Exhibit
10.11


 


Memorandum
Of Understanding 


This
Memorandum of Understanding (“MOU”) is executed as of February 25, 2015, between Zion Oil & Gas, Inc.,
a corporation duly organized and existing under the laws of Delaware, having an office at 6510 Abrams Road, Suite 300, Dallas,
Texas, 75231 (“Zion”) and Viking Services BV, a private company with limited liability organized in the Netherlands,
having a registered office at De entrée 99, 1101 HE, Amsterdam Zuidoost, The Netherlands (“Viking”). Zion is
properly registered to transact business in the country of Israel. Zion and Viking may be referred to individually as a “Party”
or collectively as the “Parties”.&


 


Purpose


 


The
Parties seek to enter into a mutually beneficial business relationship with a framework for the good faith negotiation and consummation
of the transactions and agreements described below. Furthermore, the Parties seek to confirm certain preliminary understandings
as to a possible future business relationship. These understandings are subject to the preparation, negotiation and execution
of other agreements reasonably necessary to consummate the transaction (collectively, the “Definitive Agreements”),
the receipt of all necessary regulatory and other approvals and consents, and the fulfillment of any other conditions precedent.
Therefore, this MOU sets forth only the present intention of the Parties, and is not intended to constitute an exclusive description
of the terms of the Transaction, or the terms of the final Agreement and the other Definitive Agreements.


 


Business
Relationship


 


Zion
desires to obtain the right to contract a land-based oil and gas rig with deep drilling capacity and certain other oilfield services
and crew for the benefit of its oil and gas exploration activities located onshore Israel. Viking desires to provide fully integrated
oilfield services (e.g., well design, drilling, completion, etc.) to help Zion with its oil and gas operations in Israel. Subsequently,
the Parties seek to enter into discussions to possibly establish a private company, Zion Drilling, Inc., (“Zion Drilling”),
wherein Zion and Viking will each own 50% of the shares of Zion Drilling. The activities described in this paragraph comprise
the “Project”.


 


Scope
of Work – Drilling Rig and Oilfield Services


 


Viking
agrees to provide, subsequent to an executed drilling contract, Rig 35 refurbished, or a rig of equivalent capacity and standard
requested by Zion, and subject to availability, other oilfield services and equipment to Zion, for an initial term of two years,
for not fewer than two wells (with an option to drill a third well), unless otherwise indicated in the drilling contract. Viking
agrees to act in accordance with the terms outlined in the drilling contract with Zion for as long as the contractual agreement
between the parties remains in effect. Viking’s rig must have at least a 1500 HP engine and be capable of drilling to a
depth of at least 15,000 feet. The Parties agree to use reasonable efforts to enter into a drilling contract by September 15,
2015. The drilling contract shall be substantially in the form of the IADC International Land Daywork Drilling Contract (revised
March 2010).


 


Viking’s
services will be provided at locations to be determined by Zion with all operations located onshore Israel, within Zion’s
Megiddo-Jezreel License area.


 


	Zion – Viking MOU (February 2015)




	 	












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Anticipated
Spud Date


 


The
Parties agree that the anticipated spud date for the first well (Megiddo-Jezreel #1) is in the second half of 2015, although both
parties agree that this date is flexible and subject to Zion securing full regulatory approval from the State of Israel and regional
and local governing bodies. Viking shall have no obligation or responsibility to begin mobilization of Rig 35 and any related
equipment to Israel until Zion has obtained full regulatory approval from the State of Israel as well as all regional, local and
any other approvals that may be required, and that a definitive drilling contract has been entered into between the Parties.


 


Establishment
of Zion Drilling, Inc.


 


Following
the completion of the primary term of the drilling contract described above, the Parties may seek to establish Zion Drilling,
Inc. (“Zion Drilling”) a private company or entity, to be organized perhaps under the laws of the State of Israel,
wherein Zion will own 50% and Viking will own 50% of the total shares of the new entity.


 


Zion
Drilling will initially lease and then may acquire and hold title to a drilling rig. Zion Drilling’s stated business purpose
will be to conduct drilling on Zion’s oil & gas interests within the State of Israel and to the extent not so utilized,
to lease out the rig for hire to other Israel-based drilling projects on a for profit basis. The arrangement between the Parties
will include the following terms:


 


		1)	After
                                         the completion of the second well with Rig 35 (or an equivalent rig), Viking will manage
                                         the build-out of a deep drilling capacity land rig (at least 1,500 HP). The rig should
                                         be suitable and fit for drilling to a depth of up to 5,000 meters (~16,500 feet). Zion
                                         Drilling would purchase the rig for a mutually acceptable price.



 


		2)	The
                                         Parties will consult with their respective employees and advisors (accounting, legal,
                                         tax, etc.) regarding the best way to establish Zion Drilling so as to minimize the tax
                                         consequences to each Party. The Parties agree that Zion Drilling may be a foreign entity,
                                         if that is mutually agreed to be in the best interest of the Parties; and



 


		3)	The
                                         Parties will enter into legally binding agreements relating to the establishment and
                                         administration of Zion Drilling including, without limitation, a shareholders’
                                         agreement defining their respective rights in Zion Drilling, the composition and makeup
                                         of the Board of Directors and Management of Zion Drilling and other related matters.



 


Conditions


 


Financing:
The Parties understand that the effectuation of the terms specified above is conditioned upon and subject to Zion’s raising
at least $30 Million in gross proceeds within 12 months from the effective date of this MOU and thereafter, Viking providing a
suitable rig.


 


Inspection
& Repairs: Before any purchase of a rig by Zion Drilling, Inc., the Parties shall retain a mutually acceptable independent
third party expert to inspect the Rig and provide a fitness report for the Rig and each Party shall pay one half of the inspection
and report costs. Prior to closing of the transaction, the Parties shall agree on any required upgrades and repairs to cause the
Rig to be fit for the purpose for which it is to be used and the amount which each Party shall contribute for the same.


 


	Zion – Viking MOU (February 2015)




	 	











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Definitive
Agreements


 


Upon
execution of this MOU, the Parties will enter into good faith negotiation of the terms and conditions of one or more definitive
agreements to govern the business relationships described herein (the “Definitive Agreements”).


 


		1)	Expenses:
                                         Unless otherwise expressly agreed in writing in each instance, each Party shall bear
                                         its own costs in connection with the preparation, negotiation and finalization of the
                                         Definitive Agreements.



 


		2)	Timing:
                                         The Parties agree to use their best efforts to enter into the Definitive Agreements by
                                         no later than 12 months from signing this MOU.



 


		3)	Conditions
                                         to Close Include:



 





	 	a)	Satisfaction
with the results of legal, accounting, business and other due diligence  investigations to be performed by each Party
and its respective advisors;
	 	 	 
	 	b)	Negotiation and execution of a satisfactory commercial agreement, which shall include the principal business terms set out herein;
	 	 	 
	 	c)	The absence of any material adverse change in either Party’s condition or assets;
	 	 	 
	 	d)	Obtaining all necessary consents or approvals from third parties, including Israeli governmental authorities, and directors and stockholders if required; and
	 	 	 
	 	e)	Fulfillment of the terms of the Paragraph titled “Conditions” above.


 


Entirety
of Agreement


This
MOU represents the entire agreement between the Parties to date and supersedes all prior negotiations, representations and agreements
between the Parties. The terms of this MOU reflect certain agreed terms that are intended to be incorporated into the body of
a definitive final agreement. However, it is also understood that any Definitive Agreement or Agreements later reached will be
the result of the good faith negotiations of the Parties, and that certain terms contained herein may be modified or additional
terms may be added to the final Definitive Agreement or Agreements of the Parties.


 


Applicable
Law


 


In
no event shall either Party have any liability to the other with respect to claims arising out of or in connection with or resulting
from this MOU whether in contract, tort or otherwise and it is specifically agreed that except for the paragraph dealing with
confidential and proprietary information on the following page, this MOU is non-binding upon the Parties since it contemplates
that Definitive Agreements are to be entered into between the Parties.


 


	Zion – Viking MOU (February 2015)




	 	











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The
laws of the state of Texas shall govern the terms and conditions of this MOU. The Parties agree to comply with all applicable
laws governing activities under this MOU.


 


The
Parties agree that they will adhere to and abide by any applicable USA or Israeli laws in the performance of this MOU and will
also adhere to and comply with any applicable USA or Israeli laws in the performance of their respective obligations and responsibilities
arising under the Definitive Agreements.


 


Miscellaneous



 


Both
parties agree that any and all business, geological and other information furnished pursuant to this MOU, including but not limited
to financial information, processes, specifications, equipment and services of any kind or nature related to the Project, shall
be treated as confidential and proprietary information, and each Party undertakes that it will not at any time, either during
or after the term of this MOU, disclose, divulge, publish, use or otherwise reveal such information to others. The obligations
and the restrictions contained herein shall not apply to: 1) information which at the time of disclosure is in the public domain;
2) final order of a court of law; and 3) prior mutual written consent of both Parties. 


 


The
immediately preceding paragraph regarding confidential and proprietary information shall be valid and binding upon and inure to
the benefit of the Parties and their successors and permitted assigns. This MOU may not be assigned, partially or totally, by
either party without the express written consent of the other party.


 


Any
changes, modifications, revisions or amendments to this MOU, to be effective, must be in writing and signed by all Parties.


 


In
witness whereof, the Parties have executed this MOU as of the date first mentioned above.


 


	Zion Oil & Gas, Inc.	 	Viking Services BV
	 	 	 
	/s/ Victor G. Carrillo	 	/s/ Dustin Guinn
	Victor
G. Carrillo, President & COO	 	Dustin Guinn, CEO




 





Zion – Viking MOU (February 2015)


 


	




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