It was good news yesterday for the much beleaguered UK and Norwegian shareholders of Zenith Energy (LON: ZEN). The Company returned from their self-imposed suspension after the audited financial results for the year ended March 31, 2020 were released. And lets face it, 2020 hasn’t been a ‘vintage’ year for the markets in general, not least the Oil & Gas sector which is still struggling to come to terms with the Global Covid 19 pandemic and a wayward (Falling) oil price.
So, that being said lets get into the nuts and bolts. As I see it at the moment for me it’s a binary play. I’m stripping out Tunisia, Nigeria etc. The jewel in the crown is Congo, reports of the loss of the Tilapia licence have to coin a phrase ‘been greatly exaggerated’. The Congo licence expired as per the terms of the licence. (Which was known by every serious O&G investor, writer and market watcher before ZEN bought it for peanuts).
It’s custom & practice on ALL O&G licences, they expire. Standard operating procedure on expired licenses is a renegotiation if both parties, Ministry of Hydrocarbons of the Republic of the Congo and Operator wish to go forward. That’s exactly where things are as of today! There’s also the small matter of the return of $5.3M back to the Company, which has to be, again, negotiated.
One, even begrudgingly, has to admire the dedication of Andrea Cattaneo (CEO), in spite of the ‘relentless Tom Winnifrith hate campaign’ he’s been ‘in situ’ Congo for over 6 weeks working tirelessly for his shareholders. I spoke to him yesterday.
To give you an idea of his schedule; 7am Business correspondence, transport organisation for various government meetings. 9am Breakfast. 9:30am-4pm is taken up with various visits & meetings with government depts. Once back at his hotel he liaises with Tunisa, Nigeria etc For updates and also updates staff at the ZEN office. 5;30pm late lunch, 9pm shower, light meal, then more calls and email correspondence 11pm bed. Wake up start again. That’s a gruelling schedule in 30 degree heat. So let it not be said that ZEN are sat on their arses….
Should Zenith Energy come back with the goods then their SP will rocket. Tilapia is potentially the make or break deal. I can see see 2p-4p with the proviso of a successful outcome.
As I understand it negotiations are soon to be concluded. That’s the ‘binary play’.
‘Ya pays ya money ya takes ya chances’.