Potential new Tunisian Acquisition

MarketGunsling
ZENA 06.12.2021 kl 13:19 1569

Interesting announcement this morning from Zenith of the access to the new €3 million finance facility from Winance and the drawdown of €1 million of it already. Given the comment from the CFO it looks like we are close to making more than one additional asset purchase and that they are going to be in Tunisia.

The putting out of an additional 80 million shares as the security for this deal is not great but I do like the comment that they are likely to service the loan not out of the shares but instead out of Tunisian revenue. To my mind, this is the perfect use for the Tunisian oil revenue as the whole point of having production assets is to enable companies to leverage their revenue without always having to turn to equity issues. It also fits in with what Andrea has long been promising us in the investor calls – namely that we are serious about looking at non-equity methods of financing.

However, it is not the method of financing that is particularly interesting in this case, but rather which assets the company will use the money to buy. Normally, we would have no idea but AGEOS’ post from Saturday on the UK forums may potentially give us a clue as to what we might be going for. As he has pointed out ATOG which acquired a number of assets by taking over Medco Energy O & G Tunisia but are in deep trouble with their two Tunisian permits having been removed. This is the kind of deal that AC loves – a distressed seller and a potential bargain because of it.

The Bir Ben Tartar (BBT) Concession where ATOG are the operator and which currently produces at around 500 bopd average (subject to a PSC with ETAP) would be the obvious target for some of this Winance money. The asset has consistently produced over 500bopd but ATOG were always planning to complete a workover to increase production there by 50% as well as then following a infill drilling programme aimed at quadrupling production there. So in total if all had gone well the BBT concession could potentially be producing between 2,000-3,000 bopd.

Obviously, we do not know if BBT is definitely the target of Zenith’s latest Tunisian acquisition spree, but it does fit the profile of the kind of assets that AC likes and given that the asset is held by another offshore limited company (the same as Ezzaouia and El Bibane) then it should be a simple deal to close. It is simply a matter of how much we would be willing to pay for it and how desperate ATOG actually are.

We shall wait and see. Full credit to AGEOS for the Medco research here.
Viking_I
06.12.2021 kl 13:42 1511

80,000,000 (eighty million) new common shares of no par value (the "Reserve Shares") have been issued to the Lender at a price of NOK 0.12 (equivalent to approximately £0.01) to be held in a depositary institution designated by the Lender.

"Under the terms of the Loan Agreement, Zenith may elect to pay each Instalment either by cash or by utilising the Reserve Shares, by delivering to the Lender an amount of Reserves Shares equivalent to the quotient obtained by dividing the Instalment Amount by 95 percent of the applicable VWAP (volume weighted average price) for the period of ten business days prior to the due date for each Instalment. "
An average either 10million share or cash each month with VWAP (volume weighted average price) for the period of ten business days prior to the due date for each Instalment. if share price average 0.16 then share will be issued by kr 0.16.
For Winance it is beneficial to keep share price around 0.1 until he buys all 80 million shares and then he can earn hefty profit after Nigeria production starts. So it is in hands of Zenith and its's shareholders how much make costly for Winance these 80 million shares. 80million share to give away with 8 million nok (kr 0.1) or 31 million nok (kr0.3875).

Simple thing is out of kr31 million, how do you want to pay
1) kr 8million by shares (kr0.1/share)+ remaining kr 23million in cash or
2) kr 31million by shares(kr0.3875/share )
if you lower the course zenith will pay more money.

I doubt many will understand that, but good deal by AC
1) by issuing USD$1 million worth share he will get USD$3Million if course reach kr0.4 after Tilapia II, new acquisition in Tunisia and Nigeria as now he having money so it is zenith beneficial to announce deal as soon as possible.
Redigert 06.12.2021 kl 14:24 Du må logge inn for å svare
Slettet bruker
17.01.2022 kl 15:22 1088

Nå må de få gang på dette!
TheLondonOiler
19.01.2022 kl 11:09 729

Potential looks great