Tuesday, 13 January 2015 09:30 AM
Calgary, Alberta / ACCESSWIRE / January 13, 2015 / Zenith Energy Ltd. (the "Company") (TSX VENTURE: ZEE) would like to provide the following update on the regulated Argentinean oil market following the government's adoption of a new price mechanism designed to promote production and drilling activity in the country, as reported by the Argentinean national press.
In recent years, the Argentinean Government has fixed the price for various grades of crude oil sold to the domestic market. As a producer, Zenith, through its wholly owned operating subsidiary Petrolera Patagonia srl, supplies crude oil, called Escalante, from its facilities at Don Alberto and Don Ernesto in the province of Chubut. During the last several years, Argentina's domestic oil prices remained significantly below the Brent and WTI crude oil benchmark prices. During 2014, the oil price for Escalante was set at US$67 per barrel, while Brent oil prices have sharply declined from approximately US$110 per barrel to US$49 per barrel. Argentina's regulators have now set January 2015 oil pricing at approximately US$60 per barrel for Escalante crude oil compared to the 2014 posted price of approximately US$67 per barrel of oil. This US$60 pricing is currently a premium of approximately 31% compared to the WTI closing price of US $45.76 on January 12, 2015.
In light of this change to the commodity price environment, Zenith's Petrolera Patagonia reiterates that it will stay the course with its budgeted capital expenditures within Argentina, which is free from any contractual or regulatory obligations as articulated previously through public news updates.
Today, with approximately 60% of the Company's current energy production priced relative to Argentina's regulated oil prices, Zenith remains well positioned in the South American business community while continuing to advance near term international opportunities to acquire production. Zenith's management and Board of Directors will continue to monitor the economic and political developments in Argentina in tandem with the current commodity price environment, so as to maximize the Company's opportunities to develop its two 100% owned oil fields, which are exempt from corporate taxes.
Andrea Cattaneo, President & CEO of Zenith Energy, reiterates that "This is a very encouraging sign for development in Argentina and the corresponding growth of the country's energy industry. It also confirms our rationale for investing in the country."
About Zenith Energy Ltd.
Zenith focuses on near term producing properties that can be further optimized with its engineering and technical experience. 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.
Zenith management is actively pursuing onshore fields with low acquisition costs from national or senior companies that have chosen to allocate their capital to unlock non-traditional resources with typically higher costs. Zenith's acquisition costs are further minimized by a strategy of reinvesting a portion of future cash flows back to remediation and capital improvements typically forgone on older fields. Combined with the use of modern technological practices and the Company's technical expertise, management continues to demonstrate the capacity to increase production and optimize remaining reserves.
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 doubling its production (ii) increasing the Argentinian production to approximately 280 barrels per day and (iii) that the workover program will bring several additional wells into 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 raise financing needed to 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 obtain additional financing or other resources to realize its 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: [email protected]
Telephone: (403) 938-8154
Telefax: (403) 775-4474
This press release is not to be distributed to U.S. newswire services or for dissemination in the United States. Any failure to comply with this restriction may constitute a violation of U.S. securities law.
SOURCE: Zenith Energy Ltd.