Last checked at 16 Jul 2018 07:00
July 16, 2018
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 ("MAR"). Upon publication of this announcement via a regulatory information service ("RIS"), the inside information contained in this document is now considered to be in the public domain.
ZENITH ENERGY LTD.
("Zenith" or the "Company")
Update on Proposed Indonesian Acquisition & Appointment of Operations Manager
Zenith Energy Ltd. ("Zenith" or the "Company") (LSE: ZEN; TSX.V: ZEE), the dual listed international oil & gas production company operating the largest onshore oilfield in Azerbaijan, announces an update on its proposed Indonesian acquisition (the "Proposed Acquisition"), first announced to the market on March 28, 2018, after the signing of a Binding Exclusivity and Option Agreement (the "Binding Option").
The Company can now report, following its announcement dated July 2, 2018, and a visit by management to Indonesia, that the ultimate vendor of the Proposed Acquisition has decided not to entertain further negotiations with Zenith about certain discrepancies identified in the Company's accounting due diligence report of the Proposed Acquisition's financial accounts, which report Zenith had used as reference for pricing the Proposed Acquisition under the Binding Option agreement.
Zenith's Board of Directors has therefore determined not to proceed with completion of the Proposed Acquisition due to the vendor's refusal to renegotiate the total consideration. As aforementioned, the accounting due diligence process evidenced negative discrepancies largely exceeding 5% of the book values declared in the Proposed Acquisition's financial statements dated February 28, 2018.
In addition, the vendor and Zenith take different views regarding the return of the deposit advanced by Andrea Cattaneo, Chief Executive Officer & President of the Company, in good faith and support of the Proposed Acquisition. Zenith and Andrea Cattaneo consider the retention of the deposit by the vendor to be contrary to the mutually agreed terms and the parties' intention.
Azerbaijan Update
The Company is pleased to announce that it has appointed Mr. David Sadoway to the position of Operations Manager of Zenith Aran, its fully-owned Azerbaijan subsidiary, effective September 1, 2018.
Zenith has accepted Mr. Mike Palmer's resignation with retroactive effect from July 1, 2018.
Mr. Sadoway is a Canadian national and has thirty years of experience in completion and workover operations in Kazakhstan, Canada and Azerbaijan. He has held a number of managerial roles as a workover and completions specialist, most notably at Nations Energy and Legacy Oil & Gas in Kazakhstan.
Andrea Cattaneo, Chief Executive Officer, commented:
"I am very pleased that Zenith has been able to secure the services of David Sadoway, who has a skillset that is highly relevant to our work to derive the maximum upside potential from our Azeri assets. His specialisation is workover and completion operations and he has a proven track-record of success in delivering results, having worked his way from roughneck to his current position during thirty years of experience across various projects in Kazakhstan, Azerbaijan and Canada.
David supports our view that the field has significant potential and that, with the right equipment and funding, there are many opportunities to increase production. He will be coordinating the work programmes for the planned workovers of Z-21, Z-28 and Z-3 in the Zardab field, and subsequently MOC-1 in the Muradkhanli field. Zenith is very positive that the arrival of new management and the right equipment will enable the Company to unlock the significant value of its Azeri assets."
David Sadoway, Operations Manager, Zenith Aran, the Company's Azerbaijan-based fully owned subsidiary, commented:
"I am pleased to be here. It is all about results for me. With the right equipment and funding, I am confident we can do well. There is a big opportunity to turn this around and I intend to seize it. I look forward to assuming my position."
For further information please contact:
Zenith Energy Ltd.
Andrea Cattaneo
Chief Executive Officer
E-mail: info@zenithenergy.ca
Tel: +1 (587) 315 9031
Vigo Communications - PR Adviser
Patrick d'Ancona
Chris McMahon
Kate Rogucheva
Tel: +44 (0) 20 7830 9700
Daniel Stewart & Company Plc - (Joint Broker)
Robert Emmet- Corporate Broking
Nikhil Varghese- Corporate Finance
Tel: + 44 (0) 207 776 6550
Optiva Securities - (Joint Broker)
Christian Dennis
Tel: + 44 (0) 203 137 1903
Allenby Capital Limited - (Financial Adviser)
Nick Harriss
Nick Athanas
Tel: + 44 (0) 203 328 5656
Notes to Editors:
Zenith Energy Ltd. is an international oil and gas production company, dual listed on the TSX Venture Exchange and London Stock Exchange.
The Company operates the largest onshore oilfield in Azerbaijan following the signing of a 25-year REDPSA, (Rehabilitation, Exploration, Development and Production Sharing Agreement), with SOCAR, State Oil Company of the Azerbaijan Republic, in 2016.
The Company's primary focus is the development of its Azerbaijan operations by leveraging its technical expertise and financial resources to maximise low-cost oil production via a systematic field rehabilitation programme intended to achieve significantly increased revenue. Zenith also operates, or has working interests in, a number of natural gas production concessions in Italy. The Company's Italian operations produce natural gas, natural gas condensate and electricity.
Zenith's development strategy is to identify and rapidly seize value-accretive hydrocarbon production opportunities in the onshore oil & gas sector. The Company's Board of Directors and senior management team have the experience and technical expertise to develop the Company successfully.