TIDMZEN
RNS Number : 4175V
Zenith Energy Ltd
03 December 2019
December 3, 2019
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")
Acquisition of Coro Energy Italian Assets
Zenith Energy Ltd., ("Zenith" or the "Company"), (LSE: ZEN;
TSX.V: ZEE; OSE: ZENA-ME), the international oil & gas
production company, is delighted to announce that it has signed a
share purchase agreement ("SPA") with AIM quoted Coro Energy Plc
("Coro") for the acquisition of Coro's entire natural gas
production and exploration portfolio in Italy ("Acquisition").
Acquisition Highlights
-- The Acquisition will add material production to the Company's
existing Italian operations, resulting in the creation of a
significantly enlarged, revenue generating, low-risk production and
exploration portfolio.
-- Coro's Italian portfolio consists of 100% working interests
in four producing natural gas concessions: Sillaro, Rapagnano, Casa
Tiberi and Bezzecca, as well as one production concession which is
development ready, S. Alberto. Two exploration concessions, Laura
and Santa Maria Goretti complete the portfolio.
-- The Acquisition will enable Zenith to increase gross
production revenue in Italy by approximately 410% with 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).
-- Zenith will become one of the largest natural gas production
operators in Italy with a total cumulative production from its
Italian portfolio of approximately 55,000 standard cubic meters per
day ("scm/day") (approximately 322 barrels of oil equivalent "BOE"
per day).
-- The Acquisition assets generated EUR1.53 million in revenue
(equivalent to approximately GBP1.31 million; NOK15.575 million or
CAD$2.26 million) in the first six months of 2019 at an average
cumulative production rate of 40,000 scm/ day (approximately 234
BOE per day).
-- Independently assessed 2P reserves of 7.5 BCF as of January
1, 2018 (CGG Services (UK) Limited CPR - Reference No: BP512 -
dated March 1, 2018).
-- Production is expected to reach 113,000 scm/day following the
completion of a series of targeted interventions planned during the
next 6-9 months for which all necessary approvals have already been
obtained.
-- Consolidation of Italian portfolio will strengthen Zenith's
credentials as a natural gas producer to support the acquisition of
additional natural gas production assets in other regions,
including Norway.
-- Enhancement of Italian operational team with the addition of
highly experienced technical management fully familiar with the
domestic Italian energy production environment and the potential
future productivity to be achieved from the Acquisition
concessions.
-- Zenith's significantly enhanced natural gas production
activities in Italy are expected to give the Company increased
relevance in the context of Italy-Azerbaijan natural gas industry
cooperation in view of the imminent activation of the TAP (Trans
Adriatic Pipeline).
Zenith and Coro entered into a conditional share purchase
agreement in respect of the purchase of the entire issued capital
of Coro Europe Limited by Zenith on December 2, 2019. The
consideration for the Acquisition is payable in common shares in
Zenith and is divided into two parts.
An initial GBP402,000 is payable at completion in common shares
in the capital of Zenith ("Consideration Shares") at a price of
GBP0.06 (equivalent to approximately NOK0.71 or CAD$0.10) per
Consideration Share with a six-month hold period.
The second part of the consideration, up to GBP3.5 million, is
also payable in shares at the closing price of Zenith shares on the
issue date plus 40 per cent. of such closing price only in the
event that production of natural gas extracted and recovered from
the Acquisition's Italian assets exceeds an average of 100,000
scm/day over a period of four successive months (equivalent to
approximately 590 BOE per day).
Completion of the Acquisition is conditional, inter alia, on the
approval of sale by the Italian Ministry of Economic
Development.
The Acquisition is also subject to final regulatory approval
from the TSX Venture Exchange.
Andrea Cattaneo, Chief Executive Officer, commented:
"We are delighted to have signed this exciting SPA with Coro
Energy. Upon completion of the acquisition, Zenith will have
significantly enhanced its Italian operations with a material
increase in revenue generation and natural gas production making it
one of the leading natural gas producers in Italy.
There are a number of opportunities to increase production from
current levels in the acquired assets through targeted relatively
low-risk well interventions, also present in our existing Italian
portfolio. Our newly enhanced technical team and financial
resources will enable Zenith to apply renewed focus on its Italian
portfolio.
We look forward to updating the market in due course regarding
progress."
Further Information:
Zenith Energy Ltd
Andrea Cattaneo, Chief Executive Tel: +1 (587) 315
Officer 9031
-----------------------------
E-mail: info@zenithenergy.ca
-----------------------------
Peterhouse Capital - Joint Broker Tel: + 44 (0) 207
469 0930
-----------------------------
Lucy Williams
-----------------------------
Charles Goodfellow
-----------------------------
Novum Securities Limited - Joint Tel: + 44 (0) 207
Broker 399 9400
-----------------------------
Charlie Brook-Partridge
-----------------------------
Hugh McAlister
-----------------------------
IFC Advisory Limited - Financial Tel: + 44 (0) 203
PR & IR 934 6630
-----------------------------
Graham Herring
-----------------------------
Zach Cohen
-----------------------------
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
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.
Forward-looking statements
This news release contains forward-looking statements and
forward-looking information within the meaning of applicable
securities laws. The use of any of the words "expect",
"anticipate", "continue", "estimate", "objective", "ongoing",
"may", "will", "project", "should", "believe", "plans", "intends"
and similar expressions are intended to identify forward-looking
information or statements. More particularly and without
limitation, this press release contains forward-looking statements
about the potential natural gas production increases to be achieved
as a result of possible well intervention activities to be
performed in certain concessions of the Acquisition.
The forward-looking statements and information are based on
certain key expectations and assumptions made by Zenith based on
information it has received from Coro in relation to the production
potential of certain concessions within the Acquisition.
Although Zenith believes that the expectations and assumptions
on which such forward-looking statements and information are based
are reasonable, undue reliance should not be placed on the
forward-looking statements and information because the Company can
give no assurance that they will prove to be correct. All timing
given in this announcement, unless stated otherwise is indicative
and while the Company endeavours to provide accurate timing to the
market, it cautions that due to the nature of its operations and
reliance on third parties this is subject to change often at little
or no notice. By its nature, such forward-looking information is
subject to certain risks and uncertainties (both general and
specific) that could cause actual events or outcomes to differ
materially from those anticipated or implied by such
forward-looking statements. These risks and uncertainties include,
but are not limited to, Zenith being unable to finance or realise
growth opportunities. Readers are cautioned not to place undue
reliance on this forward-looking information, which is given as of
the date hereof, and to not use such forward-looking information
for anything other than its intended purpose. Zenith undertakes no
obligation to update publicly or revise any forward-looking
information, whether as a result of new information, future events
or otherwise, except as required by law. The forward-looking
information contained herein is expressly qualified by this
cautionary statement.
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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