Zion Oil & Gas

Zion’s mission is to explore for oil and gas in Israel. Zion’s principal assets are petroleum rights issued by the Ministry of National Infrastructures of the State of Israel, specifically two onshore exploration licenses covering approximately 162,000 acres located between Tel-Aviv and Haifa and a preliminary exploration permit covering approximately 165,000 acres located to the east of Zion’s Asher-Menashe license area. We have named the project to explore the license areas the “Joseph Project.”

We hold 100% of the working interest in our licenses, which means we are responsible for 100% of the costs of exploration and, if established, production. Our net revenue interest is 81.5%, which means we would receive 81.5% of the gross proceeds from the sale of oil and gas produced from lands subject to the licenses (and any leases granted following a declaration of a discovery thereon), if there is any commercial production. The 18.5% we don’t receive is due to a 12.5% royalty reserved by the State of Israel and a 6.0% royalty to charitable foundations that we established. Other than its 12.5% royalty, the government has no right of participation in any portion of our project. No royalty would be payable to any landowner with respect to production from our license areas as the State of Israel owns all the mineral rights. In addition, we intend to establish an employee incentive pool of up to 1.5%. This means that our effective net revenue interest after payout will be no less than 80%, subject to our maintaining a 100% working interest in our licenses.