Zion Oil & Gas Founder, John Brown, met Nir Barkat in Washington, in July 2008, during Christians United for Israel’s Third Annual Washington-Israel Summit, when Zion Oil sponsored the “Night to Honor Israel” banquet.

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The contract was executed by both parties on September 12, 2008. Under the terms of the contract AME has committed to provide a completely refurbished and updated 2,000 horsepower rig and crews (anticipated to arrive in Israel in November 2008) and to drill Zion’s planned Ma’anit-Rehoboth #2 well ‘directionally’ to below 18,000 feet. The well is planned to appraise the strong shows seen in the Triassic (during the drilling of the Ma’anit #1 well) and to drill deeper into the Permian formation.  It will be the first well drilled to the Permian in Northern Israel. The commencement of the drilling program is subject to receipt of various government permits and raising additional capital, whether through Zion’s current public offering or otherwise.

Richard Rinberg, Zion’s Chief Executive Officer, said today, “This is an important milestone for Zion, one which we have been working towards for a long time.  We are very impressed by the quality of AME’s rig and the professionalism of their people.  We appreciate the hospitality shown to us by AME during our visit and are excited about working with AME and drilling our next wells, just as soon as we can.

Additional information relating to the drilling contract and related matters will be included in Zion’s Current Report on Form 8-K, that Zion will be filing soon with the Securities and Exchange Commission.

Zion Oil & Gas, a Delaware corporation, explores for oil and gas in Israel in areas located onshore between Tel-Aviv and Haifa. It currently holds two petroleum exploration licenses, the Joseph and Asher-Menashe Licenses, between Netanya on the south and Haifa on the north covering a total of approximately 162,000 acres.

AME is an independent oil and gas exploration and production company, incorporated in Delaware in 1962, with its head office in Wichita, Kansas. AME has drilled more than 130 exploration and development wells in Turkey for major oil companies, including Exxon, Mobil, Wintershall AG, MOL, Placid Oil, Neste Oy, Terralliance (USA), JKX (UK) and TETHYS (Sweden). Its rig inventory includes 11 drilling and workover rigs and AME’s personnel have enormous work experience in many countries, including Turkey, Bulgaria, Azerbaijan, Kazakhstan, Turkmenistan and Georgia.

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We have recently appointed our Chief Financial Officer and Executive Vice President, Martin Van Brauman, to our Board of Directors.   As you can read in the Press Release below, Martin has impressive qualifications and experience.   Zion is lucky to have such a high caliber individual.

Sincerely yours

John Brown Chairman of the Board and Founder

Zion Oil & Gas Appoints New Board Member

Wednesday August 13, 11:53 am ET

DALLAS–Zion Oil & Gas, Inc. (Amex: ZN – News), of Dallas, Texas and Caesarea, Israel, announced today that Mr. Martin Van Brauman has been elected as a Director of Zion Oil & Gas, Inc. Mr. Van Brauman is currently Senior Vice-President and Chief Financial Officer of Zion.

Mr. Van Brauman holds a B.E. degree from Vanderbilt University, a Doctor of Jurisprudence degree from St. Mary’s University and an M.B.A. and LL.M. (Tax Law), from Southern Methodist University. Mr. Van Brauman has over 22 years of experience in corporate tax and accounting analysis and is Board Certified in Tax Law by the Texas Board of Legal Specialization. In addition to working as a tax partner in several private law firms, Mr. Van Brauman spent 12 years as a Senior Attorney (International Specialist and Petroleum Industry Specialist) with the Office of Chief Counsel, IRS, following which he spent three years as a tax consultant with the global accounting firms of Deloitte & Touche and Grant Thornton.

Mr. John Brown, Chairman of the Board and Founder, said that the appointment of Mr. Van Brauman as a Director of the Company strengthens Zion’s Board and that he looks forward to Mr. Van Brauman’s future contribution to the company.

Zion Oil & Gas, Inc., a Delaware corporation, explores for oil and gas in Israel in areas located onshore between Tel-Aviv and Haifa. It currently holds two petroleum exploration licenses, the Joseph and Asher-Menashe Licenses, between Netanya on the south and Haifa on the north covering a total of approximately 162,000 acres.

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ISRAEL IS OIL-RICH, EXPLORATION-POOR

Sir-

As a geologist and managing director of various oil exploration companies in Israel over the past 20 years, I was quoted in several paragraphs of Michael Arnold’s article “Slippery dreams” (January 22). I would like to amend and add certain facts as follows:

The oil potential of Israel was evaluated twice at the request of the Israeli government. In 1962, Lewis Weeks, the former chief geologist at Exxon, determined that “the potential ultimate oil resources of Israel should be of the order of 500 to 2,000 million barrels from primary recovery… The figures do not include gas… which may equal 50% and upwards of that of the oil.”

In 1979, James Wilson, former chief geologist or Shell (US) determined that on-shore Israel (the off-shore and the Dead Sea Rift Valley were not included) has a potential of330 to 2,000 million barrels of recoverable oil.

Both these experts have been president of the American Association of Petroleum Geologists.

Since the Wilson evaluation in 1979, extensive data have been accumulated relating to on-shore and off-shore Israel. From this data, it becomes clear that the total may exceed 2,000 million barrels.

Israel’s per annum consumption amounts to about 70 million barrels.

The 1962 evaluation predicted that “the finding and recovery of this oil and gas may require many decades” -and evidently assumed that such efforts would be made. Unfortunately, this has not been the case.

It is most likely that this failing is one of the main reasons why the forecast potential has not yet been discovered.

YOSSI LANGOTSKY

Herzliya

 2,000 million barrels? That’s 2 billion barrels. That’s Exxon and Shell saying it. So the question isn’t “does Israel have any oil?” The question is, “If the big boys have known about this for so long, why haven’t they done anything about it?” The answer, unfortunately, is pretty easy. They’ve got larger, established assets in the Arab world and the Arab world has told them, “If you do business with Israel, don’t bother doing business here.” That’s what the 1973 oil embargo was all about.

What’s Israel’s answer? Keep supporting those who are exploring for the oil they know is there. What can we do about it? Stop wondering if Israel really has any oil. It does. If you want to see it come to the surface, support the exploration already in country. This piece of history will come about, and it won’t be long until it does. Those involved in that effort are destined to be written in to the story of Israel’s future.

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Surrounded by the richest oil countries in the world, many would wonder why Israel has never found oil. Now they have. Ginko Oil Exploration, led by Dr. Eli Tannenbaum, has located a potentially large oil field in the Dead Sea region of Israel.

The Dead Sea, near a large oil deposit

Dr. Tannembaum and other specialists on site

In an effort to attract financial partners to harvest the oil, Ginko Oil Exploration reopened a small previously drilled oil well near the Dead Sea and began extracting oil. In an on site interview with Dr. Tannenbaum, he said this first strike is very exciting because it shows that there is oil in the region that can be harvested. He said that Ginko will begin drilling the second well within two months and that the second well should produce a much more significant amount of oil.

An exploration oil rig

One step in the process of oil extraction

Dr. Tannenbaum says that this oil region is not directly connected with surrounding oil fields, but that the sources of the oil deep inside the earth’s crust could be related. He said the oil field in the Dead Sea region is on a deep rift (or tear) similar to Libyan or Egyptian oil fields. The Dead Sea region is the lowest point on earth at almost 400 meters below sea level. Tannenbaum says that he does not foresee Israel’s drilling of oil to be detrimental to surrounding nations’ oil fields.

Ed speaks with Dr. Tannenbaum

Ed speaks with Ginko Exploration’s Site Supervisor

Ginko Exploration’s Site Supervisor said that Israel currently has two oil refineries that could refine the newly extracted crude oil. The extracted crude oil would be taken to the refineries by truck. Israel does not currently have an oil pipeline from this region, and it would most likely not need one in the near future.

Here is Israel’s future oil field

Lead Geologist, Dr. Eli Tannenbaum

My wife and I had the privilege of watching some of Israel’s first oil being pumped from 1800 Meters beneath our feet. Ginko began dismantling the exploration rig while we were on site. They were then going to place a permanent pump on the well as the first of many in the region.

The flow of oil must be carefully monitored

A head on oil well

Israelis currently pay the highest gas prices in the Middle East. Gasoline is approximately $6.50 per gallon and Diesel is $5 per gallon. If Israel could produce its own fuel, it could mean lower prices at the pump for the average Israeli.

The oil is just flowing from this dig

Oil being extracted

Oil in Israel can mean less economic dependence on oil from surrounding countries. It could also mean fewer political negotiations with oil producing countries that routinely plot the demise of Israel.

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Aug. 26, 2008
Ehud Zion Waldoks , THE JERUSALEM POST

The search for oil in Israel got a big push forward on Tuesday night after The Nature and Parks Authority general assembly approved plans for the drilling of an exploratory hole to search for oil in the Judean nature reserve. Two Israeli companies, Ginko Oil Exploration and Delek Energy Systems, believe there could be as much as 6.5 million barrels below the reserve.

The assembly approved Zuk Tamrur 4 on the condition that the Authority comes up with strict guidelines to reduce the environmental damage as much as possible. The assembly also demanded that the companies rehabilitate the area afterwards. In addition, if oil were to be found, the assembly ruled, the pumps to remove it would have to be placed outside the reserve.

Until now, the Authority’s administration had rejected all attempts at drilling, but they were overruled Tuesday by the general assembly, which comprises representatives of environmental organizations and the government.

Avraham Poraz, former internal affairs minister and now consultant to the oil companies, told The Jerusalem Post Tuesday night how he explained the issue to the assembly a month ago in the run-up to the decision.

“I put it to them very simply. One third of Israel is nature reserves. It cannot be that we can’t search for oil in one third of the country.

“Moreover, I told them that according to our ecological estimations, the damage would be minimal because we are talking about 1.25 acres without fences, or dogs or anything like that,” he told the Post.

The Society for the Protection of Nature in Israel (SPNI) decried the decision.

“We are distressed that the assembly gave in to the pressures of the initiators, did not heed its own science committee’s recommendation against the plan and so will cause unnecessary damage to the reserve,” the organization said in a statement.

The Authority had suggested drilling a hole diagonally from outside the reserve to search for oil, but a geological consultant said that would create too many problems, an Authority spokesman said.

Ginko director Rami Karmin told the Post earlier this week that Zuk Tamrur 4 represented Israel’s best bet to find oil. He said they only needed 1.25 acres for two months to drill a hole 2,000 meters deep and see if they struck oil. 6.5 million barrels would be worth about $800 million, he added.

The area where the companies want to sink their hole represents a bridge for animal populations between the Judean and Negev reserves, the Authority’s science committee had written, and putting in a hole would block that narrow passageway. It had also said that any sort of drilling was bound to cause severe environmental damage and therefore recommended rejecting the request.

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Aug. 25, 2008  Ehud Zion Waldoks , THE JERUSALEM POST

Two Israeli energy companies are convinced the best chance for finding oil in Israel lies at a site in the Judean Desert nature reserve and have stirred up a storm of controversy with their persistent requests to drill an exploratory hole.

The companies, Ginko Oil Exploration and Delek Energy System, want to drill in an empty corner of the desert. However, the Nature and Parks Authority Science Committee and the Society for the Protection of Nature in Israel (SPNI) contend that even exploratory drilling will destroy the fragile ecosystems in the reserve. The two sides will go head to head on Tuesday in front of the Nature and Parks Authority general assembly, the Authority’s highest body, which will decide whether to grant the companies’ request.

The situation, from an environmental perspective, has also been complicated by the fact that Environmental Protection Minister Gideon Ezra has recommended the drilling plan, although on the condition the ecological damage was reversible.

Ginko made headlines two years ago when it discovered a small amount of oil near the Dead Sea through Zuk Tamrur 3. This time around, Ginko director Rami Karmin believes Zuk Tamrur 4 in the reserve has the best chance to produce as much as 6.5 million barrels.

But even he admits that drilling for oil is “a tricky business” and there are no guarantees.

“We are talking about drilling in a spot that the Authority had already approved drilling there 10 years ago, and we requested that spot because we thought they’d approve it again. The district committee approved it two weeks ago and now we need the Authority’s approval,” he said.

“We need [approximately] 1.25 acres out of 150,000 for two months so that we can drill an exploratory hole 2,000 meters down. We had an ecological company evaluate the area. There have also been other exploratory holes in the Dead Sea area and you can’t even see them anymore,” Karmin argued.

According to Karmin, Zuk Tamrur 4 is the likeliest place in Israel to find oil because of its unique geological properties.

“There is oil around the Dead Sea but the constant little earthquakes that occur because the Sea is on a fault line release the pressure before the oil can be driven to the surface. At this spot, there is a four-way closure and there is a good chance there is oil there,” he said.

However, SPNI argued Sunday in a position paper ahead of Tuesday’s meeting that the relatively small predicted reservoir did not justify the massive ecological damage. Israel uses about 80 million barrels of oil per year, or 270,000 per day. 6.5 million barrels would meet Israel’s needs for less than a month.

Karmin contended that the amount of oil wasn’t the point, its cost was.

“Six-and-a-half million barrels is worth about $800 million. The government would be receiving about $400m. in fees and taxes – can we really afford to turn down that much money?” he demanded.

The Authority’s Science Committee, nevertheless, has submitted its assessment report to the general assembly and has counseled the body to prohibit the companies from drilling. The committee consists of, among others, two professors and two doctors, including the Environmental Protection Ministry’s chief scientist Dr. Yishayahu Baror – who apparently disagrees with his minister.

Rather than a deserted corner of the desert, the site actually sits in the middle of a very narrow corridor which serves as a natural transit area between the Judean Desert Reserve and the Negev reserve, the committee said. Disturbing the area would have a massive impact on plant and animal life in the whole area, they argued. Animal populations would be cut off from their main groups with no way to get back to the Negev, they said.

The committee addressed both the potential damage from the initial drilling, but also the greater potential impact of striking oil.

While an exploratory hole would inevitably cause some damage, if oil was found, much more damage would result, the committee wrote. A constant stream of tanker trucks and the new roads they would require would doubtless result in severe damage. Even putting up lights, as is usual for drilling sites, would adversely affect the delicate ecosystems. The inevitable accidents if oil were found would pollute the ground in the area as well, according to the report.

The committee concluded by reminding the general assembly that it was precisely their job to protect nature in the face of such threats.

Meanwhile, even if the committee voted against granting them permission on Tuesday, Karmin vowed to employ additional legal measures to get the permits.

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John Brown, Zion’s Founder and Chairman, commented today, “Zion is proud to be a part of the CUFI Washington-Israel Summit and to support CUFI’s educational and public policy work in support of Israel”. Zion Oil & Gas, a Delaware corporation, explores for oil and gas in Israel in areas located onshore between Tel-Aviv and Haifa. It currently holds two petroleum exploration licenses, the Joseph and Asher-Menashe Licenses, between Netanya on the south and Haifa on the north covering a total of approximately 162,000 acres.

NOTICE: Zion Oil & Gas has filed a registration statement (including a prospectus) with the SEC for the offering of its securities. Before you invest, you should read the prospectus in that registration statement and other documents Zion has filed with the SEC for more complete information about Zion Oil & Gas and its offering. You may get these documents free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, Zion Oil & Gas or its underwriter will arrange to send you the prospectus if you request it

by calling toll free 1-888-TX1-ZION (1-888—891-9466). A direct link to the prospectus in PDF format may be found on the Zion Oil & Gas, Inc. website at http://www.zionoil.com/investor-center/investor-relations.html.

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