Letter From The President & COO

To Zion Friends and Supporters:

To begin with I want to express my sincere gratitude to all of you who were supporting me in prayer while I was undergoing medical treatment in December, January and February. The doctors and nurses were amazed at how well I tolerated the radiation and how few side effects were manifested. I was able to return to work in Israel with an unusual amount of energy and feel completely revitalized.

Since I wrote to you last, as Victor Carrillo, our CEO, has informed you, our Environmental Impact Assessment was readily accepted by the various regulatory authorities and the Northern District in Israel voted unanimously to grant our drilling permit. We even received a yes vote from the representative of the Ministry of Environment — probably the first time that has ever happened!

Our first choice for a drilling contractor experienced some internal problems and re-organization. Being unsure of the final outcome, we delayed executing a contract, sought out two other contractors and filed for and received an extension for the spud date for the Megiddo-Jezreel #1 well. As of this writing we now have three viable drilling contractors to choose from and are in the final stages of making a selection so that we can build the location suited to the selected rig.

Once we sign the drilling contract, we should be able to quickly finalize the drilling permission from the Ministry of Energy and Water Resources.

All of our long lead items (tubular goods, wellhead, liner hangers and cementing accessories) are either in our storage yard or are in transit and expected within the next few weeks. In the meantime, we are taking advantage of the industry slowdown to negotiate the best terms for the services we will require.

As of now, we have not raised sufficient monies to drill and complete the first well in the manner and standard that is required to maximize success. If you are a shareholder and contemplating participating in the current offering, I would encourage you do so before it expires at the end of this month.

I know many of you are concerned about how the price of oil affects our prospect for a commercial well. Based upon my experience these last 40+ years, I am convinced beyond any doubt that, if successful, we will be profitable at the current price and that the oil price will rebound by the time we drill, test and complete the well and are ready to initiate sales of the oil and/or gas.

Again, it is great to be back home in excellent health and enjoying the work here at Zion. I hope to see at least some of you at the annual meeting in June, in the meantime, Shalom from Israel.

Glen Perry, COO

This letter update does not constitute an offer to sell, or the solicitation of an offer to buy, any securities, and there will be no sale of any securities in any state in which such an offer, solicitation, or purchase would be unlawful prior to the registration or qualification of such securities under the securities laws of any such state. The offer of the Senior Convertible Bond issuable upon exercise of the rights is made only by means of the prospectus supplement dated October, 21, 2015, as subsequently amended, filed with the SEC, and related documents. A copy of the prospectus may be obtained, free of charge, on the SEC website at www.sec.gov, or by contacting us at info@zionoil.com or by calling us at 888-891-9466.

FOR A COMPLETE DESCRIPTION OF THE RIGHTS OFFERING TERMS AND CONDITIONS, WE HIGHLY ENCOURAGE YOU TO READ AND STUDY THE REGISTRATION STATEMENT, INCLUDING THE PROSPECTUS SUPPLEMENT DATED OCTOBER 21, 2015.