Zenith has a footprint in Azerbaijan, Italy and Argentina.
Azerbaijan is the potential elephant in the room. The beginning of operations last year followed the signing of a ‘REDPSA’ (Rehabilitation, Exploration, Development and Production Sharing Agreement) with SOCAR, State Oil Company of the Azerbaijan Republic, on March 16th, 2016 for an area of 642 square kilometres. This is Azerbaijan’s largest onshore oilfield.
Current production averages 300 barrels of oil per day. Historical production once averaged 9,000bopd during the Soviet Union period
Zenith is confident that the application of modern production techniques and investment in new infrastructure will allow significantly greater oil production volumes. This would result in an important re-evaluation of the field.
Zenith was conservatively targeting 1000 bopd within 12 months with one workover team. An additional work-over rig and team is also to be imminently deployed to accelerate the operations.
The biggest plus point with Azerbaijan is the rapid payment for oil produced. Zenith has received full payment for all oil under the agreement to date.
With a proven historical high-producing onshore field the work-over and servicing of wells should prove highly cash-generative in the short, medium and long-term.
The company is listed on the LSE market and TSX. It is not an AIM stock.