Member Info for AGEOS

Continuing the subject of further acquisitions, although ZEN [ref RNS 02.03.2022] elected to not renew the Option Agreement with Noble Hill-Network Ltd [NHNL] for the purchase of a 42% interest in the share capital of NHNL, it stated “The Company remains of the view that the development of the North-West Corner of OML 141 in Nigeria has significant potential, and it shall look to revisit the opportunity once the ownership of NHNL is unequivocally confirmed by the Nigerian courts.”

Since then the Interim Injunction obtained by ADM Energy plc & K.O.N.H.(UK) Ltd, restraining NHNL from disposal of equity to any third party investor, and which was the cause of ZEN's decision not to renew the Option, was extended by the Federal High Court of Nigeria to 16.11.2022. Note, it was the Interim Injunction which was extended, not the timing of any legal ruling on the validity or otherwise of the 70% share holding in NHNL claimed by KONH [also claimed in RNS 30.03.2022 to be a 70% interest held by KONH in a Risk Sharing Agreement RSA, ie a contract, not an equity stake.], a claim for which I can find no legally meritorious evidence whatever in the Nigerian corporate registration system. This latter point may explain why ADM Energy informed the court “that they (ADME & NHNL) are in settlement discussions with a view to resolving the dispute” [ref ADM RNS 01.07.2022.] which to a legal mind implies there is no legally valid case for an equity-stake claim so at best the plaintiff hopes for a monitory pay-off re the RSA and avoidance of a counter-suit for damages.

Whilst I anticipate that ZEN will have a further opportunity to participate in an equity stake in NHNL, the publication of the CPR for the Barracuda Field on 30.03.2022 may not be sufficiently encouraging to merit involvement. The resources are classified as Prospective and within four potential Agbada Sandstone reservoirs, C, D1A, D1B and a 'Deep Prospect'. Unrisked Resource is calculated probabilistically at P50 [most likely] as:
C3 193 mmbbl [million barrels oil] with 15% CoS [chance of success]
D1A 25 mmbbl with 30% CoS
D1B 103 mmbbl with 18% CoS
D.P. 51 mmbbl with 25% CoS
Whilst the economics of a successful drill program appear robust, the CoS estimates offer a cautionary note for an early stage company contemplating what would be a significant capital investment.
AGEOS.

continuation:

AC need be in no hurry to conclude a Saouaf deal with UPL. The 20th June RNS from UPL which referred to “a continuation of discussions with interested parties, as well as opening discussions with new potential partners” regarding the Farm-In, not only crashed the Pennpetro share price but produced a retaliatory RNS on the 24th confirming the “exclusivity to the Farm-In to the Saouaf Permit until 15th July 2022” and an apology, extracted by PPP from UPL. I suspect that relationships between the two entities are now somewhat strained and with an end on July 15th of the Exclusivity Agreement, the stated intention of “both parties to use their best efforts to finalise and execute the Farm-Out Agreement currently in draft form” will most likely fail to materialise. The Chairman of PPP, in the recently released 2021 Annual Report has inevitably highlighted the prospect for a positive deal but that should be read in the context of 2021 not 2022. Part of the deal is to reimburse UPL for £290,000 of costs incurred, in the form of PPP shares at a value of £0.35, not a very attractive proposition with the current value at £0.17, and there are several other aspects of the HoT [Heads of Terms] unfavourable to UPL. Perhaps of most significance is the total absence of any cash, a commodity UPL is in desperate need of and which ZEN could supply in return for a buy-out of Upland (Saouaf) Ltd.

A buy-out of Upland (Saouaf) Ltd would provide ZEN with Operator status in a 50/50 joint venture relationship with ETAP [State Oil Company] for the remainder of the Prospecting Validity Period, valid until 23.12.2022, with the option of entering the Exploration Phase which requires the acquisition of 150km of 2D seismic and the drilling of an exploration well within three years. The current Prospecting Validity Period requires UPL to “acquire, process and interpret 300km of new 2D seismic data” an obligation which appears not to have been met as the current geoseismic interpretation is clearly based on data acquired in 2006 and 2012. This discrepancy would have to be renegotiated with ETAP prior to the acquisition as it appears to be an obligation inconsistent with current data requirements and which ZEN might wish to be integrated with any seismic survey of the adjacent N Kairouan Permit area assuming ZEN acquires the 22.5% interest from KUFPEC to supplement that acquired from CNPC.

With regard to AC's probable priorities relating to acquisitions, additional current oil production will be first and foremost and maybe in new jurisdictions as both Tunisia and Congo [Brazzaville] appear to be in bureaucratic stasis due to current political and economic instability. .Acquisition of the Saouaf Permit area would however be a strategically significant addition to the Tunisian portfolio with medium/long-term transformational potential.
AGEOS.

Further to my posts of 21 & 24. 06.2022 regarding the Saouaf Licence, Tunisia, the Exclusivity Agreement granted [UPL RNS 16.03.2022] by Upland Resources Ltd [UPL] to Nobel Petroleum USA Inc [NPUSA] a wholly owned subsidiary of Pennpetro Energy Plc [PPP] relating to a Farm-In to the Saouaf Permit, expired last Friday without notification by either company of a Farm-In being successfully concluded. In the absence also of a mutually agreed extension to the Exclusivity Agreement it is reasonable to conclude that the Farm-In is available for others to negotiate or, as I suggested on 22.06.2022, could be superseded by an offer to acquire Upland (Saouaf) Ltd, UPL's Tunisian subsidiary, a proposition which could be of interest to ZEN and beneficial to UPL in its need for funds.

The exploration potential of the Saouaf area and its relevance to ZEN's N Kairouan Permit was outlined in my 21.06.2022 post [with ref to previous more detailed posts]. Of the 11 prospects and leads identified by Roberto Bencini of GA.I.A. Srl [GAIA Consulting], within the Saouaf area, the best-defined structure named 'Pyrite' is estimated to contain a Prospective Resource of P50 value 1.1 TCF [trillion cubic feet] of gas, equivalent to 183 Mmboe [million barrels of oil]. Similar plays named Galena and Marcasite have been identified in nearby stratigraphically equivalent Jurassic-Lower Cretaceous structures. A possible major sub-salt play has also been identified with the potential for multi-TCF of recoverable gas.

Whilst Saouaf would not be a priority acquisition for ZEN, since it has no current or prospective short-term production and would incur significant developmental cost, it nevertheless could be an attractive strategic addition to the Tunisian portfolio not only because the country is already failing to meet its own domestic demand for energy but has spare capacity in the trans-Med pipeline which transmits N African gas to Italy and runs through the Saouaf permit area. Tunisia recently failed to negotiate an increase in domestic gas supplies from Algeria and is currently using its strategic stock of petroleum products [30 days supply of LPG and 60 days of gas & oils] to meet local demand. With national production of 35,000 boed [barrels of oil equivalent per day], consumption of 90,000 boed and national refining capacity of 32,000 boed, the import requirement of 58,000 boed in refined products is at current price levels a major cost to the country and a clearly unsustainable supply imbalance.

To be continued

Latest addition to ZEN website & twitter.com but appears to be subsciption only access.

Alternative Resource Capital – Research Note
"Exceptional transformation... and it may be just a beginning." ? Take a look at Alternative Resource Capital’s new note on Zenith.......
- June 28, 2022

Pennpetro Energy Plc issued the following statement by RNS today in regard to the Tunisia Saouaf Licence, presumably in response to the UPL RNS of June 20th which referred to “opening discussions with new potential partners”, the subject of my Tuesday June 20th post.

“Clarification re Proposed Farm-In and Tunisian Saouaf Licence
London, 24 June 2022 - Pennpetro, an independent oil and gas company focusing on production in the Gonzales Oil Field in Texas, USA, would like to clarify the recent RNS statement issued by Upland Resources Limited ("Upland") on 20 June 2022, which caused deep market uncertainty as to the status of its Saouaf permit in Tunisia and specifically as to the intending role of the Company.
Upland sent official apologies to Pennpetro for the unintended consequences caused by the narrative in its announcement, and in his address to Pennpetro's management, Mr. Amin Azal Nasharuddin, a Board director of Upland Resources Limited, confirmed that Pennpetro retains the exclusivity to the Farm-In to the Saouaf Permit until 15 July 2022, while both parties use their best efforts to finalise and execute the Farm-Out Agreement currently in draft form.”

No doubt more will be revealed in due course.
AGEOS

As an afterthought to last nights post regarding the UPL Saouaf concession, the most effective strategy for ZEN would be to acquire Upland (Saouaf) Ltd, UPL's Tunisian subsidiary.

In March 2021 [see post dated 07.03.2021] I posted details of the 4004 sq km Saouaf Licence which occupies the area immediately north and west of the 2200 sq km N Kairouan Permit in which ZEN has a 22.5% interest, which will double with anticipated acquisition of the KUFPEC Sidi El Kilani [SLK] interest. This was prompted by the announcement from Upland Resources of an open tender for a potential farm-in regarding the 15 potential plays identified in the Saouaf area and by the fact that the SW Enfidha structural high appears to extend from Saouaf into the N Kairouan permit area. I added that at the time it seemed unlikely that ZEN would be interested in such a farm-in but indicated the potential significance this might have for future development of the N Kairouan permit area.

Upland Resources Ltd [UPL] acts as operator of Saouaf, with ETAP [State Oil Co] as partner in a 50/50 JV [see www.uplandres.com for details]. On March 16 2022 UPL announced a Heads of Terms agreement with Pennpetro Energy Ltd for a proposed farm-in for Saouaf but in a 20th June RNS, announcing restoration of trading, refers to “a continuation of discussions with interested parties, as well as opening discussions with new potential partners”.

UPL has a market cap of £1m, is desperate for cash, and will probably prioritize its Moray Firth and/or Asian interests, if it survives as a going concern. It was suspended from the LSE, I understand for failing to meet a regulatory deadline regarding accounts, and has I believe failed to meet the Tunisian requirement of a guarantee deposit bond relating to Saouaf.

The reference to “opening discussions with new potential partners” leads me to surmise that ZEN could now be interested as AC may see this as an opportunity for acquiring further assets, at a bargain price, from a distressed seller.
AGEOS

Fakevenues,

Yes. The operating permit was granted to Trident OGX on 14.12.2021 [as I posted on 06,02,2022 albeit with reservation as to reliability of the report] but the “process of transferring the MKB II permit ie concession from SNPC to Trident was launched on 17.05,2022”. The photo appears to relate to the second event as implied by the “Legendes et credits photo”.

As posted on Friday, at 09.42, the award of the MKB operational license to Trident OGX, suggests that the Ministry of Hydrocarbons may also be in the final stages of progressing the award of the Tilapia II license, as anticipated in favour of Zenith. Bruno Itoua, the new Minister of Hydrocarbons, had declared on appointment his intention to expedite development of the Fields controlled by SNPC and specifically mentioned MKB as the primary concern. Having now it appears, achieved that objective, it seems reasonable to assume that Tilapia II, the only other Field currently under direct SNPC control, will be similarly resolved.

On 12.04.22 in a post regarding the Tilapia II contract, I mentioned [para 4] that Maixent Raoul Ominga had been reappointed as Directeur General of SNPC despite the efforts by Bruno Itoua to replace him, and conjectured that the inevitable mutual enmity between these two might impact on a successful conclusion of the Tilapia contract. However, the apparent conclusion of the MKB deal suggests that Itoua has the upper hand in negotiations involving SNPC assets, so providing some reassurance that the Tilapia contract should be unaffected.

Political dynamics at this level are complex and inevitably affect economic outcomes so I note that the photo accompanying the May 18th news item to which Fakevenues supplied a link [see his post 19.05.22, 23.11.], shows the Minister Bruno Itoua [3rd from left[ seated next to Maixent Ominga [4th from left] and the new DG Ministry of Hydrocarbons Stev Onanga [5th from left]. These are the same three whom AC will be negotiating with regarding Tilapia. Ominga and Onanga have close ethnological links to the President.

The loss of at least part of MKB [ assuming the Tchiniambi Field is included] as a potential “second asset” is disappointing but not altogether surprising; after all, Orion Oil paid $150m for a 20% interest in 2013 and although then based on a wildly optimistic assessment of there being 1.3 billion barrels of oil reserves, Trident OGX obviously believe it still has significant potential. As I posted on 06.02.2022, Trident appear to be basing their interest in MKB on a study of the Mengo Reservoir so their relative success or failure in enhancing production will have relevance to the Mengo at Tilapia. MKB lacks an equivalent to the Tilapia Djeno reservoir but has the deeper Vandji prospect.

This plus the May 10th EUR 1.3m loan “to provide additional financial support for the achievement of its business development objectives in the Republic of the Congo” suggests Tilapia II negotiations may not be far from conclusion.
AGEOS.

Fakevenues; thanks for the link to what is a significant development.

In my post of 06.02.2022 regarding the involvement of Trident OGX Int Pte Ltd in an MKB Field production potential study, I maintained a previously outlined proposition that MKB in part or whole might be the “second production asset” first announced by ZEN in an RNS of 07.07.2020. Clearly this latest announcement confirms that the MKB Concession will henceforth be shared by Trident OGX, Orion Oil Ltd [controlled by Lucien Ebata], SNPC [state oil company] and the Congolese government, and operational control is granted to Trident OGX for 20 years.

Although this removes MKB from the ZEN list of potential “second assets”, it provides some reassurance that the Ministry of Hydrocarbons may now be about to move on the Tilapia concession also. As previously posted [20.07.2021 & 08.08.2021], Bruno Itoua the new Minister of Hydrocarbons, was highly critical of Maixent Ominga CEO of SNPC for not having developed the MKB Fields, and had also appointed Stev Onanga as DGH [Directeur General des Hydrocarbures] within the Ministry to expedite this and other developments. Onanga was previously General Manager of SONAREP, the Research & Production subsidiary of SNPC, with responsibility for the State's interest in both Tilapia and MKB.

With the MKB II licensing process now underway it seems likely that Tilapia II will follow shortly.
AGEOS

Sentimentalist

I am unsure as to the validity of the information you have posted on the Robbana Field as the reference “Offshore Technology dot com” you provide, and every permutation of it, only produced invalid search results. However, with regard to the anticipated production and recoverable reserve figures quoted these must pre-date the G & G [Geology & Geophysics] study and figures published by Candex the previous owner/operator, published on SEDAR in 2015. The recoverable reserves you quote, of 0.08 Mmboe [ie 80,000boe] economical to 2055, implies a production rate of 6.6boed from today until 2055.

The Candex figures are included in my posts of 04.05.21 and 03.10.2021, and were redefined in December 2019 as “contingent reserves [1C] of 10.99 MMSTBO [million stock tank barrels] of remaining oil in place from the Lower Cretaceous Mu1 and Mu2 reservoirs, plus a further 5.4 Mmbls [million barrels oil] from the deeper and as yet undrilled Middle Meloussi Formation.” See posts for detailed information.
AGEOS

CanaryinTM

From my limited knowledge of the procedures it appears from the video that Schlumberger used a transmission wireline which was fed through the production string to log the well casing within the production zone and may also have completed remediation repairs. They have various techniques for applying “through-tubing patches and packers”via high pressure wirelines designed to transmit cements and sealants, so in theory could have completed the job. However, if so I would have expected the video caption to have stated “job done”. Whatever the result we should know within a few days.
Note that 0.17min into the video there is only a single length of production pipe on the pipe-rack [confirmed at 0.31min ], and at 1.14min, that pipe has presumably been 'tripped' back in at end of procedure. That suggests the production pipe was raised sufficient to allow logging-tool access to the production zone only and to enable the through-pipe procedure to proceed.
Assuming a successful conclusion, ROB-1 should be back on stream soon.
AGEOS

MG
The view of the second rig you refer to, which is equally visible in the opening shot, is insufficiently detailed to identify its functionality. Bear in mind that the sequence of workover activities could require two rigs with different capabilities ie removal of production tubing string; insertion of wireline to perform logging and examination of casing integrity, and in the event of casing damage being identified, repair or replacement of casing. The rig in place over the wellhead is the same one pictured in the April 6th image captioned as “ workover rig on location at ROB-1” and appears in this latest video to be set up for removal of production string. The second rig appears to be on a shorter transporter implying a different truck-based assembly which could conceivably include the Schlumberger wireline unit. A wholly 'left-field' possibility is that this is the BD-80 A-100-ton truck mounted 375HP workover rig imported from Azerbaijan. The only visual of it confirms the colour scheme but was taken from the cab end at ground level and before the two upgrades.

With regard to workover activities at Ezzaouia, according to the March 4th Prospectus page 42, this has now evolved to “three workover interventions and two sidetracks in non-producing wells over the next 18 months.” no doubt having evolved due to ongoing geological studies in cooperation with ETAP. These activities will be undertaken by MARETAP, the joint operating company, through which the rig-hire and operational contract will be negotiated on a 50/50 basis with ETAP the state oil company. Robbana contracts are 100% ECUMED, on behalf of ZEN.

When viewing this latest ROB-1 video I was equally interested in looking for signs of possible site preparation for ROB-3 which should be within 0.5km of ROB-1. Unfortunately nothing visible. The walled compound, centre left in the opening shot is not it as it has an entrance gate of Islamic form.. The March 4th Prospectus page 42, item 3, states “For the planned drilling of the Robbana-3 well in the Robbana concession the Issuer plans to spend £600,000, plus another £300,000 for the cost of transporting the Company's drilling rig to Africa.” So maybe we will see the BD-250 rig in place for ROB-3.
AGEOS

ROB-1 workover rig in place and appears ready to begin operations as of the 12th April.

https://t.co/qK2jtNNB3u

In the absence of an RNS update on progress relating to the Tilapia II contract, the latest information we have is that included in the ZEN Prospectus dated March 4th 2022.

On page 35 [and in greater detail on page 48] of the Prospectus, it confirms that on December 23rd 2020 [as previously RNS'd] Zenith Energy Congo SA had been selected as the successful bidder for the award of a new 25-year license to operate the Tilapia II oilfield and that on February 10th 2021 the company had successfully completed the necessary public utility inquiry. It also confirmed that the final steps [yet to be concluded] would be the finalisation and ratification of a production contract and a drilling license, by the Ministry of Hydrocarbons.

Successful completion of both the bidding process and public inquiry provide a significant degree of legal and financial redress if the Congo authorities fail to complete the remaining stages in the award process. These stages include the award of a production contract, issue of a drilling license and receipt of the $5.7m due from SNPC. It is stated on page 41 of the Prospectus that discussions are in progress to settle this payment issue, and importantly, that all capital expenditure [relating to Tilapia] is deferred until the funds are received. Only then will drilling proceed.

Although there appears to be no obvious reason for delay in completing the Tilapia II contract, I suspect that competition between rival factions in the governmental administration are in play. In early March, Maixent Raoul Ominga was reappointed as Directeur General of SNPC [State Oil Company] despite the efforts of Bruno Itoua, the recently appointed new Minister of Hydrocarbons, to replace him. Itoua had publicly rebuked Ominga for failure to develop the MKB fields, and by implication Tilapia also, as management of both had long been Ominga's responsibility..Since both SNPC and the Ministry will be involved in the contract award process, hostility between the heads of both organisations is hardly conducive to a rapid conclusion to negotiations. See 20.07.2021 & 08.08.2021 posts for background details.

Since we know that the award of Tilapia II will be the prelude to the anticipated award of a second asset, which I have previously conjectured to be one or more of the MKB fields, and there has been no confirmation of the rumoured award of MKB to Trident OGX [see 06.02.2022 post for details], I conclude that ZEN remains front-runner for both Tilapia and at least part of MKB. We can only await developments.
AGEOS

Mambamentality

Thanks for acknowledging and re-posting part of my 21.01.2019 post relating to Guaimarala. It is encouraging to know that my observation on that aspect of ANZA was noted by at least one contributor to this chat-site and was not, as I conclude for most, a waste of my time.
I wish you success with your investment.

Buko
Yes, you may well be right and this is just a routine update prompted by a three month time-lapse since the last one. However, as Rimsha has just emphasised, why now and especially with an updated presentation, when nothing to justify a significant update has been reported during the three months. A Conference Call and update in mid-late March would at least allow inclusion of further developments re Nigeria and Tunisia.

I was also influenced by awareness of the MKB Field potential developments, sufficient to conclude that ZEN might be close to revealing progress in Congo [Brazzaville] which alone would justify a major presentation update and elicit a conference call arranged at what seemed short notice. This would of course also require a prior RNS.

However, perhaps the timing of the Conference Call & Presentation is influenced by matters more mundane but nevertheless of special concern to AC, namely the 25% fall in market capitalisation on the Oslo/Euronext Market in recent weeks, from 210m NOK [£17.5m] to 160m NOK [£13m].

Whatever the motivation no doubt there will be some revelations of interest tomorrow and especially if even half of the questions submitted by MarketGunslinger are answered.

The ZEN Press Release relating to the Investor Call, posted on the Euronext website [link below] includes reference to “an updated corporate presentation (to be made available for download on the morning of February 22, 2022, ar www.zenithenergy.ca )

https://live.euronext.com/en/product/equities/CA98936C1068-MERK#CompanyPressRelease-8853746

Leaving aside what appears to be an absence of similar disclosure to the London Market and a defective link on the company website which leads to a duplicate of the Nov 10th, 2921 Conference Call, the reference to “an updated corporate presentation” implies significant developments since the Nov 2021 Investor Presentation.

Having re-read that Presentation during the weekend I failed to find any part worthy of “updating” based on developments RNS'd since last November, so concluded there was a high probability of significant news prior to Tuesday's Investor Call. There is still time for such an RNS of course, although unlikely, so it will be interesting to see what constitutes an “updated presentation” in the anticipated absence of significant news in the remaining hours. The Investor Call itself cannot be a means of releasing significant information not previously released in RNS.
AGEOS

Even more confusion; this time by me it seems.

The SFP [ Societe de Forage Petroliers ] I refer to is the rig company quoted by AAOG on 12 Nov 2019 as undertaking the drilling at Tilapia, whereas the ZEN RNS of 11.11.2020 referenced by Fakevenues refers to the company as SMP [Societe de Maintenance Petroliere].

Without ploughing through the AAOG documentation presumably both drilling companies were involved but only one is the subject of ZEN's litigation ie SMP.

A bit of confusion there.

$5.3m [now $5.7m minimum] is the debt owed by SNPC {Societe Nationale des Petroles du Congo] to ZEN which is not subject to litigation and from which the initial fee relating to the Tilapia II licence will be deducted before payment of the balance, plus accumulated interest, presumably in cash. [ref RNS 20.07.2020 and several subsequent confirmations including 02.02.21 Financial Fox interview at which the amount was said by AC to be $5.7m including interest up to that date]

$3.1m is the minimum in compensation [could be substantially more] being sought by ZEN from SFP [Societe de Forage Petroliers] by litigation through the Paris courts for rig failures during the AAOG Tilapia drilling exercise.. It was referred to by AC during an Investor Call April 2021 and incorrectly reported by some as being “SNP” hence the subsequent confusion with SNPC. The court case is due Q1/2 this year.
AGEOS