Member Info for SEA7

Zenith has recently acquired a modern drilling rig capable of drilling to 4,500 m to carry out the fifteen-year drilling programme. Zenith started it's drilling programme by deepening one existing well (C-37 into the Lower Eocene and Upper Cretaceous intervals). One additional well (C-30) will be deepened until November 2079. Afterwards the Issuer plans to drill a new well starting the related operations by the end of 2019.

The Issuer estimated that it will be able to drill 3 to 4 wells in 2020. Zenith is planning on acquiring one additional drilling rig at the end of 2020, in order to accelerate its developments plans that provides at the proved plus probable level, provide nine wells are projected to be drilled in 2021 and up to l0 per year to the year 2035. In total,147 development wells are expected to be drilled, of these, 58 will be horizontal wells in the Mid Eocene.

The primary reasons for not increasing the daily production of oil include the poor condition of many of the Issuer's existing wells, the challenging geology of the Issuer's field, as well as the unreliability of well data and historical records from the Soviet-era which have rendered workovers in some of the Issuer's wells extremely challenging.

The Issuer intends to acquire during the year 2020 an additional workover rig and related equipment in order to satisfy, the requirements of an acceleration of its developments plan in Azerbaijan.

from the prospectus - re azer oil production...

In the subsequent months and until the date of this Prospectus the production stabilized to a 240 barrels of oil per day level.

definitely zeb

the prospectus also states that socar has no right to terminate the agreement if zenith demonstrates it is pursuing a course of action that remedies the breach of the agreement in relation to the minimum production levels by early october 2019.

as the company is drilling, i.e pursuing a course of action - the agreement is not likely to be affected

I wouldn't get too comfortable about the rating... from the prospectus.

The rating is dated October 2018 and is therefore based on assumptions that may be outdated and/or have proven to be materially inaccurate. For example, the rating was based on sales of more than CAD 45,000,000 for the calendar year 2019 (ending 3l December 2019), whereas the annual financial statements for the Financial Year 2019 (as of 31 March 2019 only provides for Group revenues in the amount of approximately CAD 6.5 million, even though it includes the first three months of the calendar year 2019.

That implies a risk, that an up-to-date rating based on current data could differ significantly from the rating assigned to the Issuer in October 2018

https://www.zenithenergy.ca/wp-content/uploads/2019/11/315-033-Prospekt-APPROVED.pdf

that is correct jsb - the markets are littered with companies that have billions of shares in issue and would love to have this kind of cash available, when it comes.

hilly - jon and others like him do not take their cues from the price action of the stock.

They buy a decent stake and then wait. They are knowledgeable enough about the industry to know what to expect, what the risks are and what the opportunity is.

he isn't going to panic because the stock price has changed and the company hasn't said much via rns lately.

people like jon fitpatrick carry out DD then commit to a decent sized position. Once purchased they leave it alone. These are minimum two or three year holds for guys like him.

chances are he won't have even noticed the drop in the price today, or any other day for that matter.

someone dumped £51k of stock at 6p

i agree appiama - the success will be down to production. Andrea seems to be able to raise cash at the drop of a hat.

At least he isn't trying to dig the wells himself.

yep - with zens rate of progress, renting an offshore rig at about $200k a day, would mean that money would be gone in no time.

Andrea can forget about buying an offshore rig as well -eyewatering cost

The deadline for submitting applications is 27 August 2019

appiama

if you look at the drilling program, you will see that to self finance needs a signficant amount of oil - well in excess of 1000bopd.

Throughout zens history they have continually stated that the company is reliant on debt and equity issues to fund itself.

Sadly the plan to be over 1000bopd by now didn't materialise and they had to change strategy - the geology is complex and Andrea tried to do it on a shoestring, with a black and decker drill from B and Q. He realised his error and we now have a more competent strategy, that should deliver, albeit a couple of years late.

my first thought was "better get oil flowing to service a debt like that" and then secondly "in the absence of immediate oil flow of over 1000bopd, then this is the next best option to get over that line and secures the company a cash runway that isn't about 5 minutes long.

About time!!

When I read the CPR and saw what the plans were, I thought that Andrea will need to come up with some serious financing and not mess about with chump change from equity issues. This rns today demonstrates that Andrea is actually serious about developing the assets and enhancing the value of the company.

These are the guys doing the seismic...

https://www.geofizyka.pl/

their snazzy promo video...

https://www.geofizyka.pl/wp-content/uploads/2015/04/2019-Geofizyka-Torun-wizyt%C3%B3wka-v6.mp4

if all you do is sell at breakeven, then the risk you took with your capital was pointless. You might as well leave it in a savings account, you would actually do better, with virtually no risk.

Buy when the stock price is depressed and may go lower, then sit and wait.

thanks pawn - did ok, then a duster