TUNISIA – Zenith Energy, an international oil & gas production company, has announced that its newly incorporated fully owned subsidiary, Zenith Energy Africa Limited (ZEAL), has entered an agreement to buy Candax Energy Ltd’s unit Ecumed Petroleum Zarzis Ltd for US$150,000.
Ecumed holds a 45% interest in the Ezzaouia concession oilfield asset in Tunisia.
The oil & gas company with production, exploration and development assets in Africa and Italy said an additional US$100,000 will be satisfied through the issue of Zenith shares.
A royalty of US$0.35 per barrel of hydrocarbons produced from the Ezzaouia oilfield also will be payable, with the royalty not being less than US$50,000 per annum for 10 years, it added.
“The Board strongly believes in Zenith’s future successful establishment in Tunisia and we intend to capitalise on certain additional acquisition opportunities that may present themselves in the near-term.”
Andrea Cattaneo – CEO, Zenith
Zenith said the acquisition has development obligations during the course of the 20-year concession, including the drilling of a side-track, the drilling of a replacement well and a development well.
Planned field production optimisation and workover activities are expected to increase Ezzaouia’s gross production to 1,000 barrels of oil per day, which could potentially result in a production of 450 barrels of oil per day net to Zenith.
“I am delighted to have completed this transaction which reflects the continued successful implementation of our development strategy – that of acquiring prospective oil production and development assets – and delivers immediate daily production revenue to Zenith during a time of material appreciation in the price of oil,” Andrea Cattaneo, Chief Executive Officer of Zenith said.
“Ezzaouia has significant unexploited potential which we intend to develop progressively via a combination of workover and drilling activities. By way of this acquisition, we have further reinforced our settlement in Tunisia, enabling a demonstration of our technical and financial capabilities locally.
“The Board strongly believes in Zenith’s future successful establishment in Tunisia and we intend to capitalise on certain additional acquisition opportunities that may present themselves in the near-term.”
Ezzaouia is located in onshore Tunisia on the Zarzis peninsula, south of the island of Djerba in the southern Gulf of Gabes. It was first irst discovered by Marathon Petroleum Corporation in 1986, with production activities starting in 1990 with a peak production being achieved of 35,000 barrels of oil per day in 1991.
Approx. 25,000 barrels of oil are currently held in storage with a commercial value of approx. US$1.25 million and Zenith will shortly commission a new Competent Person’s Report in compliance with Canadian securities laws, specifically the COGE Handbook and National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities, in order to obtain an updated reserves evaluation for the Acquisition.
Planned field production optimisation and workover activities are expected to increase Ezzaouia gross production to 1,000 bopd (potentially resulting in a production of 450 bopd net to Zenith).
Ezzaouia has modern oil treatment and storage facilities with a total field storage capacity of approximately 20,000 barrels of oil.
MARETAP, the joint operating company, operates an oil storage terminal, connected to Ezzaouia by way of two pipelines (one for gas and one for oil respectively), at the port of Zarzis, with a storage capacity of approximately 200,000 barrels of oil, from which all oil production from Ezzaouia is exported to the international markets.
