Zenith Energy Share Discussion Threads

[pugugly] 19/4/2017 20:12

sea7: Thanks - only just hit my radar thanks to your posts and old epic from Zynergy Power (what a dog that was)

[sea7] 19/4/2017 20:04

pug,

They got rid of all the argentine assets which were doing really well until the tank collapse earlier. They announced this divestment for a nominal amount to local investors and then the stock started to retrace from 13p.

The words "unexpected difficulties" in the workover report has scared some no doubt and there is also a persistent seller in the background, Epsilon or Gunsynd probably selling off.

[sea7] 19/4/2017 20:01

you've all probably read this from a few days ago...



Excerpt...

Regarding the impact of oil price fluctuations on the company’s activities, the CEO said that Zenith Energy has a reputation to be a low-cost operator.
"So, we are always profitable. Even when the oil prices are lower, our profit is guaranteed

[pugugly] 19/4/2017 19:59

Stupid question ?
(thanks to sea7 & ZENGAS for their input - looks interesting) but any idea why has the share price fallen back from 13p - Market capat £11.5M - if ADVFN correct looks interesting for a cash flow positive company?

[sea7] 19/4/2017 19:53

grannyboy,

Tks - yep shouldn't be too long to find out about m-195 - this is not the easiest well, it is one of the more challenging workovers, however, has good upside if it goes well.

[sea7] 19/4/2017 19:52

ravin - mine was the 30k buy at 9.99p at 14.09pm.

[grannyboy] 19/4/2017 19:49

Thanx for all the info provided by sea7 and ZENGAS.

Just re-read the M-195 rns update and it states that 'A window will be cut in the casing at approx 2960m, then sidetrack down to approx 3065m'...Thats just around 100m to drill..With the cementing and casing to do that shouldn't really take too long...I don't want to sound as if i'm getting impatient, but if all goes to plan, maybe middle of next week?

A good result would be a confidence booster all round, and for the future.

[ravin146] 19/4/2017 19:48

Oh sea7 you just got in today...yes I can see a 29k buy in the morning.It would be nice to see a few director share buys too.All the best.

[sea7] 19/4/2017 19:45

zengas,

no problem

We are looking at a field that has declined due to poor support and maintenance. Some wells haven't been re worked in over 15 years since stopping production.

One aspect of oil field dynamics is the area of natural replenishment. I read in one article ages ago about wells that had been depleted, left and then looked at again years later, to see that oil had filled up in them again, probably from other reservoirs leaking in under natural pressures. This is a large enough field to have this happen.

I have, in my view taken 5p off for Italian assets and we are left with 5p for azer or £0.20p per barrel in the ground. (against the cpr 33.4m barrels to zenith). This field, discovered in 1969 and messed about with until 2000, will likely show some good numbers when modern techniques are applied.

We are at a low mcap, with cash being generated from both assets and good potential.
Buying now at these prices gives a much greater chance of upside over the limited downside, considering the usual risks in O and G.

[sea7] 19/4/2017 19:35

11smith

I am not taking much notice of these massive valuations.

To me it is generating decent free cashflow and the workovers are bread and butter for now.

ceo view...


“The company believes that this lack of maintenance and gradual dilapidation of field equipment is the principal cause of the decline in oil production and that these fields are far from reaching a stage of natural depletion. This has been confirmed by the recent Competent Persons Report (CPR) that assessed 2P reserves of 33.4 million barrels of oil net to Zenith.

..................

$2B means nothing to me at this stage. 33.4 million barrels, is what is being attributed to zenith. Per barrel valuations are lousy at the best of times, so taking the 5p per share valuation for Italian assets off, we are left with 5p at the current share price, which is about £0.20p per barrel against those 33.4 million barrels in azer.

Cash is king in this game and they are generating cash which covers the work overs for this year and the start of the drilling next year.

[zengas] 19/4/2017 19:11

Thanks for that sea7.

Definitely the oil is not in question and even under the old Soviet era wells, the Muradkhanli field still managed to produce some 17.6 million bls.

One glaring fact is that 17.6 mmbls have been successfully produced while the overall contract area has produced over 22.5 mmbls - so if they can do that under old soviet era wells, what could they not do with modern well drilling and completion techniques ? The oil has not run out, just the state of the wells and lack of investment.

There is 72 mmbls P2 still to be produced, 3,000 bopd (Beaufort expectation) at some future point is only 1m bls/yr - so imo it can be done and entirely feasible and that's before any of the exploration upside.

Also if well 211 could initially produce over 2,000 bopd and 17 years later still produce 1400 bopd before dropping suddenly to 50 bopd - "probably due to a well collapse" - imo with new well casing and chemical resistance which Ramco identified as a problem, surely there exists somewhere in the not too distant future that such a well could be drilled nearby or be a recompletion target itself.

Also - "Despite the main Muradkhanli reservoir being fractured volcanic rocks, horizontal drilling has never been used" (Beaufort Feb 2017) - one successful well even out of 2-3 attempts could yield very, very substantial production potential imo versus a standard vertical.

The workovers are a work in progress but I intend to stay the course on this at such a low m/cap. On the above, I can see where the CEO is coming from re a £100m valuation versus £10-£11m now and a steady approach is fine by me in endeavouring for incremental production increases over the course of target date to March. If it only get's to 50-70% of where PPC is at £76m m/cap, 1000 boepd and 21 mmboe P2, it won't be a taxing valuation even if the odd £1-£2m is brought in along the way and I've no fears or issues on that front. For $2.65m expenditure today, PPC added £9m in m/cap so who knows how the market may react if any new producing acquisition is acquired in the overall game plan.

[11smith] 19/4/2017 19:03

cpap man, I too like to read balanced posts and not the ones that read like - Oh, I don't like that issue, filtered. Why don't you provide a list of the points you accept as being relevant. Then read it and think for a day or two. You will see where you are going wrong and be a wiser investor. We will have some accounts to look over soon. It will be clearer then how a $2 Billion NPV can be justified. There may not be much cash left and some more debt may be required, this is likely to be at 12% interest. The CEO taking his salary in shares could be a sign that the company is concerned about cash flow. There are no assets in Argentina now. I am unable to find any obviously positive points to mention at present except perhaps that the CEO has said the company may be looking to acquire another asset. We will be able to judge whether that is possible and/or a good idea when the coming accounts are published. There, something positive to 'balance' my discussion points raised. ps. keep an eye on the relevant foreign exchange rates.

[sea7] 19/4/2017 18:37

Half the share price is covered by the Italian assets, which if all goes well, will be increasing total Italian production by 25% in june, when the production restarts in the san teodoro concession.

This leave about 5p a share for cash and Azerbaijan, or about £5.5m mcap. I see fairly limited downside from here and with cash coming in from both assets it is already covering itself.

Iirc, azer is generating about £100k a month free cash flow and is fully funded for the 2017 work programme.

Plenty of news to come over the months with a few share price triggers as well, so if all goes well then we should see some good capital appreciation on the back of good fundamental asset performance.

[sea7] 19/4/2017 18:33

Been looking at it for a while and bought in today at a tad under 10p. Only bought a small holding of 30k shares though. I do not like putting a whole position on at once.

[ravin146] 19/4/2017 18:20

Sea7 you seemed to have done thorough research into this area, much appreciated. Just read that article. Interesting indeed.Have you invested here for a while or recently entered?

[ravin146] 19/4/2017 18:12

5,109,334 - 4.42%GUN holding 3rd April.Very small, short term like align research.ZEN need a few institutional investors going forward.Anyone have to hand the current/ largest holders of the shares?

[sea7] 19/4/2017 18:09

zengas..

Scroll down to azerbijans largest oilfield....for ramco's views dated august 4th 2000

[sea7] 19/4/2017 18:06

Nah, coincidence that I use sea7 and ramco's old ticker was sea!!

[zengas] 19/4/2017 17:35

sea7 thanks for the Ramco info. I could never find anything on them doing a workover other than drilling the new, then sidetracking the MOC-1 well in 2000 before they streamlined their operations, scaled back and pulled out of a number of countries including Azerbaijan. Is that the well they drilled after 195/208 ?

Never knew that M-195 was previously 208 ? With your handle being Ramcos old ticker, I take it you are more up to speed than me so much appreciated.

[sea7] 19/4/2017 17:29

Last I saw gun converted some loan into 1.637m shares and They also disposed of 890,909 shares in mid march which left them with just over 5.5m shares. so they could still be holding 7.2m shares.

[ravin146] 19/4/2017 17:12

Won't be surprised, need then gone really like align research!

[cpap man] 19/4/2017 17:10

Odd number of shares sold [see trades] so wonder if that is GUN shooting their final load?

Anyone with the exact numbers reference GUN?

[sea7] 19/4/2017 17:09

Tks ravin, I saw that as well.

[ravin146] 19/4/2017 17:08

Great news via twitter at 430pm...Zenith Energy? @zenithenergyltd#ZEN #ZEE confirms the installation of a fully reconditioned gas-powered electricity generation engine at the Torrente Cigno Concession

[sea7] 19/4/2017 16:55

This could happen again....

Well 130 drilled at Muradkhanli Field is a good example. Drilled in 1985 (15 years after first production), initial production was a modest c.100bopd, however within 24 hours production increased to 10,000 bopd as an uncontrollable gusher. Local farmers quickly built a sump and the well returned to normal production 25 days later. It then failed 1 year later having produced 650,000 barrels of oil.