UPDATE TO NESS ENERGY STOCKHOLDERS

NESS ENERGY UPDATE

There is no news of consequence that has occurred over the last 30 days. The Ness attorneys in Israel generally expect a decision from the judge there sometime before the 15 th of September, which would precede the beginning of the High Holy days, although there is no assurance of when the judge's decision will be issued. Once a decision is issued by the Israeli court the case may be re-opened in the U.S. Federal Court in order to obtain a ruling on equity as to the percentage ownership of Ness Energy of Israel, Inc. that will be shared between Alpha Capital and Ness Energy International, Inc. If there is any news of consequence during the month, an update will be placed on the website at that time.

UPDATE TO NESS ENERGY STOCKHOLDERS

NEWS FROM THE TRIAL IN ISRAEL

David Boyce returned on July 22, 2012 from a weeklong trip to Israel. Mr. Boyce made the trip to testify and be cross examined in connection with an affidavit he had previously submitted to the court. The affidavit set out Ness Energy International's position in this trial and supported the facts and circumstances surrounding the dilution of Ness Energy of Israel's ownership in Noya. This dilution is the primary issue of the Israeli trial. As many of you know, Noya is the Israeli company which manages Modi'in Limited Partnership, a publicly held LP traded on the Tel-Aviv Stock Exchange.

As it turned out Mr. Boyce was not called to testify in the trial but the trip was extremely valuable for Ness International. His presence in Israel assured that the affidavit mentioned above would be accepted by the court verbatim without challenge by either party. This would not have been the case had he not made an appearance.

The trip also provided the opportunity for Mr. Boyce to meet and talk with several of the significant parties in this lawsuit, on both the plaintiff and defendant side. Being in the court room and hearing several "expert" witnesses on the last day of testimony proved to be very interesting and may be helpful going forward with our case in the US.

In further developments, there was a lawyers only hearing on Monday, July 23rd at which time the judge made an informal proposal to settle the case. We will find out soon if anything comes of this as he has scheduled another hearing for July 31st for the parties to state their position on this proposal.

We will provide additional information as it becomes available.

UPDATE TO NESS ENERGY STOCKHOLDERS

LEGAL ACTIONS IN THE U.S. AND ISRAEL

U.S. CASE

Nothing noteworthy has taken place since the last update. The trial date is still pending and there have been no significant negotiations between the parties.

ISRAELI CASE

The trial in Israel started as originally scheduled on Sunday June 24 and will, to our knowledge, continue on the dates previously listed. It is of course too early to have any news to report.

UPDATE TO NESS ENERGY STOCKHOLDERS

LEGAL ACTIONS IN THE U.S. AND ISRAEL

U.S. CASE

In the U.S. case in the Western district of Oklahoma, the court issued an Order on March 28. In the order it was established that the Stock of Ness Israel was conveyed to Alpha Capital as a result of the New York litigation in 2008. However, the court also concluded:

"to the extent, however, that Alpha Capital seeks a ruling that it is entitled to retain all of the NessIsrael stock, or its value , even if the stock value exceeds the amount of Alpha Capital's New York Judgment, the motion must be denied because balancing of the equities between the parties is required, and such cannot be made based on the current record."

In further developments, a Settlement Conference was ordered by the court and held on May 8th at the Federal Courthouse in Oklahoma City. Representatives from Alpha Capital and Ness Energy were present. However no agreement was reached to settle the case. We will continue to seek a fair and reasonable settlement prior to the trial, the dates for which have not yet been set.

ISRAELI CASE

The Israeli case is progressing and trial dates have now been established. The dates are as follows: 
June 24th, July 2nd, July 5th, July 8th, July 11th and July 18th

We remain optimistic for an outcome favorable to our interests in both these cases and appreciate your prayers that such will be the case. We will continue to keep you informed in future updates.