TIDMZEN
RNS Number : 5584Z
Zenith Energy Ltd
13 January 2020
January 13, 2020
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")
Put and Call Option Agreement with AAOG
Zenith Energy Ltd., ("Zenith" or the "Company"), (LSE: ZEN;
TSX.V: ZEE; OSE: ZENA-ME), the international oil & gas
production company, is pleased to announce that it has entered into
a term sheet for a Put and Call Option Agreement with Anglo African
Oil & Gas plc ("AAOG") over the residual holding of 20 percent
in Anglo African Oil & Gas Congo SAU ("AAOG Congo") that AAOG
will retain ("the Residual Shares") following the signing of a
conditional share purchase agreement ("SPA") for Zenith's
acquisition of an 80 percent interest in AAOG Congo (the
"Acquisition").
As announced on December 27, 2019, the SPA is conditional, inter
alia, on the passing of an ordinary resolution of shareholders in
AAOG in a General Meeting, to be held on January 13, 2020,
approving the Acquisition and certain regulatory requirements in
the Republic of the Congo, including consent of the Minister of
Hydrocarbons ("Completion").
The term sheet for the put and call option provides for the
following key provisions:
Call Option
The Call Option over the Residual Shares may only be exercised
by Zenith on January 16, 2021, and can only be exercised if, as at
January 15, 2021, the total production from the Tilapia oilfield
has never exceeded an average of at least 2,000 bopd for any period
of 30 consecutive days prior to January 15, 2021.
If the Call Option is exercised, the consideration payable by
Zenith for the Residual Shares shall be an amount of GBP1,000,000
("Call Option Consideration"). The Call Option Consideration is to
be settled by the issue of common shares in Zenith, the number of
common shares to be issued being calculated on a 15-day VWAP
(volume-weighted average price) of Zenith's common shares admitted
to trading on the London Stock Exchange Main Market for listed
securities in the 15-day period immediately prior to exercise of
the Call Option.
Put Option
The Put Option over the Residual Shares may only be exercised by
AAOG on January 16, 2021 and can only be exercised if, as at
January 15, 2021, the total production from the Tilapia oilfield
has been an average of at least 4,000 bopd for any period of 30
consecutive days prior to January 15, 2021.
If the Put Option is exercised, the consideration payable by
Zenith for the Residual Shares shall be an amount of GBP2,500,000
("Put Option Consideration"). The Put Option Consideration is to be
settled by the issue of common shares in Zenith, the number of
common shares to be issued being calculated on a 15-day VWAP of
Zenith's common shares admitted to trading on the London Stock
Exchange Main Market for listed securities in the 15-day period
immediately prior to exercise of the Put Option.
The Company is in the process of agreeing and entering into the
final form of the Put and Call Option Agreement and a further
announcement will be made on this in due course.
Andrea Cattaneo, Chief Executive Officer, commented:
"We are pleased to have agreed these terms with AAOG for its
residual 20 percent holding in AAOG Congo. The Tilapia asset has,
we believe, potentially transformational production potential.
Indeed, our primary operational goal shall be to source a fully
inspected and functional rig to begin drilling operations at the
earliest opportunity in TLP-103C to test the productivity of the
Mengo and Djeno horizons.
The aforementioned terms will further ensure that, in the event
of future success, both Zenith and AAOG shareholders will enjoy the
fruits of victory.
We look forward with excitement to the challenge ahead."
Further Information:
Zenith Energy Ltd
Andrea Cattaneo, Chief Executive Tel: +1 (587) 315 9031
Officer
-----------------------------
E-mail: info@zenithenergy.ca
-----------------------------
Peterhouse Capital - Joint Broker Tel: + 44 (0) 20 7469
0930
-----------------------------
Lucy Williams
-----------------------------
Charles Goodfellow
-----------------------------
Novum Securities Limited - Joint Tel: + 44 (0) 20 7399
Broker 9400
-----------------------------
Charlie Brook-Partridge
-----------------------------
Hugh McAlister
-----------------------------
IFC Advisory Limited - Financial Tel: + 44 (0) 20 3934
PR & IR 6630
-----------------------------
Graham Herring
-----------------------------
Zach Cohen
-----------------------------
Notes to Editors:
Zenith Energy Ltd. is an international oil and gas production
company, listed on the TSX Venture Exchange (TSX.V:ZEE) and London
Stock Exchange(LSE:ZEN). In addition, the Company's common share
capital was admitted to trading on the Merkur Market of the Oslo
Børs (ZENA:ME) on November 8, 2018. The Merkur Market is a
multilateral trading facility owned and operated by the Oslo
Børs.
The Company was assigned a medium to long-term issuer credit
rating of "B+ with Positive Outlook" on October 9, 2019 by Arc
Ratings, S.A. On November 18, 2019, the Company was assigned a "B+"
with Stable Outlook debt issuer credit rating by Rating-Agentur
Expert RA.
The Company operates the largest onshore oilfield in Azerbaijan
by cumulative acreage following the signing of a 25-year REDPSA,
(Rehabilitation, Exploration, Development and Production Sharing
Agreement), with SOCAR, State Oil Company of the Republic of
Azerbaijan, 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, condensate and
electricity.
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
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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