TIDMZEN
RNS Number : 7774Z
Zenith Energy Ltd
05 September 2018
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.
September 5, 2018
ZENITH ENERGY LTD.
("Zenith" or the "Company")
Purchase of Drilling Rig and Completion of Financing
Zenith Energy Ltd. ("Zenith" or the "Company") (LSE: ZEN; TSX.V:
ZEE), the dual listed international oil & gas production
company operating the largest onshore oilfield in Azerbaijan, is
pleased to announce that it has signed a convertible unsecured loan
facility (the "Facility") for an aggregate amount of US$1,500,000
to provide additional funding for the Company's field development
operations in Azerbaijan and to pursue potential new
acquisitions.
Purchase of BD-260 Drilling Rig
Zenith is pleased to announce that its oilfield service company
subsidiary, Zena Drilling Limited, ("Zena") has signed a purchase
agreement for the acquisition of a BD-260 drilling rig assembled by
B Robotics W S.r.l., ("Robotics") for a total consideration of
EUR2,250,200. The aforementioned agreement supersedes the six-month
rental agreement Zena had signed with Robotics for the BD-260
drilling rig (the "BD-260") announced by the Company on June 6,
2018. In addition, Robotics has confirmed it will provide its
highly experienced drilling personnel for a minimum of 6 months as
part of the aforementioned agreement.
Zena has purchased the BD-260 in order to complete the Company's
planned workover and drilling activities in the Muradkhanli,
Jafarli and Zardab fields for the next 18 months. As announced by
Zenith on August 13, 2018, the Company has completed two
comprehensive geological studies that have provided a significantly
enhanced understanding of the hydrocarbon production of the
Company's operations in Azerbaijan which will have a direct
influence in shaping the Company's operational activities going
forward.
Robotics has advised the Company that it is in the process of
sending the first shipment of material in relation to the BD-260 to
Azerbaijan. The Company will provide an update once the BD-260 is
fully assembled on location.
Initiating of Tender Process for Leasing of 180-ton Workover
Rig
The Company is pleased to announce that it is formalising a
tender process in Azerbaijan for the leasing of a 180-ton
truck-mounted workover and drilling rig for a period of four
months. Zenith has received preliminary indications that a rig of
this specification will be available to start work on October 20,
2018. The Company will provide an update once the tender process is
concluded.
It is expected that the BD-260 and the 180-ton truck-mounted
workover and drilling rig, to be leased from a local drilling
company following the completion of a formal tender process, will
be in operation concurrently across the Company's field operations
in Azerbaijan.
Convertible Loan Facility
The Company has entered into a US$1,500,000 unsecured
convertible loan facility (the "Facility") with a consortium of
lenders (the "Lenders"). The Facility has a term of 18 months
starting from August 30, 2018 and the Company shall pay interest on
the outstanding amount of the Facility at the rate of 0% per annum
(the "Interest Rate"). The Facility includes an initial immediate
advance of US$1,300,000 and a further advance of US$200,000, to be
provided at a later time and only at the discretion of the Lenders.
The Facility is repayable as follows:
-- US$50,000 on October 16, 2018;
-- US$100,000 on November 16, 2018; and
-- The remaining balance to be paid 18 months after each such advance
Under the terms of the Facility the Company has issued the
Lenders with 6,977,988 share purchase warrants (the "Warrants") to
subscribe for the equivalent number of common shares of no par
value in the share capital of Zenith ("Common Shares") at a price
of GBP0.0505 per Common Share on subscription at any time from
December 30, 2018 to February 28, 2020 subject to the articles of
the Company and the terms and conditions of the Facility.
The Facility is wholly or partly convertible into Common Shares
at the lower of GBP0.0505 per Common Share and 90% of the lowest
daily volume weighted average price on the London Stock Exchange of
the Common Shares during the 10 trading days immediately prior to
the request for conversion, subject to maximum total shareholding
restrictions from each Lender of 9.99% ("Conversion"). The Lenders
have the right to request Conversion between December 30, 2018 and
the expiry of the Facility.
An application will be made for any Common Shares issued and
allotted on exercise of the Warrants or Conversion to be admitted
to the standard segment of the Financial Conduct Authority UK
Official List and to trading on the Main Market for listed
securities of the London Stock Exchange (the "Admission"). The new
Common Shares will rank pari passu in all respects with the
existing common shares of the Company. An application will also be
made for the new Common Shares to be listed on the TSX Venture
Exchange.
The Facility agreement includes normal warranties and default
clauses.
Andrea Cattaneo, Chief Executive Officer, commented:
"The financing Zenith has secured provides additional capital
that will be invested directly into our operations.
The purchase of the BD-260 reflects Zenith's strategy of owning
the key equipment required for the long-term development of its
asset portfolio. We have been working closely with Robotics to
ensure that the BD-260 is tailored to our operational requirements
in the Zardab and Muradkhanli fields. Ownership of the rig will
significantly reduce operational expenditure and, at the same time,
give us the flexibility to determine our work programme on the
basis of the many opportunities across the field area to achieve
increased oil production.
Furthermore, we shall also be able to deploy the BD-260 in other
locations across our present portfolio, specifically Italy, where
some of the Company's natural gas concessions have significant
untapped value, as well as new assets that may be added to our
portfolio in the near-term.
We are initiating a formal tender process to lease a 180-ton
workover and drilling rig to avoid delaying our operational
activities in Azerbaijan. Our primary focus is to resume activities
in the Zardab field and thereby regain momentum. The new equipment
we are expecting, combined with our enhanced geological
understanding and the new operational personnel who have joined us,
will enable us to achieve this."
For further information please contact:
Zenith Energy Ltd.
Andrea Cattaneo, Chief Executive Officer
E-mail: info@zenithenergy.ca
Tel: +1 (587) 315 9031
Vigo Communications - PR Adviser
Patrick d'Ancona
Chris McMahon
Kate Rogucheva
Tel: +44 (0) 20 7830 9700
Daniel Stewart & Company Plc - (Joint Broker)
Robert Emmet- Corporate Broking
Joel Bayley- Corporate Finance
Tel: + 44 (0) 207 776 6550
Optiva Securities - (Joint Broker)
Christian Dennis
Tel: + 44 (0) 203 137 1903
Allenby Capital Limited - (Financial Adviser)
Nick Harriss
Nick Athanas
Tel: + 44 (0) 203 328 5656
Notes to Editors:
Zenith Energy Ltd. is an international oil and gas production
company, dual listed on the TSX Venture Exchange and London Stock
Exchange.
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 Azerbaijan Republic, 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, 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.
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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