TIDMZEN
RNS Number : 4548Q
Zenith Energy Ltd
06 June 2018
June 6, 2018
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulation (EU) No. 596/2014 ("MAR"). Upon
publication of this announcement via a regulatory information
service ("RIS"), the inside information contained in this document
is now considered to be in the public domain.
ZENITH ENERGY LTD.
("Zenith" or the "Company")
Signing of Rental Agreement for BD-260 Drilling Rig
Zenith Energy Ltd., ("Zenith" or the "Company"), (LSE: ZEN;
TSX.V: ZEE), the international oil & gas production company
operating the largest onshore oilfield in Azerbaijan, is pleased to
announce that its oilfield service company subsidiary, Zena
Drilling Limited, ("Zena"), has signed a six-month rental agreement
with B Robotics W S.r.l., ("Robotics"), a leading Italian drilling
rig manufacturer, for a BD-260 type Robotics drilling rig.
Technical Overview of BD-260 Type Drilling Rig
The BD-260 has the following key technical specifications:
- 1200 HP drilling rig
- Static hook load capacity of 260 metric tons
- Mast height of 41 metres
- Drilling depth capacity of up to 4,600 metres
- Two diesel driven 1000 HP NOV triplex mud pumps
- Three mud tank systems with mud treatment
BD-260 Operational Objectives
Zena has contracted the BD-260 drilling rig in order to complete
the Company's planned workover and drilling activities in the
Zardab and Muradkhanli fields during the six-month period. As
announced on May 8, 2018, the Company's ongoing in-depth geological
study has led to the identification of several highly attractive
near-term drilling opportunities. Zenith intends to fully maximise
the exploitation of these opportunities in light of the significant
increases in the market price of oil.
The BD-260 rig will complete the workover of Z-21 by pulling out
the entire tubing string from the well, cleaning out the casing to
the well's total depth, 3,982 metres, and subsequently performing a
number of production tests. In the event that a satisfactory rate
of production was not to be achieved from Z-21 following these
operations, the Company would proceed with deepening well Z-21
beyond the Maykop formation into the Eocene and Upper Cretaceous
formations by drilling an additional 300 metres, extending the
well's total depth to approximately 4,270-4,300 metres. The primary
reason for the evaluation of this possibility is the proximity of
Z-21 to well Z-3, spud in 1979 and drilled to a total depth of
4,300 metres into the Eocene and Upper Cretaceous formations. Z-3
tested approximately 2,900 barrels of mixed hydrocarbons per day
before the wellbore collapsed.
Following the completion of operations in well Z-21, the Company
will move the BD-260 rig to Z-28, where 69 metres of tubing require
milling out before the well is cleaned out to its total depth,
3,944 metres. Zenith will perform a number of production tests once
the well has been cleaned out to total depth.
After the completion of operations in well Z-28, the Company
intends to use the BD-260 rig for the workover of Z-3, where
historical records indicate that 775 metres of tubing has been left
in the well, and for the workover of MOC-1 in the Muradkhanli
field. Zenith will further update the market in greater detail
regarding these planned operations once the workovers of Z-21 and
Z-28 have been completed.
Transportation of the BD-260 rig from one operation to the next
in the Zardab field is expected to be relatively fast on account of
the proximity of the Z-21, Z-28 and Z-3 well locations.
Delivery of BD-260
Robotics has advised the Company that the BD-260 will be
delivered to its field operations in Azerbaijan within 90 days.
Under the rental agreement signed with Zena, Robotics has agreed to
provide its highly experienced drilling personnel for the first
month of operations to assist Zenith's field team.
Update on negotiations to contract a ZJ-30 150-ton workover
rig
After the signing of the aforementioned rental agreement for the
BD-260 drilling rig, the Company has ended negotiations for the
contracting of a ZJ-30 150-ton workover rig, announced to the
market on May 18, 2018.
Update on Genesis BQ500 Hydraulic Drilling Rig
On November 1, 2017, Zenith announced that it had signed a
commitment letter for a BQ500 automated hydraulic drilling rig to
be manufactured by Robotics. As announced, delivery of the rig is
anticipated in the second half of 2018. Zenith is currently in the
process of finalising the lease arrangement for the BQ500 drilling
rig and will update the market once this is defined.
Andrea Cattaneo, Chief Executive Officer of Zenith,
commented:
"Zardab is the least developed and most interesting field in
Zenith's REDPSA area. We have known this since we began operations
in Azerbaijan and our ongoing in-depth geological study has given
new impetus and substance to this belief.
Success in our Zardab operations would enable the Company to
further increase the record high oil production revenue it has
achieved in recent months and clearly underline the very
significant potential of this asset.
The BD-260 drilling rig contracted by Zena from B Robotics W,
with whom Zenith has an established technical partnership, will
enable the Company to begin its first drilling activities in
Azerbaijan in the short-term by deepening some of its most
promising wells in Zardab.
I look forward to reporting on the arrival of the BD-260 rig in
due course."
For further information please contact:
Zenith Energy Ltd.
Andrea Cattaneo
Chief Executive Officer
E-mail: info@zenithenergy.ca
Tel: +1 (587) 315 9031
Vigo Communications - PR Adviser
Patrick d'Ancona
Chris McMahon
Kate Rogucheva
Tel: +44 (0) 20 7390 0230
Daniel Stewart & Company Plc - (Joint Broker)
Robert Emmet- Corporate Broking
Nikhil Varghese- Corporate Finance
Tel: + 44 (0) 207 776 6550
Optiva Securities - (Joint Broker)
Christian Dennis
Tel: + 44 (0) 203 137 1903
Allenby Capital Limited - (Financial Adviser)
Nick Harriss
Nick Athanas
Tel: + 44 (0) 203 328 5656
Notes to Editors:
Zenith Energy Ltd. is an international oil and gas production
company, dual listed on the TSX Venture Exchange and London Stock
Exchange.
The Company operates the largest onshore oilfield in Azerbaijan
following the signing of a 25-year REDPSA, (Rehabilitation,
Exploration, Development and Production Sharing Agreement), with
SOCAR, State Oil Company of the Azerbaijan Republic, in 2016.
The Company's primary focus is the development of its Azerbaijan
operations by leveraging its technical expertise and financial
resources to maximise low-cost oil production via a systematic
field rehabilitation programme intended to achieve significantly
increased revenue. Zenith also operates, or has working interests
in, a number of natural gas production concessions in Italy. The
Company's Italian operations produce natural gas, natural gas
condensate and electricity.
Zenith's development strategy is to identify and rapidly seize
value-accretive hydrocarbon production opportunities in the onshore
oil & gas sector. The Company's Board of Directors and senior
management team have the experience and technical expertise to
develop the Company successfully.
To find out more, visit www.zenithenergy.ca or follow Zenith on
Twitter @zenithenergyltd
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
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of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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