Member Info for MarketGunslinger

Ezhik,

I think that you are being quite literal here. You are saying that ZEN hold nothing in terms of assets because “at this second” they do not have the assets in their name however:

1) The Tilapia deal is in place – the approval from AAOG has come through today and so Tilapia now belongs to ZEN. Ok, they still need to pay the £200k to make it official, but that is going to be done imminently I suspect. It is a very small amount of money for a very large asset that has already had tens of millions spent on it by AAOG.

2) ZEN have an agreement in place to acquire the Sisi El Kilani Tunisia asset from KFPE. They need to pay $500,000 to complete this deal, but they are in negotiations for an offtake agreement to fund this deal and they have also just raised £540,000 in cash, so it clearly can be funded.

The important part about the Tunisia deal is that it is a producing asset. Zen’s share of production equates to 158bopd and their share of the gross annual revenue would be $3,375,000.

3) Although ZEN have handed over the CRA production in Azerbaijan back to SOCAR, they still have the very significant exploration upside there in a license that relates to approx. 100 sqkm in Azerbaijan.

4) We also know that ZEN are in talks with a major oil producer in West Africa, rumoured to be Total about two assets in Gabon, that potentially produced 1600 bopd. There is not information as yet on how much these will cost to acquire or what ZEN’s percentage of them would be, but we know that they would not be bothering with anything insignificant.

So overall, I think that it is clear ZEN already have significant exploration assets (Azerbaijan and Congo) and are in the process of acquiring what appear to be equally significant production assets (Tunisia and Gabon). All of this is also being done on cut-price deals at a time when the market is very depressed. Zen have shown good ability to raise money to fund these deals even in this environment and by getting them in place at such good prices then they are very well positioned to come out of the Coronavirus period firing on all cylinders and with a rocket under the share price.

share_talk - what a load of nonsense. If you knew anything aboutZEN you would know that it has ssets.

However, looking at the 9 posts you have made on other boards here in the last 7 minutes it is clear you know nothing about the shares you are talking about and are just using this forum as a place to promote your garbage website and that absolute idiot oilmanjim.

Someone here said that the only experience oilmanjim had of the oil industry prior to becoming a share ramper was that he used to work in a car park. Is that true?

They need $6 million by July, and ned to show a balance sheet to support the work programme, which to bring Tilapia into production is at least $20million.

Well, this is a nice $4.5 million reduction from the $30.5 million in your original post from an hour ago. If we continue at this rate then by the end of trading, it will be free! ROTFPML!

Seriously though- You were CEO of a company that spent £5 million on an asset that ZEN have just bought for £200k. You were also CEO of a company that then spent another $6.5 million failing to bring the well to production.

Regardless of how you try and spin it you were CEO of AAOG as a public company from March 6th 2017 when it IPO'd until 11th December 2017 when you were demoted to country manager (after a huge fall in share price). You remained employed at the company until you finally quit on January 23rd 2018.

During the first 9 months that you were CEO - the man in charge of everything.

This work failed. You were CEO. You were responsible.

However hard you spin it, you do not get to take credit for acquiring the asset and putting together a work programme while blaming others for the failure of this self-same work programme.

Also, you still haven't answered my other two questions (now slightly amended)

2. Will you admit you are wrong if ZEN still hold onto the asset by August without paying $6 million?

3. Do you really think that ZEN are going to pay £200k for an asset that they will lose in July, or do you think that they have already talked to the necessary people in the Congo to ensure that the license will be extended before making the deal?

Ha ha ha, Highlander. These are clearly the ramblings of a failing mind.

Serious questions:

1. Do you really think that Tilapia requires an investment of $30.5 million before July in order to hold onto the license?

2. Will you admit you know nothing if ZEN still hold onto the asset by August without paying $20.5 million?

3. Do you really think that ZEN are going to pay £200k for an asset that they will lose in July, or do you think that they have already talked to the necessary people in the Congo to ensure that the license will be extended before making the deal?

please do let me know the answer to these very simple questions.

Always frustrating to get diluted, but given that they are setting aside £180k for acquisitions and £260k for the identification of new acquisitions it seem like AC's buying spree is going to continue.

The bottom line is that if we are going to go on a buying spree then we should do it now when all of the assets out there are at distressed prices. We saved £800k on Tilapia because of the global economic situation and that is on an asset that AAOG originally paid over £5million on.

Raisings on themselves do not matter. It is what they do with the money that counts. Hopefully we are going to see more RNS releases about more assets in the near future.

It also does show that the market has a degree of confidence in ZEN that they can raise this money in today's environment. Overall sa may positives as negatives IMO.

Also Alex, you didn't RESIGN from being CEO. You were DEMOTED to Country Manager, Republic of the Congo. This was announced by RNS on 11th December 2017. https://www.lse.co.uk/rns/AAOG/corporate-update-fvfrg8pdr1hcvuh.html

You resigned from the position of country manager over a month later - as announced by RNS on 23rd January 2018 https://www.lse.co.uk/rns/AAOG/board-changes-bjhcfggpj9sizns.html

So unless you are accusing AAOG of releasing completely fabricated RNS releases (in which case the FCA should definitely be told) it is clear that you were demoted well before you resigned.

Don't change the subject alex, there is an awful lot to discuss. In your disastrous tenure as CEO you lost shareholders who bought into the IPO 65% of their money by the time you were demoted to country manager.

That my old chum is a total disaster of management.

It gets even better - 12 months after you left there was a 45% increase in share price and a 69% increase in market cap for ZEN from the day you got canned from the CEO role.

https://twitter.com/zenithenergyltd/status/1255085046509207555

Nice touch from ZEN. Small quantity but a decent gesture nonetheless.

I hope this is the first of many donations made and the next ones are from stock manufactured with our own equipment.

Brokerman Daniel seems to like the PPE idea a lot:

https://mobile.twitter.com/BrokermanDaniel/status/1255070006448132097

1. Firstly: PPE in general.

PPE is widely available in China but since the manufacturers there know that demand is high globally they have hiked the prices massively. As per the data posted by Itsagame, the Chinese are selling individual masks are approximately £2.20 per unit which means that 50,000 units would cost £111,000 before delivery charges. ZEN have informed us that they can buy the machines that would manufacture 50,000 units per day for $75,000 (£60,000).

If we assume a manufacturing cost of 25% of the wholesale price (which is conservative considering the current price hikes) then we are looking at it costing £30,000 per day to manufacture PPE that sells for £111,000 (an £81,000 profit). This means that it takes only just over 1 day's production to pay for the equipment, if the product is sold at Chinese price gouging prices.

Realistically, there is no chance that ZEN will sell the PPE at these extortionate rates either in the UK or in Africa. However, it does prove that there is not only a market for it but also that the market will be profitable. So the basic benefit is that ZEN will be able to make money out of this project.

2. Secondly: PPE specific benefit to ZEN

The real benefit to ZEN is not going to be that they can sell PPE to just anyone though but rather that they can deliver it to the locations in which they have oil developments in bulk and at a timescale of ZEN’s own choosing.

Coronavirus has not yet taken hold in Africa in the same way it has in the Western world. However, it is likely to according to all reasonable reports. It is also not going to go away in a hurry so PPE is going to become important there too.

If the Chinese keep charging extortionate prices for their products then this equipment is going to be out of reach to most developing countries who have small economies and large populations. Delivering an affordable supply therefor becomes a significant bargaining tool for ZEN when dealing with the governments in the areas in which it operates. It also buys a lot of goodwill for ZEN ass an operator if they can provide cheap/PPE to their workers and families in all locations globally.

The most interesting idea is that of linking the provision of PPE to the payment of debts owed to ZEN by governmental organisations. For example, if the Congo govt is desperate for affordable supplies then it is perfectly possible for ZEN to link the delivery of the PPE to the payment off the $5.3 million owed.

Overall, it seems that for a very small $75k investment this PPE idea could have a lot of benefits for ZEN both as an income stream but also (more importantly) as a "lubricant" for their forthcoming dealings with governments in developing countries - especially if they undertake to build local manufacturing facilities.

Itsagame - I wasn't arguing with you. I just thing that it is fascinating that the Chinese, who are currently the only place to buy PPE in bulk from have raised the prices so dramatically.

Production of PPE for Africa would definitely be beneficial to smoothing ZEN's operations in Congo etc if these are the current prices. The bit that really staggers me is that ZEN have said it will cost $75k to get the machinery to manufacture 50k units per day - whereas buying 50k units from China would cost £100k + for a single order.

Sorry, my numbers were based on the cheaper £2.22 figure per mask, not the more expensive £2.64 per mask.

itsagame - Isn't the price 90% of the point . The interesting thing is that your prices prove the viability of the strategy. Your Chinese contacts are charging £2.64 per unit. ZEN are saying that they could manufacture 50,000 units per day. for ZEN to buy these from your contacts would cost £111,000 plus delivery. PER DAY!

I have no idea what the actual manufacturing costs would be but it would certainly be a fraction of the manufacturing cost being charged by the price gouging Chinese.

If that is the going rate then you could see why African countries would rather deal with ZEN and pay in oil licenses.

One day's output from the machines that ZEN are proposing to by would cost more than the $75k for buying the machines in the first place. I can't believe that the prices are that high, but if they really are then doing this is a total no-brainer.

As I said below, PPE for repayment of $5.3 million may well become an obvious option for the Congo govt if Coronavirus starts spreading there.

The other interesting thought about this diversion is that the PPE stuff could end up benefitting the core company very significantly. Africa at the moment has got away fairly lightly from the Coronavirus epidemic, but it is unlikely that this will continue. Aljazeera says that cases there could increase from thousands to tens of millions of cases: https://www.aljazeera.com/news/2020/04/africa-coronavirus-cases-hit-10-million-months-200417055006127.html and Bill Gates said back in February that he think s that it may kill over 10 million people in Africa: http://french.presstv.com/Detail/2020/02/17/618896/Bill-Gates-US-China-coronavirus-Africa

If coronavirus actually starts hitting people in Africa at the same rate that it has in the rest of the world then their health systems will be instantly overwhelmed. They will be hit by price gouging from China for PPE in the same way that the UK is currently being hit. Actually having the capability to deliver PPE in bulk directly to the governments of these countries will become a very important supplier. If that is ZEN then it will strongly increase our negotiating position on everything.

Imagine if the Congo needed PPE it might be quite easy to link the delivery of this to the repayment of the $5.3 million that they owe. Just a thought...

I think that it is a shrewd move to be moving into the PPE manufacturing as long as they do not take their eye of the ball and remember that the main business is oil.

For $75k they can establish the capacity to produce a significant amount of PPE and by being the manufacturers they can decide exactly where it will go - which I assume will be to the UK as it is required and then to the areas in which they are working. This will act as a significant lubrication to getting business done in developing countries as ZEN will bring more than just money to the table.

Hey Alex - I was looking at your record at AAOG and it is pretty poor. The company started at a market cap of £15 million when it went public and by the time you were demoted from CEO to country manager (a mere9 months) you had overseen a more than 50% reduction in market cap and a 62% reduction in share price.

No wonder they got rid of you.

£30k of buys today and less than £1k sells, but the share price has not moved. I wonder if there is something brewing in the background and we may close significantly higher than we are now?

There are many reasons that the oil price is going to go up in the near future and absolutely no reasons that it is going to go down. In terms of demand (or lack of it) we are absolutely at the nadir now with the world shut down and the price war only just coming to an end. The only way is up from here and these (IMO) are the key factors that will raise the price:

1. Agreement between Opec and Russia to cut production by 10 million bopd commences on June 1st (4 days).

2. Countries round the world are showing the first signs of coming out of lockdown. This will increase demand for vehicle fuel in the immediate term (and this can already be seen in the increase in traffic on the roads in the UK as lockdown continues). As countries come fully out of lockdown there will also be a glut of cheap flights available globally as desperate airline companies try to fill their seats and get things back to normal.

3. The sabre rattling between the US and Iran. As people have pointed out below the US has traditionally liked a good foreign skirmish to take the pressure off trouble at home. Any significant increase in tension here will instantly raise the global price of oil due to the potential blocking of the Strait of Hormuz that this would result in. There would also be the likely added effect of the Iranians or their proxies attacking Saudi oil facilities which would also have a significant knock-on effect.

I’m sure that there are other things that I have not thought of here but the point is that for oil prices the only way is up from here and for companies like Zenith who are taking advantage of the global chaos at the moment by buying great assets for low prices this is going to have a huge benefit when the oil price rise kicks in.

Ezhik - I will have a look through Ageos' posts this weekend. Thanks for the heads up.