Republic of Azerbaijan Parliament ratifies the REDPSA signed between Zenith and SOCAR
(via Thenewswire.ca)
Calgary, Canada / June 20, 2016 / Zenith Energy Limited is pleased to announce that the Rehabilitation, Exploration, Development and Production Sharing Agreement ("REDPSA") for the block including the Muradxanli, Cafarli and Zardab oil fields in the Republic of Azerbaijan has been ratified by the Parliament of the Republic of Azerbaijan.
The REDPSA had initially been signed between Zenith Aran Oil Company Limited and SOCAR (the National Oil Company of the Republic of Azerbaijan) on March 16, 2016 and, as disclosed by the Company in the last 3 months, the approval process of the REDPSA has progressed steadily and rapidly.
Zenith Energy Ltd., on behalf of Zenith Aran Oil Company, delivered the Ultimate Parent Guarantee in favour of the REDPSA on April 10, 2016.
On April 27, the Cabinet of Ministers of the Republic of Azerbaijan approved the transaction and issued a 'National letter of Guarantee' and the Parliament of the Republic of Azerbaijan, called "Milli", has now unanimously ratified the REDPSA.
It should be underlined that a REDPSA is unique insofar as it holds the strength of statutory law in the Republic of Azerbaijan upon ratification by Parliament.
The three fields cover an area of 642.4 square kilometres, and currently produce ~350 barrels of crude oil per day. These fields, however, have produced significantly larger quantities in previous years. Minor quantities of natural gas are also produced and used onsite.
Zenith will hold an 80% participating interest in current and expected increased future production, while a SOCAR Oil affiliate company (fully owned by SOCAR) will retain 20% of production. The duration of the REDPSA is 25 years, with a potential extension of 5 additional years.
Andrea Cattaneo, CEO of Zenith Energy Ltd comments: "This acquisition represents Zenith's first investment in the Republic of Azerbaijan, a jurisdiction that management holds in high regard. We look forward to working with SOCAR, bringing the strength and expertise of an independent oil company with Canadian expertise. Innovation, new technologies, different production protocols and great management's commitment to the environment and the local regional economy stand most prominent among Zenith's contributions to this project. We are confident that our investment in Azerbaijan will be a long-lasting one.
I am pleased that the legal process of establishing the REDPSA has now been achieved with final Parliamentary ratification. While the process has had various steps, since Zenith was granted Presidential Approval in October 2015, the procedure has been well defined and has enabled both the Government and the Company to advocate for a deal that will benefit all parties.
I look forward with enthusiasm to commencing production of crude oil in Azerbaijan very shortly under the Zenith Aran banner".
"During the recent period of declining global energy prices, our management team has continued to pursue its core strategy and focused on acquiring mature or shut-in production and low cost reserves with the capacity to scale production for the future benefit of shareholders. Zenith's acquisition in Azerbaijan markedly transforms the value of the company, as evidenced by our recently filed reserves report, but would not be possible without the extensive operational expertise that the Company has demonstrated in Argentina and Italy."
About Zenith Energy Ltd.
Zenith Aran Oil Company Limited is a fully owned affiliate of Zenith Energy Ltd.
Zenith Energy Ltd focuses on the acquisition and further development of proven onshore oil and gas fields where production has declined over time, but which are capable of increased productivity following an injection of capital and optimization through its corporate engineering and technical expertise. To maximize shareholder value, Zenith targets acquisitions of production opportunities that offer strong logistics and close proximity to refineries and pipelines. Zenith's management and directors have extensive international and governmental experience and possess the technical knowledge to execute this strategy.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Forward-Looking Statements
This news release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "objective", "ongoing", "may", "will", "project", "should", "believe", "plans", "intends" and similar expressions are intended to identify forward-looking information or statements. More particularly and without limitation, this news release contains forward-looking statements and information concerning (i) the Company's goal of acquiring producing properties in Albania, (ii) the current and future production potential of Company properties, (iii) the revenue associated with production, (iv) the pricing and profitability of oil and gas production, and (v) successful exploration and a subsequent ability to achieve production. The forward-looking statements and information are based on certain key expectations and assumptions made by Zenith, including the ability to execute its strategy and realize its growth opportunities including its ability to finance and execute its plans. Although Zenith believes that the expectations and assumptions on which such forward-looking statements and information are based are reasonable, undue reliance should not be placed on the forward looking statements and information because Zenith can give no assurance that they will prove to be correct. By its nature, such forward-looking information is subject to various risks and uncertainties, which could cause the actual results and expectations to differ materially from the anticipated results or expectations expressed. These risks and uncertainties, include, but are not limited to, Zenith being unable to finance or realize growth opportunities. Readers are cautioned not to place undue reliance on this forward-looking information, which is given as of the date hereof, and to not use such forward-looking information for anything other than its intended purpose. Zenith undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law.
For further information, please contact:
Jose Ramon Lopez Portillo Andrea Cattaneo
Chairman of the Board CEO & President
Email: info@zenithenergy.org
Telephone: (403) 938-8154
Telefax: (403) 775-4474
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