REG - Zenith Energy Ltd - Court rejects SMP’s request and awards damages

Zenith EnergyAnnouncement

03/07/2023 11:15

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RNS Number : 7543E  Zenith Energy Ltd  03 July 2023

July 3, 2023

ZENITH ENERGY LTD.

("Zenith" or the "Company")

Court rejects SMP's request for stay of proceedings and awards damages

Zenith Energy Ltd. (LSE: ZEN; OSE: ZENA), the international energy
production and development company, is pleased to announce that its fully
owned subsidiary, Anglo African Oil & Gas Congo S.A.U ("AAOGC"), has been
awarded a payment of compensatory damages by the Paris Commercial Court (the
"Court") in its claim against SMP Energies ( hereafter "SMP", formerly
Société de Maintenance Pétrolière - SMP) the rig contractor that performed
drilling services in wells TLP-103 and TLP-103C of the Tilapia oilfield during
2018-2019.

In the decision, the Court rejected SMP's request for a stay of proceedings in
France due to new proceedings having been initiated in the Republic of the
Congo, stating that SMP's request contained "all the characteristics of a
dilatory request", and ordered it to pay an amount of EUR 30,000 to AAOGC by
way of compensatory damages. The Court decision is immediately enforceable.

The Court has scheduled the next procedural date as September 29, 2023.

Background

On July 15, 2019, AIM quoted Anglo African Oil & Gas ("AAOG"), the
previous owner of AAOGC prior to its acquisition by Zenith, announced that
AAOGC had initiated a legal claim (the "Claim") in the Paris Commercial Court
against SMP following a series of significant performance failures by the SMP
102 rig (the "Rig") during drilling activities in wells TLP-103 and TLP-103C,
and the refusal of SMP to engage in negotiations to cover the significant cost
overruns that had been incurred by AAOGC as a result.

 

On February 17, 2023, Zenith announced that it had increased the claimed
amount for SMP's failures during drilling activities to US$9 million in
consideration of the significant commercial damages suffered by AAOGC,
specifically the impossibility to begin production activities from the Tilapia
oilfield, as a direct result.

 

The Company believes that the Claim launched by AAOGC has merit, especially
because of the significant evidence collected at the time to substantiate its
position and has since intensified its legal activities in support of the
Claim by commissioning third-party expert reports.

 

A final decision in respect of the Claim is expected prior to the close of
Zenith's next financial year, March 31, 2024.

Andrea Cattaneo, Chief Executive of Zenith, commented:

"We are pleased that the Court has rejected the latest attempt by SMP to delay
proceedings.

AAOGC has submitted third-party expert reports for consideration by the Court
which have, to date, not been engaged with or countered by SMP.

The Court's decision has symbolic value for Zenith insofar as it suggests that
our steady and resilient approach to our African operations eventually does
bear fruit.

We are aware that the significant delays incurred by some of our initiatives
in Africa have demoralised some of our investors.

However, as a management team, our confidence in Zenith's strategy remains
unchanged and we are fully committed to achieving the Company's successful
development."

 

Further Information:

 Zenith Energy Ltd

Andrea Cattaneo, Chief Executive Officer     Tel: +1 (587) 315 1279

                                               E:  info@zenithenergy.ca (mailto:info@zenithenergy.ca)
 BlytheRay - Financial PR/IR                   Tel: +44 207 138 3204

 Tim Blythe, Megan Ray, Matt Bowld             E:  zenith@blytheray.com (mailto:zenith@blytheray.com)

 Allenby Capital Limited - Financial Adviser   Tel: + 44 (0) 203 328 5656

 Nick Harriss

 Daniel Dearden-Williams
 Miriad Limited - Media Enquiries              Tel: +44 7867527659

 Zak Mir                                       E: zak@zakmir.com (mailto:zak@zakmir.com)

 

 

 

Notes to
Editors:

Zenith Energy Ltd. is a revenue generating, independent energy company with
production, exploration and development assets in Africa, the Middle East and
Europe, including electricity generation in Italy. The Company is listed on
the London Stock Exchange Main Market (LSE: ZEN) and the Euronext Growth of
the Oslo Stock Exchange (OSE: ZENA).

Zenith's strategic focus is on pursuing development opportunities through the
development of proven revenue generating energy production assets, as well as
low-risk exploration activities in assets with existing production.

For more information, please visit:  www.zenithenergy.ca
(http://www.zenithenergy.ca)

Twitter: @zenithenergyltd

LinkedIn:  https://bit.ly/3A5PRJb (https://bit.ly/3A5PRJb)

 

Market Abuse Regulation (MAR) Disclosure

The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulations
(EU) No. 596/2014 as it forms part of UK domestic law by virtue of
the European Union (Withdrawal) Act 2018 ("MAR"). Upon the publication of
this announcement via a Regulatory Information Service ("RIS"), this inside
information is now considered to be in the public domain.

 

 

 

 

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