(Alliance News) - Zenith Energy Ltd on Monday abandoned the acquisition of Nordic Petroleum AS citing unexpected complications and high costs, but said that it will continue to pursue establishing a Norwegian vehicle for participating in future licensing bids and for potentially buying mature energy production assets.
Shares in Zenith Energy, which is currently focused on Azerbaijan, were down 5.0% at 2.18 pence each in London.
"Due to unexpected complications and potentially high costs to complete the proposed acquisition, the board has decided not to proceed with the proposed acquisition," the Canadian oil and gas producer said.
The acquisition was first announced in November and envisaged Zenith issuing 9.1 million shares to buy 905 million outstanding shares in the Nordic company.
Zenith said it instead expects to create a Norwegian subsidiary, to be named Zenith Energy Norway AS, in the immediate future
Zenith Chief Executive Andrea Cattaneo said: "It is regrettable that the proposed acquisition of Nordic could not be completed due to unforeseen complications and the potential incurrence of high costs. At the same time, we are pleased to have found a strategically preferable, non-dilutive, alternative avenue for the imminent establishment of our presence in Norway."
By Tapan Panchal; tapanpanchal@alliancenews.com
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Zenith Energy (ZEN)