EXHIBIT 10



EXHIBIT 10.2

ASHER PRELIMINARY PERMIT

The pages which follow are free translations from the Hebrew of the documents setting forth the granting of Preliminary Permit No. 185/ "Asher".

Document A: Cover letter dated August 1, 2005 from the Minister of National Infrastructures granting the Preliminary Permit.  

Document B: Original Preliminary Permit No. 185/ "Asher", granted on August 1, 2005, including First Annex (Description of the Area) and Second Annex (Special Conditions).




MINISTRY OF NATIONAL INFRASTRUCTURES



 

25 Nissan 5765

1 August 2005



Petroleum 2005-190



Mr. E. Roih

Zion Oil & Gas, Inc.

9 Yair Stern St.

Herzelia 46412



 

Dear Sir,



Re:Preliminary Permit 185/ "Asher"



Please be informed that pursuant to the authority vested in me under Section 7A of the Petroleum Law, 5712-1952, and following consultation with the Petroleum Commission in accordance with the said law, I have decided to grant to



"Zion Oil & Gas" - 100%



a Priority Right to receive Petroleum Rights in the area subject of Preliminary Permit 185/"Asher".



The estimated cost for executing the required activities mentioned in the Second Annex is $325,000.

 

The Priority Right to receive Petroleum Rights is conditioned on the fulfillment of all conditions of the Preliminary Permit.



The validity of the Priority Right shall lapse upon the termination of the Preliminary Permit.



 

Sincerely, 



/s/ -

Binyamin (Fuad) Ben Eliezer

Minister of National Infrastructures 



 

Copy: Dr. Yaacov Mimram, Commissioner of Petroleum Affairs




STATE OF ISRAEL



Petroleum Law, 5712 - 1952 



Preliminary Permit No. 185/ "Asher"



Preliminary Permit 



 

	
There is hereby granted to -
	 
	 	
Zion Oil & Gas, Inc. 100%

	
A PRELIMINARY PERMIT
	
To conduct preliminary investigations,including geological and geophysical activities, for the purpose of evaluating the potential to discover petroleum on the area described in the First Annex which is an integral part of this Preliminary Permit.

	
THIS PRELIMINARY PERMIT
	
Is granted subject to the provisions of the Petroleum Law, 5712-1952, and to the Regulations issued thereunder, and to the Special Conditions set forth in the Second Annex which is an integral part of this Preliminary Permit.






 

The validity of this Preliminary Permit shall be terminated on 12 Shvat 5767

31 January 2007

Granted in Jerusalem, on 25 Tamuz 5765

1 August 2005



 

 

 

 
/s/ (-)





          Dr. Yaacov Mimran

Commissioner of Petroleum Affairs






STATE OF ISRAEL



Petroleum Law, 5712 - 1952 



Preliminary Permit No. 185/ "Asher"



F I R S T   A N N E X 



DESCRIPTION OF THE AREA:



 

 

 

From Map point 196.00/740.00 thence East 

To Map point200.00/740.00 thence South East 

To Map point218.00/715.00 thence West

To Map point213.00/715.00 thence South West 

To Map point210.00/712.00 thence West 

To Map point208.00/712.00 thence South West 

To Map point204.00/711.00 thence West 

To Map point194.40/711.00 thence South West 
  To Map point                      188.50/704.00 thence North East along  











                                                                            the cost of the Mediterranean 

                                                                            Sea, back 

To Map point196.00/740.00 



Total area is 490,000 Dunam (490.0 km2)

The coordinates are based on the new Israeli Grid



 

 

It is specifically declared hereby that the boundaries of the Permit Area are as set forth in the above description, notwithstanding any apparent changes from the boundaries set forth in the maps submitted by the recipient of the Preliminary Permit.



 

Granted in Jerusalem, on 25 Tamuz 5765

1 August 2205



 
/s/ (-)





          Dr. Yaacov Mimran

Commissioner of Petroleum Affairs




STATE OF ISRAEL



Petroleum Law, 5712 - 1952 



Preliminary Permit No. 185/ "Asher"



S E C O N D   A N N E X 



SPECIAL CONDITIONS:



 

During the term of the Permit, the Company shall execute the following work plan:

	
1.
	
Not later than May 1, 2006, reprocessing of existing seismic lines, geologic and geochemical data and preparation of a regional geological report regarding the Triassic.

	
2.
	
Not later than May 1, 2006, submission of a Prospect and application for grant of License or release of the area or an undertaking to acquire new seismic lines.

	
3.
	
Not later than November 1, 2006, acquisition of 20 km of new seismic lines, interpretation and processing thereof and submission of a summation report.

	
4.
	
Not later than January 31, 2007, submission of Prospect for drilling in the Permit area.

	
5.
	
At the end of every stage, the findings and their summations are to be submitted to the Commissioner of Petroleum Affairs.

	
6.
	
Toward the end of the Permit period, a report of the activities performed in the area and their findings shall be submitted, in two copies. In the report the following matters shall be detailed:

	 	
a.
	
Evaluation of the prospectivity of the various plays.

	 	
b.
	
Structural maps (time and depth) and isopatch maps of the key Mesozoic and Cenozoic horizons.

	 	
c.
	
Seismic attribute maps in the appropriate contexts, if conducted.

	 	
d.
	
Paleographic maps of the strategic intervals constituting the various plays.

	 	
e.
	
Evaluation of petroleum potential and hydrocarbon migration paths.

	
7.
	
The final reports shall also include a description of all the activities performed in the Permit area. There shall be appended to the reports the following details (to the extent that they have not been previously submitted in quarterly reports or further to clause 5 above):

	 	 	
All the geophysical material, including copies of the magnetic field tapes etc., the documentary material accompanying the field tapes, as surveyors' reports, operators' reports, location maps, results of processing of new seismic lines and the reprocessing of the old seismic lines. The relevant material shall be submitted both on magnetic tapes and on semi-originals of the Mylan type.

	
8.
	
The Permit owner shall coordinate the entrance of boating vessels, required for its activity with the State of Israel defense and security authorities






No original geophysical material, as magnetic tapes etc., shall be exported from Israel, but rather copies only.



Failure to comply with these conditions will result in immediate cancellation of the Permit from the date of the failure to comply with the conditions.



 

Granted in Jerusalem, on 25 Tamuz 5765

1 August 2005



 
/s/ (-)





          Dr. Yaacov Mimran

Commissioner of Petroleum Affairs