TIDMZEN
RNS Number : 1779K
Zenith Energy Ltd
20 April 2020
April 20, 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")
Acquisition of Sidi El Kilani from KUFPEC
Zenith Energy Ltd. ("Zenith" or the "Company") (LSE: ZEN; TSX.V:
ZEE; OSE: ZENA-ME), the listed international oil & gas
production company focused on pursuing African development
opportunities, is pleased to announce that its newly created wholly
owned subsidiary Zenith Energy Netherlands B.V. ("Zenith
Netherlands") has signed a conditional sale and purchase agreement
("SPA") with KUFPEC (Tunisia) Limited ("Seller"), a 100% subsidiary
of Kuwait Foreign Petroleum Exploration Company K.S.C.C, a
subsidiary of the State of Kuwait's national oil company, for the
acquisition of a working interest in, inter alia, the North
Kairouan permit and the Sidi El Kilani Concession (the " Tunisian
Acquisition "), which contains the Sidi El Kilani oilfield
("SLK").
The Seller holds an undivided 22.5% interest in the Tunisian
Acquisition, together with 25 Class B shares in Compagnie
Tuniso-Koweito-Chinoise de Pétrole (CTKCP), the operator,
representing 22.5% of the issued share capital of the company.
Zenith's partners in the Tunisian Acquisition will include the
national oil company of Tunisia, Entreprise Tunisienne d'Activités
Pétrolières (ETAP) with a 55% interest and CNPC, China National
Petroleum Corporation with a 22.5 % interest.
The Seller has agreed to sell, assign and transfer to Zenith
Netherlands the Tunisian Acquisition on the terms and subject to
the conditions set out in the SPA.
The consideration payable by Zenith Netherlands under the SPA is
US$500,000.
Completion of the Tunisian Acquisition is conditional on
approval being granted by the Comité Consultatif des Hydrocarbures
of the Republic of Tunisia in respect of the transfer of the
Seller's right, title and interest in and under the SLK Concession
to Zenith Netherlands.
As first announced on March 2, 2020, Zenith is currently in
negotiations with an international oil major to sign an offtake
agreement for the asset's future oil production in order to fund
the Tunisian Acquisition and its development post-completion.
Tunisian Acquisition Highlights
-- First discovered in 1989 by KUFPEC with commercial production
commencing in 1993 and reported to be the second largest oilfield
discovered in Tunisia since 1989.
-- SLK reached a peak production of c. 20,000 boepd in 1995.
-- Covers an area of 204 square kilometres, located onshore, in
the Pelagian Basin, Eastern Tunisia.
-- SLK is one of the most productive fields in onshore Tunisia
and currently produces, natural flow, at a rate of approximately
700 bopd.
-- Generates gross annual revenues of approximately US$15 million.
-- SLK produces 39 API gravity oil from a fractured carbonate
reservoir (Abiod Formation), at a depth of c. 1,600 metres. The
reservoir characteristics are enhanced by natural fractures and
locally by dolomitisation.
-- SLK Facilities include a permanent Gas Oil Separation Plant
(GOSP) and a Pipeline of 125 km x 8" diameter, 22,000 bpd capacity
from the field to La Skhira terminal.
Zenith expects to soon commission a new Competent Person's
Report in compliance with Canadian securities laws, specifically
the COGE Handbook and National Instrument 51-101 - Standards of
Disclosure for Oil and Gas Activities, in order to obtain an
updated reserves evaluation for the Tunisian Acquisition.
Andrea Cattaneo, Chief Executive Officer, commented:
"We are delighted to have executed the SPA with regards to the
interest in the Sidi El Kilani Concession, a highly productive
Tunisian onshore oil production and development asset, which has
consistently outperformed even the most optimistic production
forecasts since commercial production commenced in 1993.
The Board views Tunisia as a safe, democratic jurisdiction with
a well-established history of successful oil and gas production
activities for junior, independent companies such as Zenith.
Upon completion of this deal, Zenith will have material
production revenue for reinvestment in field development
activities.
Our strategic outlook is that oil prices will progressively
strengthen in line with a gradual worldwide recovery in financial
and industrial activity following the progressive alleviation of
the devastating COVID-19 pandemic.
The current low oil price environment provides an unprecedented
opportunity for companies wishing to expand countercyclically by
securing large, revenue generating oil and gas production assets at
advantageous terms.
I am also delighted to have initiated a fruitful relationship
with KUFPEC, a highly respected subsidiary of Kuwait's State Oil
Company with operations across the world including Norway, and I
look forward to exploring further cooperation opportunities in the
future."
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
-----------------------------
Colin Rowbury
-----------------------------
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. Zenith's development strategy is to identify and rapidly
seize value-accretive hydrocarbon production opportunities in the
onshore oil & gas sector, specifically in Africa. The Company's
board of directors and senior management team have the experience
and technical expertise to develop the Company successfully.
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END
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