Zion Oil & Gas Presents Updated Joseph Project Summary



    CAESAREA, ISRAEL, October 8 /CNW/ - Today, Zion Oil & Gas, Inc. (AMEX:  ZN)
of Dallas, Texas and Caesarea, Israel, released a summary of the current
status of its oil and gas exploration related activities in Israel. The
summary, which presents developments that have transpired during the past
several months, is set out below and will be posted on Zion's website -
www.zionoil.com. The Company intends to update the summary from time to time
to reflect new developments as they occur. Zion has named its project to
explore for oil and gas in Israel, the "Joseph Project."

    JOSEPH PROJECT SUMMARY

    (as of October 8, 2007)

    LICENSES

    --  Zion currently holds one 79,000 acre Petroleum Exploration License
(the Asher-Menashe License) along the Israeli coastal plain and on the Mt.
Carmel range, between Caesarea and Haifa. The License began on June 10th, 2007
and is for a three-year term, extendable to a maximum of seven years. Zion
currently holds a 100% Working Interest and an 87.5% Net Revenue Interest in
the License.(1) By the terms of the license, Zion must commence the drilling
of a well by July 2009.

    --  Zion has been informed that the Israeli Petroleum Commission has
recommended that the Petroleum Commissioner grant the company's application
for a second 83,000 acre Petroleum Exploration License (the Joseph License)
located along the Israel coastal plain between Netanya on the south to the
southern border of the Asher-Menashe License. Upon its grant, expected in
mid-October, the Joseph License will cover much of the land that Zion
previously held under the Ma'anit-Joseph License, which was relinquished on
June 22, 2007 with the expiration of its seven-year term. Zion anticipates
that the Joseph License will have an initial term of three years, extendable
to a maximum of seven years. Zion's Working and Net Revenue Interests in the
Joseph License will be the same as its interests in the Asher-Menashe License.
Under the Joseph License, it is expected that Zion will have to commence
drilling a well by July 2009.

    --  In the event of a discovery, Zion will be entitled to convert the
relevant portions of its licenses to 30-year production leases, extendable to
50 years.

    GEOLOGY

    --  In order to understand and interpret the geology of the license
areas, Zion's staff of three geologists is using an Israeli country-wide
seismic database together with SMT Kingdom software. The database consists of
219 seismic sections totaling 3,100 kilometers of coverage and also includes
the stratigraphic sections from all of the wells drilled in Israel.

    --  Currently, Zion is developing four leads and one prospect in its
license areas. Three of the leads are located in the Asher-Menashe License
area and one lead and the prospect are in the Joseph License area. In the 4th
quarter of 2007, the company anticipates acquiring an additional 60 kilometers
of seismic in the Asher-Menashe License with the intent of upgrading two of
the three leads into firm prospects.

    --  From studies conducted by Zion, the five areas under investigation,
shown in the map below, appear to have a total potentially productive acreage
in excess of 20,000 acres.

    --  The prospective geological horizons in the areas are in the Middle to
Lower Triassic and the Upper Permian Section of the Paleozoic, during which
geological periods all of the prospective areas were situated in what is
believed to have been a high energy depositional environment.

    --  Based on its analysis, Zion believes that there are prospective
hydrocarbon bearing intervals at depths between 12,500 feet and 18,000 feet
and that, if successful, the primary hydrocarbons will be natural gas and
condensate, with the possibility of oil.

    DRILLING

    --  In 2005, Zion drilled the Ma'anit #1 well on the Ma'anit structure in
the Joseph License area. Drilling breaks and shows of hydrocarbons were
recorded from 12,000 to the total depth of 15,500 feet. Due to mechanical
problems that prevented the company from isolating highly conductive water
bearing zones from the tighter hydrocarbon bearing formations, the shows were
never successfully tested and the well was abandoned in June 2007.

    --  The Ma'anit structure encompasses 7,400 acres and, compared to any
other well in Northern Israel, the top of Triassic is over 1,600 feet higher,
i.e. closer to the surface.

    --  Zion's current plans are to re-enter the well and then 'sidetrack'
and drill directionally to a distance approximately 2,500 feet northeast of
the present location by the time the well reaches its projected true vertical
depth of 18,040 feet in the Permian section of the Paleozoic Age. The purpose
of the well is both to appraise the apparent findings of the Ma'anit #1 in the
Triassic and to test the deeper Permian horizons. The bottom hole location for
the second well on the Ma'anit structure has been chosen in an attempt to
maximize the chance of being in localized fracturing in the Permian section.
This will be important for successful completion of the well at such an
extreme depth.

    --  Based on the results of the Ma'anit #1 well, the primary product of
the planned second well, the Ma'anit-Rehoboth #2, is expected to be natural
gas plus condensate. However, oil was seen on the pits while drilling the
Ma'anit #1 well and some oil zones are possible.

    --  Preparations for drilling the Ma'anit-Rehoboth #2 well are
continuing. However, the timing of the commencement of drilling the well is
uncertain. This is because there is currently no drilling rig in Israel
capable of drilling to either the Triassic or the Permian. Zion intends to
import an appropriate drilling rig into Israel. In order to justify the
importation costs, Zion, together with other on-shore operators, is
considering a multi-well drilling program in which Zion may commit to the
drilling of both the Ma'anit-Rehoboth well and possibly the first well on the
Asher-Menashe License. This program would require Zion to raise additional
financing and/or sell a portion of Zion's rights in all or part of the Joseph
Project. Please note there can be no certainty that Zion will be successful in
raising the required additional funds.

    --  Due to the depth and slow bit penetration rates, dry hole drilling
costs per well are estimated to be between $7 million and $9.5 million.
Completed well costs are estimated to be between $9 million and $11 million.

    MARKETS

    --  The natural gas market is developing in Israel following the offshore
discovery of the Mari-B field in 2000, the construction of several natural
gas-fired generating stations by the national electric company and the planned
construction of several gas-fired IPPs and inside-the-fence plants by a number
of large industrial users. The Israeli government is encouraging the power and
industrial sectors to convert to natural gas and, jointly with the private
sector, has completed most of the offshore underwater natural gas pipeline
infrastructure intended to connect the newly discovered offshore gas fields to
the markets in Israel; construction of the first phases of the onshore
pipeline system has also been completed. It is believed that the electrical
generating sector, together with the industrial, commercial, and future
residential sectors when developed, should be able to absorb any gas discovery
within a reasonable period. As the system is being developed we are seeing an
upward trend in the gas price now in the range of $3,500 to $4,500 per billion
BTU. Tenders are currently being issued by the Israeli government for the
establishment of LDCs (Local Distribution Companies) in several regions of the
country and the Israeli government has announced its strategic need to find
additional suppliers of natural gas for the anticipated significant expansion
of the market.

    --  In the Ma'anit area, a market for approximately 2,500 mcfpd currently
exists within 1,000 feet of the Ma'anit #1 wellsite. In conversation,
representatives of the Israel Natural Gas Authority stated that a
high-pressure transportation line from offshore line's existing landfall at
Hadera to Ma'anit is expected to be completed by the end of 2009. The
cross-country, high-pressure gas transportation line currently in construction
is expected to pass within 3,000 feet of the well sometime between 2011 and
2013. Entry into either of those pipelines would open the entire country to
gas marketing from Zion's license areas.

    --  Because Israel imports all of its crude oil needs and the markets for
crude oil in Israel are the two oil refineries, no special marketing strategy
need be adopted with regard to any oil that Zion may discover. Zion believes
that it will have a ready local market for its oil at market prices, and will
have the option of exporting to the international market.

    FORWARD-LOOKING STATEMENTS: Statements in this press release and the
Joseph Project Summary that are not historical fact, including statements
regarding license and lease rights and applications, exploration, development
and drilling plans, future geophysical and geological data and interpretation
and results of seismic surveys and data, generation of additional prospects
and reserves, drilling locations, availability and costs of drilling rigs,
timing and results of any wells, plans regarding and ability to raise
additional capital, possible participation of operating partners, and other
statements regarding future operations and results, financial results,
opportunities, growth, business plans and strategies 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 actual
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.

    (1) After payout the 87.5% NRI will be reduced by 6% for the two
charitable trusts and 1.5% for an employee incentive pool. The resulting NRI
will be 80.0%

    MULTIMEDIA AVAILABLE:
http://www.businesswire.com/cgi-bin/mmg.cgi?eid=5512768




For further information:

For further information: Zion Oil & Gas, Inc., Dallas Ashley Chatman,
214-221-4610 Email: ashley@zionoil.com

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