SAN ANTONIO – Christians United for Israel, the nation’s largest pro-Israel organization, announced Monday that Zion Oil & Gas, Inc. (NASDAQ GM: “ZN”) will sponsor the Night to Honor Israel and the Ambassador’s Reception at CUFI’s 2010 Washington Summit.

The evening will feature remarks from Pastor John C. Hagee, CUFI’s Founder and National Chairman. He will be joined on the stage by keynote speaker Michael Oren, Ambassador of Israel to the United States.

“This sponsorship is very good news,” said Pastor John Hagee. ”We appreciate Zion’s support for our efforts to strengthen the US-Israel relationship.”

Christians United for Israel is the largest pro-Israel organization in the United States and one of the leading Christian grassroots movements in the world. CUFI spans all fifty states and reaches millions with its message. Each year CUFI holds hundreds of pro-Israel events in cities around the country. And each July, thousands of pro-Israel Christians gather in Washington, D.C. to participate in the CUFI Washington Summit and make their voices heard in support of Israel and the Jewish people.

Zion Oil & Gas, Inc., a Delaware corporation, explores for oil and gas in Israel in areas located on-shore between Haifa and Tel Aviv with a total area of approximately 327,000 acres in petroleum exploration rights.

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Noble's Charles Davidson

Investors should be cautious and differentiate between concepts and reality, says chairman of gas explorer.
By Eytan Avriel Haaretz

The probability that natural gas will be found in the deepwater prospects being explored by Noble Energy and Delek Group – the Leviathan prospect – is 10% to 15%. That is a probability, which by definition does not mean “sure thing.” However, says Charles Davidson, CEO of Noble Energy, he hesitates to talk about the prospect because some people in Israel relate to announcements of potential as though they were announcements of actual discoveries.

“That worries me,” he said on a panel on oil and gas exploration at a conference of the Tel Aviv Stock Exchange in London on Thursday: Oil exploration is a high-risk business.

What Noble does, Davidson said, is manage risk in a portfolio of opportunities. Investors should be cautious and differentiate between concepts and reality. Reality is the gas discovered at Tamar.

At the lowest part of the areas the partners looked at, there is the potential of oil, but – Davidson stressed – that doesn’t mean there is oil there. It has never been tested.

Systems of the type down there can produce oil, Davidson said, but one has to check whether a reservoir of trapped liquids of the type is actually there.

Gideon Tadmor, CEO of Delek Energy, fielded a question about the difference between investment in fossil-fuel exploration for the long-term, and as a speculative investment. In his view the difference lies in the company’s diversification: picking a company involved in one project is speculative. The more projects the company has, the better it is, Tadmor said.

One also has to check the company’s ability to actually do the job, Davidson added. For instance, to drill at Tamar, the partners had to bring in a rig from Africa. By the time the exploration was done, the cost had reached $300 million. Not every company could pull off a job like that.

On the geopolitical risk of drilling in Israeli territorial waters, given claims by Lebanese and Cypriot elements that they own a share, Davidson said Noble employs companies that analyze risks unrelated to the actual drilling, and in their opinion, Israel ranks well. Noble has been working in Israel for 12 years, Davidson said; obviously it feels comfortable about it.

“There are areas more problematic than Israel,” Tadmor added; Israel is relatively safe. “I see no geopolitical risk in our explorations.”

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On June 16, 2010, field acquisition of new 2-dimensional seismic in the Jordan River Valley section of Zion’s 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).

According to Zion CEO Richard Rinberg, “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 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.”

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

‘Field seismic’ or ‘seismic reflection’, according to Wikipedia, is a method of exploration geophysics that uses the principles of seismology to estimate the properties of the Earth’s subsurface from reflected seismic waves. The method requires a controlled seismic source of energy, in this case, trucks equipped with seismic vibrators, commonly known by the trademark name Vibroseis. By noting the time it takes for a reflection to arrive at a receiver, it is possible to estimate the depth of the feature that generated the reflection. In this way, reflection seismology is similar to sonar and echolocation.

Zion Oil & Gas and other exploration companies use this seismic reflection technology to ‘see’ possible hydrocarbon bearing structures below the earth’s surface by ‘interpreting’ the reflected seismic data.

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Most of the data the USGS report contained came from research conducted between 2000 and 2008 by Dr. Michael Gardosh, a researcher at the Geophysical Institute of Israel, and Dr. Yehezkel Druckman, who until a few years ago was Petroleum Israel’s Commissioner. Dr. Druckman now serves on the Zion Oil & Gas Board of Directors.

So in today’s dollars, how much oil and gas does the USGS say the Levant Basin holds in undiscovered resources? A friend ran the numbers for me:

That’s nearly $718 Billion. Most of the Levant Basin lies within the land and territorial water of Israel. Offshore, some of the ‘undiscovered’ the natural gas has been discovered and will be powering Israel in the next few years. Onshore, the ‘undiscovered’ oil, I believe, will be discovered soon.

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Zion Oil & Gas released a company video last week in which Bill Ottaviani (Zion’s President and Chief Operating Officer) and Richard Rinberg (Zion’s Chief Executive Officer) 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 us a chance to learn the strategic thinking behind some of Zion’s business decisions.

The film was shot and produced by British filmmaker Tom Boulting. Boulting’s company, Charter Films, Ltd. is also working on the full length documentary, “49:1 The Zion Story”. News on the making of the film can be found at www.zionthemovie.com.

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Israeli Natural Gas Find Keeps On Getting Bigger But Could Ignite Trouble

Vosizneias Tel Aviv – Israel’s natural gas bonanza in the eastern Mediterranean just keep getting bigger, with reserves currently pegged at around 25 trillion cubic feet.

That’s enough to guarantee the Jewish state, dependent on imported energy since it was founded in 1948, energy security for at least two decades.

The strikes at three fields, dubbed Tamar, Dalat and Leviathan, could even turn Israel into a gas exporter and transform its economy. There are indications that there’s oil down there as well.

But the offshore finds may become a casus belli (case for war) as Lebanon, Israel’s northern neighbor and longtime battleground, lays claim to the gas fields as well.

Lebanon’s As-Safir newspaper reported June 8 that the biggest field found off Israel, Leviathan, extends north into Lebanese waters and could well aggravate tensions between the countries.

Under the headline “Israel prepares to steal gas fields in Lebanon’s waters,” the leftist daily said if Israel tried to siphon gas from Lebanese territory, Beirut would be forced to defend its resources.

One of Hezbollah’s top leaders, Hashem Safieddine, head of the Iranian-backed movement’s executive council, has declared it won’t allow Israel to “loot” Lebanese gas resources.

Israel’s military chiefs say Hezbollah currently possesses around 45,000 missiles and rockets, which could be fired at Israel’s emerging energy infrastructure centered on the port of Haifa.

The city was repeatedly hit by Hezbollah rockets during the 34-day war with Israel in July and August 2006.

These days, Hezbollah purportedly has long-range weapons that have greater accuracy and carry more destructive warheads than those used in 2006. These are capable of hitting just about anywhere in Israel.

In the event of renewed hostilities, and both sides are talking tough again, Israel’s energy installations would be prime targets.

Lebanon’s parliament speaker, Hezbollah ally Nabih Berri, has urged the Beirut government to move swiftly to start its own offshore exploration or risk Israel claiming whatever resources there are.

“Israel is racing to make the case a fait accompli and was quick to present itself as an oil emirate, ignoring the fact that, according to the maps, the deposits extend into Lebanese waters,” said Berri.

The speaker, who has submitted a parliamentary bill to launch exploration of Lebanon’s potential offshore reserves, declared: “Lebanon must take immediate action to defend its financial, political, economic and sovereign rights.”

Israeli officials insist that the gas fields lie within Israeli territorial waters.

However, the liberal Haaretz daily noted Tuesday, “Israel has yet to declare its exclusive economic zone, though this usually applies to what in the sea, such as fish, and not what lies under the continental shelf.”

It quoted Professor Moshe Hirsch of Jerusalem’s Hebrew University, an expert in international law, as saying that problem could arise when the continental shelf is shared by more than one country.

But he maintained the gas lies squarely in Israel’s sector of the continental shelf and so there was no need top declare an exclusive economic zone.

The first strikes were made early this year at the Dalit field off Hadera, south of Haifa by a consortium headed by Noble Energy, a U.S. company with headquarters in Houston, which is working with three Israeli firms.

Tamar, 50 miles east of Haifa, was found in April. Last week Nobel raised its original estimate of the field’s size by 33 percent to 8.4 trillion cubic feet of gas.

But then came the discovery of Leviathan, double the size of Tamar at an estimated 16 trillion cubic feet of gas, further off the coast.

Nobel said that total offshore reserves could top 30 trillion cubic feet, double Britain’s giant gas fields in the North Sea, with a conservative value of some $300 billion. Nobel is moving a drilling platform from the Gulf of Mexico to step up exploration.

Gas production is to begin in 2012. Israel is planning to build a liquefied natural gas plant near Haifa but it probably won’t go online until 2015.

The gas finds, particularly Leviathan, which may turn out to be even bigger, are “nothing short of a geopolitical gamechanger,” Gal Luft, executive director of the U.S.-based Institute for the Analysis of Global Security, wrote in Haaretz Sunday.

“Altogether the basin the eastern Mediterranean … could contain an amount of gas equivalent to one-fifth of U.S. natural gas reserves.”

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Israel drills successful oil well

JERUSALEM, June 16 (UPI) — Israel’s Givot Olam Oil Exploration said its drilling explorations at its Meged 5 well near Rosh Ha’Ayin have been very successful.

As a result of the initial operations, Givot Olam Oil Exploration is returning its hydraulic fracturing equipment to its foreign suppliers, Globes reported Wednesday.

Since the Rosh Ha’Ayin test bore produced oil mixed with gas instead of a water flow the bore, Givot Olam Oil Exploration Director Shmuel Becker told journalists, “We’re returning the (hydraulic) frac(turing) equipment because there is natural oil flow in the well.”

Givot Olam Oil Exploration reported that the test bore produced an oil flow of 302 barrels over nearly 20 hours. Following expert analysis, based on the test bore site’s natural oil flow from the Meged 5 well, Givot Olam Oil Exploration decided to dismantle the hydraulic fracturing and propelling equipment at the wellhead and send it back overseas.

In light of the Meged 5 bore hole success, Givot Olam Oil Exploration has begun preparations for tests of section 6 of the well.

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