Zenith Energy Ltd Changes to REDPSA in Azerbaijan (6017E)
02 March 2020 - 6:30PM
UK Regulatory
TIDMZEN
RNS Number : 6017E
Zenith Energy Ltd
02 March 2020
March 2, 2020
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")
Changes to REDPSA in Azerbaijan
Zenith Energy Ltd., ("Zenith" or the "Company"), (LSE: ZEN;
TSX.V: ZEE; OSE: ZENA-ME), the international oil & gas
production company, provides the following update on its strategic
direction in Azerbaijan.
Handover of Contract Rehabilitation Area to SOCAR
In view of Zenith's strategic focus on pursuing large-scale oil
production and development opportunities in Africa, the Company
will handover the Contract Rehabilitation Area ("CRA") to
SOCAR.
Zenith expects to shortly define the handover process of the
CRA. It will continue to operate the CRA and maintain oil
production activities in Azerbaijan without interruption until the
handover is completed.
The Company expects to achieve a near total reduction of
operating expenses in Azerbaijan upon completion of the handover of
the CRA.
In addition, the Company's local subsidiary is owed
approximately US$700,000 from sales of produced oil which Zenith
expects to receive in the near future.
Current production from the CRA is approximately 180 barrels of
oil per day.
As a consequence, Zenith will not proceed with previously
planned well interventions in relation to wells C-37 and C-30 of
the Jafarli oilfield, which is expected to increase the Company's
free cash base.
The Company will provide further updates as appropriate.
Exploration - 25-Year REDPSA
The Company confirms that, once the handover of the CRA is
completed, its sole operational focus in Azerbaijan will be in
relation to performing exploration activities.
Andrea Cattaneo, Chief Executive Officer, commented:
"The transformational development oil production and revenue
generation opportunities we are currently completing in Africa
require a strategic review of our focus to optimise the deployment
of our financial resources and management attention.
Zenith has deployed significant financial and technical
resources since the beginning of the Azerbaijan project in order to
achieve material increases in oil production. Results have
underwhelmed management and market expectations for a number of
reasons including the complexity of the geological formations and
oil reservoirs, the poor condition of many existing wells, as well
the inaccuracy of historical well records.
We shall continue with our 25-year REDPSA, which remains intact,
with regards to exploration activities to be undertaken during 2020
and potentially beyond."
Further Information:
Zenith Energy Ltd
Andrea Cattaneo, Chief Executive Tel: +1 (587) 315
Officer 9031
-----------------------------
E-mail: info@zenithenergy.ca
-----------------------------
Novum Securities Limited - Broker Tel: + 44 (0) 207
399 9400
-----------------------------
Charlie Brook-Partridge
-----------------------------
Hugh McAlister
-----------------------------
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
by cumulative acreage 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. 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.
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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