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(Alliance News) - Zenith Energy Ltd said Tuesday it has signed a non-binding letter of intent for a USD2 million investment.
Zenith said the investment comes from an Arab consortium of strategic institutional investors focused on African development projects.
The energy production and exploration firm said the investment was made at 2.5 pence per Zenith share. Shares in Zenith were down 1.7% in London on Friday morning at 0.74p each.
The investment is contingent on Zenith completing acquisitions currently under negotiation.
Among the acquisitions currently being pursued by Zenith include an 80% stake in Anglo African Oil & Gas PLC's Congo business, the operator of the Tilapia oilfield in the Republic of the Congo; an oil production asset in West Africa; an interest in an onshore oil production asset in Tunisia; and the Italian portfolio of Coro Energy PLC.
Following the completion of these deals, Zenith expects daily production will rise above 1,500 barrels of oil per day.
Chief Executive Andrea Cattaneo said: "It is extremely encouraging to receive such interest from a new institutional investor, especially during the unprecedented circumstances the world is currently facing.
"The strategy Zenith is pursuing of expanding counter-cyclically at a time of great opportunity for portfolio enrichment by acquiring large, revenue-generating oil production assets is attractive to institutional investors who see material future value for a junior oil company of our size with a clearly defined set of development objectives."
Cattaneo is confident in Zenith's outlook, believing there will be a "progressive recovery" in financial markets and oil prices.
By Paul McGowan; paulmcgowan@alliancenews.com
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