Member Info for MarketGunslinger

Zen does trade on multiple markets and when these markets trade at slightly different prices like Oslo and London are doing at the moment it becomes difficult to get a clear picture of the market cap.

The market cap based on the price in London is 1,042,072,921 (shares in issue) * 1.15p (share price) = £11,983,838

The market cap based on the price in Oslo is 1,042,072,921 (shares in issue) * 1.3p (share price) = £13,546,947

This is based on the Nor Krone price of 0.155 converting to a Sterling price of 1.3p

Pawnsacrifice - AAOG’s peak market cap was on 4th January 2019 when it had 177,929,038 shares in issue and the price was 16.55p per share.

This was in the middle of the well campaign when speculation was at it’s highest and just before they announced that they had struck oil on Jan 7th.

Unfortunately the price declined when they mad ethe announcement because Tom Winnifrith leaked the news of a £4 million placing at 10p the same day. https://tinyurl.com/ychss2gh It turned out to be a £6 million raising but you can see why the price plummeted. It rose back to £24 million market cap after the placing though.

So in short, Zenith should be valued at approx. £25 million based on Tilapia alone just now.

Another good day on the market for Zenith. It looks like poor Kelsbells may get his 1.5p exit price sooner rather than later which should give a nice bit of post-Christmas cheer to both his family and this board!

Anyway, in terms of where and how we drill Tilapia AC addressed this question in the investor conference call back in September. Here is the breakdown of what he said (originally put up in my post on 4th September 2020)

The Tilapia well was never fully completed but this is actually a good thing because the execution was poor and completion may have damaged the reservoir structure, so Zenith will need to deepen it by drilling a sidetrack which is technically convenient and not a complicated process. They plan to produce from the Djeno and they do not have an opinion of how many barrels of oil that this may produce because their technical team have not yet been able to analyse the reservoir – but they note that AAOG expected it to produce 5,000 bopd.

He also pointed out that Zenith own two drilling rigs – one stationary heavy one and the other a truck-mounted workover rig. He pointed out that they can use these rigs in whatever country that they want and this could easily be Congo after the confirmation of the Tilapia2 license.

This was also confirmed on page 8 of the 2020 annual report where the company announced that "We are confident that we shall be successful in obtaining a new 25-year license. In the event our Offer is accepted, the Company will look to deploy its 1,200hp drilling rig in the Republic of the Congo in order to begin drilling activities in well TLP-103C."

In conclusion, AC made it pretty clear in September - we are definitely going to drill a sidetrack to fix the AAOG well ****-up and we are going to use our own rig to drill it.

Rimsha - Tilapia is producing 30bopd at the moment (as per the company website: https://www.zenithenergy.ca/operations/republic-of-the-congo/) which is not a lot but will still be $750 a day.

It is also worth remembering that AAOG had very high costs in Congo as their bungling country managers wanted to have to do the minimum work themselves. When Zenith took over they conducted a mass cull of excess staff and management with a plan to replace them once the license was renewed (as per the Africa Intelligence article earlier this year) so I expect that we will start seeing some new appointments in Jan/Feb.

From the calculations I have just done Zenith should expect approximately $2 million to come into the company by this time next week. This is because as soon as the Tunisia deal is approved as they are due all of the oil that has been produced from each of the two shares that they have bought from the ate of purchase.

Calculations breakdown as follows

The deal with KUFPEC explicitly states that Zenith Is entitled to their 22.5% of all oil produced from Sidi El Kilani since April 20th 2020. Zenith Energy Regulatory News. Live ZEN RNS. Regulatory News Articles for Zenith Energy Ltd. Com Shs Npv (Di) (lse.co.uk)

The deal with CNPC was signed on September 8th and presumably works to the same arrangement meaning that Zenith will also their 22.5% of all oil produced since September – though it is worth noting that when Zenith start acquiring the oil is not explicitly stated in this RNS Zenith Energy Regulatory News. Live ZEN RNS. Regulatory News Articles for Zenith Energy Ltd. Com Shs Npv (Di) (lse.co.uk)

Since April 20th Sidi El Kilani has produced 133,261 barrels of oil according to the Tunisian govt ETAP: Production journalière so Zenith’s 22.5% share of this (based in the KUFPEC deal) is 29,984 barrels of oil.

Since September 8th Sidi El Kilani has produced 55,339 barrels of oil according to the Tunisian govt ETAP: Production journalière so Zenith’s 22.5% share of this (based on the CNPC deal) is 12,451 barrels of oil.

In total, Zenith have 42,435 barrels of oil, which at today’s oil price of $51 would be worth $2,164,185.

They said in the CEO's statement on the Annual Report that "We look forward to receiving regulatory approval from the Comité Consultatif des Hydrocarbures of the Republic of Tunisia in respect of the transfer of ownership for both acquisitions within the next 60 days".

So we should get Tunisia s regulatory approval within the next 7 days.

The good news is coming thick and fast at the moment.

The positivity on this share is no mindless ramping. Ad Florida pointed out below:

1 - Congo Joint Venture Partnership with Congo operator
2 - Tunisia licences 1 and 2
3 - Nigerian licence (seems like it's in the bag)
4 - Recovery of the £5.7m
5 - Transportation of rig to Congo
6 - Transportation of Workover rig to Congo, Tunisia or Nigeria
7 - Drilling the final stage of Tilapia ll

The Tilapia news should lead to a total re-rate of Zenith and 1p will just be the beginning. We are now targeting 5,000 bopd in Congo and will be drilling with our own rig, which means that we can keep going as long as we need.

Do your own research but I have been talking about the potential of Zenith all year and I can assure you that this is not just a flash in the pan ramp.

I have to hand it to Andrea Cattaneo. He has pushed and pushed at the Congo and Tilapia, has spent months and months in the country and has now finally managed to get the deal over the line. And what a deal it is…

We have spent £200,000 on acquiring the Tilapia license and we have now got it renewed for another 25 years. In addition to this we have also acquired a debt of $5.7 million which AC has not forgotten about and which look like we will get paid sooner rather than later. This puts us nearly $5.5 million and a 25 year license up on our initial £200,000 investment.

This is a massive achievement for Zenith Energy the company and for AC personally. There have been people on these boards and further afield who have said that we would never get the license without investing millions and that even if we invested millions it would be granted to other people – yet here we are. Little Zenith Energy has a 25 year license in the bag and is now targeting 5,000 bopd with it’s own rig.

This is the completely company-changing news that we have been waiting for. We still have plenty of other good news on the horizon from a myriad of other projects but we should all remember that AAOG peaked at £30 million market cap in their run up to drilling Tilapia and they only had three years left n the license and did not own their own rig. The sky is the limit for Zenith from here on in and today should be just the beginning of a market re-rate.

Good luck everybody and enjoy the ride!

Willibob33 - I think that we can expect an RNS soon but there was no reason to think that it should specifically be today.

I have always said that I think that we will hear news before Christmas. AC has been out in Congo for months now, so I don’t think that he will want to leave without the license in his pocket but equally he will want to be back home in Italy for Christmas. I think that the reason for the meeting and photo with Massimo D’Alema last week was to put on diplomatic pressure to make this happen.

The sustained buying and massive price rises in Oslo last week suggests that people with money and contacts know that something is going to happen so I maintain that we will hear news sooner rather than later and that the news will be good.

Anyway, most of you know my opinion. I have said all year that Zenith has huge potential and that the company has done some of the best covid business of any small cap I have seen. We look like we are reaching the sharp end now. I think that the news will start to flow thick and fast soon and we will all be thanking AC for his deal-making foresight in the very near future.

Rocklawn, I am sure that Florida's "lower end of the barrel" comment was not directed at you, but was instead directed at the small but vocal group of derampers who seem to think that because they lost money on the unfortunate Azerbaijan adventure that the company can never be successful again.

Sometimes I think that the only thing that people who have lost money on a share think is worse than the loss is the idea that they sell out and it can then go on to become successful without them. It is the only explanation that I can come up with for the seemingly bottomless rage with which they can attach AC and the company.

As Takeyourbets points out below if the share price drops the director is a villain but I would not agree with his first point. If the price flies the director is never a hero, it is more like "the investor is a genius". There are weird sub-populations on every forum of these boards populated by those who cannot take responsibility for their own investment decisions and are always looking for somebody to blame so I suppose we should not be surprised to have them here as well. They cannot stand to be wrong and always require someone else to blame.

Anyway, as far as I am concerned both AC and the company have performed brilliantly this year. Of course, we are waiting on news to prove things but I feel that Zenith has never been in a stronger position to deliver a massive return to shareholders. I can’t think of any other small cap AIM company that has so many different bits of potentially company-making news expected so imminently.

1. Tilapia license
2. Tunisia ownership approval
3. $5.7 million payment
4. Nigeria marginal fields potential licenses
5. Additional Congo licenses.
6. Potential additional global deals from CNPC and KUFPEC

In a short period of time Zenith could be banking millions in cash from the SNPC money and the accumulated Tunisia money. They could have approx. 500 bopd coming in to cashflow from Sidi El Kilani. They could be drilling a sidetrack in Tilapia that will potentially produce 5,000 bopd with their own rig, which means the drills would be cheap and they would not have to stop drilling to return it. They could have additional marginal field licenses granted to them in both Nigerian and Congo.

They also have the potential to be an incredible farm-in partner for other small oil companies in the Congo as there are not many rigs available out there hence all of the problems that AAOG had with cost and availability (didn’t one guy post on here that there is only one rig in the Congo once?). Being the local guys that can get your wells drilled quickly in exchange for crew costs and an equity stake in the license would make a very appealing prospect to many local operators I would have thought…

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

Make no mistake the price rise in Zenith in London is being driven by the trading in Oslo and it is usually very much the other way round. However, the volume traded in Oslo and the sustained rise is spectacular. There has been 50 million shares traded there today which is over £250,000. Not only that but the buying pressure has been sustained for more than three days and the price is 100% up in one week on no news.

Zenith have an enormous amount of irons in the fire, any of which could be total company makers:

1. Tilapia license
2. Tunisia ownership approval
3. $5.7 million SOCAR money imminent
4. Nigeria marginal fields potential licenses
5. Additional Congo licesnses.

However, like I said yesterday, with the huge volumes suddenly being traded in Oslo it seems that without a doubt somebody at the Oslo end has an inside track on what is happening. I know that Florida has suggested that this could be about the Nigeria licenses or the additional Congo licenses, but in my opinion it has to be to do with Tilapia. Tilapia is the big one for Zenith and with a significant amount of Norwegian companies operating in Congo it makes sense that this is what has prompted such big money moves.

Fingers crossed for an RNS very soon.

Well all of the evidence points now to Tilapia being done and dusted.

1. AC has been out in the Congo since 23rd September, meaning that he has been working solidly on getting the Tilapia deal over the line – maybe along with other license opportunities too.

2. The tweet Zenith put out today of AC with the former Italian Prime Minister also hints that there is diplomatic pressure being put on Congo to grant the license to the Italian businessman at the head of Zenith. Italy is a powerful country compared to Congo and the former PM is a powerful ally for AC.

3. The buying and massive increase in share price on the Oslo bourse followed by the increase in London suggests that somebody has had the heads up that the deal is done. This information has clearly come via the Norwegian side on this occasion as it is Norway that rose first. As I said earlier there are a lot of Norwegian companies out in Congo so it looks like somebody’s contact has maybe passed on the news about the license earlier to investors in Oslo.

4. Finally big volumes (for Zenith) being bought in London.

5. We also have the leak from the African twitter account saying the deal is done. This is unsubstantiated but seems as if it may have a grain of truth in it when looked at alongside the other evidence.

Obviously none of this is proof that the Tilapia deal is done and we will not know for sure until Zenith release an RNS about it, but we all know that in Africa the decisions on these kind of deals are made well before any formal approval is ever sent to the company so I think that the evidence all points to us long-term holders being well rewarded in the near future.

This is the strongest sign so far that the Tilapia license will be coming Zenith's way. Oslo is up 76% this week and the volumes have been not huge but significant - which means in my opinion that somebody knows something and is building a position. Otherwise, why would the buying continue after two days of rises?

I know that there are a lot of Norwegian companies operating in Congo. Someone has clearly been given the inside line and passed the message back to Oslo. Time to pile in.

Azerbaijan was always a massing drain on company resources. Because of all of the expenses of running the government team of hundreds of people and the soviet-era wells being in such poor condition then it was never going to make any money. We are well out of it and that is without even mentioning the war...

Florida, you are absolutely right, the company is in a great position to spring board forward. The market is simply awaiting confirmation that Tilapia and Tunisia are 100% guaranteed to belong to Zenith before a massive re-rate occurs.

Obviously all who are investing at this point are taking a risk that these things will not come off but the converse is that the share price will be many times higher when the news does arrive.

Personally I think that good news will arrive of both as a Christmas present to all of us.

I agree, as soon as the Tilapia license is awarded then this will fly. Also, don't forget Tunisia which will not only deliver significant ongoing cashflow when approved. It's not in the Tilapia quantities, but it is certainly not to be sniffed at.

If demand has been hidden for over a week due to a big seller then there is a huge appetite for Block amongst investors at the moment. I don't blame them, if I was not already very heavily invested in here then I would be buying more here. The future is looking incredibly bright.

PS - AGEOS, I very much look forward to reading your report on Tilapia once we get the license granted.

Rimsha, I am not sure if this is what you are after, but I posted this back in May:

"ZEN also have what I have chosen to call the "exploration" upside of the Tilapia assets that it bought from AAOG for $200,000 (an absolute steal since AAOG paid £6 million + for the exact same assets back in 2017). Tilapia was the only asset that AAOG ever had and as recently as April 2019 this asset alone drove the market cap of AAOG up to a value of £27 million.

AAOG have said in the annual reports that their intention was always to produce 5,300 bopd from Tilapia and that at those levels it would have a cost basis of only $5 per barrel to get out of the ground (see page 6 of the 2017 Annual report https://www.aaog.com/docs/librariesprovider10/archive/reports/aaog-annual-report-2017.pdf?sfvrsn=a8959c13_2)

If ZEN were to manage to do the same thing then their 56% share of the asset would be worth $32.5 million per annum in net revenue - even at $33 POO."

Obviously with oil prices now being $47 per barrel then this would now be worth $45.5 million net to Zen if they were to be able to produce 5,3000 bopd at a $5 cost of extraction as AAOG proposed.

The big question is whether we will hear the news on Tilapia first or on Tunisia first. Obviously I am hoping for Tilapia but I think that either way we will know about both before Christmas.