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ZENITH ENERGY LTD.
("Zenith" or the "Company")
Completion of financing with institutional support
Zenith Energy Ltd. ("Zenith" or the "Company") (LSE: ZEN; OSE: ZENA; OTCQB: ZENAF), the listed international energy production and development company with a focus on opportunities in Central Asia and the USA, is pleased to announce that it has completed private placement in the United Kingdom (the "UK Financing"), and in Norway (the "Norwegian Financing", collectively, the "Financings").
The Financings have attracted the participation of existing institutional investors, including Premier Miton Investors, as well two Directors, Mr. Andrea Cattaneo and Mr. Luca Benedetto, respectively the Chief Executive Officer and Chief Financial Officer of the Company, to raise an aggregate total amount of approximately £1,260,000 (equivalent to approx. 16,814,000 NOK and US$1,590,000), resulting in the issuance of a total of 37,856,250 new common shares.
Issue Price
The Financings were completed at price of £0.03 (3 pence) for the UK Financing and NOK 0.42 for the Norwegian Financing, representing a premium in respect of the closing price of the Company's equity securities on both the London Stock Exchange and Euronext Growth Oslo on February 12, 2024.
Use of Proceeds
The proceeds of the Financings will be used to fund the Company's publicly announced acquisition campaign in the US, to provide additional funding for Zenith's existing production and development portfolio in Italy, as well as for general working capital purposes.
Norwegian Financing
Zenith has issued a total of 29,556,250 common shares of no-par value in the capital of the Company in connection with the Norwegian Financing (the "Norwegian Financing Common Shares") to raise gross proceeds of 12,373,600 NOK (approximately £927,000).
An application for the Norwegian Financing Common Shares to be listed on the standard segment of the FCA Official List and to be admitted for trading on the London Stock Exchange Main Market for listed securities (the "Norwegian Financing Admission") will be made within 12 months of the issue of the Norwegian Financing Common Shares.
UK Financing
Zenith has issued a total of 8,300,000 common shares of no-par value in the capital of the Company in connection with the UK Financing (the "UK Financing Common Shares") to raise gross proceeds of £249,000 (approximately 3,324,000 NOK).
An application for the UK Financing Common Shares to be listed on the standard segment of the FCA Official List and to be admitted for trading on the London Stock Exchange Main Market for listed securities (the "UK Financing Admission") will be made.
It is expected that the UK Financing Admission will become effective and that unconditional dealings in the UK Financing Common Shares will commence on or around 8.00 a.m. (BST) on approximately February 22, 2024.
Debt Settlement
The Company has allotted 2,658,914 Common Shares ("Debt Settlement
Agreed actually very good news and I think we have now seen the bottom.
Onwards and upwards finally.
Whilst dilution is never great, funding was required and to have raised at a slight premium todays price with no warrants is attached in the current environment can be taken as a positive.
Https://www.azernews.az/oil_and_gas/221731.
In January 2024, the export of Kazakh oil from Aktau port amounted to 287,000 tons, which is 76,000 tons or 36% more than the corresponding indicator of 2023, Azernews reports, citing Kaztransoil.
Mls actually same price last couple weeks. Sure once we get the Kazakhstan news the price will rectify itself.
Its raining outside today ,probably Zens fault.
Slipped quite a bit last couple weeks
Https://timesca.com/kazakhstan-to-increase-oil-shipping-along-trans-caspian-route/
Ajmalkhuram. I owe you and others an apology here. I have no idea why but for some reason I never read the rns relating to the acquisition in full. I must have read the first couple of paragraphs which are somewhat confusing and never got past the reference to a deep well of 6000mtres plus and never scrolled down to the end- which makes my last post on here somewhat irrelevant. ATB
Do we know if the drill has arrived, hopefully we get some pics on twitter of proceedings
Ezhik, I appreciate the insightful points you've raised in your last post. However, I would like to express some minor differences of opinion regarding certain aspects of your comments.
Upon careful examination of the RNS concerning the acquisition, it is evident that the existing licenses extend until July 2025, precisely 18 months from the present date. However, I believe the drilling of the well within the current year, as you suggest, is a prudent approach.
The RNS explicitly outlines that drilling a well and reprocessing seismic data are the last two criteria mandated by the Kazakhstani government for the license transition from a six-year exploration license to a 25-year production license. It appears that successfully completing this well fulfills the remaining requirement, positioning the company to secure the 25-year license.
Contrary to your observation about drilling a deep well, I find no indication in the RNS that suggests Zenith would be drilling such a well. While the document mentions a deep well, AK-1P, drilled in Soviet times down to 6,290m, the document also makes clear that this was intended to drill to 7,000m but encountered difficulties with high gas pressure. I cannot see any circumstance whereby the company would drill to this depth for the first well.
To me, the RNS clearly suggests that the next well will be an appraisal well, signaling a transition from exploration as the license development advances toward a production permit. This leaves the choice between the AK-20 well, which recovered oil at 2,660m and gas at 1,913m, and the KM-1 well, encountering 30m of oil-bearing sands between 1,680 to 1,720. My inclination is toward the KM-1 well, given the additional details provided in the RNS and the known oil deposits. However, I defer to your expertise in the oil-field domain for correction or guidance on my assumptions.
Considering the relatively shallow depth of a well drilled to approximately 1,700m, as indicated in the RNS, and drawing on the example of the BD-260 rig's successful drilling to a total depth of 4,350 meters in the C37 drill in Azerbaijan, the rig demonstrates the capability to drill more than twice the required depth for the KM-1 well in Kazakhstan.
In my opinion, Zenith appears to possess the necessary equipment capable of drilling the anticipated shallow well, and finding a competent team to operate it should be feasible. The primary remaining question, as you rightly pointed out, is the duration required to recondition the BD-260 rig for drilling readiness. While I tentatively estimate 2-3 months as sufficient, I defer to your superior knowledge in this domain. However, I am strongly inclined to believe that the well will be drilled within the current year, hopefully early H2,, and I find no compelling reason to incur additional expenses on an external rig for this purpose.
@Ajmalkhuram. I prepared a fairly comprehensive reply to you yesterday and then just before posting it, my internet connection failed and the message was lost--very annoying.
I won't try and replicate it entirely but if the proposed acquisition comes to a conclusion, the way the rns reads is that the license area is a deep structure, the conditions of the production licence which follows the current exploration is dependant upon a new well to be drilled and the current licence has about 12m before expiry. Which, if I'm reading it correctly means that if Zen obtain it, they have a year to drill a deep well. Currently Zen have no 'oil-men', no crew(s) and the rig will need recommissioning, and testing. They could obtain folk and try to build the necessary crews but they would likely be individual contractors as opposed to a cohesive and experienced crew. Deep wells are not for the feint hearted and often experience high pressures and sometimes high temperatures which a cobbled together inexperienced drill crew may well struggle to manage. If they contract out the whole thing to a drilling contractor, the crews are more likely to be familiar with each other and there is more likely to be a culture of good safety and quality amongst them..not forgetting that the drilling contractor takes responsibility for a successful drill---as opposed to Zenith directly, i.e. someone else to sue for damages. Once they get this first drill out of the way then by all means start putting together their own teams to carry out development wells using the knowledge gained on the first well. I'm not a 'finance' or 'international tax savvy chappie' so there may be financial advantages to use their own people, but from a pragmatic and expedient perspective with the time limitations from the license conditions I would contract it out. Anyhow--in reality it's none of my business tbh, just voicing an opinion.
If I get my 50p I’ll put up an Italian stallion statue in the middle of my driveway. Not unrealistic if we get our arbitration payout with good production from Kazakhstan and USA.
One day tyb you will get your tasty Italian fayre accompanied by a bottle of Chateau Cattaneo from his personal vineyard---it's the least he can do in return for your support. maybe even 2 bottles.
Re the bond exchange - Though it says 'up to' re all 3 bonds, I think it's about $10.2m outstanding looking at the recent account notes.
If exchanged then this will add a further $500k/yr interest on top of what they are already paying.
They said they were working on a $25m bond ? what interest rate price will that be with those 3 just under 15% ?
Will they use part of the $25m bond if successfully issued to repay other bonds in the portfolio ?
It's strange but imo not surprising they completely ended the three seperate US transactions which i said at the time was extreme folly and nonsensical re diversification over a wider US area and so small.
The 5% royalty interest is another folly and just what is the point of Leopard rather than Zenith ? It's so small and insignificant they can't even say what it's worth or cost or how much actual monthly revenue they'd get. The number of wells in total versus actual producers and the Texas Oil and Gas activity data for Lavaca County imho shows why.
Ezhik a tasty spaghetti dinner will be finally served by zenith in 2024 and we have been waiting very patiently.
@deano. There are some tasty dishes that come out of a slow cooker-- the proof will be in the pudding though.
I have just has a read through the RNS's and it is cuisine in a slow cooker, we will know better come Sept / Oct.
In the mean time we can wonder if Florida is still doing his 50p coin trick or if MGSlingerie is going to write us some more fantastic oil porn, you can really get off on that script!
20th feb is the deadline if I remember right? Once Kazakhstan is ours the fireworks shall begin.
Things don'e always go smoothly if you do contract the drilling out. AAOG a case in point.
Ezhik, thanks you for your sensible points. Your detailed knowledge of the Azerbaijan drills is certainly useful to me and I appreciate it.
I find it interesting that the significance of the rig acquisition becomes context-dependent, influenced by the temporal perspective from which it is observed. Initially, the decision to procure the rig aligned with strategic plans for extensive well drilling, presenting a cost-effective measure for long-term savings. However, with the subsequent utilization limited to a single well in Azerbaijan, the expenditure appeared imprudent and fiscally inefficient
.
Presently, as the organization strategises to undertake multiple well drilling projects in Kazakhstan utilizing their proprietary equipment, the earlier acquisition is reevaluated as a judicious investment. The dynamic nature of the oil drilling industry often renders judgments on such acquisitions subject to the evolving circumstances and outcomes.
In reflecting on this variability, an apt analogy is drawn from the words of Ian Fleming: "The distance between insanity and genius is measured only by success." This sentiment underscores the volatile nature of success in the oil drilling sector, where decisions may oscillate between brilliance and folly based on the realized outcomes and prevailing conditions.
We can only hope for a successful outcome in the drilling of the Kazakhstan license. However, to me it seems like a sensible commercial decision at this point in that the potential rewards of Kazakhstan considerably outweigh the potential risks, which are essentially the same as in any other drill. The program is neither genius nor insanity but it will inevitably be re-evaluated as one or the other when we look back at events with the benefit of hindsight.
That top drive should be available too!!!
Don't forget that!
Yep. Well, most of my posts here get deleted, when you post the truth, someone doesnt like it. The excuse about the well data applied mainly to the work attempted by the small mobile workover rig (s) that they had on loan from SOCAR. These were supposed to be low cost/low reward but aimed at building from the 350 or bbls a day up to 1000 over a 12-24month period. Maybe there were inaccuracies, maybe not, but also it shouldnt have been a surprise to find that early casings were corroded and the cement behind them had deteriorated, so when they went into the wells, they pretty nuch disintegrated. Some pre-entry logging/measuring and testing may have identified the issues before attempting the workovers - in hindsight. At the time, whilst each hurdle or failure came about- being an ex drilling person I understood the issues and supported Zen with comments on the bb and never criticised. There were others that wanted AC's head on a pole but that wasn't me as I took the view that wasn't the one operating the rig. I also agree with your post that the 'deal' with employing Azer labour also caused some difficulties--whatever the issues were we really dont know for sure, but at one time there were about 200 employees mentioned in the company reports which if accurate was completely bonkers -- imposed by Socar as you say.
I just wanted to put you right on the BD 260 which ended up not being utilised and its purchase was not such a good move- in the end. The motivation and rationale for buying it at the time appeared to make sense and if they had actually used it to any degree may have proven to be positive but it only came out of its box once, it did operate well and despite it being alien to the drill crew, they, together with representation from the supplier managed to get to where they wanted. How they managed to make a complete mess at C37 will remain a mystery.
There was a package of drill equipment bought to support the rig operation therefore in theory, all of that should still be available and it won't need to be bought again, but will need re-commissioning as it has been sat idle for several years
Kazakhstan-- on the face of it, less constricted as you say. If they manage to bag a decent lump of dirt there I would contract out the drilling process-at least at the start and then bring in their own after any success.
ATB
Ezhik not sure what happened to your post it disappeared as I was responding. In the Azerbaijan drilling project, it's important to clarify that Zenith's rig demonstrated no issues with drilling capacity when employed for a deeper and more modern well. The failure in the cement job, as acknowledged, was attributed to the contractor and not the rig itself.
The absence of modern data for drilling operations in Azerbaijan clearly posed a significant challenge during the project and to claim otherwise is simply to engage in a historical reinterpretation that, from my perspective, lacks accuracy.
A notable hurdle in Azerbaijan was clearly the mandatory use of local Azerbaijani teams for all project-related work by Zenith. The inability to leverage international expertise became a central challenge in the drilling operations in the country and was a major contribution to the project’s failure.
Contrastingly, the upcoming project in Kazakhstan presents a different operational landscape for Zenith. The government's apparent openness to international collaboration, a proactive stance toward learning from international partners, and a more favorable approach to workforce utilization make Kazakhstan a more promising venture. Additionally, the availability of newer 3D seismic data in Kazakhstan distinguishes it significantly from the situation in Azerbaijan. Drawing direct comparisons between the two countries is erroneous given their distinct operational contexts as the one has no relationship with the other.
seems like the civil war brewing up in usa is going to start in texas.
**** joe biden.