CEO Insights for September

CEO Insights
September 11, 2015

Dear Shareholder and/or Supporter,

Zion Oil and Gas, Inc. (“Zion” or “Company” NASDAQ: ZN), is a publicly traded oil and gas exploration company dedicated to finding oil and gas onshore Israel. Our experienced and professional team continues to focus its efforts on drilling our next exploratory well, the Megiddo-Jezreel #1, late this year or early in 2016.

Since my last update to you, Dr. Yuval Steinitz, Israel’s Energy Minister, appointed Mr. Yossi Wurzburger to be Israel’s new Petroleum Commissioner. I am planning to meet Commissioner Wurzburger in person when I next travel to Israel in October.

Our Megiddo-Jezreel License gives Zion the exclusive right to explore in a large area of approximately 99,000 acres. We have recently achieved the following critical milestones:

• Zion has approved a purchase order for over 3900 meters (~465 tons) of oil and gas casing for our well. We already had an adequate amount of a certain size casing from previous operations that will be used to reach the estimated 4500 meter depth in the well.

• Zion is in the late stages of drilling contract negotiations with Viking and Viking’s Israeli subsidiary for use of a 1,500 HP land-based oil and gas rig with deep drilling capacity (see picture below) with which to drill our next well(s).

• Forrest Garb & Associates, an international petroleum engineering and geoscience consulting firm, has now completed its Independent Resource Assessment Report of Gross Prospect Resources for Zion’s drilling prospect as required under our license terms. This independent analysis affirms Zion’s internal interpretation of four separate objectives (Mid-Cretaceous, Upper Jurassic, Mid-Jurassic and Triassic) with combined original oil in place estimates possibly in the hundreds of millions of barrels if a discovery is made.
• The Forrest Garb Report estimates of prospective resource volumes used probabilistic analysis methods in accordance with the Petroleum Resources Management System as endorsed by the Society of Petroleum Engineers, the American Association of Petroleum Geologists, the World Petroleum Council, and the Society of Petroleum Evaluation Engineers. The classification system and definitions are in common use internationally within the petroleum industry. They provide a measure of comparability and reduce the subjective nature of resources estimation. This analysis provides a consistent approach to estimating petroleum quantities, evaluating development projects, and presenting results within a comprehensive classification framework.
• Zion’s Environmental Impact Assessment (EIA) study documents and drilling plan have now been formally approved by Israel’s Energy and Environmental Ministries. The Northern District Committee in Nazareth has now reviewed and authorized a 60-day public comments period of our drilling plans. The 60-day period will not end until mid-November. However, Zion’s final approval to drill cannot be granted until after the 60 days have past and a formal meeting is held by the Northern District Committee. We will not be authorized to begin well site construction until after we have a final drilling permit in hand so it increasingly looks like we will not be able to spud our well until early 2016.

Your ongoing prayers, support and trust are vital to us and I thank you for them.

Shalom from Texas,

Victor G. Carrillo CEO

“And I will bless those who bless thee…”
Genesis 12:2-3