DALLAS and CAESAREA, Israel, May 24, 2010 (GLOBE NEWSWIRE) -- Zion Oil & Gas, Inc. (Nasdaq:ZN) announced today that, on Friday, May 21, 2010, it signed an extension to its drilling contract with Aladdin Middle East Ltd (AME), which was originally executed on September 12, 2008. Under the terms of the extended contract, AME has agreed to serve as the drilling contractor for Zion's planned next well, the Ma'anit-Joseph #3 well, located in the area covered by Zion's Joseph License.
The Ma'anit-Joseph #3 well, scheduled to "spud" (that is, begin drilling) in August 2010, is planned to be drilled below 18,000 feet and is targeted at the 'deep' Permian geologic formation. If successful, it will be the first well drilled to the Permian in Northern Israel. The commencement of the drilling program is subject to receipt of various government permits. (Gen. 49:25 and Deut. 33:13)
Zion's Chief Executive Officer, Richard Rinberg, said today, "The signing of the amendment to the drilling contract is another important milestone for Zion. We are very happy to continue working with AME and continue to be impressed by their high quality of service and professionalism. The amended drilling contract will serve as the basis of our relationship with AME for the interim period until we are able to establish our planned drilling subsidiary. As outlined in the Memorandum of Understanding that we signed in April 2010, provided our rights offering is successful, we and AME plan to establish a subsidiary of Zion, tentatively named 'Zion Drilling, Inc.', which will purchase AME's 2,000 horsepower drilling rig (currently located in Israel)."Zion's common stock trades on the NASDAQ Global Market under the symbol "ZN" and Zion's warrants trade under the symbol "ZNWAW". Zion Oil & Gas, a Delaware corporation, explores for oil and gas in Israel in areas located on-shore between Haifa and Tel Aviv. It currently holds two petroleum exploration licenses, the Joseph and the Asher-Menashe Licenses, between Netanya, in the south, and Haifa, in the north, covering a total of approximately 162,000 acres and the Issachar-Zebulun Permit Area, adjacent to and to the east of Zion's Asher-Menashe license area, covering approximately 165,000 acres. Zion's total petroleum exploration rights area is approximately 327,000 acres.