TIDMZEN
RNS Number : 1523X
Zenith Energy Ltd
30 April 2021
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF REGULATION 11 OF THE MARKET ABUSE (AMENDMENT) (EU EXIT)
REGULATIONS 2019/310.
April 30, 2021
ZENITH ENERGY LTD.
("Zenith" or the "Company")
Acquisition of Robbana and El Bibane in Tunisia
Zenith Energy Ltd. ("Zenith" or the "Company") (LSE: ZEN; OSE:
ZENA), the listed international oil & gas production company
focused on pursuing African development opportunities, is delighted
to announce that, following its market announcement dated April 21,
2021, Compagnie Du Desert Ltd ("CDD"), its recently incorporated
fully owned subsidiary, has entered into a share purchase agreement
("SPA") with Candax Energy Limited ("Candax") for the acquisition
of a 100 percent interest in Candax's fully owned subsidiary in
Barbados, Ecumed Petroleum Tunisia Ltd ("EPT") (the
"Acquisitions"), which holds a 100% interest in the El Bibane and
Robbana concessions in Tunisia.
Terms
Pursuant to the terms of the SPA, CDD has agreed to acquire 100%
of the issued share capital of EPT for a nominal consideration of
US$100 payable at completion, as well an additional consideration
of approximately USD$200,000 in the form of assumption of debt
payable by the close of May 2021.
El Bibane Highlights
-- The El Bibane concession ("El Bibane") is located 16
kilometres offshore from the port of Zarzis in the Gulf of Gabes,
covering an area of approximately 228 square kilometres and in
approximately 7-8 meters water depth. The field was discovered by
Marathon Oil Corporation in 1982. However, it was not developed
until 1998. Upon initial development, a peak production of 4,500
bopd was achieved. The reservoir is located in the cretaceous
Zebbag fractured dolomite formation at approximately 2,150 metres
below surface .
-- Zenith has acquired a 100% working interest in El Bibane.
-- A total of three wells remain active within El Bibane: EBB-5,
EBB-4 and EBB-3RE2. A tot al of 6 w e l ls plus 4 s idet racks have
been drilled.
-- EBB-5 currently produces approximately 80-100 barrels of
condensate per day (API 49/50) with 5.5-6 MMSCF of natural gas from
well EBB-5, which is re-injected into the formation via well
EBB-4.
-- It is expected that, by utilising new technologies, well
EBB-4 may achieve commercial production of natural gas in addition
to its current use as an injector well.
-- EBB-3 suffered string damage and has been temporarily
shut-in, having previously produced at a rate of between
approximately 500-600 barrels of oil per day (35 API) prior to
production being suspended. The low oil price environment during
2020 and the material investment required to restore production
from this well have prevented the necessary repair work from being
implemented.
-- Zenith has already obtained market quotations for the well
intervention required to restore production from well EBB-3 for an
amount of approximately US$3.5 million.
-- In the event of a successful well intervention in EBB-3, the
Company expects to produce approximately 500 barrels of oil
equivalent per day from El Bibane.
-- Candax commissioned an independent reserves evaluation, as of
December 31, 2019, for the contingent reserves (1C) of El Bibane
which evaluated remaining oil in place as 25.7 MMSTBO and 6.5 BCF
of natural gas.
-- Zenith has commissioned a new Competent Person's Report, in
compliance with Canadian securities laws, specifically the C OGE
Handbook and National Instrument 51-101 - Standards of Disclosure
for Oil and Gas Activities, in order to obtain an updated reserves
evaluation for the El Bibane concession.
-- El Bibane expires on December 31, 2033.
Robbana Highlights
-- The Robbana concession ("Robbana"), covering 48 square
kilometres and located onshore in the island of Djerba in the
southern Gulf of Gabes, was discovered in 1988, achieving a peak
production of 500 bopd in 1994. The ROB-1 well encountered two
hydrocarbon-bearing reservoirs in the Cretaceous Upper Meloussi
Sandstone formation. Only two wells have been drilled in Robbana
since discovery, ROB-1 which is still in production and ROB-2 which
is temporarily abandoned.
-- Robbana currently produces approximately 25 barrels of oil
per day from ROB-1, having previously produced approximately 50
barrels of oil per day prior to an unsuccessful well
intervention.
-- Studies have suggested that an infill well, to be drilled in
the proximity of well ROB-1, is expected to produce approximately
200 barrels of oil per day.
-- Candax commissioned an independent reserves evaluation, as of
December 31, 2019, for the contingent reserves (1C) of Robbana
which evaluated remaining oil in place as 10.99 MMSTBO. The study
noted specifically noted that the " Middle Triassic sandstones of
the Ras Hamra formation present a very significant 'high-risk/high
reward' exploration objective."
-- Zenith has commissioned a new Competent Person's Report, in
compliance with Canadian securities laws, specifically the C OGE
Handbook and National Instrument 51-101 - Standards of Disclosure
for Oil and Gas Activities, in order to obtain an updated reserves
evaluation for Robbana.
-- Robbana expires on November 4, 2034.
Andrea Cattaneo, Chief Executive Officer of Zenith,
commented:
"The Board and I are very pleased to report on this latest
acquisition that enables Zenith to enrich its portfolio of oil and
gas production, development and exploration assets in Tunisia.
The key significance of the acquisition of El Bibane and Robbana
is the undeveloped potential and the possibility to achieve, in the
near-term, a stabilised cumulative production in excess of 500
barrels of oil per day, as well as a material production of natural
gas and condensate. This volume of production, holding a 100%
working interest in both concessions, would transform our revenue
position and enable the Company to concretely achieve its long-held
growth ambitions in terms of production, especially as the
intention would be for the revenue to be reinvested in the further
development of the assets.
Our near-term objective is to produce in excess of 1,000 barrels
of oil per day and to substantially scale production upwards from
this threshold by developing our portfolio via systematic workover
and drilling activities in the current favourable oil price
environment.
The management team and I are greatly excited about Zenith's
development trajectory and I look forward to reporting on
additional progress in Tunisia and the Congo in due course."
Further Information:
Zenith Energy Ltd
Andrea Cattaneo, Chief Executive Officer Tel: +1 (587) 315 9031
-----------------------------
E-mail: info@zenithenergy.ca
-----------------------------
Allenby Capital Limited - Financial Adviser
& Broker
-----------------------------
Nick Harriss Tel: + 44 (0) 203 328
Nick Athanas 5656
-----------------------------
Notes to Editors :
Zenith Energy Ltd. is an international oil and gas production
company, listed on the London Stock Exchange (LSE:ZEN) and the
Euronext Growth Market of the Oslo Stock Exchange (OSE:ZENA).
Zenith's development strategy is to identify and rapidly seize
value-accretive hydrocarbon production opportunities in the oil
& gas sector, specifically in Africa.
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END
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