March 13, 2025
ZENITH
ENERGY LTD.
("Zenith" or the
"Company")
Final
Hearing for legal claim against SMP
Zenith Energy
Ltd. ("Zenith" or the
"Company") (LSE: ZEN; OSE: ZENA; PINK MARKET:
ZENAF), the listed international energy production and
development company, is pleased to confirm
that the Final Hearing in respect of
the legal claim (the "Claim") brought before the Paris
Commercial Court (the "Court") by its fully owned
subsidiary, Anglo African Oil & Gas Congo S.A.U ("AAOGC")
against SMP Energies (hereafter "SMP", formerly Société de Maintenance
Pétrolière - SMP) the rig contractor that performed drilling
services in wells TLP-103 and TLP-103C of the Tilapia oilfield
during 2018-2019, is due to take place on Friday March 14,
2025.
Background
On July 15, 2019, formerly AIM
quoted Anglo African Oil & Gas plc ("AAOG"), the previous owner of
AAOGC prior to its acquisition by Zenith in May 2020, made an
announcement confirming that AAOGC had initiated a claim against
SMP following poor performance in drilling wells TLP-103 and
TLP-103C, and the refusal by SMP to engage in negotiations to cover
the significant cost overruns that had been incurred by AAOGC as a
direct consequence.
The Claim was initially launched in
Court against SMP to recover costs of US$3.1 million relating to SMP's
unsatisfactory performance.
In taking the decision to launch the
Claim for costs against SMP the following reasons were considered
significant at the time:
· AAOGC had maintained
extensive, contemporaneous technical records of the failures of the
Rig and the losses and delays that were caused as a
result;
· SMP had not put forward
evidence, of any kind, to suggest that Rig performance was not the
cause for cost overruns; and
· Advice from
International counsel in London, Paris and the Republic of the
Congo was that the Claim had merit.
Under the rules and conventions of
the Court, mediation between the parties engaged in a dispute is a
recommended course of action. As a result, a supervised mediation
meeting took place during the Autumn of 2019.
On December 11, 2019, AAOG announced
that mediation efforts had proven unsuccessful and that, as a
result, AAOGC would continue to pursue the Claim.
On November 11, 2020, Zenith
provided an update on the Claim announcing that SMP had retaliated
to the Claim by obtaining a number of unjustified seizure orders
over the fixed assets of AAOGC in the Republic of the Congo, as
well as over its local bank accounts, and that whilst the
initial granting of these orders had no bearing on
the Claim launched in the Paris Commercial Court, it had been
successful in fully revoking all of the wrongful seizure orders
initially obtained in the Republic of the Congo.
On February 17, 2023, Zenith
announced that it AAOGC had increased the amount of the Claim for
SMP's failures during drilling activities to US$9
million, in consideration of the significant commercial
damages suffered by AAOGC, specifically the impossibility, as
a direct result, to begin production activities from the Tilapia
oilfield.
Further, Zenith announced that AAOGC
had intensified its legal activities in support of the Claim by
commissioning third-party reports from leading experts.
On July 3, 2023, the Company
announced that the Court had
rejected SMP's request for a stay of proceedings
in France due to new proceedings having been initiated in
the Republic
of Congo, stating that SMP's request
contained "all the
characteristics of a dilatory request", and ordered SMP to
pay an amount of EUR 30,000 to AAOGC as initial procedural costs (the "Initial Procedural Costs").
SMP unsuccessfully appealed this
intermediate decision of the Court, resulting in the Paris Court of
Appeal upholding the decision of the Paris Commercial Court
and AAOGC receiving Procedural Costs in the amount of approximately
EUR 30,000.
On October 4, 2024, the Company
announced that it had appointed Charles
Russell Speechlys France as new legal counsel before the
Court in connection with the legal claim against SMP.
Procedural Timeline
The Court is expected to reach its
final decision within approximately three months of the Final
Hearing.
Andrea Cattaneo, Chief Executive Officer,
commented:
"AAOGC has been pursuing the Claim for a
period of approximately 5 years.
During the period, affected in part by the COVID-19 pandemic,
SMP has sought in every possible way to delay proceedings,
specifically by initiating vexatious and misguided actions in the
Republic of the Congo, all of which have been subsequently
dismissed.
This conduct has been recognised by the Court and has resulted
in payment of Initial Procedural Costs to AAOGC by
SMP.
Having examined the case upon acquiring AAOGC, we are
confident that the Claim has merit and that AAOGC should be
compensated for the significant damages it was caused by SMP. More
specifically, SMP has primary responsibility for the failure of
wells TLP-103 and TLP-103C.
It should be underlined for the sake
of historical record that the fate of AAOG, a company once
commanding a market valuation of circa £30 million and having AAOGC
as its sole asset, was impacted in a determining way by these
failures.
We
are hopeful that the Court will recognise the scale of the damages
suffered by AAOGC".
Further Information:
|
Zenith Energy Ltd
Andrea Cattaneo, Chief Executive Officer
|
Tel: +1 (587) 315 1279
E: info@zenithenergy.ca
|
Notes to Editors:
Zenith Energy Ltd. is a revenue
generating, independent energy company with energy production,
exploration and development assets in North Africa, the US
and Europe. The Company is listed on the London Stock Exchange
Main Market (LSE: ZEN), the Euronext Growth of the Oslo Stock
Exchange (OSE: ZENA) and the Pink Markets of the OTC (OTC
PINK: ZENAF).
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
