TIDMZEN
RNS Number : 2235I
Zenith Energy Ltd
03 August 2023
August 3, 2023
ZENITH ENERGY LTD.
("Zenith" or the "Company")
Third Acquisition in USA
Zenith Energy Ltd. (LSE: ZEN; OSE: ZENA), the international
energy production and development company, is pleased to announce
that it has signed a binding memorandum of understanding ("MOU")
with Jala Capital Investments, LLC, a company incorporated in the
State of Texas ("Seller").
Highlights
-- Seller owns a 100% Gross Working Interest ("GWI") and a 75%
Net Revenue Interest ("NRI") in approximately 320 acres of oil and
gas lease from surface down to a depth of approximately 800 metres,
located in the East Half of section 14, Block 50, University Lands,
Crockett County, Texas (the "Property").
-- Geologically, the Property is situated in the southern
section of the Midland Basin, a subbasin of the Permian Basin. The
Property will give Zenith the opportunity to develop production
from the San Andres formation, a prolific carbonate formation in
the Permian Basin in Texas and New Mexico.
-- The Property is situated in the southern section of the
Farmer Field which has produced over 34 million barrels of oil
since 1950 from approximately 1,000 wells drilled in leases
adjoining the Property.
-- Zenith has confirmed its intention to operate the Property
and conduct oil and gas extraction and exploration activities.
-- Subject to completion of satisfactory due diligence by
Zenith, the Seller agrees to execute, convey, and assign to the
Company a GWI of 90%, with a NRI of 67.5%.
-- The Consideration for the MOU is US$50,000, which includes
the sale oil surface equipment such as a battery of oil tanks and
oil separation equipment.
-- The Seller will retain a carried GWI of 10% in respect of all
drilling and completion work necessary for the first two wells to
be drilled. The Seller has agreed to pay its proportionate share of
all subsequent drilling and completion work to be performed, as
well as its share of ongoing operating costs, including
workovers.
-- Zenith has an obligation to notify the Seller at least 24
hours prior to spudding a well on the Property.
-- Prior to commencement of drilling the first well, Zenith and
the Seller will formalise a Joint Operating Agreement to govern all
aspects of the relationship between the parties in respect of the
Property.
-- Zenith intends to use a highly experienced third-party local
drilling contractor to conduct drilling activities.
-- The drilling and completion of each well is expected to
require a total budget of approximately US$500,000, with an
estimated potential production output of approx. 60 barrels of oil
per day for each well.
-- Nine wells have historically been drilled in the Property,
with neighbouring properties recording sustained material
production.
-- Zenith will commission a 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 - to obtain an updated reserves evaluation for the Property.
-- The first well is planned to be drilled by the close of 2023.
Drilling and cementing activities are expected to take less than
seven days, with subsequent potential stimulation and testing work
to be performed, as well as the installation of any required
infrastructure to manage potential production from the
wellsite.
Andrea Cattaneo , Chief Executive Officer, commented:
"We are pleased to be gaining increasing momentum in our USA
acquisition campaign. The goal is to complete acquisitions with
significant production upside potential, having performed a
comprehensive due diligence exercise, to maximise our development
as a successful revenue generating energy production business.
The USA is proving a highly attractive jurisdiction for Zenith
in view of the lack of bureaucracy and other factors that have
historically delayed our progress elsewhere.
The acquisition of the Property in Texas should enable Zenith to
achieve material additional daily production revenue in an
exponential manner by way of drilling activities on very
advantageous terms.
We look forward with enthusiasm to consolidating our recent
business development as soon as possible ."
Further Information:
Zenith Energy Ltd
Tel: +1 (587) 315 1279
Andrea Cattaneo, Chief Executive E: info@zenithenergy.ca
Officer
BlytheRay - Financial PR/IR Tel: +44 207 138 3204
Tim Blythe, Megan Ray, Matt E: zenith@blytheray.com
Bowld
Allenby Capital Limited - Financial Tel: + 44 (0) 203 328 5656
Adviser
Nick Harriss
Daniel Dearden-Williams
Miriad Limited - Media Enquiries Tel: +44 7867527659
Zak Mir E: zak@zakmir.com
Notes to Editors :
Zenith Energy Ltd. is a revenue generating, independent energy
company with production, exploration and development assets in
Africa, the Middle East and Europe, including electricity
generation in Italy. The Company is listed on the London Stock
Exchange Main Market (LSE: ZEN) and the Euronext Growth of the Oslo
Stock Exchange (OSE: ZENA).
Zenith's strategic focus is on pursuing development
opportunities through the development of proven revenue generating
energy production assets, as well as low-risk exploration
activities in assets with existing production.
For more information, please visit: www.zenithenergy.ca
Twitter: @zenithenergyltd
LinkedIn: https://bit.ly/3A5PRJb
Market Abuse Regulation (MAR) Disclosure
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 as it forms part of
UK domestic law by virtue of the European Union (Withdrawal) Act
2018 ("MAR"). Upon the publication of this announcement via a
Regulatory Information Service ("RIS"), this inside information is
now considered to be in the public domain.
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