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The future for Zenith at the end of 2021 looks brighter for the company than it has ever been before and the revenue that is now coming into the company from the Tunisian operations is crucial to this. It is this Tunisian cash flow that will enable the company to fund the acquisitions and development on high potential exploration/production assets and do this without having to issue even more equity.

The cash-flow from Tunisia currently stands at $10 million per annum and with the addition of the second 22.5% of SLK it will increase to $12 million. This figure is crucial as it will enable the company to then service a debt of $20 million which will enable the funding of the purchase of 42% of Noble Hill Network Limited and therefore giving the company access to the potential of the ONL141 NW license.

If the company can deliver the ROB-3 infill well (which is fully funded and targeted to commence in Jan/Feb 2022) then this would increase production in Tunisia to 1,035 bopd and deliver a revenue of $19 million per annum then this would allow them to service up to $40 million worth of debt (at 12% interests and repayable over four years) The successful completion of the Ezzaouia sidetracks (which are also fully funded) would increase production to 1,326 bopd and revenue to $24 million. This would allow the company to borrow up to $50 million and repay it over only 40 months by making $1.5 million per month in repayments.

The use of this debt as a financing instrument would allow Zenith to AT A MINIMUM, fully fund the acquisition and drilling of OML141 and also the drilling of Tilapia 2 (which between them should come to no more that $26 million).

So the key factors going forwards for Zenith should be to get the second SLK deal done, and to complete the ROB-3 and Ezzaouia drills (which are already both fully funded) in order to deliver the cash-flow which will unlock access to up to $50 million.

If the company is successfully able to deliver this cash flow from Tunisia and is also able to complete the suggested purchase of Bir Ben Tartar (500 bopd) then it would be generating $33 million per annum from Tunisa alone.

The successful completion of the TLP-103C would deliver another $12 million per annum in net revenue (500 bopd) and my (very conservative) estimate on the B-5 drill in Nigeria suggests that it could deliver a net revenue to Zenith of $34 million (840bopd) per annum if it is successful .

So in total, if everything came in as we all wish then it is possible that by the middle of 2022 that Zenith could be producing 3,166 bopd and generating a net revenue of $79 million per annum on a pro-rata basis. This would give a share price value at a minimum of ten times today’s price.

From what the company has suggested in their Nov 29th RNS we would expect production to commence in Q2 2022 and so (assuming the well is successful) we can expect a minimum cash flow of $17 million from this in 2022.

Obviously, before the company can generate any revenue from the asset then they have to successfully drill it and in order to do this they have to be able to come up with the $20 million. The company has made it clear in their RNS that this would be funded by loans from pan-African financial institutions and, as I pointed out in the other thread there would be no problem with Zenith covering this loan from their existing Tunisian revenue assuming that they complete the other SLK deal.

To fund a loan of $20 million at an interest rate of 12% repayable over four years then Zenith would need to repay at $500,000 per month over 48 months (giving a total interest payment of $4 million). This would total $6 million per annum and on top of this they would also need to cover the company administrative expenses of $5.5 million per annum. This totals $11.5 million and the annual income from Tunisia once the second SLK deal is completed would be $12 million.

This is why the Tunisian production is so crucial to the development of the company as a whole as it is this money that will allow the borrowing (and servicing of debt on) much larger amounts of money to develop other opportunities.

With a relatively low risk drill such as B-5 (bearing in mind that hydrocarbons have already been found on the site by CNOOC) debt seems like an ideal way of funding it, especially since the Tunisian revenue can fund the loan even if the drill is unsuccessful. Obviously, if it is successful then the production from B-5 would pay for itself.

While Zenith have not yet acquired any share of OML141 there is an option agreement that has been released publicly which shows the details of what the asset purchase would cost and there have also been a significant amount of information that has been put up by ADM Energy which gives us more information about what the value of the asset could be in the long term.

However, the first element to deal with about OML141 NW is exactly who owns it as ADM Energy appear to be embroiled in an argument with Noble-Hill Network Limited as to who has the rights to what. I do not plan to rehash all of the details and background to this in this post but my conclusion is that there is no chance that ADM Energy can have any claim on the asset. Whether they were duped into buying a share of KONH UK Ltd or they were knowingly misleading their shareholders is not for me to say but the fact that Noble Hill have published their share registry showing that neither KONH nor ADM Energy own any of their shares is enough evidence for me to believe that there are no issues of ownership. As far as I am concerned Noble Hill appear to be completely free to sell 42% of their company to Zenith.

The fee for acquiring 42% of Noble Hill Network Limited has been set as being valued at $20 million and all of this money is going directly towards funding the drilling, testing and completion of the well Barracuda 5 (B-5).

Because the license in Nigeria appears to operate under slightly different conditions to the licenses that Zenith own in other areas (ie Zenith will be an equity holder in the company that owns the Risk Service Contract rather than the company that holds the ownership of the license) it is hard from the currently available data to work out exactly what this means, so in order to allocate any value to this asset I am going to have to make some (conservative) assumptions:

1) Noble Hill as an entity will have to share 50% of the oil that they recover with the government and the license holders (ie Zenith’s share will be 42% of half of the actual production). I hope that this is wrong and Zenith’s share is greater than this, but I cannot see it being any smaller.
2) Opex costs will remain at $20 per barrel for the near future (as per ADM Energy’s announcement) and the reduction to $12 per barrel will only happen at some time in the future.
3) The first drill will commence in Q1 2022 and will successfully produce 4,000 bopd.

Based on these assumptions we can start putting some numbers on what the B-5 drill could be worth to Zenith.

Production of 4,000 bopd with the oil price at $75 and opex costs of $20 per barrel would mean that Barracuda would be generating a revenue of $220,000 per day or $80 million per year. On the assumption of point 1 above that 50% of this would be going to the license holders and the Nigerian government that this would mean a net revenue to Noble Hill of $40 million per annum and Zenith’s share of this would be $34 mill

TLP-103C is a nearly completed well that was drilled to 80% of the depth and, according to Andrea’s interview with Financial Fox in February this year there only remains a few hundred meters to drill as a sidetrack/completion before it can be taken into production. It is important to note that this Djeno structure that it is targeting is extremely promising and has produced at least 1,000bopd everywhere it has been drilled in Pointe Noire. What Zenith now know (having had access to all of the AAOG data) is that there were a series of technical mistakes that were made by AAOG in the original drilling of well 103 and so they are confident that they can succeed in this well by doing the right things.

So, in conclusion we have a drill that simply needs a sidetrack to be completed and after this will have high expectations of delivering 1,000 bopd production. It is hard to tell how much the drill will cost to complete but considering it is 80% complete and it only requires a sidetrack being drilled an estimate of between £2.3 - £3.6 million (between 50% and 25% of the £9.6 million spent on the original drill does not seem to wide of the mark). This money could easily be raised by debt as it would not be difficult to service a loan of £3.6 million with a cash flow of $10 million (which is the current net revenue delivered from the Tunisian assets).

Revenue from a successful drill would be pretty significant at today’s prices and considering the opex costs that were originally put out by AAOG. 1,000 bopd production would be split 50%-50% between Zenith and the SNPC (presumably with drilling costs to be covered first) and this would give Zenith an initial production of 500bopd. With oil prices at $75 and doubling up on the $5 opex listed by AAOG to call it a more conservative $10 this would give Zenith a net revenue of $65 per barrel which would work out at $32,500 per day or $12 million per annum. Essentially a successful sidetrack at Tilapia would pay for itself in under 3 months and then the revenue produced from the well would allow the company to fund a comprehensive drilling program on an ongoing basis. This could either target the full 5,300bopd that AAOG talked about as being potentially available in Tlilapia or it could fund exploration work in the new Congolese license that Andrea has said that we are in discussions about. The financial benefits to Zenith from Tilapia alone could clearly be company-making but obviously the license renewal needs to be granted first. Here’s hoping for another Christmas surprise like last year…

It is a source of some considerable frustration to me that the Tilapia license is taking so long to be granted but it feels like things must be coming to a successful conclusion now. Andrea has said in the investor conference calls that the company is getting on well with the relevant officials in Congo but that there is simply no way to speed them up. Officialdom in Africa simply goes at the speed that officialdom in Africa wants to go.

Assuming that the new license is granted for Tilapia 2 then Zenith will have acquired for £200,000 a 25 year license on an asset that AAOG originally paid almost £7 million for when it only had 5 years left. The license also contains a well (TLP-103C) that has already been drilled at a cost of £9.6 million (£5.4 million net to AAOG with the rest owed by SNPC) and has discovered oil across 56 meters.

This money spent by AAOG Congo but owed by the SNPC is very important to Zenith as when they bought AAOG Congo this debt became due to them. At the last count I have seen, the amount of money owed now stands at $5.7 million owned by SNPC to AAOG Congo. Although it is highly likely that much of this money will go back to the government when it comes to finalising the signing on bonus it is still means that a 25 year oil license where oil is known to be present was acquired in it’s entirety for a mere £200,000. If for any reason the license is refused then the company is still owed $5.7 million from the Congolese government and this will be a strong reason for then to grant the license approval in the first place.

Although the drill itself was not commercially viable, the fact that it did discover oil is important and the information that was gathered during the failed drill is going to be extremely important to making sure that any new drill is successful.

Other things that we know from the release of information by AAOG is that they thought that the original well (targeting the Djeno layer) would deliver at least 1,000 bopd and that it could deliver up to 2,500 bopd (see page 19 of the AAOG AIM Admission document). They also thought that by drilling down to the Mengo layer with a second well then they could increase this production up to 5,300 bopd and they stated that opex costs (at the 5,300 per day production level) were less than $5 per barrel.

However, despite the fact that they cannot fund the OML141 acquisition by the issue of equity we do know that the company do believe that they can fund it or they would not have announced the deal. In fact, in the RNS they were specific about how they were going to fund it and this was vial “pan-African financial institutions”. This is not the first time these had been mentioned either as in the November investor call when he was asked about alternatives to equity financing Andrea mentioned that local (regional) banking is becoming a very effective way to raise money and he said that Zenith are already in negotiations with 5-6 development banks in Africa about raising money in this way. He specifically said “with oil creating cash flow then we can service this”.

So the value of the Tunisian oil revenue is as much about the doors it opens to other financing as it is about the revenue that it brings in directly. The £10 million revenue is more than enough to fund a substantial debt facility. If Zenith were to take a $20,000,000 loan facility at a coupon of 12% repayable over 4 years then they would look at paying back $500,000 per month over 48 months.

At the current rate of revenue generation this would t be just too much for Zenith to manage as, according to the last annual accounts the company has administrative expenses of USD$5.5 million ($7 million CAD). Considering Zenith generates revenue of $10 million per annum from their Tunisian assets then this would be a wholly manageable amount of money to service at today’s revenues.

If Zenith were able to conclude the SLK purchase and also complete the ROB-3 infill well and the Ezzaouia sidetracks and workovers then this would mean that the company generated a net revenue of $24 million per annum. $24 million would allow them to service a loan of up to $50 million over the same 4 year term at 12% interest. And $50 million would allow a lot of acquisitions and exploration work to be completed.

The point behind this is not to say that the company would want to receive a $20 million or $50 million loan, but that with the revenue that they are generating from the Tunisian assets they could now service this money should they need to. This means that the business model that was originally put together for Azerbaijan can now be fully activated due to the Tunisian production.

From the very earliest days the Zenith business model was to try and use the revenue generated from oil production to fund exploration and Andrea has consistently repeated that this is still the case in various investor calls over the last year.

Two years ago, given the fact that the whole Azerbaijan adventure went very wrong Zenith were in fairly big trouble because a model of using production revenue to pay for exploration only works if you actually have production revenue. If production is terrible or too expensive (as it was in Azerbaijan) then the company ends up with pretty much nothing.

One thing that I think Andrea deserves great credit for is for turning around the company when it seemed to be in extreme dire straits. The acquisition of Tilapia was a good bit of opportunity-seizing, but it has actually been the slightly less sexy acquisition of the Tunisian assets that has really confirmed my feeling that Zenith Energy will ultimately be a great success.

By acquiring the Tunisian assets, Andrea returned to the original plan of using production revenue to pay for exploration works as was originally planned in Azerbaijan – only this time it looks like it will actually work. The production revenue is already significant enough to represent a game-changing moment for how Zenith can actually operate. Even the current production rates of 542bopd and $10 million per annum in net revenue will allow the company to service a significant amount of debt for exploration in other areas.

We have already seen this on a small scale how production revenue can enable the establishment of debt facilities via the establishment of the Winance credit line but where I think that we are going to really see the capability of the production revenue is in connection with the OML141 license and, to a lesser extent, Tilapia.

The value of the OML141 deal is very significant to Zenith with there being an initial target of 4,000bopd but a longer term target of approx. 25,000 bopd. However, the acquisition costs of the asset reflect this enormous potential that it presents with the company being required to come up with $20 million to pay for the drilling, testing and completing of the Barracuda well “B-5” between January 15th 2022 and October 12th 2022.

There is no way that the company will be able to come up with $20 million (£15 million) raised by equity as it is the same as the entire current market cap and even if they were willing to dilute all existing shareholders by 50% (and I doubt that they would be because Andrea is still a significant shareholder himself) then there is no chance that they would be able to find a broker to fund it.

It has been suggested by AGEOS that the potential acquisition could be the Bir Ben Tartar (BBT) field which is currently owned by Anglo Tunisian Oil & Gas. This field currently produces 500bopd but ATOG had plans to potentially quadruple production there up to 2,000 bopd. Obviously, there is nothing definite about this acquisition yet but if it was successful then the 500bopd would deliver a revenue of an additional $ 9 million per annum.

So in short –

a) Currently Tunisia produces $10 million per annum revenue net to Zenith from 542 bopd production.
b) After the acquisition of the second SLK share this would increase to $12 million per annum from 655bopd.
c) After the fully funded ROB-3 infill well this would increase to $19 million per annum from 1,035 bopd
d) After the fully funded Ezzaouia sidetracks and workovers this would increase to $24 million per annum from 1,326 bopd
e) If we were to acquire Bir Ben Tartar this would increase to $33 million per annum from 1,826 bopd.

Andrea specifically mentioned in the November conference call that Zenith were targeting production of between 2,000-3,000 bopd by the end of 2022 and this seemed like quite a lot to me. However, given that the company has now taken out the Winance loan for the new acquisitions (SLK and potentially BBT) and is already fully funded for the additional work at Ezzaouia and Robbana (from the £3 million raising) then it is entirely possible that Zenith can hit almost 2,000bopd production by the end of Q1 2022. Importantly this is all budgeted for and fully funded already.

When you take a step back an look at Zenith with a bit of perspective I think that we are seeing a company at a real turning-point in it’s development process.

Going back to its original listing dates in London when the focus of the company was on Azerbaijan the business aim was always to develop production in a quick and cheap way and use the funds developed through doing this as a method to fund more expensive but potentially much more profitable exploration work.

Although things didn’t work out well in Azerbaijan, Andrea seems to have stuck solidly to the principle of building up a production base in order to fund exploration upside. Now after the pivot to Africa it looks like this is on the cusp of working and coming together to deliver the potential for a very serious company financial performance.

The company’s production hub is Tunisia and this is currently delivering 542 bopd

a) 113 bopd from the 22.5% share of SLK
b) 120 bopd from Robanna post workover.
c) 209 bopd from the 45% share of Ezzaouia
d) 100 bopd from EBB-5 at El Bibane

Working on the assumption that opex costs are approx. $25 per barrel then at today’s oi price of $75 per barrel this is worth $27,100 per day to Zenith or $10 million per annum in net revenue. Assuming that we complete the other half of the SLK deal (for which we already have the money raised) then this will further increase to 655 bopd and a net revenue of $12 million per annum.

We also know that Zenith have every intention of also increasing production in Tunisia. They have spelled out their plans there as follows:

a) Drilling of the ROB-3 – which is due to be drilled in January or February and target total Robbana production of 500bopd. This will come at a cost of £600,000 which is already fully funded out of the £3 million raised on November 2nd 2021.
b) Drilling of 2 sidetracks and 3 workovers in Ezzaouia which are also to be drilled in Jan/Feb and are targeting an increase in production of approximately 800bopd. This will come at a cost of £1.3 million and is also fully funded from the £3 million raising.

Supposing that both these drill targets and the acquisition of SLK are successfully carried out then we would be looking at production in Tunisia of:

a) 226 bopd from the 45% share of SLK
b) 500 bopd from Robanna post ROB-3
c) 500 bopd from the 45% share of Ezzaouia
d) 100 bopd from EBB-5 at El Bibane

This would give us a total production of 1,326 bopd and a net revenue of approx. $24 million per annum.

But we also know that Zenith intend to make further acquisitions in Tunisia, both because Andrea has mentioned this in a number of the investor conference calls and also from the comments made by Luca Benedetto at the beginning of last week when the company announced that they have set up a €3 million debt facility with Winance for the specific purpose of making acquisitions in Tunisia.

As we are now coming to the end of the year, I have been reviewing Zenith’s position as an investment opportunity. I have looked at the progress that Zenith have made in 2021 and the progress that I am hoping for in 2022 and I have spent a large part of the weekend and yesterday writing it up.

I have tried to be as rational and conservative as possible but I have to say that it makes very positive reading – especially in the ability for the company to both borrow and service the $20 million that would be required for OML141 if Zenith were to go ahead with that purchase. I have read a number of opinions on both the UK and Norwegian forums that have suggested that doing this deal would be a stretch too far for Zenith, but having looked at the numbers I am inclined to disagree.

Anyway, here are my thought. It is a very long document so my apologies for that but I hope that some of you find it useful. It has certainly clarified my position that 2022 looks like it could be a very good year for Zenith and this is all thanks to production in Tunisia.

I am happy to discuss my thoughts here with everyone and look forward to the disagreements!

Sorry in advance for the long posts.

And Winnifrith's second article.

I have written to the Oxymorons at AIM Regulation led by the bogus Sheriff of AIM Marcus Stuttard, following two shock revelations on this website which should mean a 7 AM Monday Suspension of Trading in shares in ADM Energy (ADME) and a fullenquiry into Nomad Cairn Financial & broker Ardern. The letter follows:

Re ADM Energy listed on AIM but God only knows why!
To: AIM Regulation
cc Nomad Cairn

Sirs.
I urge you to suspend trading in shares in ADM Energy first thing on Monday
following revelations on ************* on Friday and Saturday. What I exposed was not known to investors but was known to Nomad Cairn and to former lead broker to the company Arden partners but neither blew the whistle as they should have done as regulated bodies and their failure on that count must be investigated ASAP. Are Jo Turner at Cairn and Paul Shackleton at Arden fit and proper individuals to remain authorized to work on AIM transactions in light of this ****show.

On 9 July 2021 ADM's partner in t he Barracuda project demanded the immediate
payment of $1.75 million which ADM had agreed to pay. ADM did not pay, still has not paid and now faces a legal battle. Its crime here is failing to inform investors of its dispute while raising money in a placing.

The full details of this episode are HERE

ADM's costs at Barracuda are meant to be funded by Dubai Bridge. But on Saturday I showed that its boss is not a Middle Eastern blue blood as he claims and ADM has reported to investors but a humble US citizen. Worse still it seems that Dubai Bridge is a letterbox company and is unlikely to have the funds needed to develop Barracuda. Advisers and all board members at ADM have been made aware of this but done nothing.

The full details of this scandal are HERE

Has Cairn done any due diligence on "His Excellency" - the boss at London
Bridge? If so t hen it can show it to you before markets open tomorrow. If not I
suggest that this is where an independent investigation into both ADM and Cairn
starts and that, while it is underway, trading in the shares must be suspended.
I remain, as ever,

Your obedient servant

One fellow who has says that upon visiting U-Bora Tower, 203, where the alleged
office of Dubai Bridge Investment is supposed to be, there was no Dubai Bridge
office there and nor did anyone in security or management of the building know
anything about Dubai Bridge nor any family office of Zubair. They have no records whatsoever of Dubai Bridge to ever been in the building.

Now of course this chap might have made a mistake and there could all be some
perfectly innocent explanation for all of this. But I suggest that there also may not
be and therefore unless Cairn Financial can show its own due diligence to
demonstrate that this fake sheikh is in fact kosher, has a legit business and is good
for the moolah, shares in ADM need to be suspended first thing Monday pending a full investigation into the company, its RNS releases, its officers - including Lord
Bellingham of 3dm infamy - who have all been informed of this matter and also
regulated advisers including those at Cairn and at Arden Partners, notably Mr
Shackleton.

This latest expose c/o Winnileaks is why shares in ADM Energy (ADME) should be suspended first thing Monday. Not only has the company and its hapless Nomad Carin sit on news of a major legal claim against it as I revealed yesterday but it seems to have met its second fake sheikh, a letter from whom is below. And to have used this fake sheikh to ramp the shares ahead of placings.

Its first fake sheikh, Ahmed Dalmook Al Maktoum, was exposed on this website
HERE. Natch no heads rolled as this is the AIM sewer and who cares about a spot of insider dealing and fraud. But hell there have been several fake sheiks fooling AIM Companies such as New World Oil and Gas or Lekoil so I guess one fake sheikh is understandable. But two?

This letter from Dubai Bridge was cited in research from Arden Partners, until
recently lead broker to the company, as a reason why mug punters should by the
shares. And it was used by ADM to secure the Barracuda deal as it was the fake
sheikh who was going to fund its $20 million capital need. Partners in that deal made it clear that the supposed support from Dubai Bridge was the reason they hooked up with ADM which had no balance sheet of its own.

As you can see in the letter and in the release of 20 October 2020 announcing the Dubai Bridge Investments deal HERE, the chairman of Dubai Bridge is referred to as HE Zubair Al Zubair, . HE stands for His Excellency. And the name might make you think he is in some way linked to a prominent Omani family with royal links. Au Contraire. The HE is a fantasy, this fellow has as much blue blood in him as the late Norah Batty or Mr Jim Davidson. Zubair Abdur-Razzaq Al Zubair, who founded the company of this name is a US citizen and thus in styling himself His Excellency and encouraging ADM to use that moniker, this chap is very clearly a fake sheikh. But maybe the fake sheikh has a legitimate business. Well, it certainly does not seem to have provided any financial support yet to ADM Energy other than in allowing folks to promote its shares to get fund raises away. Has Nomad Cairn or former broker Arden and specifically its lead executive on a number of placings, the Chgina fraud specialist, Mr paul Shackleton formerly of disgraced Daniel Stewart, done any due diligence on whether Dubai Bridge has the balance sheet to provide $20 million of support? Has it checked out the address it uses in correspondence - Bora Tower, 203, Dubai, UAE.

This is what WInnifrith published. If he is telling the truth it will destroy ADM. If he isn't then they will sue the life out of him.

This is the link to the document WInnifrith says he received: https://pdfhost.io/v/EPNIFsAM8_NHNLADM_261121

This is what he claims in his post:

By Tom Winnifrith, the Sheriff of AIM I Friday 26 November 2021

Disclosure: I have no positions in any stocks ment =ioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expressesmy own opinions. I am not receiving compensation for it (other than from *************). I have no business relationship with any company whose stock is mentioned in this article.

During the next 24 hours I shall be published a number of articles showing that AIM listed ADM Energy (ADME) has consistenly misled investors as to the state of its finances while raising money in new placings. I shall look at where some of that cash went and who was aware of it , including former Tory MP Sir (now Lord) Henry Bellingham of the the 3DM fraud infamy who is a NED. At the end of the series you will be in no doubt that this company's shares are utterly worth less and that those hawk like watchdogs at AIM Regulation, the folks fomerly referred to as the Oxymorons, should be swooping to feel col lars both at ADM but also acting against its advisors. I start with a letter sent to the Winni leaks service which ADM received on 9 July 2021.

As you can see ADM appears to owe $1.75 million and the company to which it owes the cash is asking pretty aggressively why the payment has not been made on the agreed terms. I shall deal with ADM's response and why this case is very much live in due course.

Suffice to say, since 9 July there have been seven RNS updates and one bai lout
equity raise but no mention of this dispute. What part of the AIM Rulebook allows a company, especially one seeking to raise fresh equity, to not announce a legal claim and a threat to down tools from a major partner? Over to my good pals Jo Turner and Liam Murray at Cairn Financial on that one.

Of course, the colourful history of ADM has been well document ed on this website including its run in with a fake sheikh so anyone owning shares in this POS has been warned off many times by myself . But what is to come will blow your socks off. ..

AGEOS. You are, of course, correct and ETAP is the state oil company not ECUMED. Apologies for the error and thanks for your input.

The only way that you could get a wholly accurate answer to your question is by emailing the company or asking it in the next investor presentation.

My best guess at the answer would be that Zenith are obliged to go with ECUMED and their delivery schedule on any licenses that are co-owned with EUCUMED (ie the transportation by tanker) and so this would mean for SLK and Ezzaouia. However, on licenses where the license is 100% owned by Zenith (ie Robanna and El Bibane) then they can do what they want with the oil and sell it straight away if they wish.

There may also be some obligation in the licenses for a percentage of oil produced to be sold locally (hence the reference to "domestic market sales") but again a query this detailed could only be answered with 100% accuracy by someone at the company who is privy to the actual obligations under the license.

Andrea explained how the oil sales in Tunisia worked in the last investor conference call. All the oil which is produced in fields where ECUMED, the state oil company, have a stake is put together to form a blend of oil. This is API 40 and the blend is well known to the Mediterranean refineries that they sell to.

Because Tunisia does not produce huge amounts of oil then all of the oil from all of the ECUMED fields is stored in Tunisia until there is enough of it to fill an oil tanker and then this will be chartered and will transport the oil a few hundred kilometres to the refinery.

So the oil cannot be sold directly as it is produced but is sold on an intermittent basis. It has never been mentioned how many times a year these transportations of oil take place but this would be a good question for the next conference call.

I assume that, if necessary, the company could forward sell the oil but this would obviously mean taking less money as the entity that they forward sold it to would want to make a profit and would also be taking the risk on a change in oil prices between buying from Zenith and being able to sell to a customers. So it is better to just hold onto the oil and get large payments when it is sold.

HI hve only had a chance to have a quick once through of the AC video so far an will try and write it up in full over the next few days.

There was not much new there for the seasoned Zenith investors but he did mention that they think that the SLK field has been very neglected by CNPC and KUFPEC because they are so big and that with some additional work done on it then he would hope to get production right up to 2,000 bopd.

Also, his final comments were quite interesting . Andrea feels that Zenith is worth investing in at the moment because:

1. The stock is currently undervalued.
2. It is undervalued because of delays in completing that various transactions that the company has announced.
3. However, all of the transactions are now coming through to fruition including: Tilapia (Congo-Brazzaville) ; A new acquisition in Tunisia and the acquisition in Nigeria.
4. Also, Zenith is in a perfect position to buy other fields that are producing between 2,000-5,000bopd. The company is not bureaucratic and can make decisions and complete transactions very quickly.
5. He believes that the share price will soon reflect all of the new reserves and production that is about to be acquired.

So it looks like December could be a busy month for Zenith. We appear to be able to expect news on

a) The Nigerian transaction -which we all suspected.

b) An update on a new Congolese acquisition - which will hopefully give us access to and additional 350bod and let us reach the Tunisian target of 1,000 bopd production in Tunisia before 2022.

c) The receipt of a new 25 year license for Tilapia 2 - I doubt any of us here have forgotten last year’s Zenith Tilapia December news when the share price nearly tripled in under a week. I would certainly be happy if we were able to receive the same kind of Christmas present this year.

There was some confusion on the Norwegian boards earlier about the terms of the deal.

The old deal for $300,000 did not happen. The $300,000 was never paid (unlike the KUFPEC payment which was announced) and so the deal was just ripped up and restarted.

The new terms of the deal are, as the RNS announcement states that Zenith will pay CNPC $1,658,680 to acquire the CNAOG which holds the 22.5% interest in the North Kairouan permit and the Sidi El Kilani Concession.

As part of this deal Zenith will also acquire all of the oil which has been generated by the license and has not already been sold, which totals 30,000 barrels.

So CNAOG sold approx. 37,000 barrels of oil which had previously been due to Zenith and also charged Zenith an additional $1.3 million for the license. Zenith looked like they were struggling to get the approval for the license change from the Tunisian authorities (which is not that surprising as they would definitely rather have CNPC and KUPFEC as investors in their wells than little Zenith) and so went for an easier-to-complete version of the deal. The fact that a new deal was struck allowed CNPC to renegotiate the terms and so the fee went up to reflect the new oil price and they only gave Zenith slightly under half of the oil that was originally promised.

On the plus side, the deal is no over, it has delivered us approx. $700,000 and a 22.5% share in a concession that generates approx. 500bopd so currently 113bopd net to Zenith and hopefully increasing to 226 once we get the KUFPEC deal over the line.

Peterashbeck - I didn’t copy the Nomad into my email I just went straight to AIM and complained about both the company and the Nomad. In the interest of fairness I also wrote a separate email to AIM regulation asking them to ensure that Zenith also update the market about and to try and clear up this ownership confusion.

I do not think that Zenth Energy have done anything wrong in this whole affair but I do think that the confusion about who has access to what part of OML141 NW is damaging to the share price of both companies and the question of ownership has to be cleared up as quickly as possible. Hopefully all of these emails to AIM regulation will help to do this.

Anyway, I am going to leave this board now. My only interest in ADM Energy is regards to whether or not they still have any ownership of any percentage of the asset that Zenith are negotiating for. I will let you know if I get any further updates on my emails from Aim Regulation – either about ADM or Zenith.