REG - Zenith Energy Ltd - Final Hearing for legal claim against SMP

Zenith EnergyAnnouncement

13/03/2025 07:45

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RNS Number : 5338A  Zenith Energy Ltd  13 March 2025

March 13, 2025

ZENITH ENERGY LTD.

("Zenith" or the "Company")

Final Hearing for legal claim against SMP

Zenith Energy Ltd. ("Zenith" or the "Company") (LSE: ZEN; OSE: ZENA; PINK
MARKET: ZENAF), the listed international energy production and development
company, is pleased to confirm that the Final Hearing in respect of the legal
claim (the "Claim") brought before the Paris Commercial Court (the "Court") by
its fully owned subsidiary, Anglo African Oil & Gas Congo S.A.U
("AAOGC") 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, is due to take place on Friday March 14, 2025.

 

Background

 

On July 15, 2019, formerly AIM quoted Anglo African Oil & Gas plc
("AAOG"), the previous owner of AAOGC  prior to its acquisition by Zenith in
May 2020, made an announcement confirming that AAOGC had initiated a claim
against SMP following poor performance in drilling wells TLP-103 and TLP-103C,
and the refusal by SMP to engage in negotiations to cover the significant cost
overruns that had been incurred by AAOGC as a direct consequence.

 

The Claim was initially launched in Court against SMP to recover costs of
US$3.1 million relating to SMP's unsatisfactory performance.

 

In taking the decision to launch the Claim for costs against SMP the following
reasons were considered significant at the time:

 

·       AAOGC had maintained extensive, contemporaneous technical
records of the failures of the Rig and the losses and delays that were caused
as a result;

 

·       SMP had not put forward evidence, of any kind, to suggest that
Rig performance was not the cause for cost overruns; and

 

·       Advice from International counsel in London, Paris and the
Republic of the Congo was that the Claim had merit.

 

Under the rules and conventions of the Court, mediation between the parties
engaged in a dispute is a recommended course of action. As a result, a
supervised mediation meeting took place during the Autumn of 2019.

 

On December 11, 2019, AAOG announced that mediation efforts had proven
unsuccessful and that, as a result, AAOGC would continue to pursue the Claim.

 

On November 11, 2020, Zenith provided an update on the Claim announcing that
SMP had retaliated to the Claim by obtaining a number of unjustified seizure
orders over the fixed assets of AAOGC in the Republic of the Congo, as well as
over its local bank accounts, and that whilst the initial granting of these
orders had no bearing on the Claim launched in the Paris Commercial Court, it
had been successful in fully revoking all of the wrongful seizure orders
initially obtained in the Republic of the Congo.

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

Further, Zenith announced that AAOGC had intensified its legal activities in
support of the Claim by commissioning third-party reports from leading
experts.

On July 3, 2023, the Company announced that the Court had rejected SMP's
request for a stay of proceedings in France due to new proceedings having
been initiated in the Republic of Congo, stating that SMP's request contained
"all the characteristics of a dilatory request", and ordered SMP to pay an
amount of EUR 30,000 to AAOGC as initial procedural costs (the "Initial
Procedural Costs").

 

SMP unsuccessfully appealed this intermediate decision of the Court, resulting
in the Paris Court of Appeal upholding the decision of the Paris Commercial
Court and AAOGC receiving Procedural Costs in the amount of approximately EUR
30,000.

 

On October 4, 2024, the Company announced that it had appointed Charles
Russell Speechlys France as new legal counsel before the Court in connection
with the legal claim against SMP.

 

Procedural Timeline

 

The Court is expected to reach its final decision within approximately three
months of the Final Hearing.

 

Andrea Cattaneo, Chief Executive Officer, commented:

 

"AAOGC has been pursuing the Claim for a period of approximately 5 years.

During the period, affected in part by the COVID-19 pandemic, SMP has sought
in every possible way to delay proceedings, specifically by initiating
vexatious and misguided actions in the Republic of the Congo, all of which
have been subsequently dismissed.

This conduct has been recognised by the Court and has resulted in payment of
Initial Procedural Costs to AAOGC by SMP.

Having examined the case upon acquiring AAOGC, we are confident that the Claim
has merit and that AAOGC should be compensated for the significant damages it
was caused by SMP. More specifically, SMP has primary responsibility for the
failure of wells TLP-103 and TLP-103C.

It should be underlined for the sake of historical record that the fate of
AAOG, a company once commanding a market valuation of circa £30 million and
having AAOGC as its sole asset, was impacted in a determining way by these
failures.

We are hopeful that the Court will recognise the scale of the damages suffered
by AAOGC".

 

 

Further Information:

 Zenith Energy Ltd

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

                                            E:       info@zenithenergy.ca (mailto:info@zenithenergy.ca)

 

Notes to Editors:

Zenith Energy Ltd. is a revenue generating, independent energy company with
energy production, exploration and development assets in North Africa, the US
and Europe. The Company is listed on the London Stock Exchange Main Market
(LSE: ZEN), the Euronext Growth of the Oslo Stock Exchange (OSE: ZENA) and
the Pink Markets of the OTC (OTC PINK: ZENAF).

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)

 

 

 

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