26th Feb 2020 14:37
(Alliance News) - Zenith Energy Ltd on Wednesday said it is in advanced negotiations to contract a rig to be used to perform drilling operations in the Republic of Congo.
This comes after the oil & gas producer said in December that it agreed to buy 80% of Anglo African Oil & Gas' Congolese business Anglo African Oil & Congo SAU. Anglo African Oil & Congo owns 56% of the Tilapia oilfield.
Earlier in February, Zenith said it had identified two drilling rigs to performed planned drilling operations. On Wednesday, it confirmed that it is in advanced discussions to contract one of the identified drilling rigs, which is expected to become available in the next 30 days. The company intends to commence drilling in April.
"It is the board's view that there is significant potential for near-term value creation in Zenith's equity due to a number of business development activities we are pursuing, foremost amongst which is completion of the AAOG Congo acquisition and the planned drilling activities in the Mengo and Djeno horizons," said Zenith Chief Executive Andrea Cattaneo.
"We remain fully focussed on achieving completion, having recently met extensively with all the relevant authorities in the Republic of the Congo. As evidenced by our advanced negotiations with a local drilling contractor, we intend to commence operational activities without delay once completion is achieved," Cattaneo added.
Drilling is expected to be funded by the company's EUR25 million medium term notes programme, as well as certain repayments due to AAOG Congo from Societe Nationale des Petroles du Congo as a result of past work performed for a total amount of around USD5.3 million.
Zenith Energy shares were trading 8.2% lower at 1.17 pence each on Wednesday afternoon in London.
By Ife Taiwo; [email protected]
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