(TheNewswire)
Calgary, AB / TheNewswire / November 1, 2017 - Zenith
Energy Ltd. (" Zenith " or the " Company ") ( LSE : ZEN ; TSX.V : ZEE ), the dual
listed international oil & gas production company operating the largest onshore oilfield in Azerbaijan, is pleased to
announce that it has signed a commitment letter with Olieum Services WLL (" Olieum
"), an integrated oilfield services and equipment joint venture based in Bahrain, for the procurement of
a Genesis BQ500 onshore drilling rig. Olieum has worked
closely with the Company to structure a unique lease arrangement that aligns Zenith's targeted growth plans and cash flows
with its future equipment requirements.
The Genesis BQ500 is the latest generation, automated onshore hydraulic drilling
rig to be manufactured by B Robotics W S.R.L, a founding partner in Olieum, and a leading Italian oil and gas innovation company
specialising in the design and manufacture of advanced oil and gas drilling equipment. The rig is expected to deliver enhanced
automation, efficiency and safety to the Company's drilling operations, whilst driving down costs and time-to-production. This has
largely been achieved through extensive research and development in modular rig design, and in key components including the monkey
board, slips, lay-up and down machine, pipe containers, roughneck, subs and bits loader, and all the working floor tools.
Manufacturing of the Genesis BQ500 is scheduled to begin upon the fulfilment of the
preliminary conditions detailed in the commitment letter. This is expected to take place in Quarter 4, 2017, with
delivery anticipated in the second half of 2018.
Andrea Cattaneo, Chief Executive Officer of Zenith, commented:
"I am very excited about our new partnership with B Robotics W. The BQ500 Genesis rig is an
extremely impressive piece of machinery, offering a unique mix of technological innovation, reliability and
efficiency.
Zenith is strategically committed to operational independence and strong profitability,
even in a low oil price environment. Our development drilling campaign, which we expect to begin in 2018, will play a
transformational role in Zenith's journey towards achieving its objective of mid-tier market capitalisation. Indeed, the recent
strengthening in oil prices will, if sustained, further maximise the profitability of our systematic field development
activities. It should also be noted that the ever-present risk of third-party delays negatively impacting our operations will
be greatly mitigated by operating our own rig.
We know that our field in Azerbaijan has very significant quantities of oil, with
independently assessed 2P reserves of 32.1 million barrels of oil, and our intention is to produce as much oil as possible in
full safety. The advanced automated features of the BQ500, as well as its energy efficiency, will not only reduce our drilling
expenses, but also make our operations faster and, at the same time, safer, by significantly reducing the margin for human
error.
Direct collaboration with the manufacturer, especially in the design phase before the rig
is produced, will allow Zenith's operational team to provide detailed input regarding our technical requirements, ensuring that the
rig is designed to our specifications.
I look forward to updating the market when construction of the rig begins."
Walter Bagassi, Chief Executive Officer of B Robotics W, and Director, Olieum Services WLL,
commented:
"We are very pleased to have the opportunity to work with Zenith Energy. In today's
marketplace, increasing productivity is the key to success. Our fully automated drilling rigs provide many safety and cost-saving
advantages over traditional rigs, to increase a company's competitiveness and its bottom line. Incredibly, no significant
technological advances have happened since 1923, when drilling moved from percussion to rotary - the development in
drilling rig manufacturing has been static for 94 years."
Abdulaziz Alshammary, Director, Olieum Services WLL, commented:
"Our integrated oilfield services and equipment value chain allows us to easily integrate
with the needs of national and international oil companies, operators and contractors. We packaged a bespoke equipment and
financial arrangement with Zenith, suited to their particular requirements in Azerbaijan. We look forward to exploring synergies
with Zenith to create further value for all stakeholders."
Total Voting Rights ("TVR")
The Company wishes to announce, in accordance with the Financial Conduct Authority's
Disclosure Guidance and Transparency Rules, the following information as at November 1, 2017. The issued ordinary share capital of the Company at the date of this announcement consists of 133,787,977 common shares in issue and admitted to trading on the Main Market of
the London Stock Exchange.
The above figure may be used by shareholders in the Company as the denominator for the
calculations by which they will determine if they are required to notify their interest in, or change to their interest in, the
share capital of the Company under the Financial Conduct Authority's Disclosure Guidance and Transparency Rules.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in
the policies of TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
For further information, please contact:
Zenith Energy Ltd.
Andrea Cattaneo
Chief Executive Officer
Email: info@zenithenergy.ca
Telephone: +1 (587) 315 9031
Telefax: +1 (403) 775 4474
Optiva Securities - (Joint Broker)
Christian Dennis
Telephone: + 44 (0) 203 137 1903
Beaufort Securities Limited - (Joint Broker)
Jon Belliss
Telephone: +44 207 382 8300
Allenby Capital Limited - (Financial Adviser)
Nick Harriss
Nick Athanas
Telephone: + 44 (0) 203 328
5656
Yellow Jersey (Financial PR/IR)
Tim Thompson
Telephone: +44 (0) 203 735 8825
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" , “potential”,
“transformational”, "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 the current and future
profitability and production potential of the Company's assets in Azerbaijan. 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 realise 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 the Company 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.
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