Zenith Enters Share Purchase Agreement

Zenith Energy Ltd., (“Zenith” or the “Company”), announced that it has signed a share purchase agreement (“SPA”) with AIM quoted Coro Energy Plc (“Coro”) for the acquisition of Coro’s entire natural gas production and exploration portfolio in Italy (“Acquisition”).

Acquisition Highlights
• The Acquisition will add material production to the Company’s existing Italian operations, resulting in the creation of a significantly enlarged, revenue generating, low-risk production and exploration portfolio.


• Coro’s Italian portfolio consists of 100% working interests in four producing natural gas concessions: Sillaro, Rapagnano, Casa Tiberi and Bezzecca, as well as one production concession which is development ready, S. Alberto. Two exploration concessions, Laura and Santa Maria Goretti complete the portfolio.


• The Acquisition will enable Zenith to increase gross production revenue in Italy by approximately 410% with an expected yearly gross revenue of approximately €3.6 million (equivalent to approximately £3.08 million; NOK 36.5 million or CAD$5.3 million).


• Zenith will become one of the largest natural gas production operators in Italy with a total cumulative production from its Italian portfolio of approximately 55,000 standard cubic meters per day (“scm/day”) (approximately 322 barrels of oil equivalent “BOE” per day).


• The Acquisition assets generated €1.53 million in revenue (equivalent to approximately £1.31 million; NOK15,575 million or CAD$2.26 million) in the first six months of 2019 at an average cumulative production rate of 40,000 scm/ day (approximately 234 BOE per day).


• Independently assessed 2P reserves of 7.5 BCF as of 1 January 2018 (CGG Services (UK) Limited CPR – Reference No: BP512 – dated March 1, 2018).


• Production is expected to reach 113,000 scm/day following the completion of a series of targeted interventions planned during the next 6-9 months for which all necessary approvals have already been obtained.

• Consolidation of Italian portfolio will strengthen Zenith’s credentials as a natural gas producer to support the acquisition of additional natural gas production assets in other regions, including Norway.


• Enhancement of Italian operational team with the addition of highly experienced technical management fully familiar with the domestic Italian energy production environment and the potential future productivity to be achieved from the Acquisition concessions.


• Zenith’s significantly enhanced natural gas production activities in Italy are expected to give the Company increased relevance in the context of Italy-Azerbaijan natural gas industry cooperation in view of the imminent activation of the TAP (Trans Adriatic Pipeline).


Zenith and Coro entered into a conditional share purchase agreement in respect of the purchase of the entire issued capital of Coro Europe Limited by Zenith on December 2,

  1. The consideration for the Acquisition is payable in common shares in Zenith and is divided into two parts. An initial £402,000 is payable at completion in common shares in the capital of Zenith (“Consideration Shares”) at a price of £0.06 (equivalent to approximately NOK0.71 or CAD$0.10) per Consideration Share with a six-month hold period.
  2. The second part of the consideration, up to £3.5 million, is also payable in shares at the closing price of Zenith shares on the issue date plus 40 per cent. of such closing price only in the event that production of natural gas extracted and recovered from the Acquisition’s Italian assets exceeds an average of 100,000 scm/day over a period of four successive months (equivalent to approximately 590 BOE per day).

  3. Completion of the Acquisition is conditional, inter alia, on the approval of sale by the Italian Ministry of Economic Development.
    The Acquisition is also subject to final regulatory approval from the TSX Venture Exchange.

Source / More : zenithenergy

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