Zion Oil Raises $18.25 Million

December 16, 2010 by · 2 Comments 

Zion's Ma'anit-Joseph #3 at Dawn

DALLAS and CAESAREA, Israel, Dec. 16, 2010 (GLOBE NEWSWIRE) – Zion Oil & Gas, Inc. (Nasdaq:ZN) announced today that on December 15, 2010, it completed its previously announced rights offering. The preliminary outcome of the rights offering, as of the close of business on December 15, 2010, indicates that subscriptions for approximately 3.65 million units, for gross proceeds of approximately $18.25 million, have been received (including over-subscriptions). All shareholders that requested over-subscription shares will be awarded their full over-subscription request.

Zion’s Chief Executive Officer Richard Rinberg said today, “I am pleased to announce the successful conclusion of our rights offering. The proceeds from this offering provide us with the funds that we believe are necessary to allow us to proceed with our planned drilling subsidiary, provide us with financial and operating flexibility and enable us to further our exploration and drilling program significantly.

“We have successfully drilled approximately two-thirds of our Ma’anit-Joseph #3 well and are now drilling the final third.

“We remain excited about the possibility of recovering hydrocarbons on our license and permit areas, onshore Israel, especially due to the U.S. Geological Survey report, published in April 2010, containing their assessment that there may be 1.7 billion barrels of recoverable oil and 122 trillion cubic feet of recoverable gas in the Levant Basin, as all of Zion’s exploration rights fall within the area of the Levant Basin.”

Under the completed rights offering, holders of record of Zion’s common stock were given non-transferable subscription rights to purchase eighteen (18) Units for every one hundred (100) shares of common stock owned as of the close of business on September 28, 2010. The purchase price of a Unit was $5. Each Unit consisted of one (1) share of Zion’s common stock and one (1) warrant to purchase an additional share of Zion’s common stock at an exercise price of $4.00.

Zion is currently drilling its Ma’anit-Joseph #3 well in Northern Israel and has currently reached a drilling depth of approximately 13,123 feet (4,000 meters). The Ma’anit-Joseph #3 well has targets in both the Triassic geological zone and the Permian geological zone. The primary target is Permian age lithology, expected at a depth of approximately 19,357 feet (5,900 meters).

For updates on the drilling activity please visit Zion’s website www.zionoil.com

Zion’s common stock trades on the NASDAQ Global Market under the symbol “ZN” and Zion’s $7 warrants trade under the symbol “ZNWAW”. From December 28, 2010 through their expiration date of December 31, 2012, Zion’s $4 warrants will trade on the NASDAQ Global Market under the symbol “ZNWAZ.” Zion’s transfer agent is in the process of distributing the share and warrant certificates to those rights holders who participated in the rights offering, either directly or through their brokers.

Zion Oil & Gas, a Delaware corporation, explores for oil and gas in Israel in areas located on-shore between Haifa and Tel Aviv. It currently holds two petroleum exploration licenses, the Joseph and the Asher-Menashe Licenses, between Netanya, in the south, and Haifa, in the north, covering a total of approximately 162,000 acres and the Issachar-Zebulun Permit Area, adjacent to and to the east of Zion’s Asher-Menashe license area, covering approximately 165,000 acres. Zion’s total petroleum exploration rights area is approximately 327,000 acres.

Zion Oil & Gas Starts Drilling the Ma’anit-Joseph #3 Well

August 27, 2010 by · 3 Comments 

Dallas, Texas and Caesarea, Israel – August 26, 2010 – Zion Oil & Gas, Inc. (NASDAQ GM: ZN) announced today that drilling operations have begun on its Ma’anit-Joseph #3 well, in its Joseph License area, onshore Northern Israel. The drilling operations are expected to last approximately six months.

Utilizing the 2,000 horsepower drilling rig used to drill Zion’s previous wells, Zion has commenced drilling its Ma’anit-Joseph #3 well, initially towards its secondary target, Triassic age lithology, expected below approximately 10,827 feet (3,300 meters). Zion then plans to continue drilling to its primary target, Permian age lithology, down to a planned total depth below approximately 19,357 feet (5,900 meters).

The rig will operate on a 24-hour basis utilizing two drilling crews on 12-hour shifts. On a continual basis, samples will be collected by Zion’s wellsite geologists, analyzed for both hydrocarbon content and lithology and then stored.

Zion’s Chief Executive Officer, Richard Rinberg, said today, “We are excited to be drilling the Ma’anit-Joseph #3 well and continue to be optimistic about the possibility of recovering hydrocarbons on our license and permit areas, onshore Israel, especially due to the U.S. Geological Survey report, published in April 2010, containing their assessment that there may be 1.7 billion barrels of recoverable oil and 122 trillion cubic feet of recoverable gas in the Levant Basin, as all of Zion’s exploration rights fall within the area of the Levant Basin.”

Zion Oil & Gas Newsletter March 5

March 8, 2010 by · 2 Comments 

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Zion Oil & Gas Newsletter

March 5, 2010
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Dear Shareholder and/or Friend of Zion…

Last week, both Bill Ottaviani (Zion’s President and Chief Operating Officer) and I visited New York, in order to present Zion Oil & Gas at the ‘NASDAQ-Oppenheimer 14th Annual Israeli Equities Conference’.

We presented to investment professionals attending the ‘by invitation only’ event. Amongst others, conference attendees included representatives from Bank of America, Credit Suisse and Morgan Stanley.

We believe that the presentation, an audio webcast with slides, was successful and have posted a link to it on Zion’s homepage (www.zionoil.com) so that you can review and enjoy it.

Please note that, due to the ever increasing demands on management time, from now on, we will send you an update email once every two weeks, instead of every week. Of course, if there is anything urgent to report, we will issue a press release or a ‘breaking news’ email to you.

But, as always, our petroleum exploration work will continue at an unabated pace… every single working day.

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So, here is this week’s operations update:

The Ma’anit-Rehoboth #2 Wellsite

The Ma’anit-Rehoboth #2 Well

Since the previous report, I am pleased to note that we have restarted rig operations on this well, as you can see in the pictures above (photographed on Thursday, March 4, 2010).

Apart from the rig crew of Aladdin Middle East, the Metsada wireline truck is onsite as is the Weatherford team and their equipment.

Our plan is to test several geologic intervals for the presence of producible hydrocarbons. These various ‘intervals of interest’ were previously identified through the use of open-hole diagnostic tools when the well was drilled.

Now that we have the drilling rig back on the hole, we can “complete” the well.

In the past days, we completed some of the initial down-hole preparatory work that was needed before we can production test the first geologic interval. This preparatory work included milling out the plug used to isolate the open-hole section of the well and validating that the cement bond quality between the casing and rock formation is adequate for testing.

Without a good cement bond, that effectively isolates the zone we wish to test, we risk not being able to accurately evaluate the productivity of that particular zone. To assess if the cement bond is adequate, we used an electronic down-hole tool (aptly named a ‘Cement Bond Logging Tool’) that confirmed that we do have sufficient bond quality. This is good news as it means that we do not need to perform a remedial cementing operation and can proceed to the next phase of the testing operation for this first interval.

The next phase includes perforating the zone of interest and testing the well for hydrocarbon flow. To ‘perforate’, we use shaped explosive charges that are run into the well on a perforating ‘gun’ – a long hollow cylinder.  The charges are spaced out equally along this cylinder, across the zone of interest, and detonated from the surface. The energy from the exploding charges penetrates (or perforates) the casing and into the rock formation.

This action creates a passageway for any hydrocarbons in the rock to find their way to the wellbore.  The pressure drop from the higher pressure rock to the lower pressure wellbore allows any hydrocarbons present to flow from the rock to the well. We plan to use sophisticated equipment from Schlumberger Oilfield Services to measure pressures and flow rates, both inside and outside the well, all critical data needed to assess a well’s long term production capabilities.

Logistical planning and coordination continues to be a significant challenge in Israel, as we have to import much of the equipment needed for our well operations. For the most part, we have been securing our needed resources for this well work on a ‘just in time’ basis. Now that we do not have to perform a remedial cementing operation, we find ourselves in a situation where we may need to wait on some needed equipment to continue our work without interruption.

Our suppliers have been working very hard to ensure they meet our tight timing needs, but sometimes delays are inevitable.  Should we encounter such a delay, we don’t anticipate it to be very long and will be doing everything possible to stay on our planned schedule to complete the full testing program in April 2010.


Operations at the Elijah #3 Well

(No change from previous report.)

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.

The Issachar-Zebulun Permit Area

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.

A pre-site assessment field trip was conducted last month by Zion’s geological team and members of GII.  As you can see from the photo, doing field work can, at times, be a fairly messy business.  The purpose of the site visit was to assess the general area where seismic data is to be collected and identify potential natural barriers (e.g. waterways) or other impediments (man-made structures) that could impact the seismic acquisition process.

With the pre-site assessment completed, detailed planning can now commence for the actual field work. The timing for the field work has been pushed back by a number of weeks, as the seismic crew for GII are currently out of Israel and not scheduled to return until 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
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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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Zion Logs the Ma’anit Rehoboth #2

September 3, 2009 by · 3 Comments 

Zion Logging 1Last week, Zion Oil conducted logging operations (gathering data inside the wellbore) down to a depth of 17,040 feet. Results from the logging operations will help Zion geologists determine if and where potential hydrocarbons exist in the well and how to proceed with drilling or possible production.

Below is a synopsis of last week’s efforts by Zion CEO Richard Rinberg:

An important part of our geological work during drilling is to continually examine the rock cuttings from the well bore (brought up to the surface by the circulating drilling mud) and match that physical evidence against the ‘expected’ rock cuttings. In our database of scientific information, we maintain a computer model of the expected rock strata.

As more information is gathered, the computer model is amended and in the event of a material difference between the ‘actual’ and the ‘expected’, it may be highly desirable to obtain further information by ‘logging’.

You may remember (from our previous logging) that the definition of ‘logging’ is: ‘to test and evaluate the well, using electrical wireline well logs’.

Zion Logging 2The ‘sonde’ is lowered down the hole on a ‘wireline’ and various measurements are recorded.

The ‘sonde’ is a cylinder filled with instruments that can sense the electrical, radioactive and sonic properties of the rocks (and their fluids) and the diameter of the wellbore.

The ‘wireline’ is an armored cable with steel cables surrounding conductor cables in insulation. It is reeled out from a drum in the back of the logging truck.

The data from the sonde is transmitted up the cable to instruments in the logging truck and recorded.

Using state-of-the-art Baker Atlas logging equipment, we are able to obtain very high-quality data. This past week, we logged an interval of approximately 500 meters; from a depth of approximately 4,825 meters down to approximately 5,325 meters.

The logging will enable us to make decisions based on scientific evaluation rather than hunches and guesstimates.

Glenn and logsSo, this past week, we are still at a depth of approximately 17,470 feet (5,325 meters), close to our final target of approximately 18,040 feet (5,500 meters).

Zion Licenses Fit Israeli Gas Infrastructure

March 16, 2009 by · 3 Comments 

Yesterday a friend reminded me of Israel’s gas pipeline infrastructure. That’s important now that Israel has discovered natural gas. There must be some infrastructure in place to get gas from the well site to where it will be used for energy (mostly power plants).
The Tamar #1 discovery (5 trillion cubic feet) is 80 kilometers off the coast of Haifa. That means in order to bring that gas to market, a pipeline will have to be built from the offshore rig to Haifa and then to the existing Israeli pipeline infrastructure. Noble Energy, primary partner in the Tamar discovery estimates it will be three years before gas from the discovery actually reaches the market. Others in the industry estimate longer.

But then a light went on in my head. I remembered seeing a map of Zion Oil’s license areas and Israel’s existing and planned natural gas pipelines. Here’s the map:

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Israel’s existing natural gas pipeline runs north just off the Mediterranean coast. The reason for its current location is to supply fuel for power plants along the coast. Construction is underway for a trunk line to the Hagit and Alon Tavor power plants inland. Another trunk line is planned for this year, running from the coast to the area of Zion’s Ma’anit #l well site. Remember, Zion’s immanent Ma’anit Rehoboth #2 well will use the same wellbore as the Ma’anit #1 – it’s in the same location. Should Zion find gas instead of oil or gas and oil in the Ma’anit #2 well, they would have a built in pipeline infrastructure. In the event of a discovery, they could be supplying natural gas to Israel before the offshore discovery comes on line!

I asked a friend and very high placed source of mine from Israel today about the pipeline. He confirmed what I just laid out and went a step further. There’s a manufacturing plant a few hundred yards from the Ma’anit Rehoboth well site. This plant currently uses diesel fuel to fire its boilers. It has requested to be first in line to buy any gas produced at the Ma’anit Rehoboth site. So there you have it! The greatest natural gas discovery in Israel’s history and Zion, God willing, may beat them to the market. But remember this is all just speculation. Zion has to find the gas first. And, of course, they could find oil – which is what we’ve been looking for all along.

Zion Oil & Gas Signs Drilling Contract

October 10, 2008 by · 2 Comments 

Caesarea, Israel – September 15, 2008 – Zion Oil & Gas, Inc. (Amex: ZN) of Dallas, Texas and Caesarea, Israel announced today that it and Aladdin Middle East (“AME”) have signed a drilling contract. Last week, Zion’s Chief Executive Officer, Richard Rinberg, and the President and Chief Operating Officer of Zion, Glen Perry, visited AME’s offices in Ankara, Turkey, in order to inspect AME’s rig and equipment yard, meet with key AME personnel and finalize the terms of the drilling contract.

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.Zion CEO Richard Rinberg at AME Rig in Turkey

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.

Zion COO Glen Perry at AME Rig in TurkeyAME 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.

Zion CEO Richard Rinberg at AME in Turkey