(Alliance News) - Zenith Energy Ltd said Thursday it has appointed a Gabon government official as an advisor ahead of its planned acquisition of an 80% stake in Anglo African Oil & Gas Congo SAU.
Shares in Zenith were down 4.7% at 1.81 pence in London in morning trade while Anglo African Oil & Gas PLC shares were down 15% at 0.64p.
Oil & gas producer Zenith is to purchase the 80% stake in Anglo African Oil & Gas's Congo subsidiary for GBP1 million under a sale and purchase agreement, though Anglo African Oil & Gas shareholders have yet to approve the deal.
Anglo African Oil & Gas Congo SAU holds a 56% interest in the Tilapia field in the Republic of the Congo. Once the transaction is complete, Anglo African Oil & Gas will become a cash shell on AIM. It intends to use the proceeds from the disposal to finance its day-to-day operations and consider potential reverse takeover options.
Ahead of this, Zenith has appointed Andre-Brice Boumbendje - currently employed by Gabon's Ministry of Hydrocarbons & Mines. In 2016, he was made diplomatic council for the Ministry of Hydrocarbons and became Gabon's representative at the Organization of the Petroleum Exporting Countries in Vienna.
Boumbendje's appointment is intended to assist Zenith in managing government relations within central Africa's French-speaking countries and the Republic of the Congo in particular. The Republic of the Congo joined OPEC in June 2018, putting it among the oil cartel's newest members.
Zenith Chief Executive Andrea Cattaneo said: "The board of Zenith believes that the company possesses the financial, linguistic, geopolitical and technical skills to enhance production in the Congo and to achieve, if the geology allows, success at the Tilapia oilfield. This includes the significant financial obligations that come with developing Tilapia. For these reasons, Zenith believes the transaction to be in the best interests of all parties.
"We shall provide further updates to the market in due course regarding the names of further appointments the company intends to make to manage our future operations in West Africa."
By Anna Farley; annafarley@alliancenews.com
Copyright 2020 Alliance News Limited. All Rights Reserved.