TIDMZEN
RNS Number : 2461S
Zenith Energy Ltd
15 March 2021
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF REGULATION 11 OF THE MARKET ABUSE (AMENDMENT) (EU EXIT)
REGULATIONS 2019/310.
March 15, 2021
ZENITH ENERGY LTD.
("Zenith" or the "Company")
Acquisition of oil production and development asset 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 Zenith Energy Africa Limited ("ZEAL"), its newly
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 Zarzis Ltd ("EPZ")
(the "Acquisition"), which holds a 45% interest in the Ezzaouia
Concession ("Ezzaouia").
Terms of the Acquisition
Pursuant to the terms of the SPA, ZEAL has agreed to acquire
100% of the issued share capital of EPZ for the aggregate amount of
US$150,000 payable at completion, as well an additional US$100,000
to be satisfied by the issue of ordinary shares in the share
capital of Zenith to be issued within sixty days of completion
("Consideration Shares") and a royalty payable and calculated as
US$0.35 per each barrel of hydrocarbons produced from the Ezzaouia
oilfield and allocable to EPZ, with the royalty not being less than
an amount of US$50,000 per annum for a period of ten years.
Acquisition Highlights
-- Ezzaouia is located in onshore Tunisia on the Zarzis
peninsula, south of the island of Djerba in the southern Gulf of
Gabes.
-- First discovered by Marathon Petroleum Corporation in 1986,
with production activities starting in 1990 with a peak production
being achieved of 35,000 barrels of oil per day in 1991.
-- Ezzaouia produces an average of 40 API gravity oil from the
Zebbag (Lower Cretaceous) and Mrabatine (Upper Jurassic)
formations.
-- It is operated by MARETAP, a joint operating company owned in
partnership with the national oil company of Tunisia, ETAP
(Entreprise Tunisienne d'Activités Pétrolières) on a 50:50 basis,
which holds a 55 percent interest in Ezzaouia.
-- Currently produces at a rate of approximately of 465 bopd
(approximately 210 bopd net to Zenith).
-- Approximately 25,000 barrels of oil are currently held in
storage with a commercial value of approximately US$1,250,000.
-- Zenith will shortly commission 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 Acquisition.
-- Planned field production optimisation and workover activities
are expected to increase Ezzaouia gross production to 1,000 bopd
(potentially resulting in a production of 450 bopd net to
Zenith).
-- The Acquisition has certain development obligations during
the course of the new 20-year concession including the drilling of
a side-track, the drilling of a replacement well and that of a
development well.
-- On April 19, 2019, the Tunisian State represented by the
Ministry of Industry and Small & Medium Enterprises informed
ETAP and EPZ that the Comité Consultatif des Hydrocarbures ("CCH")
had provided a favourable opinion to the application submitted by
ETAP and EPZ for a new 20-year concession to be called "Ezzaouia"
(the "New Concession").
-- A Convention for the New Concession (the agreed work
programme between ETAP and EPZ) has been signed by both
parties.
-- The New Concession is currently awaiting parliamentary approval.
-- Ezzaouia has modern oil treatment and storage facilities with
a total field storage capacity of approximately 20,000 barrels of
oil.
-- MARETAP, the joint operating company, operates an oil storage
terminal, connected to Ezzaouia by way of two pipelines (one for
gas and one for oil respectively), at the port of Zarzis, with a
storage capacity of approximately 200,000 barrels of oil, from
which all oil production from Ezzaouia is exported to the
international markets.
Andrea Cattaneo, Chief Executive Officer of Zenith,
commented:
"I am delighted to have completed this transaction which
reflects the continued successful implementation of our development
strategy - that of acquiring prospective oil production and
development assets - and delivers immediate daily production
revenue to Zenith during a time of material appreciation in the
price of oil.
Ezzaouia has significant unexploited potential which we intend
to develop progressively via a combination of workover and drilling
activities.
By way of this acquisition, we have further reinforced our
settlement in Tunisia, enabling a demonstration of our technical
and financial capabilities locally.
The Board strongly believes in Zenith's future successful
establishment in Tunisia and we intend to capitalise on certain
additional acquisition opportunities that may present themselves in
the near-term."
Further Information:
Zenith Energy Ltd
Andrea Cattaneo, Chief Executive Tel: +1 (587) 315
Officer 9031
-----------------------------
E-mail: info@zenithenergy.ca
-----------------------------
Allenby Capital Limited - Financial
Adviser & Broker
-----------------------------
Nick Harriss Tel: + 44 (0) 203
Nick Athanas 328 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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