Zenith Energy Share Discussion Threads

[buffythebuffoon] 17/1/2018 10:45

It’s fascinating to see how people are so wedded to the notion that if a company is small and underperforming with multiple missed deadlines it must be on AIM.

ZEN is an exceptional company, and it’s all of those things, but it’s on the main market!!!

Ok, maybe one or two more exclamation marks than is warranted.

While we have had frustrating delays, let’s not forget who used to operate the wells, how much they produced, and how long they have been shut in.

As for empire building, SAVP is a good case in point, where investors saw a fantastic investment proposition based on three exploration wells, where another company’s extensive drilling campaign in the same rocks produced a 75% plus success rate, and the actual zone the drills are in, a 93% success rate.

They then suspended for six months (for the second time) while striking a huge deal to acquire some of the assets of a severely financially distressed company in Nigeria (cue the usual Pavlovian type response to the mention of that country).

I was initially annoyed, but having spent quite some time analysing the deal and having spoken to the CEO, I can see how good a deal it is.

SAVP bought the assets (with a prodigious $88m of free cash flow per year over the next five years) for about 36 cents in the dollar.

Let’s see what Zenith come up with before condemning them.

Buffy

[brasso3] 17/1/2018 10:44

They must be planning to release some good news with the presentation lined up for the 25th Jan:-

[brasso3] 17/1/2018 10:39

If one well comes in we will be looking at 500+ BOPD.

If both produce then I think 700 BOPD is possible.

We know that ZENs operational cost are really low as the local currency (Manat) has been significantly devalued in the last few years. The production costs per barrel are around $10 so at $64 WTI the netbacks are huge. At 500 - 700 BOPD this company will be comfortably cash flow positive.

500 BOPD x 30 days x ($64 - $10) = $810k
700 BOPD x 30 days x ($64 - $10) = $1.13m

[coscos] 17/1/2018 10:30

Cash, agreed but current market cap is discounting any production from these workovers at the moment, therefore any workover success will realise value.I also believe MP has excellent experience in developing and producing from these old wells.

[sea7] 17/1/2018 10:13

Two new tweets regarding z21

[brasso3] 17/1/2018 09:23

A nice rising support has formed on the chart.

[cashandcard] 17/1/2018 09:00

Brasso3,


PPC have actually demonstrated growth in there portfolio. ZEN have not.

PS. That diversification is also the reason most smallcap oil firms stretch themselves thin and keep coming back for placements to raise funding. In most cases, its very inefficient use of shareholder funds and leads to value destruction.


Cash

[brasso3] 17/1/2018 08:59

Cash

Agreed but all AIM companies do this. The management call it growth or diversification. We PIs just want them to target the easy fruit and grow organically. You never know, some acquisitions can surprise you. The recent PPC purchase of Puesto Flores annoyed me at first but they have increased production from it by nearly 50% in 3 months.

[cashandcard] 17/1/2018 08:58

coscos,


Agree, it may well be. However, the history of the fields production show any given well could IP at 1,000bopd and quickly crash back down to 50bopd. We need to see well subsurface management progress.


Cash

[cashandcard] 17/1/2018 08:55

Brasso,


That is also what frustrates me the most. They have (I stress) more than enough of a resource base at M-J-Z fields. If they can build on the back of a positive Z21 &/or Z28, ths will enhance shareholder value without the need to go after new licenses. The thought of setting up parallel operations, increasing the cost base and exposing the company to risky financial obligations when there is no need for it really puts me off this longterm.


Cash

[coscos] 17/1/2018 08:50

The target can easily be reached with Z21 but most on here are too blind to see the obvious.

[grannyboy] 17/1/2018 08:46

Palmer might well be appearing to put his neck on the line..similar to cattaneo's March 1000 bopd target...which looks like it will be missed, unless Z28/21 are gushers?!!!

[brasso3] 17/1/2018 08:41

We only need Z21 or Z28 to come in to warrant a higher share price than today. I like those odds. If both perform then this will be back to 12p+ very quick.

[cashandcard] 17/1/2018 08:39

The only part of that RNS that gives any useful pointers is MP's comments at the end.

Agreed Brasso, he's putting his neck on the line.


Cash

[brasso3] 17/1/2018 08:29

Mike Palmer putting his neck on the line with this statement:-

"We are at a very exciting juncture in the Company's operations in the Zardab field, especially as we are confident regarding the success of these operations. The next couple of weeks will be instrumental in achieving our oil production objectives. I am very much looking forward to a favourable result in both these operations to reward the significant work performed to date."

[sea7] 17/1/2018 08:27

zenith are listed on the standard segment of the main market, not aim.

[rcturner2] 17/1/2018 08:21

These types of stock are perennial underachievers, the AIM oil and gas sector loses money every year.

[grannyboy] 17/1/2018 08:00

Putting too much confidence in these is not to be recommended..

They have a record of one step forward, two steps back...

[coscos] 17/1/2018 07:52

Probably to re assure investors that recent RNS regarding asset purchase has nothing to do with potential of Azerbaijan.I'm more confident than ever regarding success of these workovers, hopefully market will re assess stock value soon.

[fatfish] 17/1/2018 07:39

why bother sending that RNS nothing been done since August 17.

[ravin146] 16/1/2018 20:17

Note that media outlet is advertising it as "Current production is targeted to hit 1,000 bopd."No more date then?!

[brasso3] 16/1/2018 20:03

They would need Z21 and Z28 to come in at the high end of expectations.

Realistically 700 BOPD is achievable IMO.