Filed
pursuant to Rule 433
Registration
Statement No. 333-164563
Zion Oil
& Gas Newsletter
April 1,
2010
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Dear
Shareholder and/or Friend of Zion...
My last
update to you was on March 19, 2010. During the past two weeks, we have
continued our completion work on the Ma'anit-Rehoboth #2 well.
On
Wednesday, March 24, 2010, we received visitors, Mr. Jonathan Friedman (Senior
Adviser to Israel's Minister of National Infrastructures) and Dr. Victor
Bariudin (Israel’s Senior Coordinator of Oil & Gas Production at Israel’s
Ministry of National Infrastructures) to the Ma'anit wellsite. You can see
photographs of their visit below. Their visit lasted almost two hours, during
which time, they toured the site and reviewed the operations.
They were
interested in the various visiting consultants and experts that we have brought
to our drill sites. I commented that, whatever we do at Zion, we try and use the
best techniques available. For that reason, we brought in oil & gas industry
heavyweight companies, such as Schlumberger, Baker Hughes and
Weatherford.
Even
though Zion Oil & Gas, Inc. has a current market capitalization of only
approximately US$ 100 million, the combined market capitalization of the three
companies mentioned above is approximately US$ 100 billion. So, if we
need specific expertise, they can readily supply it.
...............................................................
Here is
this week's operations update
Left to
Right: Jonathan Friedman, Dr. Victor Bariudin, Rasim
Yoruk (Drilling Manager)
On
the Floor of the Rig
Schlumberger's
Neil Galloway
Explaining
some of the completion testing procedure
Inspecting
pipe in front of the Rig
The
Ma'anit-Rehoboth #2 Wellsite on Wednesday March 24, 2010
The
Ma'anit-Rehoboth #2 Well
In the
previous report, I noted that our first production test (of several tests)
planned for the Ma’anit-Rehoboth #2 well would be underway by the time the
report was published. True to this plan, we did carry out this first
test over an approximate two day period. The test interval was a 20
meter zone selected by our geologists as one of several that were
deemed to be potentially hydrocarbon bearing.
This
first test consisted of three separate flow periods and two separate shut-in
periods. Reservoir pressure ‘draw down’ and fluid/gas flow rates are
monitored during the flow periods and reservoir pressure ‘build up’ is measured
during the shut-in periods. The flow periods are used to determine a
well’s instantaneous flow rates whereas the pressure data is used, in part, to
assess long-term productivity and reservoir size. We are using
Schlumberger Oilfield Services equipment and personnel during our testing
operations to ensure high quality and reliability in the test
results.
Operationally,
the first test was executed very well although the results were disappointing in
that no clear evidence of hydrocarbons was detected. We did, however,
gain some especially useful information about reservoir pressures that will help
us fine-tune the test design for all subsequent tests in this well.
Currently,
we are preparing the well for the second production test in a deeper
interval. Traditionally, production tests are started in the deepest
part of the well with ensuing tests done successively up-hole. Given
the mechanical configuration of the well relative to the target test intervals,
we needed to somewhat modify this traditional approach and start our testing in
one of the middle target intervals.
Prior to
initiating our second production test, we recently installed and cemented in
place an inner casing “liner” through most of the well’s open hole
section. The second interval to be tested, the deepest of all
intervals to be tested, will then be that portion of the well that remains as an
open hole. For this test, which we anticipate will begin this
weekend, the perforating process will not be necessary since there is no casing
and cement sheath separating the wellbore from the reservoir
rock. All subsequent tests will be done through casing where the
perforating process will again be employed.
So while
the first test results were less than we had hoped, several additional targets
remain in this well. We have gained much momentum since starting this
operation and have already gleaned some useful pressure data from the reservoir
rocks. We remain hopeful and will continue to use every tool in our
testing arsenal in our ongoing hunt for the elusive hydrocarbons that
potentially lurk deep within our license areas.
Operations at the Elijah #3
Well
The
Elijah #3 well was drilled to a depth of approximately 10,938 feet (3,334
meters) when the drill string became stuck within the Asher Volcanics section of
the hole. After recovering a significant portion of the stuck drill pipe,
progress in recovering the remainder of the pipe slowed and the decision was
made to temporarily suspend drilling operations pending further analysis of the
situation and to relocate the rig to the Ma'anit-Rehoboth #2 well.
We are
currently assessing various options that should enable us to proceed with the
'next steps' for this well and are looking into the option of acquiring
additional field seismic data (at the same time that we acquire the seismic for
Zion's Issachar-Zebulun Permit area) that will help us to resolve certain
questions regarding the geology of the area surrounding the Elijah #3
well.
The Issachar-Zebulun Permit
Area
As
reported previously, Zion and the Geophysical Institute of Israel (GII) have
signed an Agreement for GII, on behalf of Zion, to acquire approximately 30
kilometers of seismic data in Zion's Issachar-Zebulun Permit area.
The
timing for the field work is scheduled to take place mid-summer
2010.
"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, the presence or recoverability of hydrocarbons,
timing and potential results thereof and plans contingent thereon and
sufficiency of cash reserves 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.
Contact
Information
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
More
information about Zion is available at www.zionoil.com or by contacting Michael
Williams at Zion Oil & Gas, Inc., 6510 Abrams Rd., Suite 300, Dallas, TX
75231; telephone 1-214-221-4610; email: dallas@zionoil.com