Offshore Gas Field is a ‘Monster’

March 9, 2010 by · 1 Comment 

Noble Energy chairman and CEO Charles Davidson expressed optimism that there will be more gas fields discovered at a press conference in Tel Aviv today.

He said, “We conducted a 3D seismic survey, which will provide very sophisticated information enabling us to know whether there are more reservoirs. We believe that there are other reserves adjacent to the Tamar and Dalit reservoirs. We’re now analyzing the results of the seismic survey. I hope that we’ll continue to find natural gas in this country. I’m optimistic about more reservoirs, whether at Leviathan or elsewhere.”

Davidson added, “Israel was the land of milk and honey in Biblical times, but in the modern era, its milk and honey and natural gas. In Israel’s deep waters, in virgin territory, a monster natural gas discovery has been made.”

Noble Energy Inc. (NYSE: NBL) is a partner in the Tamar and Dalit offshore gas fields, together with Delek Group Ltd. (TASE: DLEKG) subsidiaries Delek Drilling LP (TASE: DEDR.L) and Avner Oil and Gas LP (TASE: AVNR.L), Isramco Ltd. (Nasdaq: ISRL; TASE: ISRA.L), and Dor Alon Energy in Israel (1988) Ltd. (TASE:DRAL) subsidiary Dor Alon Energy Exploration Ltd. It is also a partner with Delek Group in the Yam Tethys partnership, which owns a natural gas field offshore from Ashkelon, and in the Leviathan prospect, west of Tamar, with Delek Group Ratio Oil Exploration (1992) LP (TASE:RATI.L).

Noble Energy convened the press conference at the Tel Aviv Hilton not only to wax poetic about biblical Israel, but to outline its program to develop its natural gas reserves in Israel. Investors are eager for any scrap of information about the Leviathan lease, where 3D seismic survey is underway, whose results are due later this month. If gas is found, the prospect’s partners will begin drilling toward the end of the year, at an estimated cost of $100 million.

Davidson said, “The company expects to drill into another large structure during the second half of the year, and to drill in the two discoveries already made during 2011.”

The statement reiterates what Noble Energy said in the conference call following the publication of its financial report for 2009 last month, without explicitly mentioning “Leviathan”. “As for Tamar, the immediate challenge is to reach an agreement with the government on how to bring the gas to shore, since seafront real estate in Israel is very expensive. One possibility is to build a new terminal, another is to use Yam Tethys’ existing infrastructure,” Davidson said.

Davidson promised that the company would meet its timetable for the Tamar well. The well’s partners are due to publish their development plan for the reservoir in the second half of the year. The plan will reportedly cost more than $2.6 billion, with gas production beginning in early 2012.

“We’ve been here for over ten years already,” said Davidson. “Noble Energy won’t be here for years, but for decades. I can’t imagine a better place to be than here.”

Noble Energy will invest $140 million in gas exploration in Israel in 2010, almost 10% of its budget.

Shares of Israeli gas and oil exploration partnerships on the Tel Aviv Stock Exchange (TASE) have skyrocketed by hundreds and even thousands of percent in the past year, as investors seek the next Isramco. Davidson, however, sends a clear message to investors: Be careful. “Oil and gas exploration shares were hyped last year, and I urge caution,” he said. “There is no sure thing in the energy industry, and in the end, only a few companies will succeed. There’s an upside potential in the shares of Noble Energy. I’m a long-distance runner, and I don’t comment about the market’s response over the next week or two. We’re managing projects that will last us decades. In this business, you don’t plan for days, but for the long haul.”

Published by Globes [online], Israel business news – www.globes-online.com

Noble Energy plans $530m investment in Israel

February 26, 2010 by · Leave a Comment 

The company plans to resume exploration in the Eastern Mediterranean.

Amiram Barkat21 Feb 10 16:56

Oil and gas exploration company Noble Energy Inc. (NYSE: NBL) will invest $530 million in natural gas exploration in Israel and in development of its current reserves at Yam Tethys and Tamar, said company executives during a conference call on Friday.

During the conference call, which followed the publication of Noble Energy’s financial report for the fourth quarter of 2009, Noble Energy chairman and CEO Chuck Davidson said, “Late in the year, we anticipate resuming exploration in the Eastern Med, looking to build on our tremendous success that we’ve had already there in Israel.”

The reference is to economic zones of Israel and Cyprus, probably at the company’s Leviathan license, west of Tamar. Leviathan is jointly owned by Noble Energy, Delek Group Ltd. (TASE: DLEKG), and Ratio Oil Exploration (1992) LP (TASE:RATI.L). Drilling will probably begin after the recently completed 3D seismic study of the strata structure is analyzed.

Noble Energy said that its capital program in 2010 will total $2.5 billion, $1 billion for major projects, most of which will be directed to projects in the Gulf of Mexico, Equatorial Guinea in West Africa, and Tamar.

Noble Energy said that natural gas sales in Israel were 25% lower in 2009 than in 2008. Sales are from the Yam Tethys field offshore from Ashkelon, in which Noble Energy owns 47.1%, with Delek (4.44%) and its subsidiaries Avner Oil and Gas LP (TASE: AVNR.L) (23%) and Delek Drilling LP (TASE: DEDR.L) (25.5%) owning the rest.

Davidson said, “Internationally, we had tremendous exploration success in Israel, with our largest discovery ever at Tamar and subsequent Dalit find. We announced signed letters of content covering $10.5 billion in gross expected revenue, with less a third of resources committed. And we immediately moved forward with the development plans that should lead to the sanction of Tamar this year.”

The Tamar partners today announced that they have signed a third letter of intent for the sale of natural gas to Dimona Silica Industries Ltd. The 17-year contract is worth $500 million. Noble Energy owns 36% of the Tamar prospect, alongside Delek Drilling, Avner Oil, Isramco Ltd. (Nasdaq: ISRL; TASE: ISRA.L), and Dor Alon Energy in Israel (1988) Ltd. (TASE:DRAL) subsidiary Dor Alon Energy Exploration Ltd.

Noble Energy attributed the lower than expected natural gas sales in Israel to warmer than normal weather, increased imports of competing Egyptian gas (from East Mediterranean Gas Company (EMG), which began deliveries in early 2009), and because the company’s customer, Israel Electric Corporation (IEC) (TASE: ELEC.B22) had some downtime on one of their power plants.

Investment house Barclays Capital reiterated its “Overweight” rating on Noble Energy stock, and kept its target price for the share at $84. However, it cut its earnings per share estimate as production guidance figures ranged lower than Barclays analysts had expected. They nevertheless maintain that strong future production growth, beginning in 2012, will support the shares.

Noble Energy Declares Dividend, Stock Upgraded

October 28, 2009 by · Leave a Comment 

PRNewswire-FirstCall

HOUSTON, Oct. 27

Noble Energy, Inc.’s (NYSE: NBL) board of directors today declared a quarterly cash dividend of 18 cents per common share payable November 23, 2009 to the shareholders of record on November 9, 2009.

Noble Energy is a leading independent energy company engaged in worldwide oil and gas exploration and production. The Company operates primarily in the Rocky Mountains, Mid-Continent, and deepwater Gulf of Mexico areas in the United States, with significant international operations offshore Israel and West Africa. Noble Energy is listed on the New York Stock Exchange and is traded under the ticker symbol NBL. Visit Noble Energy online at www.nobleenergyinc.com.

Associated Press

10/26/09

Noble upgraded to “Outperform” on increased oil focus, future accelerated production growth

NEW YORK — Shares of oil and gas producer Noble Energy Inc. have been dragged down too far by the plunging value of its natural gas assets as natural gas prices have fallen, said an analyst on Monday as he upgraded the stock.

Noble Energy’s shares are positioned to rise as the company sheds natural gas properties and shifts its investments to crude oil, which has rebounded significantly in price over the course of the year, said RBC Capital Markets analyst Leo Mariani. The move will boost shares of the company, due to better economics, given the recent rebound in oil prices, which outshine lagging natural gas prices.

Mariani said in a research note released before the start of regular trading that Noble’s share price is too-severe a discount for a company that is shifting so much of its operations to oil. He upgraded his rating on Noble’s shares to “Outperform” from “Sector Perform” and raised his price target to $90 from $85.

Mariani expects that 41 percent of Noble’s 2009 production will be based on crude, but should increase to over 60 percent by 2013.

“Noble’s best economics are in deepwater Gulf of Mexico, West Africa and Israel regions, and we expect it to devote most of its capital to these crude-weighted regions.”

Drilling Complete on Ma’anit-Rehoboth #2

September 18, 2009 by · 17 Comments 

Zion Oil CEO Richard Rinberg announced to shareholders today in his weekly drilling update that drilling of the Ma’anit-Rehoboth #2 well has been completed at 17,913 feet; 131 feet short of its intended target depth. From company reports, it still isn’t clear whether or not the bottom of the Ma’anit-Rehoboth #2 is in an upper Permian or lower Triassic stratum.

Rinberg stated that, “There were a number of factors that influenced our decision not to drill deeper.” But the only factor he gave stockholders was the increased risk of loosing the well from a cave-in due to a long section of ‘open hole’ (uncased) at the bottom of the well. Given the fact that the distance between the drill bit and the motor was nearly 3.4 miles, losing the well due to a cave-in or other catastrophic failure is a very real concern. Whatever the other factors influencing the decision to stop drilling were, they weren’t stated by Rinberg – so we’ll have to leave any other reasons to speculation.

Speculation, however, is something Zion’s managers can’t do – at least not publicly. Because the company is publicly held and in the process of another stock offering, SEC regulations prohibit Zion’s management from any form of public ‘speculation’ that could be construed as an attempt to paint a picture of the company’s future prospects in way that might not be a 100% factual projection at the moment. The SEC calls these “Forward Looking Statements”. That means Zion’s management is pretty much limited to telling us what they ‘know’ they’ve got in the Ma’anit-Rehoboth #2 well and not what they ‘think’ they’ve got. Which, at this point, doesn’t make for much news.

So if you’re going to draw conclusions, you can draw some of them from what’s not said :

  1. The Ma’anit Rehoboth #2 isn’t a gusher (“Gusher” is an old term for a self pressurized free-flowing oil well). If oil was flowing out of the top of the well, it would be a fact, not a “Forward Looking Statement.” Zion shareholders (and the rest of the world) would know about it.
  2. There’s no definite agreement as to whether or not the bottom of the Ma’anit-Rehoboth #2 is in the Permian.
  3. The Ma’anit Rehoboth #2 hasn’t suffered any sort of catastrophic failure. As sparing as Zion’s management has been with potential good news, to their credit, they’ve always been forthcoming in reporting any bad news. If any sort of trend can be discerned, as far as Zion is concerned, no news is more likely good news than bad … or simply, no news.
  4. If you follow the general energy exploration news coming out of Israel as closely as I do (that’s pretty close), then you may have discerned by now that Israel is in the beginnings of an energy ‘gold -rush’. The HUGE natural gas discovery off the Haifa coast has insured Israel’s energy (gas and electric) needs in the foreseeable future. Givot Olam has reported, and the state of Israel has accepted, that they have nearly a billion barrels of oil under the ground just south of Zion’s license area; they just haven’t been able to get it to the surface yet (by the way – they’re drilling as I write).  Oil discoveries in the Dead Sea region (not huge, but there) are being reported and same companies involved in the off shore discovery are now buying into the Dead Sea exploration. Translation: Oil and gas discoveries in Israel aren’t a future possibility, they’re a present reality.

Now let’s draw some conclusions from what has been said:

  1. The Ma’anit-Rehoboth #2 well is at 17,913 feet (2071 feet deeper than the Ma’anit #1).
  2. Their are “seven zones that warrant completion testing” (I can’t locate documentation, but I believe there were three to five “zones that warranted testing” in the Ma’anit #1).
  3. What’s been concluded is the “drilling phase”. The determination as to whether or not the well will produce commercial hydrocarbons comes in the “completion phase.”
  4. The rig will soon be moved to the next drilling site, at the ‘foot of Asher.’ Zion Oil & Gas is a professional oil exploration company with multiple leases and multiple drilling prospects in the nation of Israel. Zion Oil is not a ‘one hole wildcatter.’ There is absolutely no reason to give up on the Ma’anit-Rehoboth #2 at this point, the well hasn’t even been tested yet. But regardless of how much or how little oil and/or gas the Ma’anit-Rehoboth #2 produces, Zion will continue drilling for oil and gas in northern Israel.

Now let’s look at the big picture:

  1. Zion Oil owns most of the exploration license area in northern Israel – 327,000 acres.
  2. The Ma’anit-Rehoboth #2 is among the deepest wells ever drilled, in one of the most promising locations, drilled with the best equipment, manned by the most adept crew, tested with the most sophisticated equipment that onshore Israel has ever seen. That’s not hyperbole, it’s fact.
  3. Geology and recent experience have proven – natural gas and oil lie beneath the land (and offshore) of Israel.
  4. If you want big picture, here’s the biggest – Zion Oil, Noble Energy, Delek, Givot Olam and the rest didn’t promise Israel’s children “The blessings of the deep that lies beneath.” Israel’s God did (Genesis 49:25). From where I sit, it looks like He’s keeping His promise. We’ll find out more about the Ma’anit-Rehoboth specifically as Zion begins their “completion phase”.
  5. Just as a reminder, I’ve dug up a photo taken at the Ma’anit #1 in 2005. That’s a hydrocarbon flare from the well – it’s down there.

Ma'anit Flare

Keep the faith.

Tamar partners to raise large sums for development

September 3, 2009 by · 2 Comments 

Noble Energy will buy $230 million worth of equipment and services.
Ron Steinblatt1 Sep 09 18:02

Dalit RigThe partners in the Tamar and Dalit offshore natural gas fields are preparing to raise capital to develop Israel’s largest natural gas field. Delek Group Ltd. (TASE: DLEKG) subsidiary Delek Energy Systems Ltd. (TASE: DEOL) has published a shelf prospectus to raise hundreds of millions of shekels in the coming weeks and is currently working on the structure of the offering.

Delek Energy controls Delek Drilling LP (TASE: DEDR.L) and Avner Oil and Gas LP (TASE: AVNR.L), which each own 15.625% of the Tamar and Dalit prospects. Last week, both companies, authorized Noble Energy Inc. (NYSE: NBL), which owns 36% of the prospect, to buy $230 million worth of equipment and services by 2011 to develop the gas fields. Isramco Ltd. (Nasdaq: ISRL; TASE: ISRA.L), which owns 28.75% of the prospect approved purchases of up to $160 million.

The partners in the Tamar and Dalit offshore natural gas fields are preparing to raise capital to develop Israel’s largest natural gas field. Delek Group Ltd. (TASE: DLEKG) subsidiary Delek Energy Systems Ltd. (TASE: DEOL) has published a shelf prospectus to raise hundreds of millions of shekels in the coming weeks and is currently working on the structure of the offering.

Delek Energy controls Delek Drilling LP (TASE: DEDR.L) and Avner Oil and Gas LP (TASE: AVNR.L), which each own 15.625% of the Tamar and Dalit prospects. Last week, both companies, authorized Noble Energy Inc. (NYSE: NBL), which owns 36% of the prospect, to buy $230 million worth of equipment and services by 2011 to develop the gas fields. Isramco Ltd. (Nasdaq: ISRL; TASE: ISRA.L), which owns 28.75% of the prospect approved purchases of up to $160 million.

Dor Alon Energy in Israel (1988) Ltd. (TASE:DRAL) unit Dor Gas Exploration LP, which owns 4% of Tamar and Dalit, is also getting ready to raise capital. Dor Alon plans to split its holding in the prospects from its gas stations and convenience stores business, and create a partnership that will hold the Tamar stake. Dor Alon is working with the Israel Tax Authority on this new structure, which will make it possible for the new partnership to raise capital directly to develop the gas fields.

Dor Alon is meeting with institutional investors to hold a bond issue of up to NIS 250 million for this purpose.

Published by Globes [online], Israel business news – www.globes-online.com – on September 1, 2009

Zion Drilling into the Permian

July 21, 2009 by · 1 Comment 

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Glen Perry, Stephen Pierce and Eliezer Kashai reviewing Triassic results

Zion Oil & Gas reports in their weekly update that they have finished Triassic logging operations and have resumed drilling at the Ma’anit-Rehoboth #2 to a finished depth of 18,000 feet; well into the Permian.

A couple of questions keep coming up:

1. Why did they stop at the Triassic and what do they expect to find there?

2. Why is the Permian so important?

I’ll try to answer those questions from an amateur’s perspective.

Q: Why did they stop at the Triassic and what do they expect to find there?

A: Because of their experience and data from the Ma’anit #1 well, drilled in 2005, they have a pretty good idea of what they’ll find in the Triassic this time. The Ma’anit #1 yielded hydrocarbon shows from 12,000 to 15,500 feet (the bottom of the hole).  At 15,128 feet they encountered heavy salt water with oil on top.  At 14, 245 – 14, 593 feet they encountered hydrocarbons again (and water again).  Finally, at just under 14,000 feet Zion encountered natural gas and were able to maintain a six to ten foot gas flair at the well head. When they shut the well down for evaluation, water infiltrated the hole again and they elected to give up on developing the Ma’anit #1. Translation – Zion knows they’ve got gas, or gas and oil between 12,000 and 15,500 feet because they’ve seen it. With better equipment and fore-knowledge of what to expect, they had a lot of confidence in what they would find in the Triassic strata this time. Wire logging in the Triassic is finished, they’ve seen the initial data, but news of what the Triassic holds won’t go public until the data is confirmed.

Q: Why is the Permian so important?

A: Zion Oil’s research in 2007 confirmed that northern Israel sits on top of a formation called the ‘Permian Arqov’ and that this formation is of the “same age and depositional environment” as the ‘Permian Khuff’ formation in the Persian Gulf that holds 25% of the world’s known natural gas reserves. Noble Energy’s massive natural gas discovery off the Haifa coast certainly supports the idea that there’s a lot of natural gas in Israel. If Zion taps into an enormous field of natural gas, along with Noble’s off-shore discovery, Israel may become one of the world’s significant energy exporters. The Permian also holds most of the world’s oil reserves. If Zion discovers a lot of oil, it will most likely be found in the Permian.

Zion’s CEO Richard Rinberg isn’t saying much of anything about initial test results from the Triassic or of what Zion hopes to find in the Permian, and rightly so; he’s the guardian of a public company. Anything he says, positive or negative, has an effect on the company’s value and the shareholders’ investment and trust. He’ll make darned sure that what he announces, when he announces it is fact; in his position there’s no room for conjecture.

I’m not an employee of Zion Oil and this newsletter and the oilinisrael.net website is completely independent of Zion Oil or any other exploration company in Israel, but outside of Zion’s managers and few Israeli oil professionals and government officials, it’s fair to say that I know more about the history of Israel’s search for oil, biblical or otherwise, than any other ‘outside’ observer. So until we hear official news of what the Ma’anit-Rehoboth #2 holds for Zion Oil, I’ll keep telling you what I know.

Changing Israel’s Energy Future

June 8, 2009 by · Leave a Comment 

Noble Energy’s natural gas discovery off of Israel’s northern coast has changed Israel’s energy future. Noble’s Tamar field now has estimated gas reserves of 5 trillion cubic feet and an estimated daily production rate of  30 – 150 million cubic feet per day. This field alone is enough to power Israel’s energy needs for the next 20 years.
Because of the infrastructure required to transport the offshore gas to market, production won’t be online until 2012. But that time frame coincides with Israel converting the country’s oil and coal fired electrical generating plants to natural gas. Even then, Israel should have enough natural gas to become an energy exporting nation.
Energy trouble is already brewing with Israel’s neighbors. Israel has also taken a tremendous amount of world criticism by not buying natural gas from fields off the Gaza coast and blocking the sale of Gaza gas to Egypt because they know that at least some of the money from Gaza gas sales will go into funding further Hamas arms purchases. By buying Gaza gas, Israel would, in effect, be funding Hamas terrorism.
Now, Reuters reports Lebanese official, Mohammed Kabbani stating, “‘Noble Energy’s find proves that the (Lebanese) shore is rich in gas and that there is a possibility that we have a common basin, between Lebanon and the Occupied Palestinian territories ….’ [H]e feared that Israel ‘can extract mounts of gas from the depths of Lebanon’s territorial waters if there is a common gas basin. If that basin extends to Lebanese waters, then we want to warn this company from infringing on our rights,’ Kabbani said, adding the parliamentary committee had requested the government take action.” (full article)
Notice Kabbani’s use of “Occupied Palestinian territories” rather than ‘nation of Israel’. If Israel’s neighbors won’t even recognize her right to exist, what makes us think they will recognize Israel’s right to her own gas and oil discoveries? When Israel discovers oil on-shore, I guarantee you, the anti-Israel world will claim the discovery is an encroachment on ‘Palestinian’ resources and demand that Israel cease production (which, of course, she won’t do) until a world court can ‘sort out’ who is really entitled to the oil. Israel is accustomed to the neighbors claims that she is squatting on her own land and she is growing accustomed to world opinion continually biased against her. But the oil and gas within her geographical boundaries and territorial waters are a part of the inheritance G_d gave her father Jacob, and that inheritance does have an expiration date. Complaints and false claims against Israel have been a part of her reality since May 14, 1948; they’ll increase exponentially on the day she becomes energy rich, that’s a given. Israel must and will stand firm in the midst of blessing as she always has in the midst of struggle. We must stand with her.
Zion Oil drilling at the Ma’anit Rehobeth #2 reaches beyond 12,000 feet. Zion reports that, as of quitting time Thursday, their drill bit was at 12,630 feet – 1310 feet deeper than the last report. In the 2005 Ma’anit #1 well Zion began seeing hydrocarbon shows at 12,000 feet. Zion’s full report is below.
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Zion's Aaron Kahn

Dear Shareholder and/or Friend of Zion…

Drilling Operations on the Ma’anit-Rehoboth #2 Well

In previous emails, I have highlighted the 2,000 horsepower drilling rig and rig crews, from Turkey, the 5-person directional drilling team from Italy and our drilling supervisor from Texas. Continuing with the theme of the equipment and people involved in drilling our well, this week I would like to bring into the limelight Zion’s mud logging unit and also one of Zion’s geologists, Aaron Kahn.

Aaron is from Columbus, Ohio and qualified as a Geologist at the School of Earth Sciences, Ohio State University. He is a member of the American Institute of Professional Geologists, the American Geophysical Union and the Israel Geological Society. Aaron lives in Israel and is currently in charge of our mud logging unit. He studied Well Log Analysis at the Colorado School of Mines and Mud Logging in Houston, Texas. The photograph above, taken last week, shows Aaron in the mud logging unit, next to the drilling rig, at the Ma’anit-Rehoboth #2 drilling site.

During the drilling of a well, a drilling fluid, called ‘drilling mud’, is used. The drilling mud consists of water and bentonite (a type of clay that will stay suspended in water) together with some (non-toxic) chemicals.

The drilling mud is stored in mud tanks on the ground beside the rig and using mud pumps, the mud is pumped through the drill string where it sprays out of nozzles in the drill bit, cleaning and cooling the drill bit in the process. The mud then carries the rock “cuttings” up to the surface where the cuttings are then filtered out and the mud returns to the mud pits.

The drilling mud not only cools and lubricates the drill bit and removes rock cuttings from the well, but also controls the formation pressures and powers the downhole motor.

The mud logging unit is a mobile laboratory at the well site and contains the scientific equipment required to examine drill cuttings under a microscope and produce a ‘mud log’, (a compilation of the drilling parameters and description of the well cuttings including any traces of gas and oil, as the well is being drilled).

After the drilling phase, the mud log can be used, along with the other scientific data, to help with appraisal and evaluation of the well.

Drilling Progress Report

Here is (weekly) Progress Report #4, for the week ended Thursday, June 4, 2009. The Report is from Zion’s President and Chief Operating Officer, Glen Perry.

“As I mentioned last week, the remaining drilling operations on the Ma’anit-Rehoboth #2 well can be divided into five steps:

(1)    Drilling directionally into the Triassic formation, a depth of  approximately 15,400 feet (4,750 meters).

(2)    Appraisal and evaluation of the Triassic formation using electrical wireline well logs.

(3)    Setting and cementing casing at that depth.

(4)    Drilling deeper to the Permian formation, a depth of approximately 18,000 feet (5,500 meters).

(5)    Appraisal and evaluation of the Permian formation using electrical wireline well logs.

This past week we have continued drilling towards our Triassic formation target. We have now reached a depth of approximately 12,630 feet (3,850 meters).

The drilling is going very well indeed. To date, our maximum drilling rate has been approximately 35 feet (10.7 meters) per hour and we have been averaging approximately 15 feet (4.6 meters) per hour.

Rights Offering

Our ability to reach the deep Permian formation is dependent on us raising further funds, so we are holding a Rights Offering. Anyone who was a stockholder on the record date of May 4, 2009, has the right to purchase some more Zion stock at $5.00 per share of stock.

If you are a stockholder, I hope you will exercise your rights to purchase Zion stock at $5.00 and even consider an over-subscription.

Please be aware that the rights offering is set to expire on June 10, 2009. Although we may, at our discretion, extend that expiration date, if you do want to exercise your rights before they expire, don’t wait until it is too late.

Proxy

Finally, if you have received a Proxy voting form, it would help us if you would vote. You can vote by internet, by telephone or by mailing the completed form, so please take two minutes and make your vote count.

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

Thank you for your continued 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, drilling efforts 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.

Zion Oil & Gas, Inc. has filed a registration statement (including a prospectus) with the SEC for the rights 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).

The securities are offered by prospectus only, and only within those States and other jurisdictions in which the securities may be sold, and this announcement is neither an offer to sell nor a solicitation of any offer to buy in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities of any such state or jurisdiction.

More information about the offering is available at www.zionoil.com. A copy of the prospectus can be obtained on request, by calling toll free 1-888-TX1-ZION (1-888-891-9466) or by contacting Kim Kaylor at Zion Oil & Gas, Inc., 6510 Abrams Rd., Suite 300, Dallas, TX 75231; telephone 1-214-221-4610; email: dallas@zionoil.com

Gas Discovery Already the Bright Spot in Israel’s Economy

February 18, 2009 by · Leave a Comment 

One bright spot in Israel’s financial markets. Today Israel’s Haaretz news organization posted a fairly bleak story on Israel’s financial markets. (http://www.haaretz.com/hasen/spages/1065141.html) Nothing new in that; stories of down markets are the daily fare in the midst of our worldwide economic meltdown. There was, however a bright spot (brilliant bright!) “Isramco, a main partner in the Tamar-1 exploration that found the huge field of gas off the Haifa shore, exploded upwards again, closing 24% higher on huge turnover of NIS 90 million.” Stock value in Delek Group, also a partner in the Tamar-1 gas discovery, has more than doubled in the last two months. Could Israel’s massive gas discovery (and possibly and oil discovery in the near future) play a major role in saving Israel’s economy? It looks like it already is. Just so you know, here are the partners in the Tamar -1:

Who all is involved in Israel’s offshore gas discovery? Just so you know, here are the partners in the Tamar -1:

1. Noble Energy: 36 percent (Houston, TX, ticker symbol: NBL – NYSE, http://www.nobleenergyinc.com)

2. Isramco Negev: 28.75 percent (Petach Tikvah, Israel, ticker symbol: ISRA.L – TLV)

3. Avner Oil Exploration: 15.625 percent (Petach Tikvah, Israel, ticker symbol: AVNR.L – TLV)

4. Delek Drilling: 15.625 percent (Netanya, Israel, ticker symbol: DEDR.L –TLV, http://www.delek.co.il )

5. Dor Gas Exploration: 4 percent (Yakum, Israel)

Haifa Gas Discovery Bumped to 5 Trillion Cubic Feet

February 10, 2009 by · 4 Comments 

News of last month’s natural gas discovery off the coast of Haifa just keeps getting better. Noble Energy announced today, that after flow testing of the Tamar well, they’ve increased potential natural gas production in the Tamar from 3.1 trillion cubic feet, originally estimated, to 5 trillion cubic feet. That’s a production rate of 30 – 150 million cubic feet per day!
Noble has already decided to keep the Atwood Hunter offshore drilling rig for two additional wells.
 
Noble Energy’s latest announcement is below:
 
HOUSTON, Feb. 10 /PRNewswire-FirstCall/ — Noble Energy, Inc. (NYSE: NBL) announced today flow test results from the Tamar natural gas discovery in the Matan license, offshore Israel. As previously reported, the Tamar #1 well, located in approximately 5,500 feet of water and drilled to a total depth of 16,076 feet, encountered more than 460 feet of net pay in three high-quality reservoirs. Testing procedures, which were performed over a limited 59-foot section of the lowest reservoir, yielded a flow rate of 30 million cubic feet per day (Mmcf/d) of natural gas. The flow rate was limited by testing equipment available on the rig. Performance modeling indicates the well can be ultimately completed to achieve a production rate of over 150 Mmcf/d.

The pre-drill gross mean resource potential for Tamar was originally estimated at 3.1 trillion cubic feet (Tcf) of natural gas. Immediately following discovery, we estimated the gross resource potential to be at least equal to the pre-drill mean estimate. After analysis of all the post-drill and production test data, the estimated gross mean resource potential of Tamar has now been increased to 5 Tcf.

The Company and its partners have elected to keep the Atwood Hunter, a semi-submersible drilling rig, offshore Israel for two additional wells. Subsequent to operations at the Tamar #1 well, the drilling rig will proceed to the Dalit exploration prospect in the Michal license. Dalit has a pre-drill gross mean resource of about 700 billion cubic feet of natural gas with an approximate 40 percent chance of success. Located in 4,500 feet of water and 28 miles offshore, the well has a proposed total depth of about 12,500 feet. Immediately after concluding operations at Dalit, the rig will be relocated to Tamar where it will drill an appraisal well to further define the resources of the structure.

Charles D. Davidson, Noble Energy’s Chairman, President and CEO, said, “The test results from the Tamar well confirm our initial analysis that the discovered reservoirs are very high quality. This discovery is clearly of a size for commercial development. We hope to extend the success in Israel by testing Dalit, our second prospect which is already covered by 3D. Discussions with our various partners are currently ongoing with plans to potentially conduct new seismic over our additional leads on other licenses in the area. Each incremental piece of information gathered is critically important as we continue to learn more about the potential of the Tamar discovery and this highly under-explored region. The implications of this discovery to Israel, Noble Energy, and our partners cannot be overstated, and we all have committed significant resources to better understand its scale and scope.”

Noble Energy operates both the Matan and Michal licenses with a 36 percent working interest. Other interest owners are Isramco Negev 2 with 28.75 percent, Delek Drilling with 15.625 percent, Avner Oil Exploration with 15.625 percent and Dor Gas Exploration with the remaining four percent.

Noble Energy is a leading independent energy company engaged in worldwide oil and gas exploration and production. The Company operates primarily in the Rocky Mountains, Mid-Continent, and deepwater Gulf of Mexico areas in the United States, with key international operations offshore Israel, UK and West Africa. Noble Energy is listed on the New York Stock Exchange and is traded under the ticker symbol NBL. Visit Noble Energy online at www.nobleenergyinc.com.

Expect Stock Surge in US Oil and Gas Companies Exploring in Israel

January 18, 2009 by · 10 Comments 

Noble Israel Based Offshore Drilling Rig

Noble Israel Based Offshore Drilling Rig

Israeli energy stocks surged today (see http://www.oilinisrael.net/oil-in-israel-articles/israel-energy-stocks-surge-on-large-gas-find)based on Noble Energy’s announcement of a discovery off the Haifa Coast of over three trillion cubic feet of natural gas.

Noble Energy (NBL, NYSE) who announced the discovery and Zion Oil (ZN, AMEX), both public companies trading on American Markets, and both involved in Israeli energy exploration, should experience similar stock surges on Monday when US markets open.

Zion Oil's License Area Near Natural Gas Discovery

Zion Oil's License Area Near Natural Gas Discovery

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