REG - Zenith Energy Ltd - Update on Tilapia

Zenith EnergyAnnouncement

17/02/2023 11:30

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RNS Number : 3185Q  Zenith Energy Ltd  17 February 2023

February 17, 2023

ZENITH ENERGY LTD.

("Zenith" or the "Company")

Update on Tilapia

Zenith Energy Ltd.  (LSE: ZEN; OSE: ZENA), the energy company with proven
revenue generating production, exploration and development assets in Africa,
the Middle East and Europe, provides an update on its business activities in
the Republic of the Congo.

 

Zenith had previously announced the successful completion of an Inquiry of
Public Utility (Enquête d'Utilité Publique) ("IPU"), involving an in-depth
technical and financial review of the Company performed by the Ministry of
Hydrocarbons of the Republic of the Congo, on February 10, 2021.

 

The purpose of the IPU was, in accordance with local law, to determine
Zenith's suitability for the award of a new 25-year licence to operate the
Tilapia oilfield following confirmation, announced by the Company on December
23, 2020, regarding the successful bid submitted by Zenith Energy Congo SA
("Zenith Congo") for the award of a new 25-year licence to operate the Tilapia
oilfield ("Tilapia II").

 

The Company has now become aware that a company named Olive Energy E&P has
been awarded a licence to operate the Tilapia oilfield.

 

The Company is disappointed by this development, which contradicts the
aforementioned milestones.

 

Debt owed to Zenith by SNPC - approx.US$5.3 million plus accrued interest

 

The Company announces that it has engaged a legal representative to negotiate
the full repayment of an original principal amount of US$5.3 million plus
accrued interest owed by Société Nationale des Pétroles du Congo ("SNPC"),
the national oil company of the Republic of the Congo, to Anglo African Oil
& Gas Congo S.A.U ("AAOGC"), a fully owned subsidiary of the Company, for
past work performed during the Tilapia I licence.

 

Legal Claim against SMP for approx. US$9 million

 

Zenith confirms that the legal claim launched by AAOGC against Société de
Maintenance Pétrolière ("SMP"), the rig contractor employed to perform
drilling services in wells TLP-103 and TLP-103C of the Tilapia oilfield during
2018-2019, is progressing in the Paris Commercial Court (the "Claim").

 

The Company has increased the claimed amount for the performance failures by
SMP during drilling activities to US$9 million in consideration of the
significant commercial damages suffered by AAOGC, specifically the
impossibility to begin production activities, as a direct result.

 

Zenith has not provided for the potential recovery of such costs in its
cashflow projections. Therefore, any success in this matter would enhance the
Company's cash position.

 

Luca Benedetto, Chief Financial Officer of Zenith, commented:

"This represents disappointing news. However, the Company's opportunity to
recover an amount of approximately US$15 million due to past activities in
connection with the Republic of the Congo remains unchanged.

 

This will now become our primary focus, whilst we continue to work towards
completing our acquisitions in other jurisdictions for large,
revenue-generating energy production and development assets with
transformational potential."

 

 

 

 

Further Information:

 Zenith Energy Ltd

Andrea Cattaneo, Chief Executive Officer  Tel: +1 (587) 315 9031

                                            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)

 

 

Notes to
Editors:

Zenith Energy Ltd. is a revenue generating, independent energy company with
production, exploration and development assets in 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 transformational opportunities in
the Middle East, Africa, and Europe 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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