updated 6/6/2011 8:15:47 PM ET 2011-06-07T00:15:47

DALLAS and CAESAREA, Israel, June 6, 2011 (GLOBE NEWSWIRE) -- Zion Oil & Gas, Inc. (Nasdaq:ZN) announced today that it intends to launch a rights offering. Under the rights offering, Zion will distribute non-transferable subscription rights to holders of Zion's common stock on the record date of June 15, 2011, to purchase their pro-rata portion of approximately 6.25 million Units of Zion's securities. Each Unit will consist of one (1) share of Zion's common stock and warrants to purchase two (2) additional shares of Zion's common stock at an exercise price of $3.50 per share. 

Under the rights offering, stockholders of record on the record date will therefore have the right to subscribe for one (1) Unit for every four (4) shares of common stock owned on the record date, equivalent to 0.25 subscription rights for each share of common stock owned on the record date.

Each whole subscription right will entitle the stockholders of record on the record date to subscribe for one Unit at the per Unit purchase price of $5.00. The warrant will be exercisable for a one-year period beginning on the closing date after the rights offering expires.

The rights offering is planned to commence as soon as practicable after the record date and to continue through 5:00 p.m. Eastern Standard time on July 25, 2011, subject to Zion's right to extend the offering in its sole discretion. The rights offering will also include an over-subscription privilege, entitling a stockholder who exercises all of their basic subscription privilege the right to purchase additional Units that remain unsubscribed at the expiration of the rights offering, subject to the availability and pro-rata allocation of securities among stockholders exercising their over-subscription right.

If the rights offering is fully subscribed, then the gross proceeds of the offering will be approximately $31.25 million, before offering related expenses which the Company estimates should not exceed $150,000. This figure does not include proceeds, if any, from any future exercises of the warrants. The proceeds of the rights offering will be used to further Zion's oil and gas exploration program in Israel.

As soon as possible after the Record Date, Zion plans to mail to holders of its common stock (as of the close of business on the Record Date) a prospectus and other items necessary for exercising the rights. Shareholders who hold their shares in a bank or broker name will receive the rights offering material from their bank or broker. The prospectus will contain a description of the rights offering and other information.

This announcement is neither an offer nor a solicitation of any offer. The securities are offered by prospectus only, and only within those States and other jurisdictions in which the securities may be sold, and this announcement is neither an offer to sell nor a solicitation of any offer to buy in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities of any such state or jurisdiction. The rights offering will be made by means of a prospectus supplement that will be filed by the record date (File No. 333-174266).

Zion's common stock trades on the NASDAQ Global Market under the symbol "ZN".

Zion Oil & Gas, a Delaware corporation, explores for oil and gas in Israel in areas located onshore between Haifa and Tel Aviv. It currently holds total exploration rights on approximately 218,000 acres of land. This includes two petroleum exploration licenses, the Joseph License (on approximately 83,000 acres), between Netanya, in the south, and Haifa, in the north and the Jordan Valley License (on approximately 56,000 acres), just south of the Sea of Galilee. The Asher-Menashe License (on approximately 79,000 acres), which Zion has held continuously since June 2007, is set to automatically expire on June 9, 2011 (its scheduled expiration date), however, Zion has submitted an extension application to Israel's Petroleum Commissioner.

The Zion Oil & Gas, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=6850

FORWARD-LOOKING STATEMENTS: Statements in this press release that are not historical fact, including statements regarding Zion's planned operations, drilling efforts, and potential results thereof and plans contingent thereon and the gross proceeds of the rights offering, 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.

For more information regarding the rights offering or to request copies of the prospectus supplement relating to the rights offering when it becomes available, you may contact us by calling toll free at 1-888-TX1-ZION (1-888-891-9466) or by contacting the Dallas Office at Zion Oil & Gas, Inc., 6510 Abrams Rd., Suite 300, Dallas, TX 75231; telephone 1-214-221-4610; email: dallas@zionoil.com Copies of the prospectus supplement, when available, will be available for viewing on the website of the U.S. Securities and Exchange Commission located at www.sec.gov

Zion's homepage may be found at: www.zionoil.com

CONTACT: Zion Oil & Gas, Inc.
         Mike Williams, 214-221-4610
         dallas@zionoil.com

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