LONDON (ShareCast) - (Sharecast News) - Zenith Energy updated the market on its acquisitions on Thursday, in view of the recent crude price plunge and general volatility in the oil markets.
The London-listed firm said it was in the process of finalising a number of publicly-announced acquisitions, including an 80% interest in Anglo African Oil & Gas, which operates the "potentially transformational" Tilapia oilfield in the Republic of the Congo with a 56% interest.

Completion of that acquisition remained conditional on certain regulatory requirements, which Zenith said it was expecting to achieve "imminently".

It was also in final-stage negotiations with a national authority in West Africa for an oil production asset, formerly operated by a major international oil company, which last produced at a rate of more than 1,000 barrels per day.

Zenith confirmed that negotiations had now been extended to also include the possible acquisition of a second asset, operated by an international oil major, currently producing 600 barrels per day.

The board said it believed the potential acquisition of the assets represented a "significant opportunity" to materially increase its near-term oil production and, in turn, achieve sizeable revenue generation upside.

It was also in an exclusivity agreement for a working interest in an onshore oil production asset in Tunisia, which was currently producing around 700 barrels per day, generating gross annual revenues of about $15m.

Zenith said it was currently performing its due diligence process, with the objective of finalising that transaction in due course.

Completion of the Tunisian acquisition remained subject to approval from the national oil company of Tunisia, Entreprise Tunisienne d'Activit?s P?troli?res (ETAP).

Zenith said it was in "advanced negotiations" with an international oil major to sign an offtake agreement for the asset's future oil production, in order to fund the acquisition.

Finally, the firm said it was going through the acquisition process for Coro Energy's Italian natural gas production and exploration portfolio.

Completion there remained conditional on the necessary regulatory approvals being obtained from the Italian Ministry for Economic Development.

On completion, Zenith said it would become one of Italy's leading natural gas producers, with an increase in Italian gross production revenue of approximately 410%, and an expected yearly gross revenue of around €3.6m.

The board said it was therefore expected that, on completion, Zenith would have a daily total cumulative production from its enlarged Italian portfolio of about 65,000 standard cubic metres, or 382 barrels of oil equivalent, per day.

"The recent steep decline in oil prices as a result of world events has particularly impacted financial markets, whilst also presenting new opportunities to acquire highly prospective oil and natural gas production assets at advantageous terms," said chief executive officer Andrea Cattaneo.

"We are currently in the process of completing a series of transformational acquisitions that, by virtue of their material existing production, or near-term highly prospective production potential in the case of Tilapia, will enable Zenith to rapidly enlarge and diversify its portfolio at a time of great opportunity for companies with a clear strategic focus."

At 1201 GMT, shares in Zenith Energy were down 5.35% at 0.64p.

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