Filed
pursuant to Rule 433
Registration
Statement No. 333-160871
Zion Oil
& Gas Newsletter
October
23, 2009
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Dear
Shareholder and/or Friend of Zion...
Here is
an update of our progress during the past week.
Drilling Operations on the
Elijah #3 Well
Zion's
Asher-Menashe license area is along the Israeli coastal plain and on the Mount
Carmel range, between Caesarea and Haifa. The Elijah #3 well site is situated
approximately 12 miles north of Caesarea, just off Road 4.
The name
Mount Carmel (in Hebrew 'Har
HaCarmel') means literally 'the mountain of the vineyards of
G-d'. Archaeologists have discovered ancient wine and oil presses in the
area.
The
prophet Elijah lived in a cave on Mount Carmel and in 1 Kings 18, you can read
how Elijah challenged 450 prophets of Ba'al to a contest on Mount Carmel, to
demonstrate that G-d is in control of the Kingdom of Israel.
For the
reason above, our first well on our Asher-Menashe license area was given the
name 'Elijah'.
On
Wednesday, October 21, 2009, we issued a press release (click
here to read the press release) announcing that:
'Utilizing
the 2,000 horsepower drilling rig used to drill Zion's Ma'anit-Rehoboth #2 well,
Zion has commenced drilling its Elijah #3 well toward the Triassic geological
formation, which is expected below approximately 10,000 feet (3,048 meters).
Zion then plans to continue drilling to the Permian geological formation, down
to a total depth below 17,000 feet (5,182 meters).'
On the
same day that we issued the press release, I visited the Elijah #3 drill site.
Here are some of the photographs that I took.
The
access road to the front gate of the Elijah #3 drill site is through a banana
field.
Zion's
CEO (that is 'me') standing in front of the drilling rig.
A view,
photographed from the rig floor, towards the front gate of the site. Note the
drill pipe in the foreground and the casing in front of the gate. In the
background you can see the banana fields and hills of the Carmel
region.
A view
towards the back of the site. Note the reserve pit on the far right and the mud
tanks (in yellow and gray). In the background you can see more banana fields and
hills of the Carmel region.
I asked
one of the crew 'How's it
going?' His reply was a 'thumbs up'.
A view
from a position directly in front of the rig.
A view,
to the left side, from the same position in front of the rig.
Today,
Friday, October 23, 2009 we have drilled to a depth of approximately 400
feet (122 meters) and are making good progress.
The Ma'anit-Rehoboth #2
Well
This past
week we have been considering different rigs that are suitable for completion
operations on the Ma'anit-Rehoboth #2 well, so that we can test the seven zones
that warrant completion testing. We have been in discussions with two separate
rig owners who each own rigs that are currently in Israel.
Four of
the zones are in the upper (Triassic) part of the hole and were seen in the
Ma'anit #1 well and three of the zones are in the deeper hole drilled in the
Ma'anit-Rehoboth #2 well.
We want
to start the completion operations as soon as possible and are trying to
contract for a suitable completion rig to do just that.
Rights
Offering
Our
rights offering has begun and the record date was October 19, 2009. Everyone
recorded in the official records as a stockholder on October 19th has the right
to participate in the rights offering.
The
rights offering offers a maximum of 3.6 million shares of stock at $5.00 for
each share of stock. Should the rights offering be fully subscribed, Zion will
receive gross proceeds of $18 million.
Under the
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
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 was a
stockholder of record on October 19, 2009.
The
scheduled termination date for the rights offering is November 30, 2009 but we may
elect to terminate the offering prior to the scheduled expiration date by giving
two business days notice. Please note that Zion may also elect to extend the
rights offering beyond November 30, 2009.
We have
posted on the Investor Center section of the Zion website some Frequently Asked
Questions (and answers).
Please
click here to visit the Investor Center:
http://www.zionoil.com/investor-center
If you
(personally) hold Zion stock certificates,
you will soon receive a package from us containing: (i) a Prospectus and (ii) a Subscription Agreement (with
a pre-printed label containing your name, address, shares held and rights held).
The package should arrive before November 3, 2009.
If your
Zion stock is held in a brokerage account,
then your rights should be posted electronically to your brokerage
account during the week of November 3, 2009 and you should be notified
by your broker. Each brokerage house has its own internal procedure for
accepting an exercise of rights, so please contact your
broker directly to find out the procedure that you
should follow.
"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).
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