Proposed Acquisition of Norwegian Subsidiary

RNS Number : 1259W

Zenith Energy Ltd

09 December 2019

 

December 9, 2019

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 ("MAR"). Upon publication of this announcement via a regulatory information service ("RIS"), the inside information contained in this announcement is now considered to be in the public domain.

ZENITH ENERGY LTD.

("Zenith" or the "Company")

Proposed Acquisition of Norwegian Subsidiary 

Zenith Energy Ltd., ("Zenith" or the "Company"), (LSE: ZEN; TSX.V: ZEE; OSE: ZENA-ME), the international oil & gas production company, announces that the Company has decided to discontinue its plans to acquire a Norwegian oil & gas company, Nordic Petroleum AS ("Nordic"), by way of an exchange of equity (the "Proposed Acquisition"), as announced on November 4, 2019.

Due to unexpected complications and potentially high costs to complete the Proposed Acquisition, the Board has decided not to proceed with the Proposed Acquisition. 

Zenith will continue with its plans to establish a Norwegian vehicle for intended participation in future licensing bids to be organised by the Norwegian Ministry of Petroleum and Energy, as well as to actively pursue the potential acquisition of mature energy production assets.  The Company intends to create a Norwegian subsidiary (anticipated to be named Zenith Energy Norway AS) in the immediate future.

In the meantime, the Company's strategy to enrich its portfolio has recently been demonstrated by the acquisition of Coro Energy's producing assets in Italy, as announced on December 3, 2019, which shall position the Company as one of Italy's leading natural gas producers and operators. It is expected that the acquisition of further European natural gas production assets may be completed in the near future. 

Andrea Cattaneo, Chief Executive Officer of Zenith, commented:

"The Board views Norway as an ideal environment for the development of junior energy companies such as Zenith on account of its highly specialised investor community and the country's long history of successful energy production. 

It is regrettable that the proposed acquisition of Nordic could not be completed due to unforeseen complications and the potential incurrence of high costs. We wish Nordic and its shareholders all the best in their future endeavours. 

At the same time, we are pleased to have found a strategically preferable, non-dilutive, alternative avenue for the imminent establishment of our presence in Norway."

Further Information:

Zenith Energy Ltd
Andrea Cattaneo, Chief Executive Officer	Tel: [phone]
	E-mail: [e-mail]
Peterhouse Capital - Joint Broker	Tel: + 44 (0) 207 469 0930
Lucy Williams
Charles Goodfellow
Novum Securities Limited - Joint Broker	Tel: + 44 (0) 207 399 9400
Charlie Brook-Partridge
Hugh McAlister
IFC Advisory Limited - Financial PR & IR	Tel: + 44 (0) 203 934 6630
Graham Herring
Zach Cohen

Notes to Editors: 

Zenith Energy Ltd. is an international oil and gas production company, listed on the TSX Venture Exchange (TSX.V:ZEE) and London Stock Exchange (LSE:ZEN). In addition, the Company's common share capital was admitted to trading on the Merkur Market of the Oslo Børs (ZENA:ME) on November 8, 2018. The Merkur Market is a multilateral trading facility owned and operated by the Oslo Børs. 

The Company was assigned a medium to long-term issuer credit rating of "B+ with Positive Outlook" on October 9, 2019 by Arc Ratings, S.A. On November 18, 2019, the Company was assigned a "B+" with Stable Outlook debt issuer credit rating by Rating-Agentur Expert RA.

The Company operates the largest onshore oilfield in Azerbaijan following the signing of a 25-year REDPSA, (Rehabilitation, Exploration, Development and Production Sharing Agreement), with SOCAR, State Oil Company of the Republic of Azerbaijan, in 2016. 

The Company's primary focus is the development of its Azerbaijan operations by leveraging its technical expertise and financial resources to maximise low-cost oil production via a systematic field rehabilitation programme intended to achieve significantly increased revenue. Zenith also operates, or has working interests in, a number of natural gas production concessions in Italy. The Company's Italian operations produce natural gas, condensate and electricity.

Zenith's development strategy is to identify and rapidly seize value-accretive hydrocarbon production opportunities in the onshore oil & gas sector. The Company's Board of Directors and senior management team have the experience and technical expertise to develop the Company successfully.

 

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