Monday, 29 December 2014 06:51 PM
Calgary, Alberta / ACCESSWIRE / December 29, 2014 / Zenith Energy Ltd. (the "Company") (TSX VENTURE: ZEE) is pleased to report that its 100% owned Italian subsidiary has reached an agreement with Basengas S.r.l., a successful retail marketer of natural gas within Italy, to handle forthcoming production from Zenith's 100% owned San Teodoro field, which is anticipated to restart production in August 2015. Basengas owns and operates a pipeline distribution network covering over 100 km in Southern Italy and serves approximately 7,000 consumers, with reported direct gas sales in excess of 5 million cubic metres (177 MMcf) annually.
Using existing field data, Zenith has established a development strategy for the San Teodoro region. While the field has been capable of production, a lack of regional infrastructure limited additional expansion. By signing the agreement with Besengas, Zenith will now be able to start generating revenue from this asset.
Improvements of facilities at San Teodoro began earlier in 2014 and will now be completed by tying in new dehydration equipment. Production from the existing wellbore is expected to commence at 3,000 cubic meters/day (106 mcf/d or 18 boed), increasing Zenith's current daily production in Italy by 25%, to over 100 boepd. Costs of the refurbishment and commencing production are anticipated at EUR300,000 which will be paid through an equipment leasing facility.
Zenith CEO Andrea Cattaneo comments, "I am pleased that our technical team continues to enhance the value of our portfolio of natural gas properties in Italy. They have demonstrated an ability to evaluate and monetize existing reserves on an ongoing basis through the efficient management of eight onshore producing fields and overseeing the operations at three other non-operated fields. The expected future incremental production gains are economically important as we build a base of production with a long-term viability. Zenith's producing licenses in Italy cover 837 square kilometers with net land holdings of 369 square kilometers (approximately 91,143 acres).
Zenith Extends Existing Loan
Zenith also reports that management has received final paperwork extending the maturity date of the current corporate loan, by an additional year, to June 1, 2016 at the same terms. The loan has a principal amount of US$2,050,000 and a simple interest rate of 10% per annum. Zenith and the lender agreed that payments will be limited to interest only until June 2015 followed by equal monthly installments of principal and interest thereafter.
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 the 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.
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.
Forward-Looking Statements
Certain information in this press release is forward-looking within the meaning of applicable securities laws, and related to anticipated financial performance, events and strategies. When used in this context, words such as "will", "anticipate", "believe", "plan", "intend", "target" and "expect" or similar words suggest future outcomes. By their nature, such statements are subject to significant risks, assumptions and uncertainties, which could cause the Company's actual results and experience to be materially different than the anticipated results or expectations expressed. 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.
In particular, forward-looking information and statements include, but are not limited to: (i) the capital expenditures required in order to commence or re-commence production on the San Teodoro Field; (ii) the ability of the Company to commence or re-commence production; (iii) the value of the reserves has been certified to Zenith by Ing. Bello and A.P.E. Servicers S.r.l. independent studies, but the San Teodoro reserves will be determined, evaluated and incorporated in the drafting of the next NI 51-101 Reserve Report at March 31, 2015; (iv) the price of natural gas in Italy; (v) the ability of the Company to comply with certain regulatory requirements; (vi) anticipated capital expenditures required to re-commence production; (vii) the Company's low overhead costs; (viii) the Company's ability to substantially increase its oil and gas production by the end of 2014; and (ix) the Company's ability to produce gas for industrial and retail markets in Europe.
These statements are based on certain assumptions and analysis made by the Company in light of its experience and perception of historical trends, current conditions and expected future developments and other factors it believes are appropriate. The material factors and assumptions used to develop these forward-looking statements include, but are not limited to: (i) assumptions related to international natural gas prices; (ii) ability to obtain regulatory approvals; (iii) costs of construction and development; (iv) availability and cost of labour and management resources; (v) performance of contractors and suppliers; (vi) availability and cost of financing; (vii) assumption the Company will continue to focus its activities through low-risk exploration and production opportunities offering logistical and proximate locations to refineries and pipelines and gas ducts; and (viii) the Company's business strategy and outlook.
Whether actual results, performance or achievements will conform to the Company's expectations and predictions is subject to a number of known and unknown risks and uncertainties which could cause actual results to differ materially from the Company's expectations. Such risks and uncertainties include, but are not limited to, risks and uncertainties relating to: (i) political and economic conditions in the countries in which the Company operates or may operate; (ii) fluctuations in foreign exchange rates and natural gas prices; (iii) the Company's ability to access external sources of debt and equity capital; (iv) failure to obtain any required regulatory approvals; (v) regulatory and governmental decisions including changes to environmental legislation; and (vi) availability and cost of labour, equipment and management of resources.
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 as actual results could differ materially from the plans, expectations, estimates or intentions expressed in the forward-looking statements. 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
SOURCE: Zenith Energy Ltd.