It is funny how some on here wish to distract from the good news yesterday that we have secured the services of one of the world’s biggest law firms to represent us in the tribunals against Tunisia and ETAP with minor criticisms about the court dates for the SMP case in France and the production in the USA.

SMP COURT CASE

To deal with these points quickly. Regarding the court case in France, I agree with JobPeterson’s comments. The final hearing in this case has clearly not been held yet or the company would have announced that it had happened and would have announced the timescale in which the final judgement was expected. They are obliged by their regulatory requirements for both their UK and Oslo listings to announce any news that is market-sensitive as soon as it becomes known. A court case for an amount that is roughly the same as the company’s current market capitalisation would certainly be considered market-sensitive and so any material progress on the manner would require a formal announcement. The fact that there has not been an announcement simply means that there has been no progress – ie nothing has yet happened.

Is it Zenith’s fault that the court case is taking so long? No, clearly not. The fact that the last significant announcement that we had about this case on July 3rd 2023 (https://www.londonstockexchange.com/news-article/ZEN/court-rejects-smp-s-request-and-awards-damages/16024745) clearly stated that the SMP had asked to stop the hearing in France and recommence it in the Republic of Congo and that this was rejected as, in the opinion of the judge, it had "all the characteristics of a dilatory request”. They even awarded Zenith €30,000 in damages because of this.

It is clear from these details that it was not Zenith who were trying to delay the court action but rather the SMP, and this is unarguable since it is not the opinion of Zenith but rather the judgement of the court. So it is only fair to assume that any subsequent delays are also the result of the SMP trying to continue these delaying tactics. Of course it is frustrating to us as shareholders, but it also has its plus points, because these delaying tactics also indicate that the SMP does not have confidence that it is going to eb able to win the case – hence the apparent tactic of delaying everything at all costs.

Of course, it would be nice to get an update on how things are proceeding from the company, but if nothing has happened then what information are they going to update us with? That they court case is ongoing? We already know that. That they now expect a judgement by the end of summer? If they don’t have a court date then how do they give us a timescale? They are damned if they do update us (see the comments today on them being untrustworthy because the expected date of March / summer for a conclusion in the court case was not met). And they are also damned if they don’t update (see the comment today that: “If they have not yet finished the trial by now, it shows that you cannot trust anything now either from what is said from the company.).

The simple fact is that the timescale for the completion of the SMP court case is not in Zenith’s control. It is in the control of the French legal system and the French courts. The time taken for the case to be heard will be the time taken for it to be heard and no amount of moaning on here or even by AC himself will change that. We just have to wait for a successful conclusion. If there are criticisms of the time it is taking then these should eb levelled at the French legal system and not the company.


US OIL PRODUCTION

Regarding the oil production in the USA. It is clear to me that the amount of oil production that they have acquired is incredibly small and anyone thinking otherwise is just deluding themselves. If there was any substantial amount of oil being produced then they would have had to announce the details because (as with the court case) it would be deemed market sensitive and they would be obliged to announce it for regulatory reasons. The fact that they have not announced details means that both the production, and the amount spent on it, are so small as to be insignificant. It would not surprise me if it is less than 1 barrel of oil per day.

This raises the question of why did Zenith bother acquiring this production at all? The answer is simple – they didn’t…

When you read the January 18th 2024 RNS about this acquisition (https://www.londonstockexchange.com/news-article/ZEN/update-on-united-states-portfolio/16295255) the announcement clearly states that CYAP acquired this production through its subsidiary CYAP Oil LLC. Again this raises the question of why they would do this? I have a theory on this and I think that the answer is obvious.

When Zenith acquired CYAP it was a technology company whose only value was in its US listing. The listing was what Zenith paid for but, because it was essentially not trading, and the US regulators hate a listed company that is not trading, they have had to make an acquisition to show that the company is still alive. I also think that it is significant that the acquisition was made through a subsidiary labelled CYAP Oil LLC. as this also shows the US regulator the change of focus of the company from tech to oil.

So anyway, that’s my theory behind this tiny purchase of oil assets. It shows activity within the company and it paves the way for the technology company to become recategorized in its listing as an oil company in the US. The bad point of this is that there is no material production at the moment, but the good point is that we can clearly expect some soon. If what has been mentioned on here is right (that they are aiming for 100bod by the end of this month) then we can expect the acquisition to come soon and to be roughly around 100bopd. This will be significant to all of us as a starting point of the long talked-about US acquisitions process. I also think that it is worth remembering that Zenith acquired the listed company CYAP for a reason and the only reason for them to acquire a US listed company is to be able to raise US funds through CYAP and not Zenith – so it is clearly their aim that CYAP becomes a self-funding US venture that can raise money to acquire assets itself, with Zenith merely being the controlling shareholder. This is a very exciting prospect.