Gunsynd PLC Investment in Zenith Energy (6220P)
21 November 2016 - 6:00PM
UK Regulatory
TIDMGUN
RNS Number : 6220P
Gunsynd PLC
21 November 2016
Gunsynd plc
("Gunsynd" or the "Company")
Investment in Zenith Energy
Gunsynd Plc (AIM: GUN, ISDX: GUN) is pleased to announce that it
has signed a subscription agreement with Zenith Energy Limited
("Zenith"), a junior oil and gas E&P company quoted on the
Toronto Venture Exchange in Canada with an oil production company
based in Azerbaijan, to invest GBP100,000 by way of a convertible
loan note, and as part of a wider fundaising from other investors
of up to GBP500,000.
Highlights:
Zenith has acquired the Rehabilitation, Exploration and
Development and Production Sharing Agreement ("REDPSA") for three
fields in Azerbaijan. These fields are adjacent to one another
although geologically separate and constitute a combined acreage
position of 642.4 km2. The fields are located nearly 200 km to the
west of the capital, Baku, close to the border with Iran. The
fields are:
-- Muradxanli field
-- Carfarli field
-- Zardab field
Current combined production is approximately 333 bopd of oil
from approximately 87 wells although historical production was
considerably higher prior to the collapse of the Soviet Union in
1991.
It is estimated that there are up to 100 additional inactive
wells available for rehabilitation on the fields. No new wells have
been drilled on the fields for five years. It is further estimated
that only 20% of the estimated recoverable reserves of 87.7 mmbbls
have been recovered to date.
Terms of the investment:
Gunsynd is investing GBP100,000 by way of a convertible
unsecured loan note ("Note") paying interest of 3% per annum,
payable in arrears, in quarterly installments. Subject to the Notes
not having been converted in the meantime, Gunsynd will be repaid
in full 36 months from the date of issuance.
At the option of the holder of the Notes, the principal of a
Note may be converted into common shares of Zenith at any time
prior to maturity (36 months from issuance) at a price equal to
CDN$0.10 per common share or the initial listing price of the
common shares if Zenith is listed on another senior stock exchange
at the time of such conversion.
Hamish Harris, the Company's Chairman, commented:
"This initial investment by Gunsynd provides an excellent
opportunity for the Company to participate in a proven low cost
producing field with substantial upside from both workovers and new
drilling. The Company looks forward to participating with Zenith
Energy in optimising the potential of these three fields."
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014.
The directors of Gunsynd accept responsibility for this
announcement.
For further information please contact:
Gunsynd plc: +44 (0) 20 7440 0640
Hamish Harris
Donald Strang
Nominated Adviser/ISDX Corporate Adviser: +44 (0) 20 7213 0880
Cairn Financial Advisers LLP
James Caithie / Liam Murray
This information is provided by RNS
The company news service from the London Stock Exchange
END
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