Zenith Energy close to purchasing new asset in West Africa

Zenith Energy close to purchasing new asset in West Africa

Zenith Energy Ltd (LON:ZEN) have said that they are close to purchasing a new asset for production in West Africa.

Zenith are yet to formally name the new asset, however the firm did say that it last produced over 1,000 barrels of oil per day.

The firm added that negotiations are still ongoing with an unnamed “national oil authority”.

The rate of production is certainly impressive for the potential acquisition, and Zenith have expressed intentions to get the facility operating at maximum production. The energy firm noted that a rehabilitation program might be required to restore the production.

The cost of this program would be spread over two or three months using a benchmark price of $40 per barrel of oil.

Andrea Cattaneo, Chief Executive Officer, commented:

“We believe the acquisition of the asset could represent a unique opportunity for achieving a quantum leap in Zenith’s development. The Potential Acquisition will complement our recent acquisition in the Republic of the Congo and enlarge our footprint in a prolific oil production region.

I take the opportunity to thank our advisors who have enabled us to achieve rapid progress in pursuing development opportunities in Africa during recent months.

I look forward to providing further updates in due course.”

Zenith strike deal with AAOG

A few weeks back, Zenith told the market that they had struck a deal 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.

Shares in Zenith Energy trade at 1p (-4.51%). 12/2/20 11:23BST.