Filed
pursuant to Rule 433
Registration
Statement No. 333-160871
Zion Oil
& Gas Newsletter
August
21, 2009
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Dear
Shareholder and/or Friend of Zion...
At the
onset of the Second World War, the Allies needed a direct rail link between
Europe and the Middle East. The British Mandate Authority laid down the track
for a rail line between Beirut and Tripoli (both in Lebanon) and Haifa. The
guide leaflet says that 'they made a huge effort and, in only one year, 200
meters of tunnel was bored into the rocks of Rosh Hanikra'.
The
photograph above (left) shows the 'empty' train tunnel, as today Rosh Hanikra is
on Israel's northern border with Lebanon. The photograph above (right) shows
Israel's side of the border, above ground. On the wall by the blue border gate
are arrows showing: Jerusalem 205 kilometers - Beirut 120
kilometers.
It is
interesting that it took the British Mandate Authority one full year to tunnel
200 meters. We started our drilling operations on the Ma'anit-Rehoboth #2 well,
early in May and less than four months later, we are operating at depths of over
5,000 meters. In fairness, the tunnel above had to give access to a train,
whereas our bore hole is less than one-third of a meter (one foot) in
diameter.
The
Ma'anit-Rehoboth #2 Well
Drilling Operations on the
Ma'anit-Rehoboth #2 Well
Last
week, I mentioned that one of the drill bits was literally 'torn to bits' and
that when we pulled the drill bit out of the hole, it was missing all three of
its cones.
So, we
had to 'fish' for the missing parts with a junk basket with tungsten carbide
teeth, designed to rotate over the junk and rock.
The
initial fishing procedure was only partially successful - we recovered one of
the cones, but not the other two. We then initiated further fishing procedures
and recovered a small amount of metal and some pieces of shale.
Whenever
a fishing procedure is required, oilfield industry 'best practice' is to make no
more than three attempts at a recovery.
So, after
making three attempts to recover the cones and teeth and having achieved only
partial success, we decided to set a cement plug at the bottom of the hole, in
order to 'sidetrack' the hole, i.e. drill at an angle, in order to go around any
remaining junk in the hole.
By giving
up a few meters of the hole we would protect the drilling operation from further
complications due to any unrecovered pieces of metal interfering with the drill
bit.
The good
news is that the mechanical condition of the well bore is very good, and we are
having no problems either entering or exiting the hole with drill
pipe.
This past
week, we are still at a depth of approximately 17,470 feet (5,325 meters) near
to our final target of approximately 18,040 feet (5,500 meters).
By the
way, with regard to our drilling to date, all the indications are that, as I
write, we have not yet reached the Permian geological layer, so, we plan to
drill on...
Dr. Dorit
Korngreen, Stephen Pierce and Dr. Eliezer Kashai
Triassic Logging and
Analysis of the Ma'anit-Rehoboth #2 Well
The
photograph above was taken during a visit, last week, to our Caesarea office by
Dr. Dorit Korngreen of the Department of Geological and Environmental Sciences,
Ben Gurion University of the Negev. Dr. Korngreen is an expert in dating
geological strata by identifying the 'micro-bugs' found in rock cuttings. Her
original Ph.D. was on the Triassic geological formation in Israel and she
visited us in order to discuss her findings on cuttings taken from our well. She
met with Zion's Vice President, Israeli Exploration, Dr. Eliezer Kashai, and
Zion's Exploration Manager, Stephen Pierce.
We have
cased our well from the surface down to approximately 15,830 feet (4,825 meters)
and are looking carefully at various zones of interest.
We are
(im)patiently waiting for the interpretation of the very sophisticated Triassic
logging carried out by Baker Atlas (a division of Baker Hughes). That work is
carried out in-house by Baker Hughes in Aberdeen, Scotland and we have asked
them to concentrate on a fracture analysis of an approximately 1,000 feet (300
meter) section that lies at depths between 13,125 feet (4,000 meters) and 15,830
feet (4,825 meters).
We have
already received a formation evaluation from our consultant in Houston, so
slowly, but surely, we are putting all the different information
together.
In my
July 17 update to you, I noted that the review process of the Triassic logging
and other scientific analysis would require many weeks of work, both in Israel
and in the U.S.A. I understand that many are waiting for the outcome of the
Triassic section of our well, but please be patient. We must ensure that our
conclusions, the decisions resting on them and our announcements are both
professional and prudent.
The site
of the Elijah #3 Well
Operations on the site of
the proposed Elijah #3 Well
This past
week we received a (much needed) permit from Israel's National Roads Authority
allowing us to connect the drill site to the road system, in order to have safe
vehicle access to the site. When we move the rig from the Kibbutz Ma'anit site,
more than 1,000 tons of equipment will arrive by truck at this new site at
Kibbutz Ein Carmel.
We
already have a permit from Israel's water authority (Mekorot), and the work to
connect the site to a water supply has begun.
The site
preparation work has also begun.
(New) Rights
Offering
On
Wednesday, July 29, 2009, Zion filed a registration statement with the
Securities and Exchange Commission (SEC) with respect to a proposed Rights
Offering to its common stockholders.
The
registration statement is currently under review by the SEC.
A welcome to our new
Stockholders
Zion Oil
& Gas, Inc. would not exist without the support of our stockholders and we
have tried, to the greatest extent possible, to let you know how much we value,
on an individual basis, your interest in our work, your prayers for our success
and your financial support.
Whether
you hold 100 shares of stock, 1,000 shares of stock, 10,000 shares of stock...
or even none at all (but just wish us well)... thank you for your continued
support.
This past
week, institutional investors (i.e. banks, investment houses, mutual funds,
etc.) filed their changes in investments with the SEC.
We can
now welcome, as stockholders, the institutions listed below. For your interest,
I'll note the approximate amount of stock that they held at the filing date. (By
the way, this list is not complete, but just to give you an idea of who has
purchased Zion stock.)
Barclays
Global Investors - 529,000 shares
Ing -
280,500 shares
Goldman
Sachs - 119,000 shares
Usquehanna
International - 93,200 shares
Tiaa Cref
Investments - 69,700 shares
Renaissance
Technologies - 57,000 shares
Northern
Trust - 40,600
Bank of
New York (Mellon) - 33,300 shares
Vanguard
- 21,000
Morgan
Stanley - 18,000 shares
Blackrock
Investment Management - 17,000 shares
American
International Group (AIG) - 9,600 shares
A total
of over 1.25 million shares of stock...
Exult
and shout for joy, O Zion dweller
for
the Holy One of Israel is great in your midst.
Isaiah
12:6
Once
again, thank you for your continued support of Zion
Shalom
from Israel
Richard
Rinberg
CEO of
Zion Oil & Gas, Inc.
www.zionoil.com