The Drilling Rig at the Ma’anit-Joseph #3 Wellsite

Just a short update to keep you informed regarding the drilling operations on the Ma’anit-Joseph #3 well.

On August 26, 2010, we announced that drilling operations had begun on the Ma’anit-Joseph #3 well, in our Joseph License area, onshore Northern Israel, and that the drilling operations were expected to last approximately six months.

Utilizing the 2,000 horsepower drilling rig used to drill our previous wells, we commenced drilling the Ma’anit-Joseph #3 well, initially towards the secondary target, Triassic age lithology (i.e. rocks), expected below approximately 10,827 feet.

We then plan to continue drilling to the primary target, Permian age lithology, down to a planned total depth below approximately 19,357 feet.

During the past week, operations have progressed steadily. We drilled a 26 inch hole to approximately 270 feet and then cemented in place an equivalent length of 20 inch casing. As expected, we found the rock penetrated in this first shallow hole to be rather porous in nature, so extra care was required during the cementing operations to ensure an adequate seal. The first length of casing (or “casing string”) run in a well is generally intended to provide hole stability through the largely unconsolidated shallow rock layers.

With the first length of casing run, we then resumed drilling, stepping down, as planned, to a 17 ½” hole. We plan to drill this section of the hole to approximately 3900 feet after which we plan to set our next casing string. This second length of casing is primarily intended to isolate and protect any natural aquifers penetrated by the wellbore. The estimated period to drill this next section of hole is approximately two weeks, so we should reach 3900 feet by mid-September.

As of Friday, September 3, 2010, we were drilling at a depth of approximately 450 feet. To put that in perspective, 450 feet is the approximate height of a 38-story building.

“In your good pleasure, make Zion prosper…”

Psalm 51:18

Thank you for your support of Zion and, for our US stockholders and friends, I wish you a very happy Labor Day weekend.

In addition, if you are observing Rosh Hashana (the Jewish New Year) next week, I wish you a ‘Shana Tova’ (Happy New Year).

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:
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As you can read in yesterday’s press release (click here) drilling operations on our Ma’anit-Joseph #3 well have begun. As I write (Friday morning, in Israel), the drill bit has reached a depth of approximately 115 feet (35 meters).

In anticipation of yesterday’s news, on Wednesday, August 25, 2010, our team held a ‘pre-spud’ meeting at the Ma’anit-Joseph #3 wellsite. All those involved in daily operations gathered together and were given clear instructions regarding the drilling of this well and especially regarding the safety procedures.

Here are some photographs taken on Wednesday, August 25th:

The Ma’anit-Joseph #3 wellsite

The front gate entrance

The full team assemble

Zion’s President and Chief Operating Officer, Bill Ottaviani,
addressing the rig crews

Zion’s Exploration Manager, Stephen Pierce,
addressing the rig crews

Foreground: The rig crews and wellsite geologists
Background: The base of the drilling rig between the two acoustic walls

During the meeting, the drilling rig stands ready

As you can read in the press release, drilling operations are expected to last for six months. I will, of course, ensure that you are suitably updated as we progress.

To quote Clement W. Stone (who built the Combined Insurance Company of America into a company with assets exceeding $1 billion, in 1979):

“Everyone who achieves success in a great venture, solves each problem as they came to it. They helped themselves. And they were helped through powers known and unknown to them at the time they set out on their voyage. They keep going regardless of the obstacles they met.”

He also said:

“Believe that any goal that doesn’t violate the laws of G-d or the rights of your fellow men can be achieved.”

At Zion we truly believe in these guiding ideas and are putting them into practice.

“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 procurement of needed drilling permits, 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 Michael Williams at Zion Oil & Gas, Inc., 6510 Abrams Rd., Suite 300, Dallas, TX 75231; telephone 1-214-221-4610; email:
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Contact Information
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phone: 1-888-891-9466
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The past two weeks have seen both our office and the Ma’anit-Joseph #3 wellsite ‘humming’ with activity. The drilling rig has been moved from the Ma’anit-Rehoboth #2 wellsite to the Ma’anit-Joseph #3 wellsite and has been erected. Almost everything is now in place for drilling to begin, as you can see in the pictures below.

Our schedule has had to be slightly revised (by approximately seven days) and now indicates a spud date of Thursday, August 26, 2010. The revision was mostly caused by a delay in importing some of the required equipment and consumables. Our logistics department planned carefully, but ship charter schedules are beyond the control of our staff, so a few days have been lost.

On a positive note, the extra time has allowed us to ensure that everything will be completely ready when drilling does begin.

Here are some photographs from the Ma’anit-Joseph #3 wellsite; they were all taken on Wednesday, August 18, 2010.

The front gate to the M-J #3 wellsite.

The 2,000 horsepower drilling rig has been erected.

Zion’s President and Chief Operating Officer, Bill Ottaviani, with AME’s staff engineer, Ibrahim Unsal.

Installing the equipment

A 10,000 psi Blow Out Preventer from ‘WellCat’ (Weatherford).
L. to R. – Zion’s Field Foreman, Danny Weisman, AME’s staff engineer, Ibrahim Unsal and Zion’s President and Chief Operating Officer, Bill Ottaviani.

Consultant, Mike Ellis, from The Mudlogging Company, Houston, USA.

Training the site geologists who will ‘sit’ the well during drilling.

You may be particularly interested in the photograph above of the (red) Blowout Preventer (BOP). The BOP is a large, specialized set of seals used to control the well in the unlikely event of unexpected flow (from a formation “kick”) at the surface. A formation kick can lead to a potentially catastrophic event known as a blowout. The BOP (as a fail-safe device) is critical to the safety of the crew, the drilling rig and the environment. The BOP shown above is rated for a maximum pressure of 10,000 pounds per square inch.

The recent BP disaster may have been prevented, if, in part, the correct well control equipment was both in place and working. There are industry guidelines that, had they been followed, could have minimized the severity of the effects of the problem that occurred at BP’s site in the Gulf of Mexico.

The consequences of the events at BP’s well are relevant to all of us and include: (i) an increase in Control of Well insurance premiums, and (ii) a heightened sense of care and attention when dealing with drilling safety issues. We can do little about (i) other than pay the premium, but (ii) is something we take very seriously indeed.

So, our operations department is now in high gear, as we all look forward to daily drilling operations next week.

Here is the latest, more detailed, news on Operations:

Ma’anit-Joseph #3 Well (M-J #3)

Mobilization of the drilling rig from the Ma’anit-Rehoboth #2 wellsite was completed this past week and the drilling mast has been raised. Work crews are making final adjustments to the rig and installing ancillary equipment in preparation for the upcoming spud date.

Construction of the acoustic wall surrounding portions of our drill site is now completed. Installation of mobile buildings, utility hook-ups, and related infrastructure will also be completed in the next few days.

The mudlogging unit is operational and our wellsite staff have begun their hands-on training in using this sophisticated piece of electronic equipment. “Mudlogging” is an important diagnostic process used by our geologists and engineers during the course of drilling a well. Our geologists use mudlogging to determine the type of rock being penetrated by the drill bit and to give an early indication of oil and gas presence in the rock. The mudlogging unit itself uses sensors throughout the drilling system to measure various parameters (for example, rate of drilling penetration and weight on the drill bit) that are crucial to our engineers in drilling the well effectively, efficiently, and safely.

Equipment continues to arrive daily at the wellsite coming from Asia, Europe, and other points around the world. Orchestrating such a large movement of goods and materials into Israel is a sizable task that requires careful planning and execution. Still, unavoidable delays can occur and we have experienced a few recent delays that has caused us to shift our planned spud date by a few days. Our current estimate for spudding the well is August 26, 2010.

Ma’anit-Rehoboth #2 Well (M-R #2) and
Elijah #3 Well and
Issachar-Zebulun Permit Area

No change from previous updates. We await the results of the seismic processing and integration.

Recent Oil & Gas News in Israel

Following the two recent natural gas discoveries offshore Israel, estimated to hold 24 trillion cubic feet of gas (reported to be twice the 2009 gas reserves of Britain) Lebanon has been discussing the possibility of approving its own laws regarding offshore oil and gas exploration. As per Norway-based Petroleum Geo-Services, the world’s third largest surveyor of oil and gas fields, this may prove to be ‘an exciting new province for oil and gas’.

Of course, the Norwegian experts are saying nothing new, as in April 2010, the United States Geological Survey already assessed that there may be 1.7 billion barrels of recoverable oil and 122 trillion cubic feet of recoverable gas in the Levant Basin. (Zion’s exploration rights fall within the area of the Levant Basin.)

In other recent news, you may be interested to learn that, this past week, an Israeli oil company announced an onshore oil and gas discovery, in Israel. They estimate that there are 1.5 billion barrels of oil in their exploration area – approximately 30 miles south of the location where our Ma’anit-Joseph #3 well is to be drilled. However, there appears to be uncertainty regarding the commercial viability of the discovery as well as the claimed quantity of the discovery.

“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, spud dates, geophysical and geological data and interpretation, anticipated attributes of geological strata being drilled, the procurement of needed drilling permits, drilling efforts and locations, 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 Michael Williams at Zion Oil & Gas, Inc., 6510 Abrams Rd., Suite 300, Dallas, TX 75231; telephone 1-214-221-4610; email:
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Our current schedule indicates an August 17 – 19, 2010 spud date window for the new well and the latest news regarding rig mobilization sustains that date.

Since my last update to you (on July 23, 2010) we have almost completed the site construction for the Ma’anit-Joseph #3 well.

In the past week, I visited the new wellsite, so here are some photographs (from August 3rd, 4th and 5th) showing that the site has been almost fully prepared. As I walked around the site, I saw that everything was very much in good order. Due to all the prior planning, our staff and contractors are now implementing their site construction work in a very calm and professional manner.

The Ma’anit-Joseph #3 wellsite (Aug 3, 2010).

The Platform showing the ‘Conductor Pipe’ (that will serve as a guide for the drill bit when the well is spud) and the ‘Mud Pit’ (Aug 3, 2010).

A close-up of the Conductor Pipe (Aug 3, 2010).

The ‘Mud Pit’ being lined (Aug 4, 2010).

Digging a channel for the service pipes (Aug 4, 2010).

The ‘Mud Pit’ and the full wellsite (Aug 4, 2010).

The first containers arrive at the wellsite (Aug 5, 2010)

The conductor pipe and base of the rig (Aug 5, 2010)

The mud log unit on site (Aug 5, 2010)

So, our operations department is moving into high gear, as we all look forward to being back in daily drilling operations very soon.

Here is the latest, more detailed, news on Operations:

Ma’anit-Joseph #3 Well (M-J #3)

Well site construction has continued to be the primary activity ongoing at the Ma’anit-Joseph #3 well for the past two weeks. The work done by our general contractor for this site was successfully concluded last week and the remaining work is now being handled by our local roustabout crew, under the watchful eye of Zion’s field manager. This remaining work includes the placement of mobile units that will serve as field offices and laboratories; installation of lighting and power generation facilities; installation of safety and security equipment; and various other location enhancements that will make the wellsite ready for continuous drilling operations.

In addition to finalizing our drill site, work has begun on the installation of an “acoustic wall”. This structure will mitigate sound effects from our drilling operations, so that the surrounding communities are not adversely affected by our drilling operations. Completion of the acoustic wall installation is expected to occur concurrent with our spud date for the new well.

Mobilization of the drilling rig from its temporary storage at the Ma’anit-Rehoboth #2 wellsite began this week. Full mobilization and rig-up will require approximately 10 – 12 days. It is good to see our rig crew staff back after the short absence following completion of their work on the Ma’anit-Rehoboth #2 well. With the crew back on site and the rig beginning its move, we anticipate that drilling operations will soon commence.

Equipment and well services continue to be procured and received. We have experienced a few short delays in the anticipated receipt of some equipment which could impact the timing of when we spud the well. Still, we remain optimistic that our spud date will occur at mid-month and are now projecting a specific time frame for this spud date of August 17 – 19.

The Issachar-Zebulun Permit Area

As previously reported, on June 16, 2010, field acquisition of new 2-dimensional seismic in the Jordan River Valley section of our Issachar-Zebulun permit area was successfully concluded. Approximately 30 km of new seismic data was collected on Zion’s behalf by the Geophysical Institute of Israel (GII).

This data continues to be processed by a geophysical consultant in the United States, and now also GII, into usable graphic imagery that can then be interpreted by our geologists in their investigation for future drilling prospects. The processing and interpretation of this data is expected to be finalized by October 2010.

Elijah #3 Well

As previously noted, 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. As there were questions regarding the volcanic rock that caused the stuck pipe, we decided to acquire additional field seismic data in order to help to resolve questions regarding the geology.

On June 30, 2010, GII successfully concluded field acquisition of approximately 25 km of new 2-dimensional seismic data within the Elijah #3 project area. This data will help us to resolve certain questions regarding the geology of the area surrounding this well.

As with the seismic data collected in the Issachar-Zebulun permit area, this data will also need to be processed and subsequently interpreted. In this case, however, we are not looking for new prospects but instead looking for greater clarity in the geology that underlies our Elijah-3 well.

Processing of the Elijah #3 seismic data is now underway and is being done by both GII and a geophysical consultant in the United States.

Ma’anit-Rehoboth #2 Well (M-R #2)

This well is currently temporarily suspended for possible future use as an offset well to the Ma’anit-Joseph #3 (M-J #3) well which is to be drilled a short distance away.

It is important to note that we are drilling to the deep “Permian” structure in the M-J #3 well; whereas the various intervals tested in the M-R #2 well consisted of shallower and younger age rocks. As such, and despite the relative proximity of these two wells, the results of the M-R #2 well tests are not necessarily correlative to what we expect in the Permian of the M-J #3 well.

“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, spud dates, geophysical and geological data and interpretation, anticipated attributes of geological strata being drilled, the procurement of needed drilling permits, drilling efforts and locations, 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 Michael Williams at Zion Oil & Gas, Inc., 6510 Abrams Rd., Suite 300, Dallas, TX 75231; telephone 1-214-221-4610; email:
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Since my last update to you (on July 9, 2010) we have made much progress with the site construction for the Ma’anit-Joseph #3 well, especially the concrete platform on which the drilling rig will stand. Due to the very heavy loads involved, a solid and stable base is of the highest importance, as the safety of everyone working at the wellsite is at risk if the drilling rig is not 100% stable.

Certainly BP’s recent catastrophe with deepwater drilling in the Gulf of Mexico has underlined the need for stringent safety standards.

As previously noted, we successfully concluded the acquisition of field seismic in both our Asher-Menashe License area and our Issachar-Zebulun Permit area and the raw data is currently being processed for interpretation, both in Israel and in Houston, Texas. The data processing will take a number of weeks to produce results.

Christians United for Israel

This past week, Zion Oil & Gas sponsored both the “Night to Honor Israel” banquet and CUFI’s Ambassadors’ Reception, at the Fifth Annual Washington-Israel Summit of Christians United for Israel (CUFI).

The Summit took place in Washington, D.C. during July 20th to 22nd and both Pastor John Hagee and Israel’s Ambassador to the U.S., Michael Oren, spoke at the banquet on Wednesday evening, July 21, 2010.

During the Summit, John Brown, Zion’s Founder and Chairman, was interviewed by Pastor John Hagee and the interview was broadcast on the Daystar Television Network during the “Night to Honor Israel”.

In addition, I introduced and CUFI broadcast a video about Zion at the banquet’s pre-event, and the banquet’s proceedings were telecast by live-feed over the Daystar Television network.
There was much interest shown in Zion’s work in Israel.

Installation of Conductor Pipe

Fully Installed Conductor Pipe

With regard to ‘Operations‘, here is the latest news:

Ma’anit-Joseph #3 Well (M-J #3)

Well site construction has been the primary activity ongoing at the Ma’anit-Joseph #3 well for the past two weeks. This activity involves significant amount of excavation, grading, sublayering, and compaction of soil and other materials to provide a solid, sustainable base for all equipment used during the drilling operation.

We are also building a large cement pad to serve as the drilling rig base, which must be constructed to exacting specifications so that the rig can be properly balanced and positioned when mobilized to the completed site. Other well site construction activity includes the excavation of mud return pits which will be lined with a protective, non-permeable layer to prevent the possible seepage of drill fluids into the soil and local ground waters.

In addition to all the earth moving activities ongoing at the well site, we have also started preliminary drilling work. This work involves the drilling of a shallow hole and installation of a short length of casing known as the conductor pipe. (The drill rig is not needed to drill this shallow hole which is approximately 60 feet.) This conductor pipe serves as a ‘guide’ for the drill bit when the actual drilling rig spuds the well. The spud date incidentally is still on track for next month, August 2010.

The Issachar-Zebulun Permit Area

As previously reported, on June 16, 2010, field acquisition of new 2-dimensional seismic in the Jordan River Valley section of our Issachar-Zebulun permit area was successfully concluded. Approximately 30 km of new seismic data was collected on Zion’s behalf by the Geophysical Institute of Israel (GII).

This data is now being “processed” by a geophysical consultant in the United States into usable graphic imagery that can then be “interpreted” by our geologists in their investigation for future drilling prospects. The processing and interpretation of this data is expected to be finalized by October 2010.

Elijah #3 Well

As previously noted, 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.

On June 30, 2010, GII successfully concluded field acquisition of approximately 25 km of new 2-dimensional seismic data within the Elijah #3 project area. This data will help us to resolve certain questions regarding the geology of the area surrounding this well.

As with the seismic data collected in the Issachar-Zebulun permit area, this data will also need to be processed and subsequently interpreted. In this case, however, we are not looking for new prospects but instead looking for greater clarity in the geology that underlies our Elijah-3 well.

Processing of the Elijah #3 seismic data is now underway and is being done by both GII and a geophysical consultant in the United States.

Ma’anit-Rehoboth #2 Well (M-R #2)

This well is currently temporarily suspended for possible future use as an offset well to the Ma’anit-Joseph #3 (M-J #3) well which is to be drilled a short distance away.

It is important to note that we are drilling to the deep “Permian” structure in the M-J #3 well; whereas the various intervals tested in the M-R #2 well consisted of shallower and younger age rocks. As such, and despite the relative proximity of these two wells, the results of the M-R #2 well tests are not correlative to what we expect in the Permian of the M-J #3 well.

“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, the procurement of needed drilling permits, drilling efforts and locations, 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 Michael Williams at Zion Oil & Gas, Inc., 6510 Abrams Rd., Suite 300, Dallas, TX 75231; telephone 1-214-221-4610; email:

Since my last update to you (on June 24, 2010) we have made much progress on the drilling front. In addition, today, we have made an announcement about management restructuring and an addition to Zion’s Board.

As you can read here, we announced that Kent S. Siegel, a member of Zion’s Board of directors since November 2003, has been appointed as Chief Financial Officer and Senior Vice President. Mr. Siegel replaces Sandra Green, who has resigned from the Company by mutual and amicable agreement. I thanked Sandy for her many years of dedicated work and wished her well for the future.

In addition, Patti Beals has been appointed Chief Accounting Officer and Ilan Sheena has been appointed Vice President and Managing Director of Zion’s offices in Caesarea, Israel. Also, we are welcoming to the Zion Board, Marc Singer who brings a wealth of business experience to Zion.

The vibroseis trucks go cross-country in Israel.

The vibroseis trucks on the beach by the Mediterranean sea.

The vibroseis trucks in place, on the beach.

Close-up of the vibroseis truck’s pad that is lowered from the vehicle to the surface and then vibrated to generate seismic waves.

As you can read below, we have successfully concluded the acquisition of field seismic in both our Asher-Menashe License area and our Issachar-Zebulun Permit area. The raw data that has been collected is now being processed for interpretation, both here in Israel and in Houston, Texas.

I am pleased to report that the data acquired does seem to be of good quality. This was not easy to achieve, as in the Asher-Menashe license area, there are some major roads. One night, we arranged for the police to stop the flow of traffic, so that the traffic ‘noise’ would not affect the seismic acquisition.

Even with the latest computer technology, the data processing will take a number of weeks to produce results and then the resulting information will need to be carefully built into our geologic computer model by Zion’s geologists. (As a Zion director commented: “If it was easy, then anyone could do it…”).

As a result, we should be able to have a much better picture of any geologic structures under our exploration areas and therefore make better decisions regarding our future exploration plans.

Christians United for Israel

As previously noted, Zion Oil & Gas will be sponsoring the “Night to Honor Israel” banquet at the Fifth Annual Washington-Israel Summit of Christians United for Israel (CUFI). However, this year, Zion will also be sponsoring CUFI’s Ambassadors’ Reception.

The Summit will take place in Washington, D.C. during July 20th to 22nd and the banquet will take place on Wednesday evening, July 21, 2010. Pastor John Hagee and Israel’s Ambassador to the U.S., Michael Oren, are scheduled to speak at the banquet.

It is expected that John Brown, Zion’s Founder and Chairman, will be interviewed by Pastor John Hagee during the Summit and that the interview will be broadcast on the Daystar Television Network during the “Night to Honor Israel”. In addition, CUFI will broadcast a video about Zion at the banquet’s pre-event, and the banquet’s proceedings will be telecast by live-feed over the Daystar Television network. If you want to read the press release, please click here.

With regard to ‘Operations’, we are now preparing the concrete platform on the new site of the next well, as you can read.

Ma’anit-Joseph #3 Well (M-J #3)

A very important milestone occurred this week when we began site construction for the M-J #3 well. This milestone follows the significant amount of effort made by our staff during the past months in securing the necessary permits allowing us to proceed with construction of the well site.

Our general contractor for the site construction work is a local Israeli construction company well-known for their major infrastructure development work throughout Israel. Consistent with best practice, we bid the construction work out to several contractors and made our selection based on the company expected to provide the greatest overall value to Zion.

Site construction work began on July 4 (Independence Day in the USA) and is expected to be completed within one month. As you can see from the photos below, much activity has already occurred.

In addition to beginning our well site construction, we have almost finalized the selection of vendors who will provide the major services associated with drilling the M-J #3 well. Finally, we have already begun receiving equipment for the new well from our selected material providers. Both material and service selection for this well were based on a comprehensive bid process designed to provide Zion with the best possible value.

With the start of well site construction now behind us, our next major milestone is mobilizing the drilling rig from our Ma’anit-Rehoboth #2 well site to the newly constructed M-J#3 well site. We will begin mobilization of this rig immediately following site construction activities.

All in all, our work progress remains steady and we continue to be on track for an August 2010 spud date for the M-J #3 well.

The Issachar-Zebulun Permit Area

On June 16, 2010, field acquisition of new 2-dimensional seismic in the Jordan River Valley section of our Issachar-Zebulun permit area was successfully concluded. Approximately 30 km of new seismic data was collected on Zion’s behalf by the Geophysical Institute of Israel (GII).
This data is now being “processed” by a geophysical consultant in the United States into usable graphic imagery that can then be “interpreted” by our geologists in their investigation for future drilling prospects. The processing and interpretation of this data is expected to be finalized by October 2010.

Elijah #3 Well

As previously noted, 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.

On June 30, 2010, GII successfully concluded field acquisition of approximately 25 km of new 2-dimensional seismic data within the Elijah #3 project area. This data will help us to resolve certain questions regarding the geology of the area surrounding this well.

As with the seismic data collected in the Issachar-Zebulun permit area, this data will also need to be processed and subsequently interpreted. In this case, however, we are not looking for new prospects but instead looking for greater clarity in the geology that underlies our Elijah-3 well.

Processing of the Elijah #3 seismic data is now underway and is being done by both GII and a geophysical consultant in the United States.

Ma’anit-Rehoboth #2 Well (M-R #2)

This well is currently temporarily suspended for possible future use as an offset well to the Ma’anit-Joseph #3 (M-J #3) well which is to be drilled a short distance away.

It is important to note that we are drilling to the deep “Permian” structure in the M-J #3 well; whereas the various intervals tested in the M-R #2 well consisted of shallower and younger age rocks. As such, and despite the relative proximity of these two wells, the results of the M-R #2 well tests are not correlative to what we expect in the Permian of the M-J #3 well.

“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, the procurement of needed drilling permits, drilling efforts and locations, 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.

NOTICE
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 will send you the prospectus if you request it by calling toll free 1-888-TX1-ZION (1-888-891-9466).

Contact Information
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
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:
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Zion’s Founder and Chairman of the Board, John Brown,
addressing Zion’s 2010 Annual Meeting

Zion’s ’2010 Annual Meeting’ took place on Monday, June 14, 2010, in Caesarea, Israel. Present at the meeting were stockholders who had travelled to Israel from as far away as Finland and California, USA; I believe that everyone attending enjoyed the very positive spirit of the meeting.

Mr. Victor Carrillo (L) and Zion’s CEO, Richard Rinberg (R)

One V.I.P. guest present at the meeting was Victor Carrillo (pictured above), the Chairman of the Railroad Commission of Texas. The Railroad Commission is the primary regulator of the oil and gas industry in Texas and it was a great honor for Zion to have Chairman Carrillo present at our meeting.

The business formalities were duly carried out and the resolutions were successfully carried. After the formal part of the meeting, I gave my report of Zion’s activities during the prior twelve months and then Zion’s President and Chief Operating Officer, Bill Ottaviani, gave his report.

[nggellery ID=89]

Zion’s President and COO, Bill Ottaviani

You can review my report (i.e. the Chief Executive Officer’s report) and the Chief Operating Officer’s report, presented to the meeting, on the Investor Center section of Zion’s website. If you want to do that, please click here.

John Brown being interviewed at Ma’anit

The day after Zion’s annual meeting, as you can see in the above photographs, “GLOBES”, one of Israel’s leading business papers interviewed Zion’s Founder and Chairman of the Board, John Brown, for a lead article in their weekend edition, (to be published in Israel, this weekend).

Christians United for Israel

You may be interested to learn that, as we did in 2008, Zion Oil & Gas will be sponsoring the “Night to Honor Israel” banquet at the Fifth Annual Washington-Israel Summit of Christians United for Israel (CUFI). However, this year, Zion will also be sponsoring CUFI’s Ambassadors’ Reception.

The Summit will take place in Washington, D.C. during July 20th to 22nd and the banquet will take place on Wednesday evening, July 21, 2010. Pastor John Hagee and Israel’s Ambassador to the U.S., Michael Oren, are scheduled to speak at the banquet.

It is expected that John Brown, Zion’s Founder and Chairman, will be interviewed by Pastor John Hagee during the Summit and that the interview will be broadcast on the Daystar Television Network during the “Night to Honor Israel”. In addition, CUFI will broadcast a video about Zion at the banquet’s pre-event, and the banquet’s proceedings will be telecast by live-feed over the Daystar Television network. If you want to read the press release, please click here.

…………………………………………….

With regard to ‘Operations’, we are now preparing for the next well, as you can read.

Ma’anit-Joseph #3 Well (M-J #3)

We continue moving forward through the many permitting requirements for the M-J #3 well and are securing all the necessary services and equipment to ensure an “on time” spud date.

When the permitting process for this well began, we estimated a 5-month time frame would be needed to secure the necessary permits before well site construction could begin. As it is turning out, we need every bit of this time to navigate through the complex permitting process for a new well.

We currently plan to begin well site construction in early July 2010. The construction of the concrete platform will take approximately four weeks.

On the equipment and services procurement front, we are making steady progress. All the equipment needed on site by our planned spud date has been ordered and delivery confirmations have been received. This first large order of equipment is primarily for well casing and wellhead equipment – equipment that often requires a long delivery lead time. We are expecting the first shipment of this equipment within the next few weeks.

Additionally, most of the major services we require for drilling have already been awarded through our bidding process and service contracts are in the process of being prepared.

All in all, our work progress is steady and we remain on schedule for an August 2010 spud date for the M-J #3 well.

The Issachar-Zebulun Permit Area

On June 16, 2010, field acquisition of new 2-dimensional seismic in the Jordan River Valley section of our Issachar-Zebulun permit area was successfully concluded. Approximately 30 km of new seismic data was collected on Zion’s behalf by the Geophysical Institute of Israel (GII). Preliminary indications suggest that data quality is ‘good’.

This data will soon be “processed” by a geophysical consultant in the United States into usable graphic imagery that can then be “interpreted” by our geologists in their investigation for future drilling prospects. The processing and interpretation of this data is expected to be finalized by October 2010.

Elijah #3 Well

As previously noted, 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.

We are currently acquiring approximately 32 kilometers of additional field seismic data that will help us to resolve certain questions regarding the geology of the area surrounding this well.

GII began field acquisition of this seismic on June 16, 2010, and have already finished collecting data in one of three “lines” planned. Each of the three planned seismic lines is geographically oriented in a different direction (for example, one line may be east-west oriented and another may be north-south oriented). This is to ensure that our geologists have sufficient areal coverage of the geologic region to be investigated.

As with the seismic data collected in the Issachar-Zebulun permit area, this data will also need to be processed and subsequently interpreted. In this case, however, we are not looking for new prospects but instead looking for greater clarity in the geology that underlies our Elijah-3 well.

Ma’anit-Rehoboth #2 Well (M-R #2)

This well is currently temporarily suspended for possible future use as an offset well to the Ma’anit-Joseph #3 (M-J #3) well (see above) which is to be drilled a short distance away.

It is important to note that we are drilling to the deep “Permian” structure in the M-J #3 well; whereas the various intervals tested in the M-R #2 well consisted of shallower and younger age rocks. As such, and despite the relative proximity of these two wells, the results of the M-R #2 well tests are not correlative to what we expect in the Permian of the M-J #3 well.

The Russell 3000 Index Rebalancing

The Russell 3000 is a value weighted index that measures performance of the top 3,000 stocks of the investable U.S. equity market. Zion was placed on the index as of June 26, 2009. In June of every year, the index is reconstituted,

On Friday, June 25, 2010, after the stock market close, the 2010 reconstitution of the Russell Indexes will take place, and Zion may not be part of the 2010 index. In connection with the reconstitution, NASDAQ has advised us that, in the short term, there may be increased trading volumes in Zion’s stock trading and volatility in Zion’s stock price.

As the late great Benjamin Graham noted, ‘In the short term the market is a voting machine, in the long term it is a weighing machine”.

Zion’s management team are committed to building long term value into Zion Oil & Gas, Inc. and try to ignore fluctuations in Zion’s stock price, caused by events over which we have no control.

“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, the procurement of needed drilling permits, drilling efforts and locations, the presence or recoverability of hydrocarbons, the sufficiency of cash reserves, ability to raise additional capital, the successful establishment of the drilling subsidiary and the negotiation and execution of definitive agreements with AME (the current owner of the drilling rig) with respect thereto, 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.

NOTICE
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 will send you the prospectus if you request it by calling toll free 1-888-TX1-ZION (1-888-891-9466).

Contact Information
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
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: ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

As Zion’s annual meeting is scheduled to take place on Monday, June 14, 2010, in Israel, we are distributing this email one day earlier than normal. This will give those who are not attending the meeting and have not yet voted, a chance to vote. You can vote either by returning your prepaid voting card, by telephone or by way of the Internet.

For everyone with an interest in Israel and its energy resources, we are living through momentous times!

Recently, ‘Oil & Gas in Israel’ has been featured in Israel’s business news as almost a daily headline event. For example:

On June 2, 2010, Israel’s business press reported that the estimated natural gas reserves in the Tamar offshore license have been increased… again. They have nearly doubled since the first estimates were published in 2009 and represent approximately 35 years of Israel’s natural gas needs at projected 2012 demand rates.

On June 3, 2010, Israel’s business press reported that initial seismic analysis indicated that the Leviathan prospect, offshore Israel, is estimated at double the size of the Tamar discovery.

Clearly the prediction of the United States Geological Survey’s report in April 2010 that estimated the undiscovered oil and gas resources of the Levant Basin at a mean of 1.7 Billion barrels of recoverable oil and 122 Trillion cubic feet of recoverable gas in the Levant Basin is beginning to unfold before our very eyes.

As all of Zion’s exploration areas fall within the Levant Basin… we are very optimistic regarding our petroleum exploration areas, onshore Israel.

(You can read the USGS Report if you click here.)

Zion Oil & Gas, Inc. was established 10 years ago, at a time when the idea of ‘Oil in Israel’ was seen as ‘very unlikely‘ (to say the least), as the last major discovery in Israel was the Heletz field (onshore southern Israel) in 1955. Subsequently, Heletz produced more than 17 million barrels of oil.

Now, we have seen a massive gas discovery offshore and even, in December 2009, an announcement of an onshore gas discovery, in another company’s license area, just to the south of Zion’s license area.

The year 1955 was also the one in which Frank Sinatra first sang, “Love & Marriage go together like a Horse & Carriage”. From our perspective, where there is ‘Gas’, there is likely to be ‘Oil’. We all know the term ‘Oil & Gas’…

When Zion’s Founder and Chairman of the Board, John Brown, heard the recent news regarding the offshore gas deposits, he pointed to Isaiah 60:5:

“Then you will see this and rejoice, and your heart will be thrilled with joy, because the riches of the sea will be brought to you. The wealth of the nations will come to you.”

He commented that, in the short space of ten years, Zion Oil & Gas, Inc. has achieved much. Today, Zion’s extensive petroleum exploration areas are very close to world class natural gas discoveries and, in a few weeks, Zion plans to drill the Ma’anit-Joseph #3 well, deep to reach the Permian geologic layer, in the Ma’anit structure.

“Whatsoever the Lord pleased, that did he in heaven, and in earth, in the seas, and all deep places.”

Psalms 135:6

As you can read below, there is much pre-drilling operational activity, whether with the field seismic acquisition that is currently under way, the sourcing of drill pipe and other necessary equipment or our petroleum engineers fine-tuning the well design for Zion’s next well.

Of course, none of this could take place without our loyal and, we believe, ‘heaven sent’ stockholders who enable us to carry out our work in Israel. Without your continued support, we would be hard-pressed to continue at our current pace, as exploration costs are substantial.

We believe that, subject to the final permits, we are approximately ten weeks away from spudding our next well, the Ma’anit-Joseph #3 and hopefully much closer to the day when we can also announce a discovery.

………………………………………………………………………

A NEW ZION FILM – to watch the film, please click here

As I write, over 1,650 people have viewed our latest film, in which Bill Ottaviani (Zion’s President and Chief Operating Officer) and I discuss our goal to establish Zion Drilling, Inc. and purchase Aladdin Middle East Ltd’s 2,000 horsepower drilling rig, as soon as practicable.

The film gives you a chance to learn the strategic thinking behind some of our business decisions. If you haven’t yet watched the film, please take a few minutes to do so and please share the link to the film with your friends.
………………………………………………………………………

With regard to ‘Operations’, we are now preparing for the next well, as you can read.

The Issachar-Zebulun Permit Area

Zion and the Geophysical Institute of Israel (GII) have signed an agreement for GII to acquire approximately 32 kilometers of seismic data in Zion’s Issachar-Zebulun Permit area. Zion will use this seismic data in search of geologic prospects that we hope can be matured into new well candidates.

Field acquisition of seismic began in the Jordan River Valley region on June 6. The weather report from the field thus far has been “hot, dry, and calm”. While this makes for a long day for the field workers, these conditions are very desirable for acquiring seismic data. Several kilometers of data have already been acquired and preliminary indications are that overall data quality is good.

Seismic acquisition will continue through June after which the collected data will be “processed” and interpreted for use in a geologic model of the area.

Processing seismic data means the conversion of sound wave data into a two-dimensional (2D) graphic image depicting the various layers of subsurface rock in which the sound waves were reflected. These sound waves were of course generated at the surface during the seismic acquisition process.

A final ‘processed’ 2D image might look something like this example noted here:

Our geologists will then interpret this imagery as a basis for determining if all the necessary geological elements are in place for creating a drilling prospect. .

Ma’anit-Joseph #3 Well (M-J #3)

As previously noted, we have implemented a bidding process for key equipment and services needed for the M-J #3 well and that early indications of response from our selected vendors have been very favorable. The bidding process is now closed and we are extremely pleased with the results.

To cite a few metrics regarding the process, we created (8) equipment and service categories targeting (39) companies – both local and international. These categories included casing, casing hardware, wellheads, drill bits, cementing service, mud and drilling fluids service, wireline and logging service, and equipment rentals. A total of (47) bid packages were issued and (38) offers received…a very respectable 81% positive response rate.

We are now working through each category of bids, focusing first on those that are most time-sensitive so that we have the equipment or service we need, on location, when the well is spud. Several purchase orders for this critical equipment have already been placed.

We continue to be encouraged by the pace in which “permitting” for the new well is occurring. As noted last time, permitting a well in Israel is a lengthy and time consuming process. Yet, we feel that we are ‘on track’ in working with the various regulatory agencies to ensure that we are fully compliant with the law and that we properly address the legitimate issues of other concerned stakeholders in the project.

With vendor selection and well permitting moving along according to plan, we now turn our attention to construction of the well site itself. To this end, we are using the same philosophy we did in our bidding process for well equipment and services. That is, we will seek out the best contractors that are capable of doing the job to our specifications and who offer the best overall value to Zion.

Ultimately, we want to position ourselves to begin well site construction immediately after the final permit is ‘in hand’ that allows construction activity to begin. Our expectation is that this timing will occur sometime in July. Site construction can last about one month.

Overall, work continues at a steady and productive pace in getting ready for a summer 2010 spud date of the Ma’anit-Joseph #3 well.

Elijah #3 Well

As previously noted, 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.

We have decided to acquire approximately 32 kilometers of additional field seismic data (in Zion’s Asher-Menashe License area) that will help us to resolve certain questions regarding the geology of the area surrounding the Elijah #3 well. GII will perform this seismic acquisition work following the work being done for us in the Issachar-Zebulun permit area.

Ma’anit-Rehoboth #2 Well (M-R #2)

This well is currently temporarily suspended for possible future use as an offset well to the Ma’anit-Joseph #3 (M-J #3) well (see above) which is to be drilled a short distance away.

It is important to note that while the M-J #3 well is just a short distance from the M-R #2 well, the geologic target for the M-J #3 well is completely different than the zones tested in M-R #2. We are drilling to the deep “Permian” structure in M-J #3; whereas the various intervals tested in M-R #2 were shallower and comprised of younger, Triassic, age rocks. As such, the results of testing the M-R #2 well are not correlative to what we expect should we reach and test the Permian in the M-J #3 well.

……………………………………………………………………..

2010 Annual Meeting of Stockholders

The annual meeting is scheduled to take place at the Dan Caesarea Hotel in Caesarea, Israel at 2:00 p.m. (local time) on Monday, June 14, 2010.

The Zion shareholders own Zion Oil & Gas, Inc., but management can only manage Zion effectively if you support us by voting your shares.

If you have already voted… thank you!

But if you haven’t yet voted… please take action and…

PLEASE VOTE YOUR ZION STOCK TODAY

In prior years, the SEC allowed brokers to vote the shares of stockholders who held shares at the broker but did not express an opinion as to how they wished to vote their shares.

The new rules do not allow your shares to be voted on certain items without you personally voting your shares, so please vote your shares today.

You can vote either by returning your prepaid voting card, by telephone or by way of the Internet.

Your vote really does count, so please take a very few minutes in order to exercise your right as a Zion Oil & Gas stockholder.

“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, the sufficiency of cash reserves, ability to raise additional capital, the successful establishment of the drilling subsidiary and the negotiation and execution of definitive agreements with AME (the current owner of the drilling rig) with respect thereto, 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.

NOTICE
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 will send you the prospectus if you request it by calling toll free 1-888-TX1-ZION (1-888-891-9466).

Contact Information
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
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:
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Here is an ‘unscheduled‘ update, commenting on the recent event offshore Israel and giving you an opportunity to see Zion’s latest film (see below).

RECENT EVENT - (The Gaza bound flotilla)

I received a telephone call from a concerned stockholder asking about the recent event offshore Israel and its effect on the relationship between Zion Oil & Gas, Inc (in Israel) and Aladdin Middle East Ltd (in Turkey).

I have been in contact with Cetin Mumcuoglu, the General Manager of Aladdin Middle East Ltd, in Ankara, Turkey, and he is not concerned. International incidents will occur from time to time, but business continues without interruption.

He commented to me, “We will continue with our business relationship even more strongly.”

Zion Oil & Gas and AME have excellent relations based on mutual respect and trust, so we expect that recent events will have little effect on our continuing business relationship.

Additionally, our Caesarea office and our petroleum exploration areas are in Northern Israel, well away from the Gaza area in Southern Israel, so everything is proceeding as normal.

At present, we do not anticipate that the recent event will have any material adverse effect on our business.

………………………………………………………………………

A NEW ZION FILM

I hope you will find our latest film enjoyable. In the film, Bill Ottaviani (Zion’s President and Chief Operating Officer) and I explain why Zion Oil & Gas, Inc. has decided to establish Zion Drilling, Inc. and purchase Aladdin Middle East Ltd’s 2,000 horsepower drilling rig, as soon as practicable.

Filming took place in both Israel and Turkey, and gives you a chance to learn the strategic thinking behind some of our business decisions.

To watch the film, please click here and feel free to share the link to the film with your friends.

………………………………………………………………………

PLEASE VOTE YOUR ZION SHARES AS SOON AS POSSIBLE

The Zion shareholders own Zion Oil & Gas, Inc.

But management can only manage Zion effectively if you support us by voting your shares.

If you have already voted… thank you!

But if you haven’t yet voted… please take action…

In prior years, the SEC allowed brokers to vote the shares of stockholders who held shares at the broker but did not express an opinion as to how they wished to vote their shares.

The new rules do not allow your shares to be voted on certain items without you personally voting your shares, so please vote your shares today.

You can vote either by returning your prepaid voting card, by telephone or by way of the Internet.

Your vote really does count, so please take a very few minutes in order to exercise your right as a Zion Oil & Gas stockholder.

“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, the sufficiency of cash reserves, ability to raise additional capital, the successful establishment of the drilling subsidiary and the negotiation and execution of definitive agreements with AME (the current owner of the drilling rig) with respect thereto, 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.

NOTICE
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 will send you the prospectus if you request it by calling toll free 1-888-TX1-ZION (1-888-891-9466).

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
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:
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

The past two weeks have seen various Zion Oil & Gas matters move forward significantly, as we:

(i) reported that the Israeli Petroleum Commissioner awarded Zion Oil & Gas a one-year extension on each of its petroleum exploration licenses, the Joseph License and the Asher-Menashe License. (After the initial grant, it is ‘normal procedure’ in Israel for license extensions to be granted only in ‘one-year’ extensions, for a total of four one-year extensions.)

(ii) signed an agreement with Aladdin Middle East Ltd extending the drilling contract to our planned next well, the Ma’anit-Joseph #3,

(iii) signed an agreement with Kibbutz Ma’anit granting us access to Kibbutz land and permission to drill the Ma’anit-Joseph #3 well, and

(iv) signed an Agreement with the Geophysical Institute of Israel (GII) to acquire a total of approximately 64 kilometers of two-dimensional seismic lines located within our Issachar-Zebulun Permit area and our Asher-Menashe License area.

On a national level, according to the latest rankings of the (politically independent) Swiss Institute for Management Development (IMD), Israel’s economy is No. 1 in the world for resilience to economic cycles.

This is a direct result of the actions taken by Israel’s Finance Ministry and the Bank of Israel, as they both acted very prudently in the recent world economic crises.

Israel was also ranked No. 1 for its expenditure in research and development as a percentage of gross domestic product and in the innovative capacity of firms to generate new products, processes and services

In the business-efficiency category, Israel scored very highly in availability of skilled labor, finance skills, entrepreneurship of managers and venture capital.

All we need now is… to recover oil & gas onshore Israel…

So, here is a report of Zion’s work during the past two weeks:

The United States Geological Survey (USGS Survey)

As previously reported, the USGS report (issued April 8, 2010) “Assessment of Undiscovered Oil and Gas Resources of the Levant Basin Province, Eastern Mediterranean” has attracted much media attention in Israel. (You can review the USGS Survey by clicking here.)

You may be interested to know that the term “Levant” first appeared in English some 500 years ago and originally meant “Mediterranean lands to the East” as in the French “soleil levant” (i.e. rising Sun). It referred to the Eastern direction of the rising Sun from the perspective of those who first used it.

The USGS Survey estimates a mean of 1.7 BILLION barrels of recoverable oil and 122 TRILLION cubic feet of recoverable gas in the Levant Basin… and that has caught everyone’s eye, as the value of the undiscovered oil and gas assessed in the USGS Survey amounts to approximately US$ 650 Billion…

and of course all of Zion’s exploration areas fall within the Levant Basin…

With regard to ‘Operations’, we are now preparing for the next well, as you can read.

Ma’anit-Joseph #3 Well (M-J #3)

Further to our ongoing exploration work on the Ma’anit geological structure, we are moving forward with the required permitting and planning for the M-J #3 well (targeted for the ‘deep’ Permian geologic structure). (Deut. 33:13-16)

We are well underway in the process of assembling the various product and service suppliers needed to drill this new well. As reported last time, we instituted a bidding and selection process designed to ensure that we use the best available resources, offering Zion the most favorable overall value. Based on early vendor indications, we anticipate a strong response to our RFQs (Request For Quotes) and have already begun receiving price quotes. All price quotes are expected by month-end and the final vendor selection will follow shortly thereafter.

Permitting for the new well continues to proceed favorably with the recent achievement of a very significant milestone: agreement with Kibbutz Ma’anit granting us access to Kibbutz land where we desire to drill the MJ-3 well.

In Israel, ‘permitting a well’ is a very lengthy and complicated process, as permits are required from various authorities, including the: Water, Fire, Health, Military, District Planning Commission, Environmental Protection, Israel Land, National Infrastructure, Civil Aviation and National Transport Authorities… and of course, the owner of the land.

With the Kibbutz agreement now secured, we are fine-tuning the well site layout and beginning preliminary plans for construction of the site.

The layout and construction of the well site is a project in of itself, as it involves the careful placement of storage containers, offices and living quarters, equipment and liquid storage facilities, power units, and piping all efficiently arranged around the drilling rig and large liquid containment (“mud”) pits while allowing adequate space for the safe movement of personnel and heavy equipment.

As the M-J #3 well site is near residential and commercial areas, we are working diligently with local and governmental groups, to ensure the site will meet (or in some cases exceed) all applicable environmental and safety requirements.

Actual well site construction can begin once we have received all necessary permits. Depending on weather and equipment availability, we anticipate site construction to be completed within one month after being started. Given the progress we are making in both planning and permitting for the M-J #3 well, we remain optimistic that drilling will begin this summer.

Elijah #3 Well

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.

We have decided to acquire approximately 32 kilometers of additional field seismic data (in Zion’s Asher-Menashe License area) that will help us to resolve certain questions regarding the geology of the area surrounding the Elijah #3 well. In order to perform this seismic acquisition work, we recently signed an agreement with the Geophysical Institute of Israel (GII). The seismic acquisition is scheduled to take place in summer 2010.

Ma’anit-Rehoboth #2 Well (M-R #2)

This well is currently temporarily suspended for possible future use as an offset well to the Ma’anit-Joseph #3 (M-J #3) well (see above) which is to be drilled a short distance away.

The Issachar-Zebulun Permit Area

Zion and GII have signed an agreement for GII to acquire approximately 32 kilometers of seismic data in Zion’s Issachar-Zebulun Permit area. Zion will use this seismic data in search of geologic prospects that we hope can be matured into new well candidates.

Permitting for seismic acquisition is well underway with field work now scheduled to begin in June.

2010 Annual Meeting of Stockholders – in just two weeks time…

The annual meeting is scheduled to take place at the Dan Caesarea Hotel in Caesarea, Israel at 2:00 p.m. (local time) on Monday, June 14, 2010. If you are planning to attend the meeting in person and would like to reserve a room at the Dan Caesarea Hotel, please contact Ora Weisman in our Israel office at to take advantage of a special room rate offered only to Zion shareholders.

IMPORTANT NOTE: In prior years, the SEC allowed brokers to vote the shares of stockholders who held shares at the broker but did not express an opinion regarding how they wished to vote their shares. The new rules do not allow your shares to be voted on certain items without you personally voting your shares, so please vote your shares.

You can vote either by returning your prepaid voting card, by telephone or by way of the Internet.

Your vote really does count, so please take a very few minutes in order to exercise your right as a Zion Oil & Gas stockholder.

“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, the sufficiency of cash reserves, ability to raise additional capital, the successful establishment of the drilling subsidiary and the negotiation and execution of definitive agreements with AME (the current owner of the drilling rig) with respect thereto, 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.

NOTICE
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 will send you the prospectus if you request it by calling toll free 1-888-TX1-ZION (1-888-891-9466).
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:
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