Filed
pursuant to Rule 433
Registration
Statement No. 333-160871
Zion Oil
& Gas Newsletter
September
25, 2009
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Dear
Shareholder and/or Friend of Zion...
Here is
an update of our progress during the past week.
Operations on the
Ma'anit-Rehoboth #2 Well
As noted
last week, we have successfully drilled this well to a depth of approximately
17,913 feet (5,460 meters).
This past
week, we ran a 'velocity
survey' in order to help increase our understanding of the geology of our
license area.
A 'velocity survey' is a type of
seismic survey where the seismic travel time from the surface to a known depth
is measured. Geophones are lowered into the wellbore and a pulse wave sent out
from ground level; the resulting signals are then recorded.
The
velocity survey data will be used to correlate specific formations to
reflections seen on the seismic sections that we used to map the Ma’anit
structure.
We have
decided, for the present, not to drill any deeper in this well and are now
analyzing and establishing the priorities of the seven zones that warrant
completion testing. However, the well bore is in excellent condition and it
is possible that we will drill this well deeper in the future. Next week, I will
comment further, but I'll mention that this week Zion's Chairman, John Brown,
gave me a note with the reference Psalm 135:6 - 'Whatever pleased the Lord, he did,
in heaven and on earth, in the seas, and all the depths...'
Having
carried out the velocity survey, we then ran the 7-5/8 inch tie-back casing
string into the well, in preparation for the testing of the well. The 7-5/8 inch
casing ties the drilling liner (set previously) back to the surface, giving
pressure integrity during the testing phase.
This
week, we were also negotiating for the use of a smaller rig for completion
operations on this well. However, it may be some weeks before such a
rig becomes available and we can carry out meaningful testing on the
well. Happily, one smaller rig is available in Israel so, almost certainly,
we will not need to import a completion rig.
Late next
week, we plan to start rigging down the 2,000 horsepower drilling rig and start
moving it (by truck) to the prepared site of the proposed Elijah #3 well at
Kibbutz Ein Carmel.
Preparations at the site of
the Elijah #3 Well
Here are
some photographs, taken this week, during my visit to the fields of Kibbutz Ein
Carmel (in English, Kibbutz 'Carmel Spring'), the location of the site of the
Elijah #3 well.
The
access road to the site is through a banana plantation. At the end of the road
is the site of the Elijah #3 well.
On the
left of the picture, you can see ripening bananas. At the end of the road, you
can see the concrete pad on which the drilling rig will be erected.
In this
picture, I am standing on the concrete pad, discussing with the works foreman
the hole into which the drilling will take place.
Here you
can see, up close, the hole in the concrete pad. In the background you can see
banana trees and the Carmel mountains.
On the
left is the pit (50 meters long and 20 meters wide) and in the centre is the
concrete pad. You can get a sense of scale from the two parked cars and the
works foreman.
Behind
the site is the water supply infrastructure, situated in front of further banana
fields.
Next
week, we will set the 'conductor pipe'; that is, a short length of pipe, driven
into the ground. Conductor pipe is run because the initial shallow section of
the well is drilled in unconsolidated soil rather than consolidated strata (i.e.
solid formations) encountered deeper.
We will
also, next week, initiate our security on the area and equipment can then start
to arrive on site.
Rights
Offering
As
mentioned in previous weeks, Zion has filed with the Securities and Exchange
Commission (SEC) an amendment to the registration statement (which was filed in
July 2009), with respect to a proposed Rights Offering to our common
stockholders.
As
amended, the proposed Rights Offering will offer a maximum of 3.6 million shares
of stock at $5.00 for each share of stock. Should the rights offering be fully
subscribed, the company will receive gross proceeds of $18 million.
Under the
newly amended rights offering, stockholders have the right to purchase twenty
three (23) shares of stock for every one hundred (100) shares of common stock
owned on the (to be determined) record date. This is identical to
0.23 subscription rights for each share of common stock owned on the record
date.
If you
were among the many hundreds of our stockholders who did not receive as many
$5.00 shares as you subscribed for in the earlier rights offering, 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.
The
offering can only 'go effective' (or in plain language, 'begin') when the SEC
have completed their review, so we patiently wait.
Wall Street Journal
Interview
As you
can see in the photograph (above left), Charles Levinson (on the left of the
picture), the Jerusalem Bureau Chief of 'The Wall Street Journal' (WSJ) visited
us this past week, in order to interview John Brown and visit the site of the
Ma'anit-Rehoboth #2 well.
John
explained his vision and then gave the WSJ a guided tour of our operations. The
intrepid WSJ photographer (in the centre of both pictures) got up on the rig
floor - 'real close and
personal' - in order to record the visit for posterity. I'll let you know
when the WSJ article is released.
"In
your good pleasure, make Zion prosper..."
Psalm
51:18
Thank you
for your support of Zion and 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
).