The latest focusIR Investor Webinar with speakers from: Pyx Resources, Helix Exploration, Fulcrum Metals and Metals One takes place on Tuesday 23rd July. Please register here.

Less Ads, More Data, More Tools Register for FREE

Pin to quick picksZenith Energy Regulatory News (ZEN)

Share Price Information for Zenith Energy (ZEN)

London Stock Exchange
Share Price is delayed by 15 minutes
Get Live Data
Share Price: 1.85
Bid: 1.80
Ask: 1.90
Change: 0.00 (0.00%)
Spread: 0.10 (5.556%)
Open: 1.85
High: 1.85
Low: 1.85
Prev. Close: 1.85
ZEN Live PriceLast checked at -

Watchlists are a member only feature

Login to your account

Alerts are a premium feature

Login to your account

Update on legal claim against SMP

11 Nov 2020 07:30

RNS Number : 9077E
Zenith Energy Ltd
11 November 2020
 

November 11, 2020    

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 legal claim against SMP

Zenith Energy Ltd. ("Zenith" or the "Company") (LSEZEN; OSE: ZENA-ME), the listed international oil & gas production company focused on pursuing African development opportunities, is pleased to provide an update on the legal claim (the "Claim") initiated during 2019 by its subsidiary in the Republic of the Congo,  Anglo African Oil & Gas Congo S.A.U ("AAOG Congo"), against Société de Maintenance Pétrolière ("SMP"), the rig contractor employed for drilling services in wells TLP-103 and TLP-103C of the Tilapia oilfield, following a series of significant performance failures by the SMP 102 rig (the "Rig") during drilling activities.

 

Background

 

On July 15, 2019, AIM quoted Anglo African Oil & Gas plc ("AAOG"), the previous owner of AAOG Congo prior to its acquisition by Zenith, made an announcement confirming that AAOG Congo had made the Claim following poor performance by SMP in the drilling of wells TLP-103 and TLP-103C, and the refusal of SMP to engage in negotiations to cover the significant cost overruns that had been incurred by AAOG Congo as a result of this.

 

The Claim was launched in the Paris commercial court against SMP to recover costs of US$3.1 million relating to SMP's unsatisfactory performance.

 

In taking the decision to launch the Claim for costs against SMP the following reasons were considered significant at the time:

 

· AAOG Congo had maintained extensive, contemporaneous technical records of the failures of the Rig and the losses and delays that were caused as a result;

 

· SMP had not put forward evidence, of any kind, to suggest that Rig performance was not the cause for cost overruns; and

 

· Advice from International counsel in London, Paris and the Congo was that the Claim had merit.

 

To strengthen its position, in addition to the commencement of the Claim, AAOG Congo also withheld payment of SMP's final invoice for an amount of approximately US$650,000, and exercised a retention right over the Rig which, at the time, was positioned within the Tilapia oilfield.

 

SMP subsequently retaliated by obtaining a number of unjustified seizure orders over the fixed assets of AAOG Congo in the Republic of the Congo, as well as over its local bank accounts.

 

As detailed in AAOG's above-mentioned announcement dated July 15, 2019, the seizure orders were unenforceable because AAOG Congo's fixed assets were owned in partnership with SNPC, the National Oil Company, and consequently could not be seized.

 

Further, the granting of these orders had no bearing on the merits of the Claim launched in the Paris courts by AAOG Congo against SMP.

 

Under the rules and conventions of the Paris commercial court, mediation between the parties engaged in a dispute is a recommended course of action. As a result, a supervised mediation meeting took place during the Autumn of 2019.

 

On December 11, 2029, AAOG announced that mediation efforts had proven unsuccessful and that, as a result, AAOG Congo would continue to vigorously pursue its Claim in the Paris courts.

 

Update

 

The Company can confirm that it has recently been successful in obtaining a revocation of the court order that had wrongfully blocked its bank accounts. An amount of approximately US$36,000 has now been unfrozen and made available to provide additional funding for AAOG Congo.

 

Zenith believes the Claim launched by AAOG Congo has merit, especially on account of the significant evidence collected at the time to substantiate its position.

 

Following interactions with its French legal advisers, the Company has decided to continue vigorously pursuing the Claim to recover costs of approximately US$3.1 million. The possibility of increasing the Claim amount is also being explored in consideration of the commercial damages suffered by AAOG Congo as direct result of SMP's drilling performance.

 

The Company has not provided for the potential recovery of such costs in its cashflow projections. Therefore, any success in this matter would enhance the Company's cash position.

 

 

 

Andrea Cattaneo, Chief Executive Officer, commented:

 

"We are pleased to have successfully obtained the revocation of the court order that had resulted in AAOG's bank accounts being frozen. The recovery of approximately US$36,000 has a symbolic significance because it shows that we are steadily achieving the gradual recovery of moneys rightfully held by, as well as owed to, AAOG Congo.

 

The Company has consulted with its French legal advisers and, having evaluated the merits of the case and the significant potential compensation payment of at least US$3.1 million, intends to zealously pursue AAOG Congo's Claim. To this end, we plan to reach out to third party financing providers, specialised in legal cases such as these, in order to avoid any cash burden being incurred by the Company in pursuing the Claim going forward.

 

I look forward to updating the market regarding further progress in the Republic of the Congo in the period ahead."

 

 

Further Information:

Zenith Energy Ltd 

 

Andrea Cattaneo, Chief Executive Officer

Tel: +1 (587) 315 9031

 

E-mail:  info@zenithenergy.ca

Allenby Capital Limited - Financial Adviser & Broker

 

Nick Harriss

Nick Athanas

Tel: + 44 (0) 203 328 5656

 

Notes to Editors: 

Zenith Energy Ltd. is an international oil and gas production company, listed on the London Stock Exchange (LSE:ZEN) and the Merkur Market of the Oslo Stock Exchange (ZENA:ME).

Zenith's development strategy is to identify and rapidly seize value-accretive hydrocarbon production opportunities in the onshore oil & gas sector, specifically in Africa. The Company's board of directors and senior management team have the experience and technical expertise to develop the Company successfully.

 

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.
 
END
 
 
MSCBMBJTMTBBTBM
Date   Source Headline
7th Jun 20242:05 pmRNSAdmission to trading of Common Shares
6th Jun 202412:30 pmRNSPayment of 2026 multi-currency bond coupon
4th Jun 20249:15 amRNSUpdate on Arbitrations against Republic of Tunisia
7th May 20247:00 amRNSUpdate on ICC Arbitration proceedings against ETAP
22nd Apr 20241:25 pmRNSNew Bond Exchange Offer
17th Apr 20246:20 pmRNSUpdated TCFD Disclosures in Annual Report
11th Apr 202411:45 amRNSSuccessful Conclusion of Bond Exchange Offer
2nd Apr 20247:00 amRNSTotal Voting Rights
20th Mar 20248:30 amRNSUpdate on Arbitrations against Republic of Tunisia
12th Mar 20245:50 pmRNSUpdate on Italian Energy Production Portfolio
11th Mar 20241:00 pmRNSPositive support for Bond Exchange Offer
1st Mar 20241:01 pmRNSUpdate on Bond Exchange Offer
22nd Feb 20242:15 pmRNSAdmission to trading of UK Financing Common Shares
13th Feb 20245:15 pmRNSCompletion of financing with institutional support
25th Jan 20247:30 amRNSBond exchange offer to investors
18th Jan 20241:40 pmRNSUpdate on United States portfolio
29th Dec 202312:02 pmRNSPublication of Half-Year Results
20th Dec 202311:50 amRNSAcquisition of Devonian Petroleum Limited
6th Dec 202311:00 amRNSICC Arbitration for SLK against Tunisia
30th Nov 202312:30 pmRNSNew Kazakhstan subsidiary and pre-contract terms
29th Nov 20239:40 amRNSICC Arbitral Tribunal awards costs
28th Nov 20237:00 amRNSMoU – South Sudan
9th Nov 202312:15 pmRNSPayment of 2026 multi-currency bond coupon
1st Nov 20239:15 amRNSICC Arbitration proceedings against ETAP
25th Oct 20232:30 pmRNSCommencement of Trading on OTCQB Venture Market
18th Oct 202311:01 amRNSSeizure on SMP's bank account
10th Oct 202311:45 amRNSAssignment of new Debt Issuer Credit Rating
4th Oct 20232:00 pmRNSAdmission to trading of Common Shares
29th Sep 202311:05 amRNSConfirmation of Debt Issuer Credit Rating
25th Sep 20236:30 pmRNSImplementation of Share Consolidation
22nd Sep 20236:30 pmRNSShare Consolidation
20th Sep 20233:50 pmRNSShare Consolidation
19th Sep 20239:45 amRNSThird MOU for oil production asset in Kazakhstan
15th Sep 20239:30 amRNSSecond MOU for oil production assets in Kazakhstan
4th Sep 202310:40 amRNSMOU and Exclusivity for asset in Kazakhstan
4th Sep 20237:00 amRNSTermination of SPA for acquisition of OMV Yemen
29th Aug 20237:00 amRNSAcquisition of US listed company
4th Aug 20235:20 pmRNSUpdate on Benin PSC
3rd Aug 202310:06 amRNSThird Acquisition in USA
2nd Aug 202312:00 pmRNSPayment of 2024 multi-currency bond coupon
31st Jul 202311:36 amRNSPublication of 2023 FY annual audited report
10th Jul 20238:15 amRNSConservative seizure of ETAP bank account
5th Jul 202311:35 amRNSSecond acquisition in USA
3rd Jul 202311:10 amRNSCourt rejects SMP’s request and awards damages
23rd Jun 20237:00 amRNSMOU with Ministry of Petroleum – South Sudan
7th Jun 20237:00 amRNSICSID Arbitration against the Republic of Tunisia
2nd Jun 20237:00 amRNSFirst Agreement for USA acquisition campaign
26th May 20238:00 amRNSStrategy Update
18th May 202312:21 pmRNSPayment of multi-currency bond coupon
17th Apr 20237:00 amRNSResult of AGM and Update on Block 1 PSC in Benin

Due to London Stock Exchange licensing terms, we stipulate that you must be a private investor. We apologise for the inconvenience.

To access our Live RNS you must confirm you are a private investor by using the button below.

Login to your account

Don't have an account? Click here to register.

Quickpicks are a member only feature

Login to your account

Don't have an account? Click here to register.