TIDMZEN
RNS Number : 5613C
Zenith Energy Ltd
11 February 2020
February 11, 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")
Successful Issue of Bonds & Operational Update
Zenith Energy Ltd., ("Zenith" or the "Company), (LSE: ZEN;
TSX.V: ZEE; OSE: ZENA-ME), the international oil & gas
production company, is pleased to provide an update on a number of
financial and operational matters.
EUR 25 million EMTN Programme
As anticipated on January 20, 2020, the Company is pleased to
announce that the following unsecured, multi-currency Euro Medium
Term Notes at par value have now been issued (the "Notes"):
-- EURO 1,000,000 bearing an interest of 10.125 per cent per
year (the "EUR-Notes"). ISIN: XS2108546735
-- GBP 1,000,000 bearing an interest of 10.50 per cent per year
(the "GBP-Notes"). ISIN: XS2108546578
-- USD 1,000,000 bearing an interest of 10.375 per cent per year
(the "USD-Notes"). ISIN: XS2108546651
-- CHF 1,000,000 bearing an interest of 10.00 per cent per year
(the "CHF-Notes"). ISIN: XS2108546818
The distribution of the Notes is currently ongoing across a
number of markets. It is expected that the USD Notes will shortly
be the first fully subscribed series of Notes.
The Notes have been issued under Zenith's EUR 25,000,000
multi-currency Euro Medium Term Notes Programme, as announced by
the Company on November 6, 2019, and will be due on January 27,
2024.
The Notes are governed by Austrian law and, since the Notes are
not convertible into equity of Zenith, the issuance of the Notes is
not subject to the approval of the TSX Venture Exchange in
Canada.
The issue of the Notes is aligned with the Company's strategy of
diversifying its financing towards non-equity dilutive funding to
support its continued successful development.
AAOG Congo Acquisition
The Company's management has in recent weeks completed a number
of visits to the Republic of the Congo to achieve completion of the
SPA ("Completion"), announced on December 27, 2019, for the
acquisition of an 80 percent interest in AAOG Congo ("AAOGC"),
which has a 56 percent majority interest in, and is operator of,
the Tilapia oilfield in the Republic of the Congo (the
"License").
Management believes significant progress has been achieved
during recent weeks and is pleased to report the following key
highlights:
-- Zenith has met with the relevant authorities to discuss the
renewal of the License for a new 25-year term, as well as
developing an understanding of the required signature bonus
amount.
-- The Company has also met with SNPC to present its development
programme for Tilapia. Specific discussions were held in relation
to geological and technical matters in relation to future planned
drilling activities to produce the Mengo and Djeno horizons.
Drilling operations are expected to commence during April 2020.
-- Meetings were held with SNPC with regards to seeking clarity
on the repayment of the approximately US$5.3 million owed to AAOGC
as a result of past work completed on the License. Zenith's
confidence in obtaining repayment of the aforementioned amount, of
which it will retain 80% upon Completion of the acquisition of
AAOGC, has been encouraged following these meetings.
-- Zenith can confirm that it has identified two suitable
drilling rigs, both of which are in the proximity of the License
(thereby significantly reducing mobilisation costs), to perform
drilling operations in the License. Due to known difficulties
experienced by previous operators with drilling equipment, Zenith
will request a rigorous third-party comprehensive inspection of
both units to be provided for the purposes of its commercial and
technical tendering evaluations.
Acquisition of Coro Energy Italian Assets
Zenith can confirm, as announced on December 3, 2019, that it
has commenced the necessary process with the Italian Ministry for
Economic Development to approve the sale of Coro Energy Plc's
("Coro") Italian natural gas production and exploration portfolio
to Zenith ("Italian Acquisition").
Upon completion of the Italian Acquisition once the necessary
approvals have been obtained, Zenith will be positioned as one of
Italy's leading natural gas producers with an increase in Italian
gross production revenue of approximately 410%, and an expected
yearly gross revenue of approximately EUR3.6 million (equivalent to
approximately GBP3.08 million; NOK 36.5 million or CAD$5.3
million).
The Company is pleased to note that natural gas prices in Italy
have remained stable during recent months.
In addition, natural gas production from the Italian Acquisition
has recently increased from an average of approximately 40,000
scm/day (approximately 235 BOE per day) to an average of
approximately 50,000 scm/day (approximately 295 BOE per day)
It is therefore expected that, upon completion of the Italian
Acquisition, Zenith will have a daily total cumulative production
from its enlarged Italian portfolio of approximately 65,000
standard cubic meters (approximately 382 BOE per day).
Azerbaijan Update
Exploration
As announced on December 12, 2019, the Company is currently
progressing in its selection of a drilling location for exploratory
drilling activities it plans to perform during 2020.
Zenith plans to finalise its geological and technical
investigations, in consultation with SOCAR, by March 15, 2020.
In recent months, the Company has acquired additional drilling
equipment to enhance its 1,200hp drilling rig, and enlarged its
spare parts inventory in view of near-term drilling activities.
C-30
The Company is awaiting approval to commence drilling activities
in well C-30, Jafarli and shall update the market once this is
received. As previously announced, all necessary civil works have
successfully been completed at the well location.
C-37
As previously announced, the Company intends to install a
custom-built bridge plug to isolate the Upper Cretaceous formation
and enhance the long-term productivity to be obtained from the
Middle Eocene formation.
To maximise cost efficiency, the Company plans to use its fully
owned truck-mounted A-100 workover rig to perform this installation
with mobilisation expected within the next 30 days.
Andrea Cattaneo, Chief Executive Officer, commented:
"It has been a busy start to the year for Zenith as we continue
to focus on our strategy of identifying and completing low-cost
acquisitions with significant untapped production potential.
We are actively seeking to enrich our portfolio with the
acquisition of AAOG Congo which we believe has the potential to
deliver transformational value via successful drilling activities
in the Mengo and Djeno horizons. Recent progress has been very
encouraging, and I look forward to updating shareholders further in
due course.
This is in addition to consolidating our natural gas production
portfolio in Italy with increased, consistent production revenue
which has the potential to be further increased via a series of
low-risk well interventions.
Zenith has also recently taken steps to strengthen our advisory
team with two key appointments who we anticipate will contribute
valuable knowledge and expertise to our ambitious expansion goals
in Africa."
Further Information:
Zenith Energy Ltd
Andrea Cattaneo, Chief Executive Officer Tel: +1 (587) 315 9031
-----------------------------
E-mail: info@zenithenergy.ca
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Novum Securities Limited - Broker Tel: + 44 (0) 207 399
9400
-----------------------------
Charlie Brook-Partridge
-----------------------------
Hugh McAlister
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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.
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.
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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