Filed pursuant to
Rule 433
Registration
Statement No. 333-164563
Rights
Offering Booklet
This
booklet contains:
(i)
a letter to you concerning Zion's US$ 50 million Rights Offering,
and
(ii)
a report from The United States Geological Survey: “Assessment of
Undiscovered Oil and Gas Resources of the Levant Basin Province, Eastern
Mediterranean” estimating that a mean of 1.7 BILLION barrels of
recoverable oil and 122 TRILLION cubic feet of recoverable gas remain
undiscovered in the Levant Basin.
May
2010
May
2010
Dear Zion
Stockholder...
ZION’S RIGHTS OFFERING HAS
STARTED
Together
with this booklet, please find enclosed documentation relating to Zion's rights
offering, including the offering Prospectus Supplement dated April 28, 2010. In
this booklet, you will find a copy of the very recently released United States
Geological Survey (USGS) report covering the Levant Basin, as Zion's exploration
areas fall completely within that area.
Zion's
rights offering gives you the right (but not the obligation) to purchase more
Zion stock at US$ 5.00 per share, irrespective of the market price of Zion stock
during the offering period. Your rights must be exercised by 5:00 p.m. (New York
time) on June 30, 2010; after that time, your rights under this offer will
terminate without value.
Under the
terms of the offering (as described more fully in the enclosed Prospectus), you
have the right to purchase one (1) share of stock for every two (2) shares of
common stock owned on May 6,
2010 (the Record Date). That is identical to one-half (0.50) of a
subscription right for each share of common stock owned on the record
date. Each whole subscription right entitles you to purchase one
share of stock at US$ 5.00 per share.
Please note that,
‘over-subscriptions’ are allowed. The over-subscription right allows
shareholders who are exercising all of their basic subscription rights an
opportunity to purchase the shares that are not being purchased by other
shareholders. If an insufficient number of shares are available to fully satisfy
all properly executed over-subscription right requests, as happened in both of
our previous rights offerings, the available shares will be distributed
proportionately among rights holders who exercise their over-subscription right
based on the number of shares each rights holder subscribed for under the basic
subscription right.
In
addition, if an insufficient number of shares of common stock are available to
fully satisfy all properly exercised oversubscriptions rights requests, we may (but are under no
obligation to do so), increase the number of shares of common stock available
for issuance in this rights offering by up to an additional 625,301 shares of
common stock in order to satisfy additional properly exercised oversubscription
requests.
Please
also note that all subscriptions, including oversubscriptions, take place during
the same time period. There will NOT be a subsequent time for you to
"oversubscribe" after the initial subscription period, so please be sure to
include all the shares for which you want to subscribe in your initial
subscription.
In this
rights offering, Zion plans to raise up to US$ 50 million. The funds raised will
be used: (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.
Please
review the enclosed material and consider taking this opportunity to increase
your holding in Zion Oil and Gas stock.
This
offering marks the 10th anniversary of the founding of Zion Oil and Gas. During
the past ten years we have worked hard to put together a professional team using
petroleum industry best-practice techniques in order to discover oil and gas
onshore Israel.
In 2009,
a significant natural gas discovery offshore Israel was announced. Very
recently, in April 2010, the United States Geological Survey (USGS) released a
report on the 'Levant Basin' and indicated that there are still massive
undiscovered amounts of oil and gas in the Levant Basin. As you can read, they
estimate a mean of 1.7 BILLION barrels of recoverable oil and 122 TRILLION cubic
feet of recoverable gas still remain undiscovered in the Levant
Basin.
As all of
Zion's exploration areas fall within the Levant Basin, we are optimistic that
the day draws near when we will achieve success with our exploration efforts to
find and recover oil and/or gas onshore Israel and our decade of hard work will
bear fruit for Zion's stockholders.
Please
consider this opportunity carefully, as your support is vital to Zion's work in
Israel.
In
anticipation, thank you for your support!
“But
who am I, and what is my people, that we should be able to offer so willingly
after this sort? For all things come of thee, and of thine own have
we given thee.”
1
Chronicles 29:14
"In
your good pleasure, make Zion prosper..."
Psalm
51:18
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 the rig owners, 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).
