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Silence will be broken when there is actual news to post. Topped up another 1500 this morning. Will continue to do so till are ready for good news.
The drift continues nothing from AC , silence again .
Thanks again for the great write up mg, I added further today and will continue to do so until we get the big updates we have been waiting for.
Hedgehog – my apologies. I agree that we are on the same page with regard to the bright future that is ahead of Zenith. On furth consideration I also think that you are absolutely correct in that slippage does happen and that in the big scheme of things the delay from June to September (for the civil works) is actually totally normal. I think that I just got caught up in the word “November” and missed out on the crucial point that the civil works will commence in September which is only two months away. Thanks very much for the correction.
The other thing that I absolutely in agreement with you about is that Zenith have a lot going on. I do not believe for a second that we are just waiting for Tilapia and Rob-3 and that nothing else is going on in the interim. AC is a busy many and an active deal-maker and in the last investor conference call he made the following four statements which should give us all confidence that we will almost certainly be acquiring new assets in the very immediate future:
1,.“Zenith has many other negotiations going on in Africa which have not reached announceable stage yet. However, we are looking at trying to acquire assets that can be closed quickly. “
2,.“There are also possibly other acquisitions in Tunisia but our initial strike took all of the small and easily available assets and so we prefer to focus in other jurisdictions where we can complete deals more quickly.
3,.“ We are already in negotiation of 5-6 Nigerian deals and the appeal of OML141 was quick production and staggered payment. We understand that retail investors don’t want long-drawn out negotiations and we are always looking at speed of executions without bureaucratic complications (transactions between private companies) and that can be brought to productions quickly. However at the same time this is Africa . For example Baraccuda would have been perfect if it was not for the malicious court case and so we could have completed the transaction in a matter of hours were it not for the court case. Note that this is not the only opportunity that we have and we have many many good opportunities.”
4. “July 2021 AC mentioned that they company was looking for big assets that might enable the company to increase 10-15 times in size – 2022? At the moment we are in two negotiations of this size. They are not yet at an annoucneable stage but we have developed new avenues in new countries that were not previously knows.”
Hedgehog........I concur we have a lot to look forward to........on a trading perspective I believe we have reached bottom so any positive news is welcome from here for a large spoke..........dyor
MarketGunslinger,
I always read all your posts, and am a big fan of them.
Hence my following comment to NicetoMichu on 1st. June:-
NicetoMichu Posts: 3,599 Price: 0.85 No Opinion
RE: Zen 1 Jun '22
"brilliant posting as ever Market Gunslinger and much appreciated."
Hedgehog100 Posts: 2,050 Price: 0.85 Strong Buy
RE: Zen 1 Jun '22
"Yes NicetoMichu, I second that emotion,
And re. Florida's post as well before that.
Complemented by other very well-informed and intelligent shareholders ... and it's always a bullish sign when high-calibre investors are shareholders. ..."
https://www.lse.co.uk/ShareChat.asp?ShareTicker=ZEN&share=Zenith-Energy&page=5
Please keep up your good work.
Re your comment:- "Rob-3 was originally due to be developed in June 20222"
Slippage with resource company timescales is par for the course, and I think that experienced resource investors always factor in potential delays to their considerations.
Fortunately ZEN has a lot going on, so if one area of news isn't delivering as fast as is hoped, others can potentially compensate.
Will the share price be 0.79p soon?
Regarding Tilapia and the acquisition of other assets
Everybody knows about Tilapia and the impact that it will have on Zenith and everybody knows that news could come any day. However, we also know that we are working on Africa-time in this process. As AC himself has said in the last investor conference call; “I know that sometimes our shareholders are frustrated with how long it takes between talking about a deal and then completing it but in Africa time is very difficult and there is nobody about (our size) who is completing transactions quicker than us. Zenith is a very aggressive company but we do things above board and so we are not worried about falling foul of authorities. This means that we cannot speed up African bureaucracy but our solution is to have multi-pronged deals in process so when one is stalled then others are in progress.”
What I have been suggesting is exactly what AC himself has said. Since we do not control the timescale in which the T2 license will be granted, it makes sense that we acquire new assets in the meantime to help grow the company. As I said at the beginning I believe that AC has been out there doing deals and we will hear about them soon. The company has usually been great about doing this via the Investors Conference Calls which we have traditionally had every three months but we are currently slightly behind on. It would be extremely helpful if they were to have another call in the near future to update us all. Put simply, good comms help to improve share-price performance.
Hedgehog
I am not sure that you have read my most recent post in full. You appear to have picked up on one sentence of it and not bothered to read the rest of what I have written. Therefore you have erroneously assumed that I am not positive about Zenith and the company’s future when a thorough reading of what I had written would have led you to the opposite (and correct) conclusion.
You have asked me: “Why is that incredibly frustrating?” (referring to the delay in drilling Rob3)
The delay is incredibly frustrating because Rob-3 was originally due to be developed in June 2022, so it is now being delayed by 5 months.
You have also asked: “And why do you think that Tilapia news is the only potential news in the interim?”
I do not think that Tilapia is the only news to expect in the interim. If you read the full content of what I wrote you will see that I said that “It would not surprise me at all of the Rob-3 drill has been delayed AC has other acquisitions up his sleeve for the summer but we need to know this. I have emailed the company requesting an investors conference call soon and once this comes I suspect that we might find that the action behind the scenes is much more extensive that we currently think. AC is a deal-maker by nature and I don’t think that he has suddenly just stopped doing this.”
You then state: “Robanna is just one of ZEN's four concessions in Tunisia (and Robanna isn't just one well in any case).”
I am not sure what you mean by this . I am well aware of Zenith’s concessions in Tunisia, and I am aware that Robanna is made up of more than one well, hence I referred to Rob-3 in my post. However, you are unclear as to what you are suggesting. Are you expecting that Zenith will drill at Ezzaouia or elsewhere in Tunisia before Rob-3 is drilled in November?
Regarding Zenith’s Italian assets.
Zenith’s Italian assets are great and I agree with you that they are an exciting development opportunity. In fact, if you read my history I have suggested a number of times on this board that they have just as much potential as the Tunisian devleopments and from the point of view of the company spreading its risk it would be much better to develop them further before we did any more work in Tunisia. We know that the company has plans to increase production there in H2 this year and I am sure that you would agree that it would be good to make progress on this as soon as possible.
From ZEN's interim report for the 6 months ended 30.9.21, dated 30.11.21:-
" ... Zenith remains fully confident to obtain a new 25-year license in due course. ..."
https://wp-zenith-2020.s3.eu-west-2.amazonaws.com/media/2021/12/Zenith-Financial-Statements-30-September-2021.pdf
ZEN's integrity is impeccable, and there is no why they would make such a statement unless they were very confident.
Moreover, they have been very responsible in not giving a timeline, for an event the timing of which is out of their control:-
"If you say that something will happen or take place in due course, you mean that you cannot make it happen any quicker and it will happen when the time is right for it."
https://www.collinsdictionary.com/dictionary/english/in-due-course
"Although it is incredibly frustrating to have this waiting period in front of us between now and November where there seems to be nothing to do other than wait for Tilapia news imagine how bad the situation would be if we did not have our Tunisian production assets."
MarketGunslinger,
That comment from you appears to relate to this ZEN news from 24th. June:-
"Robbana-3 well ("ROB-3")
As previously announced, the Company has selected the well location for the drilling of ROB-3, a new well that will reach a total target depth of approximately 2,500 metres, following an in-depth geological and reservoir review enhanced by new information obtained during the workover of ROB-1.
Civil works are expected to begin during the month of September 2022, with a commercial tender for the selection of a drilling services contractor to be conducted during the coming months, alongside completion of the necessary local approval process in accordance with applicable Tunisian legislation.
Drilling activities are expected to commence in November 2022, following the mobilisation of a drilling to the well location."
https://www.lse.co.uk/rns/ZEN/operational-update-robbana-concession-6dp94hwtvpv3wpi.html
Why is that incredibly frustrating? A few months isn't long in resource developments terms, and civil works are expected to begin in barely a couple of months.
And why do you think that Tilapia news is the only potential news in the interim?
Robanna is just one of ZEN's four concessions in Tunisia (and Robanna isn't just one well in any case).
Then there's Italy: from ZEN's 14th. June RNS, ZEN now appears to be accelerating its Italian gas development plans to beyond primarily just its Torrente Cigno concession. Apparently certain applications with regard to this have already been submitted, with approvals now awaited.
And there's also the possibility of a potential new acquisition or acquisitions.
Moreover, the Tilapia licence award would be so massive that it could potentially double the ZEN s.p. in a day, so even just that alone would be more than worth waiting for.
And the period of time that has elapsed means that we could now realistically expect the award the licence award at any point.
From ZEN's interim report for the 6 months ended 30.9.21, dated 30.11.21:-
"In the Republic of Congo, Zenith has announced that the Company had presented a comprehensive commercial
and technical offer to the Ministry of Hydrocarbons and that we hope to be awarded a new 25-year license for
the Tilapia oilfield (which will be named Tilapia II). Zenith remains fully confident to obtain a new 25-year
license in due course. At the same time, we are diligently progressing the recovery of the $5.7 million owed by
Société Nationale des Pétroles du Congo (“SNPC”) and we look forward to keeping our shareholders appraised
on developments accordingly."
https://wp-zenith-2020.s3.eu-west-2.amazonaws.com/media/2021/12/Zenith-Financial-Statements-
AC has indeed shown good deal making skills so far .. and hopefuly will continue in this vein, Marketgunslinger.
But a core driver of success for zen.l on it's Africa journey will be around Operational Competence of it and its chozen partners... And the first half of 2022 in that respect has been average at best imho.. or the poor side of average even.. eg Rob 1 was a poor to average average outcome versus expectations, Rob 3 will be at least 4 months late in starting activities versus the schedule outlined at beginning of the year and the recent major oil lift was for about half ? of what was previously outlined as the plan. ( Towards balance Italy is doing well operationally and Zen are generally new to Africa and Africa is a very tough place to get anything done 'on time', in fairness)
So while I'm gutted by the current s/p, from an operational competence perspective, I understand why it's this low.. especially when you layer on top that the key strategic deal that is/will be Tilipia is years? slower in achieving agreement than originally expected...
Oh well.. but I'm not going to sell any around now as I don't need to and also, the s/p is very low versus the macro asset picture.. but there are many shares in my p/f that I currently have higher hopes for in half 2 2022 than zen.l...
Did anyone hear back if whether we will be having an investor conference call? Would be good to find out what ac has planned for the summer months. MG?
What AC did then that was very impressive was to seize the opportunity when the oil price was low and the agenda was all about decarbonisation and acquire assets for almost nothing from distressed competitors. The company is now reaping the rewards of this strategy.
Although it is incredibly frustrating to have this waiting period in front of us between now and November where there seems to be nothing to do other than wait for Tilapia news imagine how bad the situation would be if we did not have our Tunisian production assets. The worst case at the moment is that each month that goes by with nothing happening the company still nets $1 million in revenue. If we were back in the days of Azerbaijan with almost no production the company would be constantly issuing shares to keep itself alive and pay the day to day costs. Instead it makes more money every day.
Also, although I talk about a waiting in front of us at the moment, this is simply where we are today as we do not know what is happening. I am certain that AC is not just sitting around and doing nothing for the next four months but shareholders need to know from him exactly what he is doing as sharing his plans and the timescales for them would help restore optimism and give new investors a reason to buy into the company. We shouldn’t forget that the company was aiming to acquire a very significant asset in Nigeria (OML141) and the only reason that this did not go through was because of the legal action taken against the vendors by ADM Energy.
It would not surprise me at all of the Rob-3 drill has been delayed AC has other acquisitions up his sleeve for the summer but we need to know this. I have emailed the company requesting an investors conference call soon and once this comes I suspect that we might find that the action behind the scenes is much more extensive that we currently think. AC is a deal-maker by nature and I don’t think that he has suddenly just stopped doing this.
Calit people often forget during covid time when most companies were in trouble, AC was working around the clock and secured us assets that actually produced and sold for cash. we saw many other companies do nothing and lose most of its market cap, people have short memories AC got a lot done during covid, and that’s why we have a lot to look forward to from Tunisia, Tilapia and Italy.
" ... confidence in developing acquired assets successfully is hugely important tiowards gaining licences in first place ..."
Then there must be confidence in ZEN, for it to have been the successful bidder for the Tilapia II licence.
ZEN can't be held responsible for the disappointing Azerbaijan assets, e.g. the complexity of the geological formations and oil reservoirs, the poor condition of many existing wells, as well the inaccuracy of historical well records.
Informed people will know that, and will instead see that ZEN did the best that could be expected with the poor assets.
And since then, ZEN has shown how efficiently and effectively it can perform with decent assets, in Italy and Tunisia.
If you read through all the relevant RNSes, it's very clear that the authorities in the Republic of the Congo are keen to go with ZEN to develop Tilapia II.
Thanks to Florida for this observation about the usual time for licence approval in Africa apparently being 9 - 18 months:-
Florida Posts: 1,055 Price: 0.85 Strong Buy
Zen 1 Jun '22
"We should be thinking about why AC bought 39m shares on the 31st January 2022. We know Tilapia couldn't happen for 30 day's after the purchase because that would have been seen as insider trading. So, he obviously bought them because he knew it was going to happen later in the year. Covid stagnated the approval proses for well over a year. Add this to the standard time usual for Licence approval in Africa - 9 to 18 months, and we find ourselves right in the middle of the optimum period for this to happen. ..."
https://www.lse.co.uk/ShareChat.asp?ShareTicker=ZEN&share=Zenith-Energy&page=5
Well interestingly, just this week we passed the 18 month threshold from ZEN's successful bid for Tilapia II:-
23rd Dec 2020 7:00 am RNS Successful bid for Tilapia II
"Zenith Energy Ltd. ("Zenith" or the "Company") (LSE: ZEN; OSE: ZENA-ME), the listed international oil & gas production company focused on pursuing African development opportunities, is delighted to announce that it has received official confirmation from the Ministry of Hydrocarbons of the Republic of the Congo that its local subsidiary, Zenith Energy Congo SA ("Zenith Congo"), has been selected as the successful bidder for the award of a new 25-year licence to operate the Tilapia oilfield ("Tilapia II").
As announced to the market on July 20, 2020, the Company had previously submitted a comprehensive commercial and technical offer (the "Offer") for the award of Tilapia II. ..."
https://www.lse.co.uk/rns/ZEN/successful-bid-for-tilapia-ii-lz7ofr8ipunko20.htm
AC seems to be answering questions well about his strategic orientation / deal making via the co's Africa O&G deals so far.. the next key question is about Zen.l and its chosen expert partners implementation skills.. drilling/workover etc success the key one of those. and ROB -1 is disappointing in that respect imho.. but plenty more such implementation to come.. so here's hoping ..
( confidence in developing acquired assets successfully is hugely important tiowards gaining licences in first place... and zen.l's capability in this sense is, being nice about it, still an open one.. eg Tilapia licences would need a strong implementation team.... and it would be extremely helpful if zen.l shows this capability in Tunisia ASAP please...)
Covid was a crazy time. Many companies just trying to do what they could to help out in a crisis.
In the end it seems Zen went for source and supply model of medical equipment through its CSR programme:
https://www.investegate.co.uk/article.aspx?id=202107231138483092G
AC should be very proud we were able to do something positive in a time of great need.
Very sensible that it never happened, Mls, in view of the way prices collapsed virtually overnight.
See for example this BRH RNS from that period:-
19th Jun 2020 2:29 pm RNS Operational Update
" ... Braveheart Investment Group (AIM: BRH), reports that, further to the announcement on 23 April 2020 regarding the increase in production capacity to 2,000 litres per day by the end of May by Pharm 2 Farm Limited ("P2F") (holding 51.72%) of medical grade alcohol hand sanitiser gel, this was achieved on schedule and as planned. However, the market price of medical grade hand sanitiser has fallen steadily from an average of approximately £25 per litre in April 2020 to a current price of approximately £3 per litre. In addition, certain producers are now providing medical grade hand sanitiser free of charge to certain organisations.
In light of the steep decline in the price of medical grade hand sanitiser and the continuing demand for nanoparticle production, P2F has decided to switch its production capabilities back to nanoparticle production and to cease the production of medical grade hand sanitiser. Two new reactors were commissioned by P2F this week, both capable of producing over 10kg per hour of nanoparticles each. This extra capacity will feed into existing and new projects, including hydroponic plant feed, combating citrus greening disease and COVID-19 face mask protection. ..."
https://www.lse.co.uk/rns/BRH/operational-update-eojqgtg0gygiz0d.html
Well done to ZEN for being astute enough to react to a very rapidly evolving situation.
What ZEN DID do, i.e. pick up quality O&G assets on the cheap, was, conversely, absolutely the RIGHT thing to have done.
Though I haven't noticed a word of praise from you, Mls, for that.
Instead, you criticise them for having 'dodged a bullet'!!
ZEN are DOERS, as is evidenced by their soaring production and revenues.
Plenty of other junior O&G companies seem to struggle to get anywhere near to meaningful production.
Let’s see what AC says in his next interview hopefully shows us what he has up his sleeve next
Mls yet you continued to invest
Let’s get an update on the PPE or the sanitising gel maker we were buying and “further news to follow” but never happened…
"What’s guessing we now don’t hear about Rob1 again in future updates (like many other things hyped and then forgotten)"
Mls,
With 21 ZEN RNSes so far this year, there can't be many companies better at keeping the market informed.
Though as 30-50 BOPD is only a few per cent of its targeted Tunisian production, it's not a big deal.
Here's a reminder of ZEN's 40-fold + increase in H1 revenues:-
1st Dec 2021 7:00 am RNS Publication of Half-Year Results
" ... The Group generated revenues from oil and natural gas of CAD$6,011k (2020 – CAD$145k).During the six months ended September 30, 2021, the Company produced 94,662 barrels of oil from its Tunisian assets. ..."
https://www.lse.co.uk/rns/ZEN/publication-of-half-year-results-4sk1kxnkn8keb5x.html
Note the oil production of nearly 95,000 barrels - worth over US$10M. at current prices.
For jam tomorrow that tastes pretty sweet right now!
Hold for gold!!!!
Or in Zens case 30bopd with a “might” reach 40-50 in future
Lacklustre again in my opinion
What’s guessing we now don’t hear about Rob1 again in future updates (like many other things hyped and then forgotten)
As always jam tomorrow.
Hurry up Zen