:lol: it is already in production But yeah a form of outsourcing is a possibility if the owner of the asset is also off taking production. There could be an transfer of ownership over time, so yes oil could be sold at a heavy discount
It will be boost the SP even if not very profitable becasue ZEN will have concluded a deal!!
"Zenith is advanced negotiations with an international oil major to sign an offtake agreement for the asset's future oil production in order to fund the Acquisition. There are no plans to issue equity consideration to fund the Acquisition. "
That can be read in different ways. The oil buyer will advance money to fund the acquisition and receive some production free of cost. Or the oil buyer receives a discount. Or somebody else funds the acquisition and a proportion of the income pays of the loan. Money is fungible
All we know about that asset is the production rate and its annual revenues of approximately US$15 million. How much will that cost to acquire I dont know, and that will shape the deal . How much cash do you think ZEN can put on the table since the SP is still declining and not really a unit of trade??
orjones , becasue the company with whom the offtake agreement is being signed is funding the acquisition without equity dilution. They will get their money back by a production sharing split. In other words ZEN isnt going to get 700 bopd
Thats what the latest RNS says. Maybe so other investors might step in to fund it
AC is more at home in this kind of environment but he started it too late. Azer hollowed out the company really badly. I thought so months ago and wished I sold out when the SP was around 4 p rather than at around 2p
Even the Tunisian deal might not provide a turn around . It produces 700 bopd and the acquisition will be funded by whoever is the offtake partner . That means the oil will be sold at a very heavy discount, and I mean heavy. ZEN is barely solvent
How do they value this well - on a npv basis ? £60 million. Some consortium of investors (possibly from the far east) with cash write a cheque ? lets not forget what happened with PVR
We all seem to think Ac will turn it around and his power of self belief seems to carry the day. Investors big and small invest in people after all. So still worth watching
Plus its entertaining. I really want to know how the story of Rig: BD 260 ends