statement is currently under
review by the SEC.
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 would receive gross
proceeds of $10 million, to be used for Zion's multi-well drilling
plan.
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. Of
course, this offer is open to everyone who is a stockholder of record on the (as
yet undetermined) record date.
"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 and rights offering 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 ).
Contact
Information
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
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