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.
The Zion Oil & Gas, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=6850AME is an independent oil and gas exploration and production company, incorporated in Delaware in 1962, with its head office in Wichita, Kansas. AME has drilled more than 130 exploration and development wells in Turkey and Egypt for major oil companies, including Exxon, Mobil, Wintershall AG, MOL, Placid Oil, Neste Oy, Burren Energy Inc. and Edison International spa. Its rig inventory includes 11 drilling and workover rigs. 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, 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 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).
Zion's homepage may be found at: www.zionoil.com
CONTACT: Zion Oil & Gas, Inc. Mike Williams 214-221-4610 firstname.lastname@example.org