Item 8.01 Other Events

(i) On January 6, 2009, Zion Oil & Gas, Inc. (hereinafter, the "Company") and Philip Mandelker ("PM"), a former Executive Vice President, entered into a settlement agreement resolving all disputes between them relating to the payment by the Company to PM of amounts in respect of deferred compensation, as well as other related matters. Under the settlement agreement, the Company remitted to PM the sum of $43,385 on account of $283,385 in total deferred payment payable to PM, with the balance of $240,000 payable on a monthly basis of $10,000 per month, over a two year period through February 2011. Under certain specified conditions relating primarily to the payment of deferred amounts owing to executives of the Company beyond a specified maximum amount prior to the payment in full of the amounts owing to PM, the monthly payment to PM may be accelerated. Under the settlement agreement, PM received certain releases and access to his pension/life insurance fund accounts under Israeli law. PM employment under his personal employment agreement with the Company expired as of December 31, 2008.

(ii) The Company's executives have agreed to continue extending through July 1, 2009, a substantial portion of deferred compensation due to them in the approximate amount of $1,345,000.

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