Zenith Investors Conference Call 10th November 2021


Hi everyone,. Here are the notes that I made in the conference call earlier. I will go over them again and tidy up any bits I have missed once they put up the audio, but I think that they are pretty accurate anyway.

Key parts in my opinion are:

1) They hope to get SLK up to 1,000 bopd production when they take it over and they still have complete faith that this will happen soon. They are discussing different ways to complete this acquisition (I guess by buying out the limited companies similar to how they did with Candax). Despite the expiry of the longstop date they are still negotiating.
2) They expect to get 500 bopd out of Robanna when they have finished.
3) They hope to drill two sidetracks and three workovers at Ezzaouia and this will be starte in January / Feb.
4) They are currently in discussions for more Tunisian assets.
5) The Candax acquisitions gave them a lot of inventory which means that they hav all the long-lead items they need brand new and on location.
6) They hope that by the end of 2022 they will be producing an additional 2,000bopd from Tunisia.
7) The Azerbaijan rigs will probably go to Tunisia where they can be used in Ezzaouia and Robanna but there is an outside chance that they could go to Congo to drill Tilapia and th eother license that the Congolese govt may be giving us. This is TBC.
8) They hope to have big news on the Congo before the end of the year.
9) They basically said that they are negotiating for OML141 and AMD Energy will not have it.


Write up following.

Zenith is in a period of incredibly transformation and there are a lot of moving parts which are of interest to old investors. But for new investors I will give a quick recap of our identity.
Zenith is an O&G company that also produces electricity in Italy. It has gained a lot of experience in dealing with govts and suppliers in two continents. The issues that we face are less in the ground and more in the management of governments and contractors.
Italy - -we produce electricity
Africa – Tunisa, Congo, Nigeria
Zenith started its transformation in November 2019 when it acquired AAOG Congo. Since then we have devoted all of our energy to Africa. We are a producer that stays connected with the local communities and during the Covid period we have mainly raised capital in Oslo where we listed in November 2018. It is thanks to the support of the Norwegian investors that we have been able to raise money in 2020.
We have finally had approval for our prospectus to allow us to list all of the Oslo shares in London and vice versa which will allow us to increase the liquidity in both markets.

Tunisa
Our first Tunisian asset acquired was Sidi El Kilani which we acquired from CNPC and KUFPEC. The field has been producing for years without any artificial lifting techniques. We hope to be able to bring it back up to 1,000 bopd using artificial stimulation. These transactions have not been completed as when we were working remotely we followed the instructions of the vendor but in 2021 we visited Tunisia and started to understand how the bureaucracy worked. While we were there we were offered two companies owned by Candax which we bought straight away. These companies owned: Robanna, Ezzaouia and El Bibane. These present a variety of workover and drilling opportunities as demonstrated by our recent completion of the Robanna workover. This increase in production exceeded 100 barrels of production increase.
The same attention can be given to another opportunity by drilling ROB-3 in the same field. We have a very low price for this and we are confident that we can carry it out for this price. Also in Romana the depth is only 2,300 so we can do this with smaller rigs. This gives us the possibility of Robanna increasing in excess of 500 or more bopd from the original 20 bopd that it was producing when we bought it – this is because the reservoir is sandstone and it easy to understand. Our geophysical report also shows we have only used 4% of the total reserves. So this can be well developed at low cost.
The other 100% owned field is El Bibane which is out first offshore field in a few meters of shallow water. We are studying this with prudence because it is offshore but specifically there is one field that had a problem with the string that we hope it can be re-entered and we have conservatively forecast 600+ bopd.
Ezzaouia is managed with the government which means that it is more bureaucratic and will take much more time to get a drilling program together but the new government is keen to increase the country’s oil production and we hope to get things going soon. Our plan is to do two sidetracks in Ezzaouia and our plan to do 3 workovers can get accepted in the next two weeks and then be communicated to the market. We have kept the rig that did the Robanna workover in the area and if the decision is made in December then we can start the first side-track in January.
We cam back to Tunisai in 2020 knowing that the country wanted to gain larger oil and gas production. Tunisia is in a very lucky geographical position and we have benefitted from that. It is a very small distance from Sicily which is where our oil goes for refining and Tunisia can definitely benefit from the rise in gas prices.
We are now discussing with the SLK vendors of different methods to complete the acquisition but investors should not be worried as we still have total faith that this will be completed. This will be announced when it is achieved but investors should be comforted by the fact that we are continuing negotiations for this asset..

In Tunisai there are other properties that are for sale. This is well known to local specialists and we are in negotiations to buy some other assets in Tunisa. Our interim balance sheet which we will published in a few days will show a good asset base and turnover and cash-flow.

In other African countries we have an office in Congo where we own the subsidiary of AAOG Congo. We had a ferocious battle in 2020 to retain control of the Tilapia asset and I had to stay from September to December in the Congo to negotiate this. Then finally we got the first stage of approval in December 2020. Then in January the process was performed and in February we could say that we passed the exam. Unfortunately there was then the Presidential election and then a stall in activity. However the appointment of the new minister who was not against us like the previous one was then done and so we are now completing our license and then bringing it towards signing and then having it approved by Parliament. We believe that 2022 is the year that we will finally complete the inexpensive acquisition of well 103 which only needs an additional drilling of a few hundred meters of side-track and then the completion and then the connection to the system to deliver the oil to the Jano terminal.
The Jano is a structure that was made famous by the production from ENIC and TOTAL and we are optimistic about the result we can achieve which we believe could be 5,000bopd. We can promise our investors that we will closely monitor the drill and the relationship with the drilling company and we are still in the process of appointing an company so that we avoid AAOG’s £20 million mistake.
Our suffering in Congo has not been without benefit We are the only junior oiler in Congo at the moment and the anti-fossil fuels campaign in the west will make mid tier companies like total abandon their smaller fields and this gives an opportunity for Zenith as the only junior OPERARTOR in the country. There are other junior participants but only an operator can be assigned a license.
The Congo process has been quite slow and we understand the anxiety and irritation of our investors as time has passed and nothing ha happened. However, this is Africa and it is slow. But we have to be patient and accept the fact that we cannot speed up the administration without antagonising the administrators. Investors have to be patient in both Tunisia and Congo. This is not because the deals are falling apart but it is just impossible to do it any faster.
Because of this Zenith have a multi-country strategy in terms of targets. We do not have a short-term view but we accept the fact that sometimes dealing in them is slow. We have been looking at Nigeria since 2015 and last year we participated in another marginal field bid. However this system has worked badly and we have lost trust in this process. Our philosophy has changed in the last 6 months and we have focused more on acquiring fields from entrepreneurs and not the government. We have eventually run onto MOL141 where we have an exclusivity agreement and we hope that after the due diligence we can get into this field. The fields is run by very serious people – two Americans and a local Nigerian. We have always said about Nigeria that it is easier to find good geology than good people on the surface but we believe we have found the good people and investors know we will be able to raise the funds necessary for this development and in December we will RNS the investors with more detail.
In Italy our assets have always been marginally profitable but recently energy (gas and oil) prices have raised as there is less investment in them (because on the anti-fossil-fuel brigade). As the world moves out of Covid prices have increased as much as 500%. Now we have announced record electricity income in our Italian companies for the last three months and the price is continuing to increase. We are trying to increase our production to enjoy these rises.
The gas to power prices also have benefits for us in Africa as we can replicate the Italian model there. Our system will allow them to have electricity provided in the provinces by wooden pole.

Investor Question


Tunisia

1) A new energy minister has recently been appointed and does Zenith have a good relationship with him?

The minister is of Industry and Hydrocarbons and we have not met him yet but we are constantly communicating by the step below – the hydrocarbons section and the relation continues with the ETPA


2) What type of oil is produced from the Tunisian wells – what is the difference of pricing?

Ezzaouia – the blend is created from all the ECUMED fields. Our API is 40 thanks mostly to El Bibane. The blend is known to Mediterranean traders. We do not produce huge quantities of oil but these quantities are sufficient to fill a tanker which can then be sent to the refinery a few 100km away. The blend has been known to them for 20 years and we sell our oil directly to refinery and so this creates good liquidity

3) When does Zenith intend to sidetrack Ezzaaoui and when will ROB-3 be drilled?

The situation is very open. The govt wants to drill the Ezz sidetracks asap but it still has to go through their operating and technical committees and so we have to wait a few weeks. We have created a new management team in Tunisia with a ne manager and new technical director and a new FD. We have the ability to make decisions about our own fields rapidly and a new Robanna well should be in Jan/Feb and we just need to find a competent drilling company. The decision on El Bibane re-entry will take more time because of the costs involved ($3.5 million) we will take longer to decide. We should hear Robanna soon and we should also soon have the sanctioning for Ezzaouia. The only problem that I see is about getting two rigs and the capex involved. It is also worth noting that the long-lead items for drilling are already on location. The Candax acquisition meant we acquired a lot of rand new stock which permits us to carry our drilling quickly without having to import long-lead items.

4) Are we looking to acquire further asserts in Tunisia – rumours that Shell and ENIC are selling out because of the political situation?

We are too small to acquire Shell’s assets in Tunisia as that would require hundreds of million but there are many other sellers who are leaving the country because of the large companies being pressured by shareholders and politicians to move away from fossil fuels. This benefits Zenith as it is unthinkable that Africa and Latin Amerian will move away from fossil fuels. But these vendors will continue to sell because of other pressure and Zenith are already negotiating with other sellers in Tunisia.


Capital Markets

1) When do you see the stopping of issuing placings?

I am an investor in this company and I also suffer from the dilution. If I could I would say that there would be no more dilution. However being listed in an effective equity market sometimes the best way to raise funds is equity. Nevertheless Zenith is also looking at other ways to raise fund – local banking is becoming a very strong way to raise sums such as $5 million. If we can do this via a local bank then we would avoid issuing £3million in shares. We are working hard with development banks in Africa. There are 5-6 and we are negotiating with there of them to give us funds. With oil creating cash flow then we can service this. Investors may ask why we would still raise money now but we need to have some cash to make acquisitions but we also have to wait from some of our other money to come in
In 2021 our amount of placing has been much reduced compared to 2020.
The recent placement attracted the participation of Miton and also well-respected Norwegian institutional investor and the discount was minimal.


2) Zenith drilling rig – where is it now and where is it going?

The drilling rig in being loaded in port to be sent to Africa. We are still discussing with partners in Congo whether to use it there but it is probable that it will go to Tunisian where it would have much work to do including in Ezzaouia. Also our second workover rig could be used there. It will probably go to Tunisia but there is an outside chance that it will go to Congo to drill Tilapia and maybe another license that they are looking to give us. Both rigs will definitely not go to Nigeria as they cannot work in the swamps.

3) Is there any news on the SNP court case?

We have shared data with three other victims of the bad management of SNP and Paris has very reliable courts of justice and not pro-French and we are determined to bring this case to a positive end. Courts are unpredictable but we are optimistic and committed and have a lot of proof of the money that was wasted by AAOG because of the incompetent of AAOG. We are looking forward to some positive news in April/May 2022. We have also inherited the $5.7 MILLION from the SNPC and so the two together would be approx. $10 million when we paid just £200k to acquire this.

4) How has the company planned to repay its debts due in Dec 2021?
The company already had the funds to repay this even before the capital raise.


Italy

1) Why has the company not made concrete progress in terms of increasing electricity and gas production. When will the company drill the Messorina 2 well and why is the company not doing more in Italy?

The view about Italy was (until a few moths ago) that it should be ignored.


Congo

1) Is there any update on Tilapia 2. It was originally to be drilled as Q4 2021 or Q1 2021 and it is now nearly 2 years since the deal was signed with AAOG?

I am travelling to Congo in the next 10-15 days and I will be able to report factual developments when we are face to face with the hydocarbons ministry. I am confident that there will be news before the next investor call but it is not our lack of pushing or being out of favour with the ministry. To prove this I met a journalist in which I asked why he cared so much about Zenith and he replied that Zenith are one of the few juniors who are active when the others do very little. We are trying our best and AI sees Zenith as a very effective performed in Africa.
For our size and possibilities we have achieved a great deal in the last 12-18 months and are only held back by the bureaucracies in the county. However hopefully we will have some big news before the end of the year

Nigeria

1) Clarify Nigeria announcement. There is speculation about the ownership of this asset. Is there any comment you can make?

I can only say to investors that we have never made imprecise descriptions of our situation regarding acquisitions. We have declared that OML141 NW is the object of our exclusivity agreement. The fact that this is exclusive means that nobody ekse is there and I have nothing else to add.


Where do you see the company being between now and the end of 2022?

• The conclusion of all the acquisitions that we are in the middle of – Nigeria, Congo, Tunisia.
• In these countries, the expansion of our portfolio in our countries by new acquisitions which are not yet known to the public.
• Increase our production in Tunisia by 2,000 -3,000 barrels. These are the negotiatiosn that we are handling at the moment.
• We want to find a cornerstone investor to create large capital support and give us more credibility. I am looking in the Middle East for this – this will avoid equity raising.
• Investigate new ways of funding like Islamic banks which can give soft loans
• OML141 is an incredibly attractive field and we believe that if we sign it we will be able to develop it soon after.
• We will speak again in 2022.

Herbius
10.11.2021 kl 18:03 5663

WOW Nice Work MG 👍👍💰💰

I Think this Will be are good Jul 😂😂😂
Galv
10.11.2021 kl 18:14 5625

MG Thanks

I hope you know and we again all will get A huge xmas present from Zenith .

God Jul 🤙
Herman*
10.11.2021 kl 18:59 5492

Great job. My take is that there is steady progress, but that working in Afrika is like trying to jogg in syrup. So the biggest threat is not that they will fail big time, but that shareholders will die of boredom while waiting for transformational news.

Great work once again, MG. thanks for your informative posts

Aqualight 🇩🇰🇳🇴🇬🇧

"They expect to get 500 bopd out of Robanna when they have finished."
Estimated time for completion?

Edit:
And what did he exactly say about Nigeria? I remember people on the forum were saying end of october or november..?
Redigert 11.11.2021 kl 11:43 Du må logge inn for å svare

"They expect to get 500 bopd out of Robanna when they have finished." Estimated time for completion?
It was a bit unclear but he seemed to say that we would drill either Robanna or Ezzaouia in Jan/Feb and I assume that the other would follow straight after. I got the impression that they would do Ezzaouia first if they got the governmental permissions to do it in December (because of the JV) and Robanna first if they didn't. But he did not say this explicitly, it was just the impression I got. You could also interpret it that we would drill both at the same time but I doubt that this will happen.

About Nigeria he said that OML141 is theirs to sign exclusively and we should expect and RNS on this in December.

Why should we expect an RNS in December when he said they had 90 days to decide on the 31 of august?

Thank you.
Then we MIGHT have SLK, Tilapia and OML141 within december.. Thats interesting.
Redigert 11.11.2021 kl 15:42 Du må logge inn for å svare
fylla12
11.11.2021 kl 16:13 4456

Our Christmas list to Santa ... :)
jantt
11.11.2021 kl 16:55 4358

Håber da virkelig at kursen kan gå amok som sidste år.

Forstår ikke min handel gennem Danske Bank.
Der ligger masser af aktier til salg under 12, men alligevel går min handel igennem til 12.21 ?

Svært lite sannsynlig at SLK, Tilapia og OML141 er i orden før nyttår. Tror vi skal være fornøyde med om vi klarer 1/3.
Tetro
11.11.2021 kl 17:35 4261

Skal være svært fornøyd om en av de tre går inn. Har tro på at Tilapia kommer. Han kan vel ikke sette av penger og ansette folk hvis ikke han har noe info fra Congo. SLK tror jeg vi kan se lenge etter. Å tro at lille Zenith skal bli prioritert av myndighetene er vel å tro på julenissen. Landet er fortsatt i kaos og store oljeselskap planlegger å avslutte sin virksomhet noe som bekymrer myndighetene og legger vi litt covid på toppen så kan vi tenke oss resten. Men med tålmodighet kan det bli enorme muligheter med italieneren som forhandler i Tunisia. Nigeria kan vel ingen si noe særlig om. Blir en bonus om noe kommer der.
Sakte men sikkert bygger Zenith stein på stein i stødig og fin framgang. Siste året har det skjedd utrolige ting når andre selskap satt på sidelinjen under pandemien. All ære til den jobben som er gjort.
Lykke til alle sammen, tror nok vi blir belønner til slutt.
fylla12
11.11.2021 kl 18:07 4195

Det er lov å håpe.
Zenith har en vellykket workover bak seg noe som burde gi bedre odds
for grønt lys i Tunsisia innen kort tid.

Selvsagt er det lov å håpe, jeg håper på news hele tiden jeg. Samtidig tror jeg det er svært viktig at vi skiller realisme og håp. Problemet her er jo at majoriteten av aksjonærer forventer at ting skal være ferdig i morgen. Det gjør at folk blir skuffet som igjen resulterer i salg av aksjer, man burde ikke bli overrasket om aksjekursen nå vi trades nedover til 10-11 øre før news. Da det er i denne rangen det har ligget på det laveste i år samt at vi er under 0.12 noe som var et visst støttenivå.

Zenith har en vellykket workover i Tunisia, det forbedrer oddsen for å få både SLK og andre ting. Jeg er klokkeklar på at jeg tror Zenith får SLK. Problemet er at SLK er en piss i havet for Tunisiske myndigheter. Om du ser på situasjonen i Tunisia er det svært usannsynlig at å godkjenne SLK har høy prioritet i det hele tatt. At man her bare må smøre seg med tolmodighet å at det kan gå langt inni 2022 før vi får noe avklaring, det ser jeg ikke på som usannsynlig i det hele tatt.

OML141 der vet vi selskapet har 90 dager på å bestemme seg. Om Andrea sa det var sannsynlig at de gikk inn her er dette best bet for hva vi får ila.2021.

Når det kommer til Tilapia tviler jeg på det kommer i Desember, jeg er selvsagt håpefull men jeg ser ikke på det som spesielt sannsynlig. Her er hvorfor:

Selskapet har veldig mange ganger før sagt at vi forventer at dealen er over linja innen da og da. SLK har jeg vel alene hørt 3-4 forskjellige tidsestimater fra selskapet, innen 60 dager blabla. Så troverdigheten til tidsestimatene til selskapene hvor de faktisk er avhengig av en annen part de skal man ta med en svær klype salt. Når det kommer til OML141 er jeg mer håpefull siden der sitter Zenith med kortene å kan velge å gå inn.

Det forbauser meg at mange aksjonærer sitter her inne å sier alt ordner seg til jul. Det er samme gjeng som i Januar sa at nå er Tilapia rett rundt hjørne, eller som etter hver IC har løpt å sagt nå er SLK rett rundt hjørne. Tror vi skal la byråkrati være byråkrati og ikke legge alt for stor vekt på tidsestimatene til Zenith da dette har vist seg å være feil mange ganger tidligere.
LATO
11.11.2021 kl 23:20 3905

90 dager har gått 01.12!

30 dager i sep
31 dager i okt
30 dager i nov

Det sier litt når vi er innstilte på at ingen ting vil skje før helt oppunder deadline, og gjerne litt på overtid av den også. Hvor lang tid tar det å få nødvendig informasjon på bordet for å finne ut om vi skal benytte oss av ekslusivitetsretten? Kan det være at informasjonen allerede er tilgjengelig, men at det avventes for å se hva som skjer med SLK og Tilapia 2?

Straks 2 milliarder aksjer.... Plutselig 100 millioner til for nedbetaling av lån.. Var de med sist?
Redigert 12.11.2021 kl 13:05 Du må logge inn for å svare
Aldara
13.11.2021 kl 23:56 3235

Hvis det virkelig har vært et snev av støtte rundt .12 så kan ikke den allerede være brutt! Hvis den er det så har der ikke vært noen støtte..
Jeg tror den holder og det hele roer seg ned. Mulig noen aksjonærer tror vi får reprise av fjoråret men hvorfor det? Noe som tilsier nettopp det? Undres...
Gullit
14.11.2021 kl 08:21 3087

Nei helt idiotisk tanke. Vi er mer solide enn vi noen gang har vert. Stadig økning i produksjon. Rekord inntekter i Italia. Og masse spennende i vente!! Ha litt is no så blir blir vi belønnet

Vi blir nok rikelig belønnet til slutt! Men nå må AC kutte strømmen til vaffelpressa for en lang stund! Det er riktig som Herman skrev at selskapet ville nærme seg ca 2 Milliarder aksjer før ting er i boks!

Ha ellers en fin søndag videre alle sammen!

Delen av TA…selv holder jeg fortsatt, ikke vits å selge nå, denne endrer seg etterhvert😀😀
Zenith Energy har brutt ned fra en tilnærmet horisontal trendkanal på kort sikt. Dette signaliserer en fortsatt svak utvikling, og aksjen møter nå motstand ved eventuelle reaksjoner opp mot gulvet i trendkanalen. Det er ingen støtte i kursdiagrammet og en videre nedgang indikeres. Ved reaksjoner opp har aksjen motstand ved cirka 0.12 kroner. Det kortsiktige momentumet i aksjen er sterkt negativt, med RSI under 30. Det indikerer økende pessimisme hos investorene og videre kursnedgang for Zenith Energy. Aksjen anses samlet sett teknisk negativ på kort sikt.
Anbefaling en til seks ukers sikt: Selg (Score: -90)
jantt
14.11.2021 kl 16:28 2788

Støtte - modstand - TA - RSI har folk altid snakket om i de aktier jeg har været.
Kursen har sgu været ligeglad med det og kørt sit eget løb.
Beklager men har aldrig set det kunne bruges til noget.
Redigert 14.11.2021 kl 16:28 Du må logge inn for å svare
Gullit
14.11.2021 kl 21:00 2560

Ingen vits i denne da det kan komme nyheter over natten som løfter oss flere 100 prosent. God natt og la oss håpe på en pen melding kl 08:00
Aldara
14.11.2021 kl 21:41 2474

DEN meldingen har vi ventet på siden januar Gullit, gjeEEEEEEsp......
Gullit
15.11.2021 kl 08:33 2203

Da har vi aldri vert nærmere. Så har vi da utviklet oss på andre felt denne tiden!!