Subscribe
Be the first with the news that moves the market- Zenith Energy (TSXV:ZEE) has purchased a 22.5 per cent stake in a Tunisian oil field
- The Sidi El Kilani concession is the second largest oil production lease in Tunisia
- The company paid C$703,000 for the rights to a company owned by the Kuwait National Petroleum company.
- The Sidi El Kilani concession has previously produced 20,000 barrels of oil per day
- Zenith Energy (ZEE) is up 1 per cent to $0.02 per share with a market cap of $13 million
Zenith Energy Ltd (TSXV:ZEE) has picked up a handful of African oil development opportunities on the cheap, during the COVID-19 downturn.
In an involved corporate deal, the company’s subsidiary, Zenith Energy Netherlands, signed a conditional sale and purchase agreement with KUFPEC Limited, a wholly owned subsidiary of the Kuwait Foreign Petroleum Exploration company, which is in turn a subsidiary of the State of Kuwait’s National Petroleum company.
The deal is for the North Kairouan permit and the Tunisian Sidi El Kilani concession, which contains the Sidi El Kilani oilfield.
Kuwait’s National Petroleum Company is one of the largest privately held energy companies in the world.
KUFPEC holds a 22.5 per cent interest in the Sidi El Kilani oilfield, and a further 25 per cent stake in the operator of the oilfield Compagnie Tuniso-Koweito-Chinoise De Petrole.
KUFPEC has agreed to sell, assign and transfer to Zenith their 22.5 per cent stake in the oil field for C$703,000.
Zenith is currently in negotiations with an as yet unmanned major oil company to sign an off-take agreement for the asset’s future oil production in order to fund the acquisition of the Tunisian asset. Currently the asset produces approximately 700 barrels of oil per day with an an annual gross revenue of $21 million.
The Sidi El Kilani oil field has the potential to do better than that though, previously hitting a peak production output of 20,000 equivalent barrels of oil per day in 1995. It is the second largest oil lease in Tunisia, and one of the most productive.
Zenith’s partners in the Tunisian acquisition will include the national company of Tunisia, Enterprise Tunisienne d’Activities Petrolieres, with a 55 per cent interest. The other partner in the deal is the China National Petroleum Corporation, which own a 22.5 per cent stake.
CEO of Zenith Energy, Andrea Cattaneo, said they were delighted to have purchased the stake in the highly productive oil field.
“The Board views Tunisia as a safe, democratic jurisdiction with a well-established history of successful oil and gas production activities for junior, independent companies such as Zenith.
“Upon completion of this deal, Zenith will have material production revenue for reinvestment in field development activities.
“The current low oil price environment provides an unprecedented opportunity for companies wishing to expand counter cyclically by securing large, revenue generating oil and gas production assets at advantageous terms.
Zenith Energy Ltd (ZEE) is up 1 per cent to $0.02 per share at 12:43pm EST.
