Filed
pursuant to Rule 433
Registration
Statement No. 333-164563
Zion Oil
& Gas Newsletter
May 14,
2010
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Dear
Shareholder and/or Friend of Zion...
This past
week, Israel has been in the news (again) as the 31 members of the group of rich
nations, the OECD (Organisation for Economic
Cooperation and Development) unanimously voted to invite Israel to
join.
OECD’s
mission is to enhance cooperation among members while meeting high international
economic standards; membership will surely boost Israel's economic standing and
help attract investment to Israel.
The
Israeli Finance Minister called the move "historic".
We
believe that the day will arrive when Zion Oil's work will also be deemed
"historic" and are steadily working towards that day.
Here is a
report of Zion's work during the past two weeks:
Rights
Offering
Under the
rights offering (see www.zionoil.com/investor-center)
Zion stockholders at the close of business on May 6, 2010, were issued, at no
charge, the following:
ONE subscription right
for every TWO shares of stock
owned.
Each
subscription right entitles the holder to purchase one share of Zion stock at a
price of $5.00, irrespective of the market price.
The
subscription rights may be exercised at any time prior to 5:00 pm EDT on June 30, 2010.
This past
week, all of our record date stockholders were mailed copies of the prospectus
and other items necessary for exercising the rights. If you were a
stockholder of record on May 6, 2010, you should begin receiving these materials
very soon.
Please
note that if you hold shares in a brokerage account, you will need to contact
your broker to determine when and how you can exercise your rights as each
individual brokerage firm has their own timeline and procedures for processing
subscriptions.
As noted
in the press release, we plan to use the proceeds from the rights offering: (a)
to purchase a 51% interest in a new company (Zion Drilling, Inc. that will own a
2,000 horsepower drilling rig), (b) to drill further 'deep' exploration wells on
Zion's licenses in Israel (in continuation of Zion's oil and gas exploration
efforts) and (c) for general corporate purposes.
The United States Geological
Survey (USGS Survey)
The USGS
report (issued April 8, 2010) "Assessment of
Undiscovered Oil and Gas Resources of the Levant Basin Province, Eastern
Mediterranean" has attracted much media attention in Israel. (You can
review the USGS Survey by clicking here.)
As I
noted previously, the USGS Survey estimates a mean of 1.7 BILLION barrels of
recoverable oil and 122 TRILLION cubic feet of recoverable gas in the Levant
Basin... and that has caught everyone's eye, as the value of the undiscovered
oil and gas assessed in the USGS Survey amounts to approximately US$ 650
Billion...
and of
course all of Zion's exploration areas fall within the Levant
Basin...
The
drilling rig at Ma’anit
With
regard to 'Operations', we are now preparing for the next well, as you can
read.
Ma'anit-Rehoboth #2 Well
(M-R #2)
This well
is currently temporarily suspended for possible future use as an offset well to
the Ma'anit-Joseph #3 (M-J #3) well (see below) which is to be drilled a short
distance away.
Ma'anit-Joseph #3 Well (M-J
#3)
Further
to our ongoing exploration work on the Ma'anit geological structure, we are
quickly moving forward with permitting and planning for the M-J #3 well
(targeted for the ‘deep’ Permian geologic structure). (Deut.
33:13-16)
Our new
well design is now finalized and we have begun the process of assembling the
various product and service suppliers needed to drill this new
well. To date we have issued (9) Requests for Quotations (“RFQs”) to
dozens of vendors addressing all the major components needed to drill and test a
well: tubulars, mud system, wireline services, well testing,
cementing, etc. The early indication is that most vendors will
participate in our RFQ process and seem quite eager to do business with us in
Israel. We have ‘cast a wide net’ in soliciting price quotes and will
carefully analyze the results, when received, to ensure that we use the best
available resources offering Zion the most favorable overall value.
Permitting
for the new well continues to move at a very good pace with progress being made
on all fronts. We continue to move forward with both local and
governmental groups in assessing needs and working towards mutually agreeable
outcomes.
Barring
any unforeseen delays or complications, we remain on track to "spud" (i.e. begin
drilling) the well in the summer of 2010.
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.
We have
decided to acquire additional field seismic data that will help us to resolve
certain questions regarding the geology of the area surrounding the Elijah #3
well. The timing for this work is scheduled to take place in mid-summer
2010.
The Issachar-Zebulun Permit
Area
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. Permitting for seismic acquisition is already
underway and the timing for the field work is scheduled to coincide with the
seismic field work for the Elijah #3 project area.
2010
Annual Meeting of Stockholders - in just one
month...
The
annual meeting is scheduled to take place at the Dan Caesarea Hotel in Caesarea,
Israel at 2:00 p.m. (local time) on Monday, June 14, 2010. If
you are planning to attend the meeting in person and would like to reserve a
room at the Dan Caesarea Hotel, please contact Ora Weisman in our Israel office
at ora@zionoil.com to take advantage of a special room rate offered only to Zion
shareholders.
IMPORTANT
NOTE: In prior years, the SEC allowed brokers to vote the shares of
stockholders who held shares at the broker but did not express an opinion
regarding how they wished to vote their shares. The new rules do not
allow your shares to be voted on certain items without you personally voting
your shares, so please vote your shares.
You can
vote either by returning your prepaid voting card, by telephone or by way of the
Internet.
Your vote really does count, so
please take a very few minutes in order to exercise your right as a Zion Oil
& Gas stockholder.
"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, the sufficiency of cash reserves, ability to raise additional
capital, the successful establishment of the drilling subsidiary and the
negotiation and execution of definitive agreements with AME (the current owner
of the drilling rig) with respect thereto, 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).
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
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