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Zenith Energy signs exclusivity agreement for production and exploration assets in Central Asia
12 Jan 2018
Canadian company Zenith Energy, the dual listed international oil & gas production company operating the largest onshore oilfield in Azerbaijan, has entered into an exclusivity agreement for the acquisition of various production and exploration licences in a Central Asian country.
- The Proposed Acquisition envisages Zenith acquiring a combined total acreage covering approx. 3,600 sq kms. Specifically, these include: production areas covering approx. 550 sq kms, and highly prospective exploration areas covering approx. 3,050 sq kms.
- Low-cost existing production of approx. 250 bopd transported via tanker to local refineries.
- The Proposed Acquisition licences are located in a prolific oil and gas basin with a proven petroleum system. These are significantly undeveloped and present a number of highly attractive field rehabilitation and exploration opportunities through the introduction of new technology and the application of international oil production expertise.
- Extensive 2D seismic performed across the license areas.
The Company will provide an update regarding the progress of the Proposed Acquisition once the due diligence process has been completed. The Proposed Acquisition remains at an early stage and there can be no guarantee that the transaction will be successfully completed. Completion of the Proposed Acquisition remains conditional on, inter alia, completion of satisfactory due diligence, the entering into of binding agreements and financing of the Proposed Acquisition.
Zenith is considering a number of funding options to finance the potential transaction including debt and equity, whilst seeking to avoid significant dilution to existing shareholders.
Exclusivity Agreement Summary
The Agreement provides that Zenith shall hold the exclusive right to negotiate the signing of the Proposed Acquisition. The Agreement will expire on the later of execution of the Proposed Acquisition, or April 30, 2018.
Andrea Cattaneo, Chief Executive Officer of Zenith, commented:
'Zenith has always made clear its intention to identify and acquire large, undeveloped onshore fields with enormous development potential. Indeed, one of the Company's defining strengths is the fact that it has real assets with large reserves in place, generating significant revenue on a monthly basis. The proposed acquisition would at this preliminary stage appear to present a valuable development opportunity for Zenith, especially on account of its significant reserves and geographic proximity to the Company's primary operational interest in Azerbaijan.
I look forward to updating the market on our progress with the transaction.'
Source: Zenith Energy