Zion Oil & Gas : PRESS RELEASE – SUCCESS IN SECURING A DRILLING RIG

This is a summary of key developments and our prayer focus points for which we seek the LORD's guidance for our plans to drill our upcoming well:

DRILLING RIG STATUS

Zion Oil & Gas, Inc. ('Zion') is excited to announce success in securing a drilling rig with which to drill its 15,000 foot Megiddo-Jezreel #1 well. On October 6, 2016, a drilling contract was executed by Zion and DAFLOG Ltd, an Israeli-registered related party entity to DAFORA S.A.

DAFORA is the largest drilling company in Romania and has drilled over 1,000 wells in Romania, Eastern Europe and East Africa. They are members of the International Association of Drilling Contractors (IADC) and have a strong commitment to 'uncompromised safety performance' in Operational Health and Safety.

Their history of operational success was a key factor in selecting them to be Zion's drilling contractor. They have regional experience in drilling challenging wells as evidenced by the fact that they hold the record for the deepest well drilled in Transylvania, Romania.

They also have experience working with top global operators that expect the highest degree of safety and operational performance excellence as highlighted by the fact that they were under a multi-year contract with Chevron to drill multiple gas wells in Romania.

Zion will use DAFORA's F-400 drilling rig which has a 3,000 HP capacity drawworks capable of drilling to over 20,000 ft. This provides sufficient horsepower and safety factor to drill our planned well with a target depth of up to 15,000 ft.

The DAFORA rig, currently stored in Israel, has a successful operating history in Israel, having drilled a 15,600 ft. deep well for Givot Olam in their Meged Oilfield in 2014.

Eliminating the need to import a rig into Israel from either the U.S. or Europe will be a substantial time and cost savings that was another benefit in choosing DAFLOG as the drilling contractor.

FUTURE DRILLING PROGRESS STATUS

On September 25, 2016, we received the fully executed agreement with the Israel Land Authority (ILA), the formal lessor of the land to Kibbutz Sde Eliyahu, to access and utilize the 3.18-acre drill site for oil exploration.

Having reached agreement with the local kibbutz and the ILA, we have been reviewing responses to a comprehensive bid proposal package that was received from various contractors to begin drill site construction. Upon selection of the construction contractor, the site is expected take 45-60 days to complete.

Depending on the results of the planned exploratory well and subject to adequate cash resources, multiple wells could be drilled from this pad site, as several subsurface geologic targets can be reached using directional trajectories for subsequent wells.

ZION'S CURRENT PUBLIC BOND OFFERING

Zion must raise substantial funds to drill our upcoming deep onshore Israel well.

We are currently in the midst of Zion's $1,000 public bond offering. Unlike prior offerings, this is not a shareholder rights offering that is open only to existing shareholders.

Rather, this bond offering is open to the public at large. This is a best-efforts minimum-maximum offering where Zion must raise a minimum of $2.5 million dollars to close on the offering with the proceeds to be used to drill the Megiddo-Jezreel #1 well.

Zion is offering (through Network 1 Financial Securities, Inc., our Placement Agent) 12% Convertible Senior Bonds to the public at principal or par value of $1,000.

Bond holders are entitled to receive a 12% annual interest rate paid on the Principal beginning October 2, 2017. Interest payments will be paid annually, in arrears, either in cash or in kind (shares of Zion common stock).

The Final Date to participate is on October 31, 2016.

For more info on Zion's 12% Convertible Bond Offering, click this link:

https://www.zionoil.com/investor-center/

OUR DEDICATION TO OUR SHAREHOLDERS

Zion Oil & Gas is dedicated to exploring for oil and gas onshore Israel. We are 100% focused on our Megiddo-Jezreel License, a large area south of the Sea of Galilee that includes the Jezreel and Megiddo valleys.

This license gives Zion the exclusive right to explore in an area of approximately 99,000 acres that appears to possess the key geologic ingredients of an active petroleum system with significant onshore exploration potential.

If the Lord wills (James 4:15), we plan to start drilling our next deep exploratory well (Megiddo-Jezreel #1) in the next several months.

Humbly seeking your ongoing support and prayers,

Victor G. Carrillo, CEO

FORWARD LOOKING STATEMENTS: Statements in this press release that are not historical fact, including statements relating to Zion's entry into a drilling contract with Daflog and the terms, the public offering, and the results thereof are forward-looking statements as defined in the 'Safe Harbor' provision 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 filings with the Securities and Exchange Commission, including the prospectus filed in connection with Zion's current public offering, 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. Accordingly, Zion can give no assurance that the expectations reflected in these statements will prove to be correct. Zion assumes no responsibility to update these statements.

Zion Oil & Gas, Inc. has filed a registration statement (including a prospectus) with the SEC for the offering to which this communication relates. Before you invest, you should read the prospectus in that registration statement and other documents the issuer has filed with the SEC for more complete information about Zion Oil & Gas and its offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, Zion Oil & Gas or its underwriter will arrange to send you the prospectus if you request it by calling toll free 1-888-891-9466 . Direct links to the SEC location, or to the documents in PDF, may be found on the home page of Zion Oil & Gas. Inc., at www.zionoil.com.