12th Feb 2020 09:24
(Alliance News) - Shares in Zenith Energy PLC rose Wednesday as the company said it is close to purchasing a "major" production asset in West Africa.
The stock was trading at 1.68 pence per share on Wednesday morning in London, up 8.4%.
The unnamed asset last produced at over 1,000 barrels of oil per day, Zenith said. The negotiations are with an unnamed "national oil authority", the company added.
Zenith believes a rehabilitation programme can restore this rate of production, the cost of which would be repaid within two to three months using a benchmark oil price of USD40 per barrel. Brent oil was trading at USD55.15 per barrel on Wednesday morning.
"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," said Chief Executive Andrea Cattaneo.
"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 agreed in December it would be buying a stake in the Tilapia field in the Congo for GBP1 million off fellow London-listed firm Anglo African Oil & Gas PLC. Zenith is buying 80% of AAOG's Congolese business, which owns 56% of Tilapia.
Zenith also currently has assets in Azerbaijan, with 75 wells across three fields. It also owns some gas production and exploration sites in Italy.
By George Collard; [email protected]
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