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Zion Oil
& Gas Newsletter
January
21, 2011
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Dear
Shareholder and/or Friend of Zion
So far,
the first three weeks of 2011 have been very busy indeed.
On
January 18, 2011, we issued a press release announcing the return of Mr. Robert
Render to our Board of directors. To read the full press release, please click
here.
As John
Brown, Zion's Chairman of the Board and Founder, said:
"We are very pleased to have Bob
Render rejoin our Board of Directors. He brings tremendous business experience
to our Board and can help us to reach important decisions, as we continue our
pursuit to recover hydrocarbons in Israel."
Next
week, John Brown and Victor Carrillo are scheduled to visit Israel for internal
strategic planning meetings with Richard Rinberg (CEO), Bill Ottaviani
(President and COO) and others. We are also scheduled to meet with Israel's Oil
& Gas Commissioner, Dr. Ya'acov Mimran.
Victor
Carrillo
Until
very recently, Victor Carrillo served as Chairman of the Railroad Commission of
Texas, which since the early 1900s, when the State of Texas became an energy
giant, has been responsible for regulating the Oil & Gas industry in Texas
(and not the railroad industry). Recently, the Texas Sunset Advisory Commission
has recommended to the Texas Legislature that the agency's name be changed to
the (much more appropriate) 'Texas Oil & Gas Commission'.
Victor
Carrillo joined Zion's Board of Directors in September 2010. He is a petroleum
geologist and geophysicist, attorney and former county judge. He has over 20
years of experience in the oil and gas industry, specifically in exploration and
production.
This past
week, Israel's prime minister, Benjamin Netanyahu, made a number of comments
relating to Israel's oil & gas industry. He said:
"Until
recently we criticized Moses, one of mankind's great historical leaders because
he did not know how to navigate. Firstly, because it took him 40 years to lead
the Children of Israel several kilometers, and secondly because he came to a
place without water, gas and oil."
He
added, "Now it is clear that he did not make a mistake. We have succeeded in
creating, without natural resources, one of the world's leading economies. We
lead the developed countries with our growth rate, and we have found gas, a lot
of gas although not as much as the public has been talking about. This gas can
now help us nurture excellence."
The prime
minister is setting up a fund for the gas revenues dedicated to "education, education and
education, and one
other thing - defense."
Netanyahu
added, "Israel's enemies will
try to damage the gas and oil projects and therefore we will secure them - and
provide full defense for them."
Zion's
CEO at the Tel Aviv Stock Exchange
On
Wednesday, January 19, 2011, I visited the Tel Aviv Stock Exchange (TASE) - the
only stock exchange in Israel. Zion is currently only traded on NASDAQ in the
USA, but as our licenses, permit and operations are located in Israel, we may
consider a dual listing (on both NASDAQ and TASE) at some future time. Of the
616 companies listed on TASE, there are 54 companies that are dual listed on
both TASE and other stock exchanges.
Turning
to financial matters, on January 3, 2011, we issued a press release concerning
our ZNWAW warrants. To
read the full press release, please click
here.
If you
hold ZNWAW warrants, you
should carefully review both the press release and my comments
below.
Finally,
here is this week's operational update:
Drilling Operations at the
Ma'anit-Joseph #3 Wellsite
On August
26, 2010, drilling operations began on the Ma'anit-Joseph #3 well, in our Joseph
License area, onshore Northern Israel.
After
drilling the 8-1/2” hole portion of the well, a 7” casing liner was run, set,
and cemented in place at 4,001 meters (13,127 feet). The additional
~500 meters (1,640 feet) of hole already drilled but left uncased will be
available for possible production testing when we begin that stage of the well
operations when all drilling is completed.
Following
the 7” casing operation, the well was prepared to drill the next and last
planned section of hole. This section of hole will be drilled with a
6-1/8” bit to the planned target depth of approximately 5,900 meters (19,360
feet). As part of the preparation to drill this final section of
hole, the Blowout Prevention Equipment was upgraded from a rating of 5,000 psi
to 10,000 psi.
After
drilling the 6-1/8” hole to a depth of 4,594 meters (15,073 feet) it was time to
replace the drill bit following its normal run life. Prior to
continuing with drilling, a logging tool was run, in order to test the cement
bond integrity of the recently installed 7” casing. Unfortunately,
due to an equipment malfunction by the logging company, the logging tool could
not be easily retrieved and had to be “fished” out of the well. On
the third attempt at fishing, the complete logging tool was recovered in one
piece thereby allowing us to resume normal operations.
As of
today (Friday, January 21), we are preparing to resume normal well operations
following recovery of the logging tool. The plan remains to drill a
6-1/8” hole to the Permian formation and then, hopefully, conduct production
testing operations.
Opportunity regarding Zion
Warrants with the trading symbol: ZNWAW
In
January 2009, Zion completed a follow-on offering and issued approximately
666,000 warrants with a $7.00 exercise price.
Since
then, approximately 65,000 warrants have been exercised, so currently, there are
approximately 601,000 ZNWAW warrants in existence.
In order
to be fair to all of Zion's investors, raise significant additional working
capital for Zion's exploration and development activity in Israel and simplify
our capital structure, we have temporarily reduced the exercise price of the
warrants trading under the symbol ZNWAW to $4.00 (from the $7.00
exercise price provided by the original terms of the Warrants).
The
reduced exercise price applies to all of Zion's currently outstanding Warrants
that trade under the symbol ZNWAW.
The $4.00
exercise price on ZNWAW
warrants will be available until 5:00 p.m. Eastern Time on March 7, 2011, but
please note that after March 7, 2011 and through January 31, 2012, the scheduled
expiration date of the ZNWAW
warrants, the ZNWAW
warrants will be exercisable at the original exercise price of $7.00 per
warrant, after which date they will expire with no value.
You can
find details regarding the offer on Zion's website. Please click
here.
If you
hold the ZNWAW warrants,
please consider this opportunity.
"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, anticipated
attributes of geological strata being drilled, the presence or recoverability of
hydrocarbons, the sufficiency of cash reserves, ability to raise additional
capital, timing and potential results thereof and plans contingent thereon are
forward-looking statements as defined in the "Safe Harbor" provisions of the
Private Securities Litigation Reform Act of 1995. These forward looking
statements are based on assumptions that are subject to significant known and
unknown risks, uncertainties and other unpredictable factors, many of which are
described in Zion's periodic reports filed with the SEC and are beyond Zion's
control. These risks could cause Zion's actual performance to differ materially
from the results predicted by these forward-looking statements. Zion can give no
assurance that the expectations reflected in these statements will prove to be
correct and assumes no responsibility to update these statements.
Contact
Information
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
More
information about Zion is available at www.zionoil.com or by contacting Mike
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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