Is Zenith in a good place at this exact moment – the honest answer is no. But does the company look like it could be in a good place in the relatively newar future – in my opinion the answer is yes.

The company has a number of different revenue generating options on the table plus a number of acquisition possibilities. To deal with these in order: Kazakhstan / US Acquisitions / The Arbitrations / SMP Court Case

1. The Kazakhstan Project – This could be massive for the company. It seems like a good deal for what could be a hugely valuable license. However, there is a relatively significant cost attached to this acquisition and there are question marks as to how the company would pay this money at the moment. Given our previous expereince of when Zenith do not make announcements about projects the signs are not good. Likelihood of happening, in my opinion, 20%



2. The USA acquisitions – These are a very interesting change of direction for the company and, if done correctly, they could have a very positive impact on the company’s future by delivering an ongoing revenue stream in one of the world’s safest and most oil-friendly business environments. The only acquisition made so far is a 5% royalty in some producing wells at Eagle Ford in Texas, as announced on Jan 18th. Since no numbers were announced as to what this 5% means in bopd then we are probably safe to assume that the numbers are very very small. However, the fact that this was acquired through CYAP is a statement of intent for the company. The acquisition of CYAP itself is also a statement of intent from the company as it is a listed vehicle in the US with the ability to issue equities in the world’s biggest equity market. Although this is a stand-alone legal entiry – according to it’s website: https://cyap.info/ Zenith hold 99.87% of the issued shares.

Obviously, it is one thing owning a listed US company and another thing actually acquiring assets into it. But there would have been no point in Zenith acquiring as US listed entity if they were not going to use it to raise capital to finance acquisitions.

My thoughts are that CYAP will be used to raise money for US acquisitions and the Zenith holding in the company will ultimately be diluted but still leave the company with control of CYAP. The big question is, of course, how much US production will they acquire and for what price? But one thing that we know about Andrea is that he has always been good at deal-making (witness the acquisition of the Tunisian assets for £250,000) AND that when he feels a deal is not right for Zenith then he walks away from it. Likelihood of happening 90%+




3. The Arbitrations – these are definitely the most significant, and potentially lucrative thing that Zenit have in the pipeline at the moment. According to the March 20th RNS- Arbitration1 is for $7.5 million / Arbitration 2 is for $85.8 million and Arbitration 3 is for $48 million, giving a total of $140 million.

Obviously, we do not know if the arbitrations are going to be successful and, if they are successful, whether Zenith will receive all the money that they are claiming. However, the simple fact is that this is a huge amount of revenue that the company could receive in pretty short order.

According to the March 20th RNS, Zenith expect that the first arbitration award will be made befor the end of 2024, the second arbitration award will be made in Q1 2025 and the third arbitration award will be made in 2027.

Imagine for one second that these were not legal arbitrations but oil wells being drilled by Zenith. How excited would we be if we were going to drill an oil well which, if successful, would be sold by Zenith for $7.5 million before the end of the year. How excited would we be if we were going to drill a second oil well in Q1 2025 which could be sold for up to $85 million with a third in 2027 that we could sell for up to $48 million. The answer is, that we would all be over the moon.

The potential with the arbitrations is huge- much much bigger than Zenith have ever had from drilling oil, and the risk is no greater than any oil drill. So we should be excited.

Even if we subscribe to the idea that Zenith do not win every arbitration, or that they do win and only get a percentage of the amounts claimed then the numbers involved are still probably at least around $50-80 million – so even a conservative success should deliver cash of at least 10 times the current market capitalisation.



4. The SMP Court Case – We also have the SMP court case in the pipeline where Zenith are claiming approximately $6 million for the failure of the drill that SMP drilled on behalf of AAOG.

I have no idea what the status of this court case is since the last announcement that the company made about it was on October 18th 2023, but if the case had been struck out then they would have to have announced that this had happened, so we can safely assume that it is ongoing.

From what I have previously read about the drill then they court case seems fairly certain that it is to be found in Zenith’s favour but it is being held in France and involving a French company so let’s give it a chance of success of approximately 50%.


If we put all of these factors together then Zenith seems like it could provide a very successful share price performance over the next 12 months. The company’s current market capitalisation is approximately $5 million USD, yet it has a court case for $6 million, arbitrations for $140 million and the potential of acquiring assets in the US that if they produce approx. 500bopd would (alongside the Italian production) more than cover the company’s expenses and provide a substantial revenue stream on top. I have not bothered to talk about Kazakhstan here as I think it is very unlikely to happen but if it did then that would also be massive for the company.

It is my contention that if any of the four events that I have mentioned were successful then the value of the Zenith share price would be many multiples of where it is now – and I think that it is inescapable that at least some of them will.

The success of the SMP court case would double the share price from current levels.
The success of the first arbitration would double the share price from current levels.
The acquisition of 500 bopd production in the US would probably quadruple the share price from current levels.
The acquisition of Kazakhstan would probably quadruple the share price from current levels.
The success of the second arbitration would send the share price up by about 15 times from current levels.
The success of the third arbitration would send the share price up by about 10 times from current levels.

This is six different events that could each individually show a massive impact on Zenith and if more than one of them came in then the share price response would be significantly magnified. I cannot believe that at least some of these possibilities ill not happen in the next 12 months and for the reason I believe that Zenith is still an excellent investment for me as a long-term holder and even more so for anybody investing now.