Zenith's bid for Tunisian concessions accepted
London-listed junior Zenith Energy has made a binding offer to buy a company with 100% interests in two unidentified producing assets in Tunisia, it said in a stock filing on April 21.
The first of the assets produces 80-100 barrels of condensate/day and 5.5-6.0mn ft3/d of natural gas, which is currently re-injected into the formation. One of its wells has suffered tubing string damage and has been temporarily shut-in, but previously produced around 500-600 b/d of oil. Low oil prices and the expense required have prevented the needed repair work from taking place.
The second asset flows 25 b/d of oil. But a recent study carried out by the seller concluded it could be raised to around 200 b/d with extra drilling work, but this work was not undertaken due to low prices.
Zenith will pay $200,000 in cash and debt assumption for the assets.
"We are very pleased to continue further enriching our portfolio of oil and gas production and development assets in Tunisia, especially with these Potential Acquisitions which contain significant untapped potential and opportunity for value creation," Zenith CEO Andrea Cattaneo said in a statement. "We expect to shortly achieve a daily production in excess of approximately 1,000 b/d of oil by way of our recently announced acquisitions, as well as the near-term development activities we intend to perform in these assets, which would very favourably position the Company in terms of profitability in the current oil price environment."
Zenith entered Tunisia in April 2020, acquiring 45% interests in the North Kairouan and Sidi El Kilani's assets Kuwait Foreign Petroleum Exploration and CNPC International. It went on to strike a deal in March this year to buy a 45% stake in Tunisia's Ezzaouia concession from Candax Energy.
The company has been producing small volumes of gas in Italy for a number of years. It also entered the Congo last year, where it is developing oil. In January this year, Zenith signed a cooperation agreement with Fleet Oil & Gas to joint pursue other oil and gas upstream acquisitions in the Mediterranean, the Middle East and Africa.