(Alliance News) - Zenith Energy Ltd on Monday announced its subsidiary Zenith Energy Africa Ltd has entered an agreement to buy Candax Energy Ltd's unit Ecumed Petroleum Zarzis Ltd for USD150,000.
Ecumed holds a 45% interest in the Ezzaouia concession oilfield asset in Tunisia.
The oil & gas company with production, exploration and development assets in Africa and Italy said an additional USD100,000 will be satisfied through the issue of Zenith shares. A royalty of USD0.35 per barrel of hydrocarbons produced from the Ezzaouia oilfield also will be payable, with the royalty not being less than USD50,000 per annum for 10 years, it added.
Zenith said the acquisition has development obligations during the course of the 20-year concession, including the drilling of a side-track, the drilling of a replacement well and a development well.
Planned field production optimisation and workover activities are expected to increase Ezzaouia's gross production to 1,000 barrels of oil per day, which could potentially result in a production of 450 barrels of oil per day net to Zenith.
"By way of this acquisition, we have further reinforced our settlement in Tunisia, enabling a demonstration of our technical and financial capabilities locally. The board strongly believes in Zenith's future successful establishment in Tunisia and we intend to capitalise on certain additional acquisition opportunities that may present themselves in the near-term," said Chief Executive Andrea Cattaneo.
Shares in Zenith Energy were up 6.9% at 1.24 pence in London on Monday.
By Zoe Wickens; zoewickens@alliancenews.com
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Zenith Energy (ZEN)