Zenith issues equity to fund workover rig purchase

RNS Number : 3029Q

Zenith Energy Ltd

11 September 2017

 

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").

September 11, 2017 

ZENITH ENERGY LTD.

("Zenith" or the "Company")

Zenith issues equity to fund workover rig purchase  

Zenith Energy Ltd. ("Zenith" or the "Company") (LSE: ZEN; TSX.V: ZEE), the dual listed international oil & gas production company operating the largest onshore oilfield in Azerbaijan, is pleased to announce that the Company has entered into an agreement to proceed with a private placement (the "Private Placement") to raise gross proceeds of £252,000 (approximately CAD$ 404,000) through the issue of 3,600,000 new common shares of no par value in the capital of the Company ("New Common Shares") at a price of £0.07 (approximately CAD$ 0.11) per share.

The proceeds of the Private Placement will fund the Company's purchase of a new, latest generation truck mounted 140-tonne workover rig. After carefully evaluating the Company's evolving technical requirements for the success of its field rehabilitation activities in Azerbaijan, specifically more complex workovers involving fishing jobs in wells beyond the depth of 3500 metres, Zenith's operational team has selected a larger workover rig than originally announced by the Company on July 14, 2017. The rig will also be capable of performing sidetracks, and carrying out well completion in newly drilled wells once the Company's drilling programme commences.

The New Common Shares will comprise approximately 3.653% of the Company's enlarged issued share capital at the date of listing on the London Stock Exchange, and are anticipated to be issued as depository interests in CREST in the United Kingdom. An application will be made for the New Common Shares to be admitted to the standard segment of the Financial Conduct Authority Official List and to trading on the Main Market for listed securities of the London Stock Exchange (the "Admission"). An application will also be made for the New Common Shares to be listed on the TSX Venture Exchange. It is expected that Admission will become effective and unconditional dealings in the New Common Shares will begin on September 15, 2017.

Following Admission, the Company's issued share capital will comprise 128,063,146 common shares with one voting right per share. No shares are held in Treasury. The total number of voting rights in the Company will therefore be 128,063,146.

The figure of 128,063,146 common shares may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the share capital of the Company.

The transaction is subject to the Approval of the TSXV in Canada and of the Main Market of the London Stock Exchange in the United Kingdom.

Andrea Cattaneo, Chief Executive Officer of Zenith, commented:

"Our Azerbaijan field development activities are building significant momentum. The progressive arrival of new, latest generation oil production equipment will add further impetus to our operations, lower our operational expenditure and increase our field rehabilitation capabilities.

Our existing recently upgraded 80-tonne workover rig, whilst ideal in size and capabilities for carrying out routine field rehabilitation activities and ESP replacements, is too small to workover more demanding wells, such as Z-28, where a much larger rig is required.

It is important to note that following a careful review of our technical requirements, specifically for high-impact workovers, Zenith's operational team has selected a larger, more advanced and, consequently, more expensive rig than originally planned. 

I expect to shortly finalise the workover rig acquisition and to confirm its estimated delivery date in Azerbaijan."

For further information, please contact:

Zenith Energy Ltd.

Andrea Cattaneo

Chief Executive Officer & President

Email: [e-mail]

Telephone: [phone]

Telefax:       [phone]

Allenby Capital Limited - (Joint Broker)

Nick Harriss

Nick Athanas

Richard Short

Telephone:   + 44 (0) 203 328 5656

Optiva Securities - (Joint Broker)

Christian Dennis

Telephone: + 44 (0) 203 137 1903

Yellow Jersey (Financial PR/IR)

Tim Thompson

Telephone: [phone]

 

 

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