Zion Begins Drilling

Zion Oil & Gas announced yesterday that drilling operations have begun at the Ma’anit Rehoboth #2 well site.

Zion will drill down to a depth of 15,400 feet (Triassic), where the Ma’anit #1 was forced to quit in 2005, and then plans to increase to a final depth of more than 18,000, into the  Permian, where most of the world’s oil reserves has been discovered.

Drilling operations will run 24 hours a day in 12 hour shifts, operated by the AME (Turkey) drilling crew.

AME’s 2,000 horsepower drilling is twice the size as the Lapidoth rig used on Zion’s Ma’anit #1 in 2005. The mechanical issues due to rig capacity in 2005 should not be a problem during the Ma’anit Rehoboth #2 well, using the new AME rig.

Even with the new rig, drilling can be slow and expensive. According to Zion COO and President Glen Perry, “Due to the depth and slow bit penetration rates, dry hole drilling costs per well are estimated to be between $7 million and $9.5 million. Completed well costs are estimated to be between $9 million and $11 million.”

The name “Rehoboth” was chosen for the new well from scripture after the decision to abandon the Ma’anit #1 due to mechanical problems. “He moved on from there and dug another well, and no one quarreled over it. He named it Rehoboth, saying, ‘Now the Lord has given us room (Rehoboth means room) and we will flourish in the land.’” (Genesis 26:22)

Below is a gallery of shots taken from the Ma’anit Rehoboth #2 well site.

Zion AME Rig Leaves Turkey

The 2,000 horsepower Aladdin Middle East drilling rig contracted by
Zion Oil & Gas to drill the Ma’anit Rehoboth #2 well in northern
Israel was loaded on the the freighter “Umiavut” yesterday at the
Turkish port of Iskenderun.

Moving the rig from Turkey to Israel is no small chore.
Transporting the Zion rig overland requires 80 truckloads of
equipment. That’s 80 trucks loaded in Ankara (inland Turkey) and
transported to the dock at Iskenderun. 80 trucks unloaded and put
aboard ship. 80 trucks unloaded at Haifa, Israel and transported to
Zion’s Ma’anit Rehoboth site. 80 trucks unloaded and set up at the
well site. Whew!

Here’s the estimated time lapse: Transit time via ship from Turkey
to the port of Haifa in Israel is four days. Combined transit and
setup time from the port of Haifa to the well site at Ma’anit is
nine days. Today is April 16. If all goes well, by April 30 (don’t
count Shabbat on the 25th) we may be hearing exciting news from
Israel!

Zion Stock Trading Over $8.00

Zion stock (AMEX ticker symbol ZN) closed at $7.06 yesterday. Today it has been trading between $7.10 and $8.71.

It’s miraculous that Zion has successfully raised capital in its second public offering and its existing shares have increased in value – in the midst of the current world economic meltdown and war in the Gaza strip. All from an oil company that has yet to produce any oil! That may change soon; Zion is scheduled to be drilling at the Ma’anit-Rehoboth site next month.

Keep an eye on the stock. I’ll make an effort to bring you photos of the rig and the drilling site, as well as updates as they happen

Zion Oil & Gas Prepares for 2009 Drilling in Israel

December has been a busy month for Zion Oil & Gas, Inc. (Dallas, Texas and Caesarea, Israel) as they prepare for drilling activities scheduled for early 2009.

The company issued three press releases over the last thirty days that, if we look a little deeper, may give us a forecast on what to expect in 2009.

The first press release, issued on November 14, reported the company’s third quarter financial results. Quarterly reports from public companies are required by SEC regulations. Zion Oil reported a net loss of $865,000 for the quarter (that’s eight cents per share). A loss like that sounds pretty glum unless we remember that Zion, at this point, is an exploration company. They explore for oil. That means they don’t produce income until they find oil. Now about finding oil – here’s something interesting you may miss if you don’t read the press release closely:

“Zion is moving forward with its exploration and drilling plans. We anticipate that the refurbished 2,000 horsepower drilling rig, with which we plan to drill Zion’s planned Ma’anit-Rehoboth #2 well ‘directionally’ to below 18,000 feet, will be shipped into Israel during January 2009. We have almost finished preparing the drill site and expect to commence drilling shortly after the rig arrives on location.”

Zion expects the delivery of a “2,000 horsepower drilling rig” in January. The new rig has a drilling depth capacity of 20,000 feet. Why is that important? In 2005 Zion Oil drilled the Ma’anit #1 well to a depth of 15,500 feet. The deeper they drilled the stronger the oil shows became. So why stop at 15,500 feet? That was all the rig they were drilling with could stand. They wanted to go to 18,000 feet but they would have lost the well due to rig failure if they had kept going. The rig Zion used in 2005 was a 1,000 horsepower rig with at total depth drilling capacity of 15,000 feet. It was the biggest rig in Israel.

So now you can understand why the rig Zion has coming from Turkey in January is such an important part of a commercially viable oil discovery in Northern Israel. Zion discovered oil at the Ma’anit #1 in 2005. They didn’t have the equipment finish the job. Come January they will.

The next press release, issued December 2, announced Zion issuing units and the second closing of their current public offering. Zion issued 350,994 units. A unit is one share of Zion stock and one warrant, giving the purchaser the option to buy one more share at a fixed price ($7.00) any time between the closing of the offering and January 31, 2012. Zion’s stock, as I write this post is at $6.20; it’s been bouncing between $6.10 and $6.50 over the last thirty days. That stock was issued at $7.00 in January of 2007 when the company went public. The fact that the stock has pretty much held its value for two years without any oil production or revenue, and in light of the current global economic meltdown is more than impressive. Makes me wish General Motors and Bank of America stock were as stable. By the way, this public offering has its final closing on January 9. After that, the public will not be able to buy more units (one share of stock & one warrant).

Let’s put two and two together. Zion is taking delivery on the rig that will reach the depth they couldn’t get to when they drilled in 2005. Zion’s public offering is closing January 9. Those who bought or buy  (we still have a few weeks left) during the current offering get one share of stock and the right to buy another share at $7.00 any time before January 31, 2012. If Zion’s stock has held its value in the last two years in spite of it not producing any oil revenue and a world economic collapse, imagine where it could go with an oil discovery. I’ll leave the rest of the math to you.

Finally, the last press release issued December 16; Zion announced the purchase of over $1 million in drilling pipe, crating up the drilling rig for transport to Israel and final preparations at the drill site. This isn’t just a post on the internet, folks. It’s the real deal. Zion Oil will be drilling at the first of the year. And who will be a part of whatever happens to Zion in 2009 will be determined when the public offering closes in January.

You can read all of Zion Oil’s press releases at http://zionoil.com/press-releases. The brilliant analysis and all news about oil and Israel, you can get right here at http://oilinisrael.net.

Zion Oil Announces Revised Drilling Schedule

Zion Oil announced today (read the full press release below) that the delivery of the AME drilling rig to Israel will be delayed until January of 2009 due to Israeli government delays in processing AME’s work permits.

According to AME, other than the delay in processing work permits, machinery updating and refurbishment is complete and the drilling rig is sitting in Ankara, ready to ship.

On Zion’s side, completion of the site preparation and final government permissions are underway.

Anyone who has ever built a house knows about delays, like the building inspector not showing up when he’s scheduled. The inspector finally arrives and the house get completed. I don’t think the process changes much as the project’s grow in size.

The bottom line is that the rig is now scheduled to be in Israel in January rather than November, as previously expected. On the positive side, it looks like AME and their drilling equipment is ready to roll and Zion’s site preparations should be complete by the time the rig arrives in January. Pray for progress without further delays. And news of a bit turning in Northern Israel!

Here is Zion’s press release:

 

Zion Oil Updates Drilling Schedule

 Dallas, Texas and Caesarea, Israel- November 7, 2008 – Zion Oil & Gas, Inc. (NYSE Alternext US: ZN) announced today updated information regarding the status and importation into Israel of the drilling rig and crews contracted for (on September 12, 2008) with Aladdin Middle East Ltd (AME). Under the terms of the contract, AME committed to provide a completely refurbished and updated 2,000 horsepower rig and crews to drill Zion’s planned Ma’anit-Rehoboth #2 well ‘directionally’ to below 18,000 feet.

AME has advised Zion that the drilling rig refurbishment has been successfully completed and that the rig stands ready in Ankara, Turkey. AME have started the process of obtaining Israeli work permits for their crews; however due to the relevant government office in Israel having been closed for most of October, the workers’ permitting process was delayed. It is now anticipated that the rig will be shipped out of Turkey in January 2009.  

Zion has recently received positive notifications on almost all of the required Israeli permits (other than crew work permits) related to the Ma’anit-Rehoboth #2 well and is now working on the location site to prepare it for the arrival of the rig.  

As detailed in its registration statement, Zion is raising funds in order to pursue its planned multi-well drilling program. Depending on actual amounts raised, Zion intends to carry out the following work program: drill Zion’s second well, on Zion’s Joseph License, to the Triassic Formation (down to a depth of 15,400 feet) and / or to the Permian Formation (down to a depth of 18,040 feet), drill a test well on Zion’s Asher-Menashe License to the Triassic Formation and, if appropriate, the Permian Formation and prepare for the drilling of an additional well on either its Joseph or Asher-Menashe License. 

Zion’s common stock trades on the NYSE Alternext US under the symbol ZN. 

Before you invest, for more complete information about Zion Oil & Gas and its offering, you should read Zion’s registration statement (including a prospectus) together with the other documents Zion has filed with the SEC. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, Zion Oil & Gas or its underwriter, Brockington Securities, Inc, will arrange to send you the prospectus if you request it by calling toll free 1-888-TX1-ZION (1-888-891-9466). Direct links to the SEC location, or to the documents in PDF, may be found on the home page of Zion Oil & Gas, at www.zionoil.com. 

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. 

FORWARD LOOKING STATEMENTS: Statements in this press release that are not historical fact, including statements regarding Zion’s planned operations, potential results thereof and plans contingent thereon, including the importation of a drilling rig into Israel, the granting of various required permits, the selection of potential drilling targets and locations, 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. 

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 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). Direct links to the SEC location, or to the documents in PDF, may be found on the home page of Zion Oil & Gas. Inc., at www.zionoil.com. 

Contact:

Brittany Russell

Zion Oil & Gas, Inc.

6510 Abrams Rd., Suite 300

Dallas, TX 75231

(1) 214-221-4610

Email: dallas@zionoil.com

Zion Oil & Gas Newsletter October 2008

I received the Zion Oil & Gas Newsletter and the latest press release today. In the middle of a global economic crisis, investors continue to stand behind Zion’s mission of discovering oil in Israel.  Zion is moving ahead as scheduled with plans for drilling their second well in November. Pay attention to the lines I put in underline and bold type. Something greater than ‘business as usual’ is going on at Zion Oil.

Here’s the Zion Newsletter and press release from CEO Richard Rinberg:

Dear Zion Shareholder and/or Friend of Zion…

 It is difficult to put into words the experience of the last few weeks. We are all living through such a remarkable and dramatic (even traumatic) period in world history. The economy looks and feels ‘broken’ and the healing may prove painful for all of us.  However, our trust is only in the Lord and not the stock market!  (Jer. 17:7)

 In Dallas, we received a phone call from a shareholder who was reviewing their stock portfolio and just had to call us and tell us that all of their retirement stocks were pretty much devastated in value, except one… there was only one steadfast rock in their portfolio – the stock of Zion Oil & Gas had maintained its value.

 Shortly after that phone call, a lawyer friend sent me a humorous email, as follows:

 ’The Best Investment Plan:

 If you purchased $1,000 of shares in Delta Airlines one year ago, you have $49 today.

 If you purchased $1,000 of shares in AIG one year ago, you have $33 today.

 If you purchased $1,000 of shares in Lehman Brothers one year ago, you have $0 today.

 But, if you purchased $1,000 worth of beer one year ago, drank all the beer, then turned in the aluminum cans forthe recycling refund, you will have received $214.00.

Based on the above, the best current investment plan is to drink heavily & recycle.’

 I sent my friend the following reply:

 …and if you had purchased $1,000 of Zion Oil & Gas, Inc. on October 3rd 2007, you would have today $995. So, I disagree with the beer plan… better to go with the Lord’s plan…

During one of the severest stock market collapses in recent decades, our follow-on $10 unit offering was successfully able to reach the minimum subscription by the due date of October 11, 2008. Every day, I watched the tally of subscriptions received. One week before the due date, I commented that if we were able to reach the minimum subscription, it would be a clear miracle from heaven.

On the very last day, we received substantial and completely unexpected subscriptions… and exceeded our required minimum subscription amount.

 I was a witness to what happened. I saw the miracle unfold. It was a deeply moving experience.

 Although we have announced (see the October 16 Press Release below) a scheduled initial closing on October 21, 2008, our $10 unit offering is still accepting subscriptions. So, it is not too late for you to subscribe and support our work in Israel. We still need both your prayer and financial support.

(I Chron. 29:10-14)

The 2,000 horsepower drilling rig is scheduled to arrive in Israel in November 2008 and we hope that you will want to subscribe for some Zion $10 units, in order to be part of the exploration effort for oil and gas in Israel.

I cannot promise, but I for one will not be surprised if we all see a further miracle in the coming months…

Psalm 51:18 – In your good pleasure, make Zion prosper…

Shalom from Israel

Richard Rinberg

CEO of Zion Oil & Gas, Inc.

P.S. Full details of the offer are set out in the Prospectus which is available for download and review on our website www.zionoil.com under “Investor Center” If you would prefer a hard copy of the Prospectus, please call: 1-888-TX1-ZION (1-888-891-9466) or email: dallas@zionoil.com

 

 

 

 

 

Zion Oil Announces Initial Closing of Follow-on Offering and Extends Termination Date

Subscriptions Still Being Accepted

Press Release  Thursday October 16, 2008

 DALLAS, Texas & CAESAREA, Israel–(BUSINESS WIRE)–Zion Oil & Gas, Inc. (AMEX: ZN) announced today that it received subscriptions on or before October 11, 2008 in excess of the minimum number of units required to conduct an initial closing. An initial closing is scheduled to take place on October 21, 2008. As the minimum subscriptions in order to close were received by October 11, 2008, Zion has withdrawn the recently filed post effective amendment which was filed to extend the minimum raise date and the final termination date.

Pursuant to the original terms of the offering, Zion is also extending the offering termination date. The offering will remain open until the earlier of: (i) January 9, 2009, (ii) the date on which a total of 2,500,000 Units have been subscribed and accepted, or (iii) such date as announced by the Company on no less than two trading days’ prior notice.

As detailed in its registration statement, Zion is raising funds in order to pursue its planned multi-well drilling program. Depending on actual amounts raised, Zion intends to carry out the following work program: drill Zion’s second well, on Zion’s Joseph License, to the Triassic Formation (down to a depth of 15,400 feet) and / or to the Permian Formation (down to a depth of 18,040 feet), drill a test well on Zion’s Asher-Menashe License to the Triassic Formation and, if appropriate, the Permian Formation and prepare for the drilling of an additional well on either its Joseph or Asher-Menashe License.

Zion’s common stock trades on the American Stock Exchange under the symbol ZN.

Before you invest, Zion’s registration statement (including a prospectus) to which this communication relates should be read along with the other documents it 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 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). Direct links to the SEC location, or to the documents in PDF, may be found on the home page of Zion Oil & Gas, at www.zionoil.com.

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.

Zion Oil & Gas Public Offering Update

“With faith there are no questions.
Without faith, there are no answers.”
 
Dear Zion Shareholder and/or Friend of Zion
 
We are extending the initial 90 day period for our public offering of $10 units. The extension gives us an additional 60 days (until October 11th, 2008) to sell the minimum subscriptions required of 325,000 units at $10 each (= $3,250,000). If we don’t reach the minimum by October 11th, then we will have to close our offering and return to every subscriber the subscription amounts that we will then have in the escrow account.
 
We have almost everything we need to drill our next two wells in Israel, but we need money to pay for importing the drilling rig from Turkey and the daily drilling costs. Since we began planning our next well, the US dollar has fallen 25% in value against international currencies, while associated oil industry costs have risen by 50% to 100%.
 
For example, when we drilled our first well, the Ma’anit #1, the contractor’s daily rate was $14,000.  For our next planned well, the Ma’anit-Rehoboth #2, the daily rate will be $28,500 per day (and that is considered to be a very good price in a market that can charge up to $40,000 for a similar drilling rig).
 
The current economic downturn has hurt many and prevented us from reaching the minimum in the initial 90 days of our public offering, but we sincerely believe that the Joseph Project will be a financial blessing to those who have the vision and faith to support it. (Ruth 2:12)
 
If you do not have money to invest then I pray that G-d will send it to you. But if you do have the funds, perhaps this is the intended use for them. (Esther 4:14)
 
Please consider what number of $10 units you want to take. The minimum is 100 units but we hope you will want to take more. 500 units at $10 each is $5,000 and, if we are successful, this may be the best money you ever invested… and you will be blessed… (Genesis 12:1-3)
 
Please give this message your serious consideration; Zion depends on your support and without your prayers and financial support, we may not be able complete our work in Israel. (Numbers 10:32)
  
Shalom
 John Brown
(Hosea 12:10)
  
NOTICE:
This communication shall not constitute an offer to sell or the solicitation of an offer to buy Units of Zion’s securities, which may only be by prospectus, nor shall there be any sale of the Units in any state or country in which such offer, solicitation or sale would be unlawful prior to the registration, qualification or exemption under the securities laws of any such state or country.
 
FORWARD LOOKING STATEMENTS: Statements in this communication that are not historical fact, including statements regarding the closing of the offering, the timing and results thereof, Zion’s planned operations, potential results thereof and potential effects of those results on the market for Zion’s securities and returns on investments in those securities, are forward-looking statements as defined in the “Safe Harbor” provision 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 Prospectus and its 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.
 
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 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). Direct links to the SEC location, or to the documents in PDF, may be found on the home page of Zion Oil & Gas. Inc., at www.zionoil.com. 
 
 Quick Links…
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Our Website: www.zionoil.com
Contact Information
Zion Oil & Gas Inc
Phone: 1-888-891-9466
Fax: 214-221-6510
Email Address: dallas@zionoil.com
Website: www.zionoil.com