Zion's Drilling Ops to Start in January after Rig's Delivery

Zion Oil & Gas has announced updated information regarding the status and importation into Israel of the drilling rig and crews contracted for (on September 12, 2008) with Aladdin Middle East Ltd (AME).

Under the terms of the contract, AME committed to provide a completely refurbished and updated 2,000 horsepower rig and crews to drill Zion’s planned Ma'anit-Rehoboth #2 well 'directionally' to below 18,000 feet.

AME has advised Zion that the drilling rig refurbishment has been successfully completed and that the rig stands ready in Ankara, Turkey. AME has started the process of obtaining Israeli work permits for their crews; however, due to the relevant government office in Israel having been closed for most of October, the workers' permitting process was delayed.

It is now anticipated that the rig will be shipped out of Turkey in January 2009.

Zion has recently received positive notifications on almost all of the required Israeli permits (other than crew work permits) related to the Ma’anit-Rehoboth #2 well and is now working on the location site to prepare it for the arrival of the rig.