NW OML141 RSC is the NW section of license OML141 (Oil Mining License) which is a mining oil license in Nigeria that coversn1,295 km2 in the swamp/shallow waters (depth of less than 25 meters) of the Niger Delta in Nigeria.

ONL141 has an interesting history. It started life as OPL229 (Oil Prospecting License) and 38% of this was originally “bought” by the Chinese state China Export and Credit Insurance Corporation (SINOSURE) in January 2005 who put is into a SPV called Aerd Projects Nigeria Ltd. Less than 16 months later in April 2006 they sold this to the China National Offshore Oil Corporation (CNOOC) for $60 million. They also put an $80 million loan into the projects, spent about $16 million on seismic and drilled two wells (Barracuda in April 2007 and Dila later the same year). Both wells were described by CNOOC as “significant finds” but they did not give any reserve figures.

In August 2008 CNOOC surprised the O&G industry by returning its stake in OML141 to the operator Emerald Energy Resources. When asked why they did this they would only say “There are many blocks we are working on. We move in and out -- it’s very normal. But I can’t comment on any specific block,” however subsequent events have made it clear that this was to do with fears about corruption rather than worries about the block itself. Chinese media reported in April 2008 that SINOSURE’s chief, Tang Ruoxin, was under government investigation on charges of unspecified illegal activities and in 2010 he was sentenced to 14 years in prison for taking bribes. Given that Sinosure paid $30 million for their 38% in 2005 and sold it for $60 million in 2006 you can see why CNOOC may have wanted to get rid of this asset before anyone in the Chinese govt looked too much into why they paid double for this asset and what happened to the money…

Emerald Energy Resources then got involved in a $60 million court case with Sinosure in 2018 https://www.oeclaw.co.uk/images/uploads/documents/China_Export_Judgment.pdf and then had to give back the ONL141 license to the Nigerian government in 2019 due to non-payment of fees https://africaoilgasreport.com/2019/04/farm-in-farm-out/nigerian-government-revokes-licences-of-seven-oil-blocks/ however, over this time NW ONL141 appears to have becaome a license in its own right.

NW ONM141 Zenith is the North West 105 square kilometers of OML141. This area is completely onshore in the marshland as opposed to the actual offshore area and according to their website Noble Hill Network Limited have a risk-service contract executed that means that they will be the exclusive service provider and will provide funding and develop the Northwest 105 square kilometres of OML 141.

We know from Zenith’s RNS of August 31st that NW OML141 contains two discovered fields (Elepa South and Barracuda) which are “drill-ready” and that there is one prospective field that has an estimated 232.7 million barrels of oil. The also say that this has the potential to grow to more than 500 million barrels of Contingent and Prospective Resources with several TCF of prospective natural gas and condensate.

We also know that ADM said in their 18th April 2021 RNS that the first drill target (that they were aiming at when they still had the rights to the asset) was targeting production of 4,000bopd. They claimed that drilling six wells would target production of 23,000bopd and they also gave the details that the opex figure per barrel of oil in this region was $20 per barrel but this could be reduced down to $12 per barrel if the company develops a 12mk pipeline to the Brass Export Terminal. All of this can be seen at: https://www.lse.co.uk/rns/ADME/completion-of-barracuda-field-transaction-whzmetdfm0mtiqe.html

So clearly the license has great potential. Back in 2006 CNOOC bought Total’s OML-130 block which had recoverable reserves of 600 million barrels for $2.69 billion, and while the NW OML141 is not likely to yield anywhere as much as this, proving up recoverable reserves of 100 million barrels would still be worth hundreds of millions and be life-changing for Zenith and it’s investors.

We have an idea of what it will cost to get hold of a share in the RSC as ADM paid $1.3 million for what they thought was a 35% stake.

We know that there are two well-sites that are ready to go and if the funds and rig were in place then it would be possible to drill before the end of the year (but more realistically this will be in Q1 or Q2 next year).

We also know from AC’s comments in the conference call that we should expect news on this in early December

What we don’t know is:

1) How much of a share the RSC itself gives of the asset as Emerald resources are still marked down as the operator. What exactly doe the RSC give us?
2) How much money we are likely to have to put in to complete the drill.
3) Any details about the previous discovery that was made in Barracuda.
4) Any information about the CPR that ADM have supposedly been working on for the last 6 months.

Hopefully, this will be cleared up when we get the announcement that we have come to a deal with NHNL over the license. This definitely looks like it could be the “big one” that AC promised us a few conference calls ago.