Bidstack (LON:BIDS) are expanding into the very exciting gaming industry and have recently announced agreements with a major agency, a key step to future success. However, Bidstack are attempting to enter an extremely competitive programmatic advertising network market and will be taking on some of the world’s largest technology companies. Although Bidstack are providing innovations through the context of in-game displays such as football hoardings, they lack a significant function other digital advertising in direct engagement. The Beauty of advertising networks run by Google, Amazon and Facebook at is the ability to drive and track engagement with adverts. Whether it be display banner adverts run by Google or an advert to download an App through Instagram, advertisers are able to measure the effectiveness of their adverts by tracking clicks, downloads or sign ups and analysing the cost per engagement.

Bidstack Business Model

Here lies the fundamental flaw in Bidstack’s model. Adverts run through Bidstack’s inventory is void of opportunity for engagement. Bidstack have said they don’t want to ruin the immersive experience of gaming. This is attractive to the game developer, but not so much to potential advertisers. Can you imagine a gamer playing Fifa online and pausing their match mid flow to interact with an advert and buy a product? It seems unlikely. Firstly because the functionality isn’t there and it is very doubtful to ever be there at a meaningful scale. Secondly, and most importantly, gamers are going to have little propensity to stop their game and make third part purchases, even if they could. This removes a lot of the potential value from Bidstack’s business model when compared to the traditional digital advertising networks. However, it doesn’t render it completely worthless. The attention of gamers carries significant value. Twitch is an example of this. The challenge for Bidstack is their inventory merely replicates an out-of-home advertising model but places it in a digital environment, without the interaction enjoyed by other forms of digital advertising. This may raise questions among the major agencies when creating plans for the world’s leading advertisers.

Demographics

Despite engagement presenting a potential hurdle, Bidstack does provide value to advertisers in the form context and the ability to gain the attention of a specific demographic. Harnessing this effectively is where long term shareholder value should be created given the recent decline in social media users. The recent slow down could signal a top in advertising growth through Facebook, Instagram and Twitter. This is of course a high risk assumption given the resources of the social media giants, but it may play into Bidstack’s hands. “Bidstack is a very interesting proposition and appeals to me as a more speculative aim stock. They look to have coupled up two sectors in a partnership that will see advertising delivered to a huge demographic in a new, unique and very passive way,’ said John Woolfitt of Atlantic Capital Markets. Summarising the potential risk of Bidstack’s model John Woolfitt continued “with any company like this you must see it for what it is, this is no defensive income share and it will need potential investors to understand the concept. Shares like this should occupy the smaller more speculative section of your overall portfolio.” “That all being said the company is well positioned to take advantage of the evolving technology, and as a lot of gamers globally are now in their 30’s and have disposable income they are well positioned to catch the opportunity at a time that has now seen the consumers become a valid audience for advertising.” Bidstack (LON:BIDS) listed in 2018 at 6p per share and currently trade at 11p, having reached highs of 42p in June.

City Pub Group PLC (LON:CPC) have said to shareholders on Monday that they will miss market expectations, leaving shares in red. The firm said that they experienced “subdued” trading across the festive period, which dampened expectations. In its financial year, which ended on December 29 the firm said that it had performed relatively well. The firm saw its revenue rise 31% to £59.8 million, as like for like sales jumped 1.7%. Following the slower Christmas period, the firm said that adjusted earnings before interest, tax, depreciation, and amortisation for the year is now expected to be slightly below market expectations, between £9.1 million and £9.2 million. Notably this would see a 15% rise year-on-year, which is something for shareholders to be pleased about. The pub chain also said that the 2018 festive period was a busy one compared to this year, where business slowed. However, a number of one-off factors in the last quarter of its year held back fourth-quarter performance. “The Rugby World Cup did not have the impact that we expected. Political uncertainty culminating in the December election held back sales until the result was known and unhelpful weather during November and December dampened trading further,” said the company. “There were also disruptions on South West trains throughout December due to industrial action, which had an impact on our London estate.” “The group has a strong business model that is quick to respond to the more normal trading conditions now prevailing,” it continued. “Efforts too refocus on operating margins are already underway and this year’s performance should see the benefits of this. In addition, there are two underperforming sites that have been earmarked and actively marketed for disposal.” Looking to its new financial year, City Pub Group noted it will benefit from some recently opened pubs. It also has three large developments which will open later in the year.

Generally successful year for City Pub

In September, the firm saw its profit rise as it posted impressive financial results for the first half of FY19. In spite of their trading performance following the announcement, the Company performed well during the first half, with like-for-like sales increasing by 2.6% and revenues spiking 36% on a year-on-year basis, to £27.1 million. This led the Group’s 20% EBITDA surge, to £3.6 million, and a 19% hike in adjusted profit before tax, to £1.9 million. City Pub Group said they had opened four new pubs during the period, with their in development becoming their main focus, in lieu of further acquisitions. The Company added that it had reaped the rewards of its new regional management structure and Weekly Employee Bonus Scheme, both of which the Group said would bolster growth and incentivise staff.

Competitors – JD Wetherspoon still leads the market

In November, J D Wetherspoon plc (LON:JDW) saw their shares spike following a bullish update. The British pub chain boasted strong sales figures, which increased across the quarter as customers spent more its nearly 900 pubs across Britain and Ireland. The company reported higher demand for coffee, pink gin, real ale and breakfast. Additionally beer sales rose significantly as British consumer trends changed by the quarter. J D Wetherspoon’s like-for-like sales rose 5.3%, which exceeded both market and analyst expectations. Additionally, the firm pledged to create 10,000 new jobs over the next four years in December. Wetherspoon updated the market by saying that they plan to open between 50-60 new pubs and hotels. These new branches will be located within in small and medium-sized British towns and cities but also in London, Edinburgh, Glasgow, Birmingham and Leeds as well as the Irish cities of Dublin and Galway. “Wetherspoon will not be entering into any deal like everyone else,” a company spokesman said.

Fuller, Smith & Turner experience turbulence

Another name in the industry, in Fuller, Smith and Turner (LON:FSTA) saw their shares crash a few weeks back. In January, pub operator Fuller’s agreed to sell its historic brewing operations to Japanese brewer Asahi Group Holdings Ltd (TYO:2502) for £250 million. Fuller’s expects the higher overhead levels to remain in place until the services agreement ends in May. Following this, the now pure-play pubs and hotels operator will be able to transition its costs structure to this new focused business. The statement provided updated shareholders saying that annual profit was set to be unchanged.The firm alluded to costs with the separation of its brewing business came in significantly higher than expected. Certainly, City Pub have performed well across their financial year. The firm still has lots of growth and development to undertake, but shareholders can remain confident that 2020 will be a productive year for the firm. Shares in City Pub Group trade at 198p (-8.97%). 13/1/20 14:28BST.

Caledonia Mining (LON:CMCL) have seen their shares bounce on Monday afternoon following record production figures from its Blanket Mine. The firm said that it is considering to revise future dividends, and following the update today these could rise. At the start of the month, Caledonia said it would be paying $0.075 quarterly dividend, which was 9.1% higher than the previous figure. The firm said that it had delivered strong performance from the Blanket Gold Mine in Zimbabwe. The mine produced 16,875 ounces of gold in the last quarter of 2019, a record for the firm. The figure was 24% higher than the quarter before and 13% higher year-on-year The firms total production in 2019 was 55,182 beating internal guidance which was pitched between 50,000 and 53,000 ounces.

Caledonia remain optimistic in future outlook

Looking to 2020, the Jersey-based company sees gold production between 53,000 ounces and 56,000 ounces. Chief Executive Steve Curtis said: “I am delighted to report a production record at Blanket of 16,867 ounces in the fourth quarter. An improvement in the electricity supply and vigilant focus on grade control and production tonnage have resulted in an excellent production result for the final quarter of which our entire operational staff can be justifiably proud. “The impressive operational turnaround was achieved without any compromises on safety. This is a commendable achievement given the distractions posed by the challenging conditions experienced by our workers due to the economic environment in Zimbabwe.” “I am also pleased to see we have not lost this momentum as we start 2020 with the mine continuing to perform very well into the new year. With the improved operational performance and the current buoyant gold prices leading to healthy operating margins we expect Caledonia to continue its track record of strong cash generation,” Curtis continued. “I expect 2020 to be a landmark year for our business: we look forward to commissioning the central shaft later in 2020 which we anticipate will then deliver increased operating cash flows and reduced capital expenditure will follow.”

Shareholders remain impressed after beating annual guidance

In July, the firm said that it planned to retain its full year guidance as it updated shareholders on its Q2 activity. The Company stated that 12,712 ounces of gold were produced during Q2, which represented a 6.4% rise on the 11,948 ounces for Q1. Caledonia Mining retained its full year guidance of 53,000 – 56,000 ounces despite H1 output standing at just 24,660 ounces; this was 3.4% lower than last year’s volume of 25,582 ounces. The Company currently holds a 49% in Blanket Mine, but has penned a conditional agreement to expand this to 64%. It said it remained on target to reach its 80,000 ounces per annum target for 2022. “As at March 31, 2019, Caledonia had cash of approximately US$9.7 million. The Company plans for Blanket to increase gold production from 54,511 ounces in 2018 to approximately 75,000 ounces in 2021 and approximately 80,000 ounces by 2022,” the Company said.

Zimbabwe Operators

Firms that hold operations in Zimbabwe have also given the market solid updates over the last few months. Notably, Botswana Diamonds PLC (LON:BOD) and Vast Resources PLC (LON:VAST) have announced a deal to replace the Heritage concession agreement between the two firms. The new agreement outlines the formation of a new company which holds the interest of Vast Resources,the Chiadzwa Community joint venture and Katanga Mining (TSE:KAT). Additionally, the agreement expresses the intent to issue new shares representing 2.5% of the newly formed company to Botswana Diamonds once the detailed agreement between Katanga and Zimbabwe Consolidated Diamond Co becomes effective. Shareholders of Caledonia Mining will be pleased with the update today, as 2020 could be a year of growth and expansion for the London listed miner. Shares in Caledonia Mining trade at 668p (+5.20%). 13/1/20 13:49BST.

Feedback Plc (LON:FDBK) have told the market about signing a new deal with a US based technology firm.

Feedback said that it had agreed a commercial partnership agreement with Imagine Engineering LLC to support the installation and refitting of a modernized fluoroscopic medical equipment across the US.

Imaging Engineering is the manufacturer of an X-ray fluoroscopy product, “Insight Essentials” which enables the capture of fluoroscopy and X-ray images using low-cost hardware.

Fluoroscopy is a form of dynamic X-ray capture which enables real time, moving patient imaging and is commonly used for a number of imaging investigations within gastroenterology, orthopaedics and interventional radiology.

Under the terms of agreement, Feedback Medical, Feedback’s wholly owned subsidiary, will receive a license fee for each installation performed by Imaging Engineering and will have no commitment beyond maintaining and providing the software.

The firm also added that all intellectual property relating to the software will remain with Feedback.

Feedback will provide the core software to manage the entire system for the “Insight Essentials” product, from image capture through data management to DICOM (Digital Imaging and Communications in Medicine) networking

Feedback Medical will receive a licence fee for or each installation performed by Imaging Engineering.

Tom Oakley, CEO of Feedback plc, said:

“This partnership will allow US healthcare providers to modernise their fluoroscopic equipment to meet the needs of the next decade, with considerable savings for the provider and a reduction in equipment disposal. For Feedback, the licence fee provides us with a new stream of revenue reflecting our strategic focus on the Cadran product portfolio which includes our flagship product, Bleepa, and its commercial roll-out in 2020. We look forward to continuing to work with Imaging Engineering as it rolls out the Insight Essentials system throughout the United States.”

Feedback grow following Bleepa trial

In November, the firm updated shareholders about a new trial with Pennine Acute Hospitals NHS for its new medical communication platform, Bleepa.

Bleepa is a platform which enables clinicians to access medical grade images through smartphones, tablets and desktop computers.

Dr Georges Ng Man Kwong, Consultant Chest Physician and CCIO of Pennine Acute Hospitals NHS Trust, commented:

“Bleepa is addressing a direct clinical challenge to better support our busy respiratory clinicians (at the Royal Oldham Hospital) by improving referral process and patient care. Each referral requires rapid and reliable access to radiology images and clinical handover information, and a means of messaging referring teams and documenting outcome. Bleepa has the potential to bring this together for our clinicians and therefore for our patients. We are delighted to be involved with this innovation solution.”

The medical technology sector remains volatile

Consort Medical plc (LON: CSRT) are a noteworthy name in this sector. The firm said that interim profit was bruised due to an incident at its Aesica Cramlington manufacturing facility.

Consort’s pretax profit for the six months ended October 31 was £1.2 million, far less than the £9.6 million profit posted the year before as revenue fell 4.3% to £146.0 million from £152.5 million.

This was primarily caused by the Cramlington incident, in which a small area of the Northumberland-based operating plant was damaged in what was described by Consort at the time as “the rapid thermal degradation of a chemical resulting in the expulsion of material and contamination of the facility”.

Additionally, AorTech International plc (LON: AOR) have seen shares become volatile following research and development investments.

AorTech is focused on the commercialization of its world leading biomedical polymer technology, components and medical devices.

AorTech has, through a licence and supply agreement, all of its materials manufactured by Biomerics, a leading contract manufacturer and innovative polymer solutions provider in the USA.

The firm said in an update to shareholders said that it had widened its interim loss on costs. However, shareholders did get some consolidation with the fact that revenues had rose.

It seems that shareholders have been more focused on the revenue gains rather than the widened loss, as share price moved positively this morning.

For the six months to the end of September, the biomaterials and medical devices firm said its pretax loss widened to £239,000 from £225,000 the year before.

This was due to administrative expenses rising by 29% to £451,000 from £350,000, as a result of research & development activities.

However revenue, which comes from the licensing of AorTech’s polymer technology, grew by 27% to £299,000 from £236,000 the prior year.

Shareholders of Feedback should remain confident with the firm, as the new deal will allow them to expand into the US medical technology market which may see longer term benefits.

Shares in Feedback plc trade at 0.95p (-6.40%). 13/1/20 13:14BST.

VIctrex PLC (LON:VCT) have told shareholders that they will be partnering with a Chinese firm to build a manufacturing unit in China.

Shares in Victrex trade at 2,471p (-0.099%). 13/1/20 12:50BST.

VIctrex have said that they will tie up a deal with Yingkou Xingfu Chemical Co Ltd to build a manufacturing plant in Liaoning, in the north east of China.

Victrex said they “already has an established relationship with its joint-venture partner through its monomer supply chain, with Yingkou Xingfu having significant experience of developing and operating chemical facilities in China which meet international quality, process and environmental standards.”

Through its Hong Kong subsidiary, Victrex will own three quarters of the joint-venture, and will aim to build a polyether ether ketone, or PEEK, polymer manufacturing facility.

The company said it will invest £32 million in the partnership, and the facility will be capable of producing 1,500 tonnes of polymers per year.

This comes at a good time for Victrex, as it follows the China 2025 initiative, unveiled by the country in 2015, which aims to increase China’s presence as a competitive global player in the manufacturing industry by 2025.

Jakob Sigurdsson, Chief Executive of Victrex, said: “This investment is in line with our record of not only investing ahead of demand, but in complementing and further differentiating our range of PEEK and PAEK grades, as well as setting the stage for specific geographic growth, whereby we can capitalise on the significant opportunities in China and the Asia Pacific region by having a competitive manufacturing presence there.

“Alongside the Made in China 2025 initiative, some of our increasingly diverse application areas mean our customers require a quality and differentiated PEEK offering. Whilst we already manufacture a range of PEEK and PAEK grades, this will enhance our portfolio, making us even better positioned in a region where we have seen strong growth in recent years and continue to see attractive opportunities, aligned to our know-how and strong technical and application development capabilities.

“Overall, we believe this is a good entry point to a China manufacturing operation, working with an established partner and offering an attractive returns profile.”

Victrex build following slow update

At the start of December, the firm saw its shares dip following a modest update.

In the twelve months to September 30, Victrex recorded pretax profit of £104.7 million, down 18% on the £127.5 million reported the year before. Additonally, Revenue fell 9.8% year on year to £294.0 million from £326.0 million.

The company lowered its total dividend per year to 59.56 pence, down 58% on the 142.24p distributed the year before.

Victrex saw a 15% drop in group sales to 3,751 tonnes from 4,407 tonnes the year before.

The company explained: “This reflects the cyclicality in Automotive and the associated impact on our Value Added Resellers segment, together with some de-stocking, with supply chain inventories running very low.”

The company also noted the “weaker” Electronics market, with both the semiconductor and smartphone markets down.

Victrex said a further headwind was the “tough” year on year comparative in its Consumer Electronics business, where it signed a large contract in the prior year. Excluding that contract, total group sales are down 12%.

Automotive Industry slumps – one of Victrex’s biggest customers

The automotive industry is one of Victrex’s biggest customers, however 2019 was a very slow year for car manufacturers and retailers.

Notable updates came from Nissan (TYO:7201) who saw their shares slide on November 13, as the firm cut its full year forecast.

Nissan’s demand was hit by a strong yen and falling sales. Its poor performance highlights stagnation in the progression of the global automotive industry.

Nissan outlined a new executive team appointment, who are set to takeover on December 1st following a string of poor performances.

The scale of the recovery that is needed is evident as Nissan reported their second worst quarter performance in 15 years.

After the appointment of Chairman Ghosn, business has gone both after facing falling profits, uncertainty over management and tensions with shareholders.

Additionally, Renault (EPA:RNO) saw its shares in red after the firm cut its 2019 guidance as a result of “less favourable” economic environment.

The firm said it now expects its group revenue to decline between 3% to 4%, “due to an economic environment less favourable than expected and in a regulatory context requiring ever-increasing costs”.

Renault added that its revenue for the third quarter amounted to €11.3 billion, down by 1.6% from the €11.5 billion figure recorded in the third quarter of 2018.

The car manufacturer continued to add that “the Automotive operating free cash flow should be positive in H2 while not guaranteed for the full year”.

Moreover, Renault said that is management will review the “Drive the Future” mid-term plan targets introduced in 2017.

The announcement that Victrex have made today will certainly please shareholders, and gives an opportunity of growth in a young Chinese market.

Faron Pharmaceuticals Oy (LON:FARN) have said that they have won approval from the MATINS trial’s data monitoring committee to expand the clinical trial of its Clevegen cancer drug.

The MATINS clinical trial is investigating the drug, which targets both metastatic cancers, forms of the disease which spread to new areas of the body, and inoperable tumours, which cannot be removed from the body surgically.

Faron said that the committee who are monitoring the drug have accepted their proposal that the the initial Clevegen dose for part II of the study should be 0.3 milligrams per kilogram.

A total of ten late-stage colorectal, or bowel, cancer patients are expected to be dosed in this 0.3 milligrams per kilogram cohort, including two patients who had previously received this dose in the earlier part I of the study.

In the initial phase of the study, patients received Clevegen dosage amounts of 0.1 milligramme per kilogramme, 0.3 milligrams per kilogramme, 1.0 milligrams per kilogramme, 3.0 milligrams per kilogramme or 10 milligrams per kilogramme.

Primarily intended to investigate safety and tolerability, the completed Part I of the MATINS trial has already shown that Clevegen administration promoted immune activation in all of the dosed patients.

Dr. Markku Jalkanen, Faron’s CEO, said:

“We continue to be impressed by the potential of Clevegen and are very pleased to have the DMC’s support for the commencement of Part II of the MATINS trial. At just 0.3 mg/kg the dose could provide an unusually high safety margin for the use of this potential therapy as a stand-alone treatment or in combination with other cancer therapies. The decline in expression of negative immune checkpoint receptors post Clevegen dosing warrants expansion of Clevegen testing in numerous cancer types and therefore we will now ensure a rapid expansion of Part II of the MATINS trial to continue investigating the safety and efficacy of Clevegen in various cancer cohorts.”

Developments to Cancer medication

AstraZeneca (LON:AZN) have told shareholders that they have sold two cancer drug rights for $198 million, which saw shares spike.

The firm said that it had sold the rights to drugs Arimidex and Casodex in a number of countries to Juvise Pharmaceuticals for up to $198 million.

Astra added that it had sold the commercial rights for these drugs in numerous countries which included France, Austria, Germany, Cyprus, Turkey, Morocco, Mali, and Cameroon.

Arimedex and Casodex treat mainly prostate and breast cancer, however they have recently lost their compound patent protection in the countries in which AstraZeneca sold to.

In 2018, Arimidex saw sales of $37 million in the countries covered by the new agreement, while Casodex sales were $24 million.

Biotechnology and cancer therapy development group ValiRx Plc (LON:VAL) have also invested heavily into this market.

The company stated that the full-year loss could largely be pinned on expenditure on developing and proving its cancer treatment candidates. It is advancing its clinical trials of the VAL201 prostate cancer treatment and said it was in the pre-clinical stage for other treatments.

In a statement to investors, Company Chairman Oliver de Giorgio-Miller said, “Given the risk-averse funding climate in the reporting period, we sustained momentum in terms of adding value to our assets by advancing VAL201 in the UCLH prostate cancer clinical trial and progressing the pre-clinical advancements of the VAL101 and VAL301 compounds, to bring these closer to the Phase I ready stage.”

It seems that Faron are bringing something unique into the market, and shareholders will be keen to see how the full trial unfolds.

Shares in Faron trade at 277p (+1.65%). 13/1/20 12:36BST.

PetroTal (LON:PTAL) have said on Monday that they are looking to expand production capacity in 2020.

PetroTal is a oil and gas development and production company domiciled in Calgary, Alberta, focused on the development of oil assets in Peru.

PetroTal’s flagship asset is the Bretaña oil field in Peru’s Block 95 where oil production was initiated in June 2018, six months after acquisition, and within 18 months has exceeded the initial 10,000 bopd goal.

In 2019, the firm produced over 1.5 million barrels of oil giving an average production figure of 4.131.

This was significant for the firm, as this showed a huge raise from the year before, and following these gains it seems that PetroTal want to go one step further.

Average production from Peru’s Bretana field within the fourth quarter of 2019 was 7,757 barrels of oil per day which showed a massive climb of 77% from the quarter previously.

Since the end of 2019, the figure has further risen to 12,500 average per day.

Texas-based PetroTal said the 5H well is continuing to perform above expectations, producing 240,000 barrels of oil in the first 30 days of operations.

The company will be announcing, within the next week, its 2020 budget, which will include a plan of achieving an exit rate production figure of 20,000 barrels per day at the end of 2020.

Manolo Zuniga, President and Chief Executive Officer, commented:

“We’re pleased that we were able to exit 2019 at the upper end of the previously announced guidance, a new record oil production level for PetroTal. The entire PetroTal team worked extremely hard to accommodate the strong oil production of the 5H well during the CPF commissioning phase. Additionally, the implementation of the PetroPeru oil sales contract, enables the Company to receive regular monthly revenues for its oil production.”

PetroTal build on last few updates

At the end of November, the firm saw its shares in green as it gave an optimistic production guidance update.

PetroTal reported the completion of drilling at its second horizontal well on the Bretana field in Peru, which gave shareholders optimism on Monday.

Following the completion of the Bretana field operation, the firm increased its year-end production guidance which would have appeased shareholders.

The 5H well reached the target Vivian formation at the prognosed vertical depth of 2,696 metres, PetroTal said, and 700 metres of the planned 870 metres horizontal section have been drilled, which is inside the main productive oil reservoir.

This will allow the expansion of nominal production facility to 10,000 barrels of oil per day, and 40,000 barrels of water per day.

Additionally, the firm just before Christmas reported a new production record.

The firm said it had completed completed the 5H well, its second horizontal well, at its 100%-owned Bretana oil field in Block 95 in Peru.

The well was completed on time and costs came in 20% under the original budget of $14.5 million, which was a noteworthy accomplishment for shareholders to take.

The initial three-day production rate was 8,250 barrels of oil per day, exceeding management’s expectations. Bretana was able to record production of over 9,000 barrels per day, a record PetroTal said, with only two of the six wells online.

The hungry nature of PetroTal is something which will impress certainly both shareholders and the market. Following these expectations, there will be a hope that the firm can deliver consistent growth across the year. Shares in the firm trade at 31p (+4.43%). 13/1/20 12:24BST.

Zenith Energy (LON:ZEN) have told the market on Monday that it has agreed a 20% stake with Anglo African Oil and Gas (LON:AAOG) for their operations in Congo.

The firm said that a put-and-call option has been formally signed for the last 20% stake in AAOG’s Congolese operations.

The two parties have agreed that this option can only be exercised by Zenith on January 16, 2021.

Another clause was inserted saying that the option is only valid if total production from Tilapia has never exceeded an average of 2,000 barrels a day for any period of 30 consecutive days.

Zenith will have to pay £1 million in shares if it does decide to exercise the option.

AAOG can only exercise the option, on the same day as Zenith, if production has averaged at least 4,000 barrels a day for 30 consecutive days prior to January 15, 2021.

Andrea Cattaneo, Chief Executive Officer, commented:

“We are pleased to have agreed these terms with AAOG for its residual 20 percent holding in AAOG Congo. The Tilapia asset has, we believe, potentially transformational production potential. Indeed, our primary operational goal shall be to source a fully inspected and functional rig to begin drilling operations at the earliest opportunity in TLP-103C to test the productivity of the Mengo and Djeno horizons.

The aforementioned terms will further ensure that, in the event of future success, both Zenith and AAOG shareholders will enjoy the fruits of victory.We look forward with excitement to the challenge ahead.”

Sarah Cope, chair of AAOG, added: “We are very pleased to have agreed these terms with Zenith which protects the upside value for shareholders in AAOG in the event that Zenith succeeds in increasing production to 4,000 barrels per day.

“The board believes this will give the company’s shareholders comfort in AAOG’s ability to liquidate its holding in a successful AAOG Congo following the investment that Zenith has committed to make into Tilapia.”

Initial deal announcement

Last week, the deal between the two firms hit headlines, which saw Anglo African shares crash.

The firm said that it has agreed a deal with both Riverfort (LON:RGO) and Zenith Energy for two separate financing deals to allow the company to continue operating.

Following the lack of funds and a recent share subscription, Anglo African entered negotiations with Riverfort for a convertible note loan.

However, a deal has not be struck. Riverfort have agreed terms where Anglo will receive an initial tranche of £250,000, if shareholders approve the Zenith deal, and a further £50,000 every month until negotiations over the convertible notes concludes, which leaves shareholders will power.

Zenith has also agreed to advance a £250,000 loan to AAOG to help with its cashflow position. This loan, whilst subject to shareholder approval, is not contingent on the sale of AAOG Congo. The loan is for an initial six month period but may be extended for an additional three months.

Anglo already hold a 56% interest in the Tilapia field in the Republic of the Congo. Once the transaction is complete, Anglo African Oil & Gas will become a cash shell on AIM.

It intends to use the proceeds from the disposal to finance its day-to-day operations and consider potential reverse takeover options.

Zenith build on Italy Deal

Zenith have been quick to build on the deal with Coro Energy (LON:CORO) to sell operations in Italy.

The deal which has been formalized will value at £3.9 million, which led to the reflections in share price movements for both firms.

The initial consideration for the Italian natural gas production and exploration portfolio is £400,000, payable by Zenith to Coro in the form of 6.7 million new Zenith shares priced at 6.0 pence each.

Then, provided the portfolio achieves average daily production of 100,000 standard cubic metres per day on average for four successive months, a up to £3.5 million in Zenith shares will be due to Coro. This production figure represents approximately 590 barrels of oil equivalent per day.

The deal will make Zenith one of Italy’s largest natural gas production operations with total production at 55,000 cubic meters per day.

Zenith CEO Andrea Cattaneo said: “There are a number of opportunities to increase production from current levels in the acquired assets through targeted relatively low-risk well interventions, also present in our existing Italian portfolio. Our newly enhanced technical team and financial resources will enable Zenith to apply renewed focus on its Italian portfolio.”

Zenith seem to be expanding their operations globally, which is something that will excite shareholders.

Upon the completion of this deal, Zenith will have started 2020 in a strong manner and will hope that this can continue across the year.