Zenith Energy Share Discussion Threads

[sea7] 19/4/2017 16:51

The well they tried to workover first was the old M- 208 first drilled in 1980 and flowed at 2100 stbl/d on a DST. It became clogged shortly after due to mechanical issues.

Ramco had a go at it and got stuck with it, then started another well 75 metres away, which they had problems with and then sidetracked it. More problems, dropped a tool in it and then gave up.

Zenith got thwarted trying to work over M-208 or M-195 as they call it. Now they are sidetracking as well.

I think that they may get better results than ramco and earlier players did, as ramco said most of the problems were inappropriate drilling and completions, coupled with difficult geography and complex resevoirs.

We are many years along the road now, with much better techniques, equipment and understanding. This well, I believe hasn't been touched for 15 years, so if they get it right and the sidetrack works well, then whose to say we suddenly find ourselves with a well gushing at over 2k stbl/d virtually from the off.

[ravin146] 19/4/2017 16:37

Zengas the potential is huge no doubt, especially when the CEO believes this is 'massively undervalued' and could be '100p'.Need the first workover complete to add to the c300bopd.Gd luck

[zengas] 19/4/2017 16:32

Just out of interest, PPC who are engaged on a workover programme today announced they bought 150 boepd of production and 321,000 boe P2 reserves for $2.65m.

"This bolt on acquisition, capable of being managed by President's existing Louisiana management, takes us firmly through the Group production milestone of 1,000 boepd."

This takes their P2 reserves to 21 mmboe.

Price up 13.5% to 8p and an increase in m/cap by £9m to £76m on the above news.

Zens m/cap £11.4m or almost by how much PPC increased today.
310+ boepd and 33 mmbo P2. Difference in m/cap of £64m or almost 6X.

[sea7] 19/4/2017 14:04

As zen are just getting started, they do aim to workover 44 wells between now and 2020. All these well are either inactive or producing less than 5 STB/d. They aim to get all these well up to 10 to 15 STB/d.

They should do ten wells this year, 11 next year, 15 in 2019 and 8 in 2020.

Next, The rig they are hoping to buy, for £8.1m or maybe less, is meant to do 4,500m depth drilling over a fifteen year programme. 5 wells in 2019 to be drilled and then 10 wells each year until 2033. They are estimating overall costs of this at just over half a billion pounds sterling. Which in my book is about £33m a year. Each well is around £3-£4m a shot.

All in all, it is a 145 development drill plan with 58 of them being horizontal drills.

Quite ambitious if I may say so. They are at the very start of a 25 year licence, so they are in no hurry at this time.

[ravin146] 19/4/2017 13:43

Cheers HC.Cpap I've unfiltered you from earlier at another bb thread. Won't be surprised 11smith, richie666 are the same, not sure as have both filtered. Align research does sound very amateurish and unprofessional.Hopefully GUN sell whole stake soon, ZEN does not need their 4% holding, plenty of buyers out there soaking it up!

[honestcrook] 19/4/2017 13:01

Andrea responded to my latest email. Dear Ryan, we made a mistake in setting a specific deadline for the announcement being made during the week- unfortunately last week was shorter than usual and I was in Azerbaijan where Friday was a normal working day. We decided Tuesday was the best day for a complete overview of our progress at M-195 with Team B and the beginning of M-45 with Team A. I'm confident, as stated many times before, that we are hugely undervalued and that we will achieve good results going forward. We have a long-term systematic programme to achieve incremental oil production increases in Azerbaijan. This process will be progressive and not happen overnight. As always there will be unforeseen challenges and delays that will have to be surpassed. There is a lot of oil in the ground and I'm fully confident we have every reason to succeed. Thank you again for your support and I hope our progress will reward your confidence in Zenith.All the best, Andrea

[sea7] 19/4/2017 11:05

ZEN raised £3m earlier this year.

The assets currently generate about $150k per month free cashflow.

This should be enough to cover 2017 work programme.

They will need additional funding of about $4m for a vertical drill and $80-$10m for a horizontal drill. The plans to finance the high end Chinese drill rig, should prove to be a cheaper option in the grand scheme of things, which we are yet to hear about.

The current cashflow could partly or fully cover the first drill.

Historically the muradkhanli has encountered problems, however, this was primarily to do with inappropriate drilling and completions rather than oil itself. The advances in tech over the last two decades should make these issues less likely to happen.

[cpap man] 19/4/2017 10:35

11smith19 Apr '17 - 10:15 - 1294 of 1295 0 0 (Filtered)

[cpap man] 19/4/2017 10:30

Sorry 11smith but those that say that you are r666 of AR could well be right. Anyway either way you have just joined my FILTERED list as i want to spend my time reading well balanced posts by the likes of TheLung, Edgein and ZENGAS

[11smith] 19/4/2017 10:15

We will have some accounts to study soon. Foreign exchange headwinds could be a headache. There is nothing in Argentina now. The main concern will obviously be cashflow and whether Zenith has to take on more debt any time soon (at 12%). The CEO taking his salary in shares could be a warning sign !! Maybe there is very little cash left?

[zengas] 19/4/2017 09:04

Who said it is bad news ?

One well of many and it's neither suspended or shelved. There was no specific time duration per individual workover. It's the brokers place to update it's investors when it has already provided coverage and one would expect a note just as much on any positive news.

[ravin146] 19/4/2017 08:40

Estocio...it's the same stance as the Jan note and it's after the first real well update so not synchronised at all, just makes sense they released a view at the first well update.What is funny and sycronised is that you have ey posted here and post just after the Beaufort note...hmm

[snickerdog] 19/4/2017 08:38

Sidetrack probably much better idea. Whenever the new drilling rig arrives then they could punch holes all over the place to access some of those 72m barrels at relatively low costs

[estoico] 19/4/2017 08:35

Funny how bad news is often followed by a 'buy' broker note!!!

You could almost think it was synchronised!!!

i'm keeping my powder dry for now

[ravin146] 19/4/2017 08:34

Just seen this from Beaufort sec...Zenith Energy (ZEN.L, 10.12p) â€" Speculative BuyZenith has published detailed updates on its workover activities in Azerbaijan. At well M-195, workover Team B has started a sidetrack operation due to metal debris encountered towards the bottom of the hole. Although this is a change from the original plan, it should be a positive as it will test an undisturbed section of the reservoir. Meanwhile, Zenith’s own team (named Team A which operates Zenith’s rig) recently replaced pumps at four wells and is now tackling some more challenging work. First is the recompletion of M-45 (in the Muradkhanli field) which requires reperforating and some production tubing replacement. Second is at Jafarli (J-2) which also requires removal of stuck production tubing and metal debris. Third is at Zardab (Z-28) where the whole length of production tubing needs removing and replacing if necessary. Team A is starting work on M-45 this week.Our view: It is good to see a detailed description of Zenith’s workover programme. With two teams (and two rigs) active and plenty of wells to work on, we should see an uplift in production throughout 2017. Management has an ambitious target of 1,000 bopd by the end of 1Q18 which if achieved would push Zenith in to a different category of junior and clearly demonstrate the quality of its Azerbaijani asset. Bearing in mind Zenith's three fields in Azerbaijan have 2P reserves of 76 million barrels. We look forward to operational updates throughout the rest of 2017 and reiterate our Speculative Buy recommendation.That first well result is going to be vital...15p easily reachable short term imo

[cpap man] 19/4/2017 08:16

From Beaufort Securities this morning....



Zenith Energy (ZEN.L, 10.12p) – Speculative Buy

Zenith has published detailed updates on its workover activities in Azerbaijan. At well M-195, workover Team B has started a sidetrack operation due to metal debris encountered towards the bottom of the hole. Although this is a change from the original plan, it should be a positive as it will test an undisturbed section of the reservoir. Meanwhile, Zenith’s own team (named Team A which operates Zenith’s rig) recently replaced pumps at four wells and is now tackling some more challenging work. First is the recompletion of M-45 (in the Muradkhanli field) which requires reperforating and some production tubing replacement. Second is at Jafarli (J-2) which also requires removal of stuck production tubing and metal debris. Third is at Zardab (Z-28) where the whole length of production tubing needs removing and replacing if necessary. Team A is starting work on M-45 this week.

Our view: It is good to see a detailed description of Zenith’s workover programme. With two teams (and two rigs) active and plenty of wells to work on, we should see an uplift in production throughout 2017. Management has an ambitious target of 1,000 bopd by the end of 1Q18 which if achieved would push Zenith in to a different category of junior and clearly demonstrate the quality of its Azerbaijani asset. Bearing in mind Zenith's three fields in Azerbaijan have 2P reserves of 76 million barrels. We look forward to operational updates throughout the rest of 2017 and reiterate our Speculative Buy recommendation.

[11smith] 18/4/2017 15:58

Thegreatgeraldo, underestimating the size of the job could be a factor. Hypeing up the prospects and stating everything as rosy was clearly not a good strategy. Realistically, where is this $2 Billion NPV? I suggest wait to look over this years accounts. They have nothing in Argentina now. Another big question, why wait until this morning to inform us of the M-195 failure? Did they really not know about it yesterday in Canada? Down 5.5% on TSX.V yesterday.

[ravin146] 18/4/2017 15:44

Update on twitter at 3:30pmWell 195 workover/sidetrack has begun...Zenith Energy? @zenithenergyltd#ZEN #ZEE confirms beginning of sidetrack operations at well M-195 in the Muradkhanli Field Also a 300k buy just gone through!

[moormoney] 18/4/2017 13:56

He is also taking shares as salary! Even bigger vote of confidence IMO.

[andy] 18/4/2017 13:50

gateway,

Bit of a token gesture to shore up the share price in my opinion, taken in the context he already owns 1.5 million shares.

Still it seems to have done the trick for now.

[thegreatgeraldo] 18/4/2017 13:38

ravin, do you think ZEN might have underestimated the size of the job facing them on the workover front?

[ravin146] 18/4/2017 13:33

Welcomed news today that the workover programme is well under way by BOTH teams. Well 195 update is welcomed too, good to see delays being rectified by looking at a new drill area/direction.Topped up earlier too, have faith in the CEO to boost production.Thorough update.I'll read email later, cheers

[bad gateway] 18/4/2017 13:22

Noteworthy that andreas has put his hand in his pocket after the news today imo.

[grannyboy] 18/4/2017 13:15

I read that article above from a piece in 2016...


I was slightly negative in my posts last week, in response to the unclear rns's, but reading that the company intends drilling a sidetrack at well M-195 into new oil, then i'm confident that if things go according to plan then good production numbers can be achieved of between 100-200+ bopd.