Zenith strikes deal for Tunisian assets
Zenith Energy has signed a share purchase agreement with fellow Canadian explorer Candax Energy to buy two concessions in Tunisia. the company said in a stock filing on April 30.
Zenith announced that its bid for two producing assets in the North African country had been successful on April 21, without disclosing details. The London-listed company said today it had agreed to acquire 100% interests in the El Bibane and Robbana concessions for $100 in cash and the assumption of $200,000 of debt.
Development at El Bibane began in 1998 and output peaked at 4,500 barrels/day. Its only producing well EBB-5 now flows 80-100 b/d of condensate and 5.5-6.0mn ft3/d of gas, which is currently reinjected into the reservoir although Zenith sees potential for commercial gas production using new technologies. The EBB-3 well has been temporarily shut-in, because of low oil prices and the cost necessary to repair it. Zenith estimates it can restore production to 500 boe/d by undertaking a $3.5mn well intervention.
Production at Robbana peaked in 1994 at 500 b/d. Its ROB-1 well currently produces 25 b/d, down from 50 b/d prior to an unsuccessful well intervention. Zenith said studies suggested an infill well drilled in proximity to ROB-1 could yield 200 b/d.
"The key significance of the acquisition of El Bibane and Robbana is the undeveloped potential and the possibility to achieve, in the near-term, a stabilised cumulative production in excess of 500 b/d of oil, as well as a material production of natural gas and condensate," Zenith CEO Andrea Cattaneo said.
Gaining this output will be transformative for Zenith's revenues, he said, enabling the company to reinvest in developing other assets.
"Our near-term objective is to produce in excess of 1,000 barrels of oil/d and to substantially scale production upwards from this threshold by developing our portfolio via systematic workover and drilling activities in the current favourable oil price environment," Cattaneo said.
Zenith entered Tunisia in April 2020, acquiring 45% interests in the North Kairouan and Sidi El Kilani's assets Kuwait Foreign Petroleum Exploration and CNPC International. It went on to strike a deal in March this year to buy a 45% stake in Tunisia's Ezzaouia concession from Candax Energy.
The company has been producing small volumes of gas in Italy for a number of years. It also entered the Congo last year, where it is developing oil. In January this year, Zenith signed a cooperation agreement with Fleet Oil & Gas to joint pursue other oil and gas upstream acquisitions in the Mediterranean, the Middle East and Africa.