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(Sharecast News) - Oil and gas production company Zenith Energy has signed an exclusivity agreement to acquire an operated working interest in an onshore oil production asset in Tunisia, it announced on Monday.
The London-listed firm said Tunisia was an attractive prospect, given its current daily national oil production of around 35,000 barrels of oil, and describing it as a "safe, democratic" jurisdiction.
It said it saw fast monetisation of produced oil with a "favourable" fiscal regime, and added that it was an "attractive" domain for junior independent exploration and production companies.
The acquisition currently produces at a rate of around 700 barrels of oil per day, generating gross annual revenues of about $15m.
Zenith said it was advanced negotiations with an unnamed international oil major to sign an offtake agreement for the asset's future oil production, in order to fund the acquisition.
There were no plans to issue equity consideration to fund the acquisition.
The company said it intended to complete the acquisition by 31 March, subject to the satisfactory conclusion of currently ongoing due diligence activities.
"It is Zenith's strategy to acquire revenue generating oil and gas production assets," said chief executive officer Andrea Cattaneo.
"The acquisition represents an attractive opportunity to enrich our asset portfolio in a country where management have significant experience."
Cattaneo said the company was currently performing due diligence, and visiting the target asset with a view to completing the acquisition by 31 March.
"It is important to underline that we have no plans to issue equity to fund the acquisition or its immediate development following completion."
At 1433 GMT, shares in Zenith Energy were up 4.11% at 0.94p.
11 Jan 2017 11:32