28th Mar 2018 14:29
The proposed acquisition would see Zenith acquiring a 100% working interest in an oil production licence comprising two onshore blocks, with a combined total acreage covering approximately 65 sq. kilometres.
Existing production at the asset is in excess of 1,000 barrels of oil per day, the company said, transported by pipeline directly into the national oil sales system with a reported all-in average production cost of
The oilfields are located in a prolific oil and gas basin with a proven petroleum system. At present, only one of the two oilfields is producing. The second oilfield is expected to be capable of significant production by drilling new wells and performing workovers on existing wells.
Drilling activities can be performed at relatively low-cost and without significant delay, Zenith said. The average total depth of production wells in the licence area of the proposed acquisition is between 350 to 750 metres.
Zenith has until April 30 to undertake its due diligence on the deal. After completing its due diligence, the company then has 15 days to choose to exercise an option to complete the acquisition for a total consideration of
Half of the consideration would be payable within 7 working days of exercising the option, with the rest payable within 3 months of the first payment.
Zenith has exclusive rights to complete the proposed acquisition for a period of 90 days started Friday last week, "whether or not it decides to exercise the option to allow for the terms of the proposed acquisition to be renegotiated following the due diligence".
Zenith is considering a number of funding options for the consideration, including debt and equity.
"The proposed acquisition will complement our long-term field development programme underway in
Shares in Zenith were up 1.5% at
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