Zenith Energy: The junior oil & gas company and its aggressive growth strategy

In the current commodity price environment, with oil prices at their lowest level for decades, companies are under huge pressure. It’s survival of the fittest. Many have been forced to halt operations, announce revised budgets as well as administration expenses and where feasible strategic reviews of projects and timelines.

However, there are some that have been working below the radar to take advantage of opportunities thrown up by the downturn, deals that 12 months ago were far beyond their financial reach.

The current depressed market is indeed a good occasion for companies to expand counter-cyclically by securing large, revenue generating oil and gas production assets at advantageous terms.

In this regard, take a look at junior producer Zenith Energy (ZEN).

Since December last year, Zenith has continuously released a flow of impressive news focusing on their revised growth strategy and new acquisitions. Their decision to move away from the Azerbaijan-focused portfolio has centred around a new strategic focus on pursuing large-scale, revenue generating oil production and development opportunities in Africa, on favourable terms as well as proven oil producing geology

Azerbaijan is a hard country to navigate and work in for a small oil & gas company. Geology was difficult while operations were hampered by poor local infrastructure. The project was hard to manage but even so, significant oil flowed. The problem was the time and resources required were above management expectations and results were coming too slowly when gauged against expenditure vis-à-vis the potential of other producing assets in much safer oil jurisdictions.

A strategic review of the business by the Board, led by Andrea Cattaneo, CEO of ZEN decided to look at African opportunities that had been brought to the company’s attention. The two first assets were secured in the Republic of the Congo and Tunisia. These went mainly unnoticed by the market.

The first was the acquisition of an 80% interest in Anglo African Oil & Gas Congo, announced in December, which gives Zenith access to a highly prospective oil production and development asset.

At the start of 2020, in view of its planned future activities in the Republic of the Congo. Zenith announced the appointment of Mr. Bienvenu Briss Aleba as an advisor.

Mr. Aleba has worked at Congolaise de Raffinage, the refinery subsidiary of the national oil company of the Republic of the Congo, Société Nationale des Pétroles du Congo for the past nine years

In April, Zenith was able to secure the acquisition of 100% of the Tilapia oilfield in the Republic of the Congo for £200,000. In the previous agreement, as announced on 24 March, the cost was set at £800,000 for 80% interest in the asset. However, the current climate, fuelled by economic uncertainty around low oil prices and the Corona Virus pandemic, opened an opportunity for a renegotiation that proved to be incredibly positive for Zenith Energy.

The acquisition also novated 100% of AAOG inter-company loans with AAOG Congo to ZEN for approx. £12.5M as well as US$5.3M that AAOG was owed by Société Nationale des Pétroles du Congo as result of past work performed on the licence. All great news for the Zenith balance sheet.

Successful drilling undertaken during 2018 and 2019 identified multiple potential productive reservoirs within the Tilapia oilfield across a number of formations including the regionally proven Mengo and Djeno reservoirs.

Only a few days later, Zenith announced the acquisition of Sidi El Kilani from KUFPEC.The asset covers an area of 204 square kilometres, located onshore, in the Pelagian Basin, Eastern Tunisia, and it is one of the most productive fields onshore Tunisia and currently produces natural flow, at a rate of approx. 700 bopd.

Once concluded, Zenith’s entry into Tunisia could yield in excess of US$3M net annual revenues whilst also working alongside CNPC.

Tunisia is an attractive market for oil producers, who make up the majority of foreign investors in the country. It is also a key location in North Africa, with close proximity to European markets as well as Arab Gulf states.

African countries present a promising business outlook for foreign companies. Africa’s economic growth remained stable in 2019 at 3.4%, and for the first time in ten years investment expenditure accounted for over 50% of GDP growth.

Beyond Africa, Zenith Energy also acquired Coro Energy Plc’s Italian natural gas production and exploration portfolio, which will turn the company into one of Italy’s leading natural gas producers with an increase in Italian gross production revenue of approximately 410%, with an expected yearly gross revenue of approx. €3.6M.

What Zenith has achieved is unique and valuable: assets which will generate certain oil production and cash flow as well as the opportunity to partner and work with big industry players. Zenith’s partners in the acreage include two industry heavyweights with the national oil company of Tunisia (55% interest) and CNPC (22.5 % interest).

Few junior companies have the network, expertise and credibility offered by Zenith.

Zenith Energy CEO Andrea Cattaneo commented about the company’s new focus during a major market shakedown:

“The recent steep decline in oil prices as a result of world events has particularly impacted financial markets, whilst also presenting new opportunities to acquire highly prospective oil and natural gas production assets at advantageous terms.

The current low oil price environment provides an unprecedented opportunity for companies wishing to expand countercyclically by securing large, revenue generating oil and gas production assets at advantageous terms.

We are currently in the process of completing a series of transformational acquisitions that, by virtue of their material existing production, or near-term highly prospective production potential in the case of Tilapia, will enable Zenith to rapidly enlarge and diversify its portfolio at a time of great opportunity for companies with a clear strategic focus.”

About the acquisitions in Africa, Cattaneo says:

“It is Zenith’s strategy to acquire revenue generating oil and gas production assets. The acquisitions represent an attractive opportunity to enrich our asset portfolio in a country where management has significant experience. The recent Acquisitions enrich, as well as diversify, our asset portfolio by adding significant reserves and prospective production potential. This is in line with our company strategy of acquiring assets with significant untapped production potential.”

Finally, today Zenith has announced its intention to delist from the TSX-V as part of its strategy to cost cut and preserve resources whilst maximising the efficiency of its corporate structure.

The delisting is due to completed on or around April 30, 2020. Zenith will remain listed on the London Standard Market (LSE: ZEN) and the Oslo stock market (OSE: ZENA-ME).

Zenith is definitely a company on a winning strategy. Pick winners. Watchlist Zenith

Save the Date: Cassiopeia Investor Symposium Autumn 2019

Cassiopeia Services is delighted to announce the next edition of our renowned Investor Symposia, the exclusive London Investor Event which gathers investors, company executives, and market watchers and influencers together in prestigious central London venues for an evening of networking and discovering investment opportunities.

Whether you are a shareholder, private or institutional investor, industry professional or thought leader, our symposia provide a unique opportunity. We facilitate connections and ongoing dialogue between companies, shareholders and market opinion leaders. Information is key to investment and trading.

In these times of market uncertainty, establishing the right connections gives investors the edge to choose the best fit for their investment.

This October, our Symposium will be held at a new location, Home Grown Private Members’ club for high-growth entrepreneurs and investors in Central London. Home Grown is an exclusive venue perfectly positioned to act as a catalyst for business development.

This edition’s theme will be Natural Resources, presented in an innovative format with two sessions to combine market insights from analysts and companies to watch. This is the time for investors to gather knowledge on and insight into how to best manage their investments in natural resources at a time when external factors are shaking up the market.

Opinion leaders and financial media representatives, market influencers and well-known City traders regularly attend our events to gain insight into market trends and promising stocks. In this edition, former SP Angel oil & gas analyst and director at O&G Advisors, Zac Phillips, and gold fund manager Angelos Damaskos, will join for more insight on the markets.

Oil & Gas

Oil & Gas stocks are a must in any investment portfolio. In 2018, oil production increased nearly 9% from 2017, hitting the highest UK oil production rate since 2011. In 2019, UK oil and gas upstream investment is expected to witness a projected 4% increase.

Additionally, gas is increasingly becoming a primary source of energy for the UK. Last year, natural gas represented nearly 40% of UK’s primary energy usage, up on the previous year.

data from Carbon Brief, August 2019

Zac Phillips, the well-known Director of Oil Gas Advisors and former SP Angel analyst, will be talking to investors about this space.

Union Jack Oil (UJO): One of the hottest stocks on the London AIM market in 2019 is small-cap Union Jack Oil. UJO caught investors’ attention this summer with the discovery of the West Newton project, which represents one of the largest onshore discoveries in the UK. Evaluation of the West Newton project showed a significant oil and gas discovery rather than a pure gas discovery as originally perceived. The UJO company also operates several other assets, among the biggest being the Biscathorpe and Wressle wells, both holding considerable potential and set to generate encouraging results in 2020.

Zenith Energy (ZEN) is a company operating the largest onshore oilfield in Azerbaijan in partnership with SOCAR, as well as nine natural gas assets in Italy. Listed on both the Canadian TSX Venture and the London Stock Exchange Main Market, Zenith’s strategy is to acquire and develop assets with untapped reserves and existing production. By the close of 2020, Zenith plans to achieve a production target of 3,000 bopd. The Company owns a fleet of 3 rigs, comprised of a 1,200hp drilling rig and two workover rigs.

Gold & Metals

it’s highly likely that they are already watching gold market as it has been growing stronger in the past weeks, especially in India, where gold prices have hit a record high. The forecast is set to continue positively, a trend which could be attributed to uncertainties in the global market, which favours the market for gold and precious metals as store of value.

Mixed economic data, persisting trade worries, Brexit uncertainty and the loose monetary policy stance of central banks are some of the factors specialists predict will push the price of gold up. Angelos Damaskos, CEO of Sector Investments and mining analyst will be sharing his views on gold and metal trends.

St Georges Mining (SX) Established in 2009, St Georges is a Canadian company, focused on mining activities and developing new technologies to solve today’s biggest environmental and energy problems. St Georges develops metal processing technologies which can be deployed to reduce the environmental impact of mining operation, while improving profitability and the financial bottom line of current base metals producers. St Georges has a diverse portfolio of mining projects including assets in Iceland and Canada, where it explores minerals and metals including gold, copper and zinc but also lithium and nickel, which power new technologies.

IMC Exploration (IMC) the newly listed Ireland-based mining exploration company IMC focuses on gold and base metals. IMC is well positioned to deliver value to its shareholders building on its resource potential and portfolio, which holds 6 prospecting licences on the east coast of Ireland. Three of the licences are aimed at targeting an area in Ireland which is considered to have high grade gold. The other two licences are operating in Tailings and Spoils Avoca, which has seen great results along with a recently acquired CPR.

Registrations are open via EventBrite here.

We see you there!

FinancialFox Mining: Ready for the next big uranium bull run

In this episode of Financial Fox, Stefania Barbaglio (Steffy) talks to Brandon Munro, a well-known international uranium market expert and CEO of Banneman resources, an Australian Listed uranium company operating the largest uranium deposit in Africa.

Uranium is one of the hottest tipped commodities in mining in recent times, due to the push for cleaner nuclear energy and lowering supply. Prices in uranium look promising in the medium to long term as more nuclear reactors start activities around the world and utilities demand more uranium.

"If an investor is looking for returns in less than 3 months, than it is better to be patient and wait. But if investor is looking for longer than 3 months returns I'd say start doing your research now," advised Brandon for those looking into the uranium space.

Uranium demand could double by 2040, believes Brandon. Although prices are still holding back, it is generally agreed that it holds strong potential to shake up the commodity market in the near future with a rapid upturn that can bring substantial returns for investors who bought at the bottom of the market.

Uranium should be on the watch-list of any investor.

FinancialFox Mining: Ready for the next big uranium bull run

In this episode of Financial Fox, Stefania Barbaglio (Steffy) talks to Brandon Munro, a well-known international uranium market expert and CEO of Banneman resources, an Australian Listed uranium company operating the largest uranium deposit in Africa.

Uranium is one of the hottest tipped commodities in mining in recent times, due to the push for cleaner nuclear energy and lowering supply. Prices in uranium look promising in the medium to long term as more nuclear reactors start activities around the world and utilities demand more uranium.

"If an investor is looking for returns in less than 3 months, than it is better to be patient and wait. But if investor is looking for longer than 3 months returns I'd say start doing your research now," advised Brandon for those looking into the uranium space.

Uranium demand could double by 2040, believes Brandon. Although prices are still holding back, it is generally agreed that it holds strong potential to shake up the commodity market in the near future with a rapid upturn that can bring substantial returns for investors who bought at the bottom of the market.

Uranium should be on the watch-list of any investor.

Mining transformed by digital revolution and clean energy shift

The mining industry is undergoing a core transformation — from the way operations work to the rising demand for base metals. Propelled by technology, pressing ethical standards and the fourth industrial revolution, the mining sector has been rethinking its approach to business since 2017.

Leveraging on the global energy transition propelled by governments and companies around the world aiming to reduce carbon emissions, as well as demand for metals for use in infrastructure in emerging economies, miners are working to meet the needs of a changing world.

S&P believes copper and zinc will be in the spotlight in the near future. In fact, China’s zinc demand could rise more than predicted in 2019 as infrastructure fixed asset investment growth accelerates to 10% from 3.8% last year, while a pick-up in construction is likely to spur zinc demand and heat up the market, according to Bloomberg Intelligence.

In anticipation of the expanding production of electric vehicles, demand for battery metals is growing, becoming the main opportunity in mining. Demand for lithium is expected to soar, as well as graphite, nickel and copper, confirming the trend for the use of base metals in batteries and storage. Copper is a fundamental metal for electric vehicles, and according to the International Energy Agency, their number will increase 1,389% — to 125 million from three million — by 2030, and 3,333% in 2040 to 300 million.

“Looking back just 20 years, it’d have been hard to believe that nickel, lithium, cobalt and graphite would be an affordable way to power batteries,” says Phil Hopwood, Global Mining Leader at Deloitte. “Today that is the reality and a potential growth opportunity, particularly with the emergence of electric vehicles.”

Hopwood also highlights that in order to succeed in this changing scenario, companies need to think long term when implementing their strategies, by studying trends and market opportunities and embracing digital innovation. “I see mining really making changes in terms of adopting digital technology and innovative thinking,” he added.

The integration of disruptive technologies into operations and risk management can be one of the pivotal points to enhance activity. Artificial Intelligence, AI, has proven very beneficial. Scenario planning enhanced by AI offers a structured way to consider unpredictable futures, equipping executives and engineers with information they can use to make more strategic choices.

Thanks to the power of AI mining, companies can identify ore bodies in greenfield and/or remote areas without access to pre-existing geological data. EARTH AI, for example, uses machine learning to analyse geophysical data to identify unexplored mineralisation opportunities in Australia. Since April 2018, it has discovered 18 new greenfield prospects with significant copper, zinc, lead, and vanadium mineralisation.

Blockchain, another hyped disruptive technology, can offer multiple advantages to mining companies. An ever-growing consumer awareness means that ethical and corporate responsibility has become a central concern for companies. With the use of blockchain, all the steps in natural resources exploration can be recorded and disclosed, holding companies to account.

Blockchain technology has the capacity to store a huge amount of data on an open, secure and accurate platform. A decentralised digital ledger network can record, track, verify and share each and every element of all the assets in one single network, which is open to public access. It can pull together links all along the chain, from raw material providers right up to retailers. Such technology can help fight slavery, child labour and environmental concerns.

In the realm of precious metals, palladium is surging, also promoted by automotive industry demand. For the first time in more than a decade, palladium is rivalling gold in value. The key drive to rising prices is increasing demand combined with long-term constrained supply.

The palladium price reached as high as $1 400/oz in January 2018, making it ‘the most precious of precious metals,” says Mining Review.

In terms of industry revenue, growth will be stable but much less impressive compared with the sharp increase seen in 2017. For the world’s top 40 miners, 2017 was an outstanding year due to the continuing recovery in commodity prices, fuelled by general economic growth, resulting in revenues rising dramatically by 23 per cent.

For 2019 and 2020, S&P Global Ratings expect relatively flat revenues across the upstream and downstream sectors.

Keep an eye out for our upcoming episode on Financial Fox about new trends in mining and the impact on digitisation. Follow us on @cassiopeia_ltd and subscribe to our YouTube channel.

New approach to the mining sector.

St-Georges Eco-Mining Corp. operates as a mineral exploration and production company. The Company explores gold, platinum, palladium, rhodium, copper, cobalt, nickel, and other base metals. St-Georges Eco-Mining develops its projects in Canada and Iceland.

St-Georges is developing new technologies to solve the some of the most common environmental problems in the mining industry. Part of the strategy of the company is to invest and develop technologies that address corporate responsibility issues underlying the mining industry, and by addressing these flaws, will make mining more sustainable and accountable.

The Company controls directly or indirectly, through rights of first refusal, all of the active mineral tenures in Iceland. It also explores for nickel on the Julie Nickel Project & for industrial minerals on Quebec’s North Shore and for lithium and rare metals in Northern Quebec and in the Abitibi region. Headquartered in Montreal, St-Georges’ stock is listed on the CSE under the symbol SX, on the US OTC under the Symbol SXOOF and on the Frankfurt Stock Exchange under the symbol 85G1.

St Georges’ business model is straightforward: the company develops metal processing technologies to be deployed to change the environmental impact of mining operations around the world, while improving the profitability and the financial bottom line of current base metals producers.