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Zenith cancels expansion

plans in Italy

ITALY CALGARY-BASED Zenith Energy has dropped coronavirus (COVID-19) pandemic, which
expansion plans in Italy in response to weak has caused European gas prices to tumble to
The Canadian junior market conditions. record lows. The company is also focusing
wants to focus on its The company struck a deal in December to more of its financial resources and management
African operations. buy interests in seven gas concessions in the time on activities in Africa, where it recently
country from London-listed Coro Energy. The reached deals to buy assets in Tunisia and
agreement included an initial GBP402,000 Congo-Brazzaville.
($528,000) payment in shares and a further “There will therefore be no equity dilution
GBP3.5mn if the acquired concessions flowed associated with this transaction, enabling a fur-
over 590 barrels of oil equivalent per day (boepd) ther maximisation of our financial resources and
over four months in a row. attention towards possible additional value-ac-
The acquisition would have greatly expanded cretive acquisition opportunities in Africa,”
Zenith’s Italian footprint, which currently con- Zenith CEO Andrea Cattaneo said.
sists of interests in nine onshore blocks that yield Zenith also announced plans in November to
only 55 boepd. acquire a Norwegian junior called Nordic Petro-
The agreement between Zenith and Coro leum, hoping to use the company as a spring-
was conditional on Italian regulators giving their board for acquisitions in Norway. But it scrapped
approval by July 31. But that deadline was not that deal in March.
met, the companies said. It is therefore unlikely Until recently Zenith’s main focus had been
that the transaction will be closed by October 31 Azerbaijan, where it reached a 25-year produc-
as planned, so the pair have decided to terminate tion contract with state oil company SOCAR in
it. 2016 for the onshore Maradhanli, Zardab and
Zenith added that the assets in question Jafarli oilfields. But it returned control of produc-
now had “negative profitability” because of the tion activities to SOCAR in March this year. ™

PERFORMANCE

PGNiG expects soaring profits in Q2

POLAND STATE-CONTROLLED Polish oil and gas In other segments, Ebitda in exploration and
company PGNiG expects to post a net profit extraction dropped 75.4% y/y to PLN170mn,
of PLN5.14bn (€1.16bn) in the second quarter, while in the distribution segment, it fell 71.4%
an expansion of 1,803% year on year, the War- y/y to PLN140mn. In generation, Ebitda dou-
saw-listed company said in results estimate on bled to PLN120mn, the company’s statement
July 31. showed.
The ballooning net profit is coming on the PGNiG is publishing its financial report for
back of hugely increased Ebitda of PLN7.27bn, the first half of 2020 on August 20.
which is an expansion of 657.3% versus the The company’s stock fell 1.77% to PLN5.12 at
second quarter of the previous year. PGNiG’s the end of the day’s trading on the Warsaw Stock
overall revenue declined 12% y/y, however, to Exchange on July 31. ™
PLN7.28bn.
Broken down by key segments, Ebitda of
PLN6.65bn in the trade and logistics segment –
versus negative PLN160mn in Q2 2019 – drove
the company’s result.
That comes on the back of the “settlement
of the Yamal contract [with Russia’s Gazprom]
annex, [which] reduced costs on gas purchases
by PLN5.69bn,” PAP reported.
In early July, Gazprom refunded $1.5bn
to PGNiG for overpayments of gas supplied
between 2014 and 2020, following a ruling by an
international arbitration court.

Week 31 06•August•2020 www. NEWSBASE .com P15