Page 13 - FSUOGM Week 44 2019

FSUOGM PROJECTS & COMPANIES FSUOGM
Azerbaijan-focused Zenith to enter Norway
AZERBAIJAN
Zenith is developing mature assets in Azerbaijan, but now has its eye on Norwegian opportunities.
CANADIAN oil and gas junior Zenith Energy is looking to make its foray in the Norwegian oil industry, having announced plans for an all- shares acquisition of a local operator.
The company, whose shares are traded in London and Toronto, said in a stock exchange filing on November 4 that it had formalised an offer to buy Nordic Petro- leum. It will offer one of its common shares for every 100 shares in Nordic, which it said had an unaudited net value of NOK8.8mn ($960,000), with the aim of gaining at least 90% control of the company.
Set up in 1996, Nordic’s main focus at pres- ent is heavy oil development in Canada’s Alberta province, though it does not currently generate any revenues. Zenith’s goal is to use the company as a springboard for the acquisition of mature production assets and potentially applying for acreage in future Norwegian licensing contests.
“The board of directors views Norway as an ideal environment for the development of junior energy companies such as Zenith on account of its highly specialised investor community and the country’s long history of successful energy production,” Zenith CEO Andrea Cattaneo explained in a statement.
Through the deal, Zenith also hopes attract
greater support from long-term Norwegian institutional investors, he said.
“The offer from Zenith represents an oppor- tunity for our shareholders,” Nordic’s chairman Per Gunnar Loge added. “While Nordic has struggled with a position in a cumbersome heavy oil segment of the industry, Zenith has established a growing business in conventional petroleum segments. Hence we believe that this transaction will give our shareholders a more interesting future, and a future with upside potential.”
Zenith also produces gas in Italy and oil in Azerbaijan, though its output remains at a low level, averaging only 222 barrels of oil and 31,500 cubic feet (892 cubic metres) per day in the three months ending June 30. The company has pinned its growth hopes on Azerbaijan, where it is partnered with national oil company (NOC) SOCAR at the onshore Muradkhanli, Jafarli and Zardab oilfields.
Zenith aims to boost output in Azerbaijan to 3,000 bpd by the end of 2020, according to its lat- est investor presentation, following a deep drill- ing programme. Zenith reported on November 1 it had closed an additional share placement, earning NOK3.142mn to fund further drilling at Muradkhanli. ™
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