Zenith Energy has entered into final stage negotiations with a national oil authority to secure a material oil production license in West Africa.
The Potential Acquisition, formerly operated by a major international oil company, last produced at a rate in excess of 1,000 barrels of oil per day.
Following extensive due diligence, the Company believes an initial production rate of approx. 1,000 barrels of oil per day can be achieved via a rehabilitation programme, the costs of which Zenith expects will be repaid within a timeframe of 2-3 months once production has successfully been restored using a conservative oil price benchmark of US$40 per barrel.
The Potential Acquisition is in line with the Company’s strategy of identifying near-term, existing production assets which do not require material upfront capital investment and have the potential to fulfil Zenith’s mid-cap development objectives.
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.’
Source: Zenith Energy