Zenith Energy Share Discussion Threads

[sea7] 29/1/2018 08:56

in case there is any doubt, from andreas own page...

My involvement in the European textile sector continued when I took over PEX Plc.

[sleveen] 29/1/2018 08:37

From the presentation (thanks Tadtech) we can see ZEN generate around $400k cash per month ($600k revenue -$200k op costs)at the current 350bopd.

No royalties to pay only the compensation oil up to 350k barrels max after op costs at a rate of 15%.

Q4 results should make good reading.

[ravin146] 28/1/2018 17:18

Muddy,From todays' 350bopd to 600bopd by end of March will be a poor result imo.The company had a target of 1000bopd, which they again state in their last presentation.Missing targets is not a good sign, the market won't like it and they'll prob do more funding for the drilling plan post April.Btw the increase oil price has not deterred the BoD to do more funding...so the cost have obviously risen.Let hope the first workover is a success and then to z-21.

[muddy_40] 28/1/2018 17:09

Ravin,

It would not be a disaster, it is double where we are now, and consider oil price, I am sure ZEN was planning on $50 per bbls oil, we are now nearer $70, so a big uplift their, we are priced at failure at the moment, anyway I think we will be around the 900bbls per day come end of March, with very cheap production.

[muddy_40] 28/1/2018 17:08

Ravin,

It would not be a disaster, it is double where we are now, and consider oil price, I am sure ZEN was planning on $50 per bbls oil, we are now nearer $70, so a big uplift their, we are priced at failure at the moment, anyway I think we will be around the 900bbls per day come end of March, with very cheap production.

[ravin146] 28/1/2018 17:01

600 is not enough...that will be a disaster case imo

[muddy_40] 28/1/2018 16:47

Brasso3,

I reckon Z28 and Z21 are in the bag already, with the blowout in Z21 we know the oil is there and flowing, Z28, in the last RNS Mike Palmer said once completed it will go into production, I reckon they will get to about 900bbls per day with these 2 and current production. Lets hope they do a good job on Z24. All 3 come in this company will be different than now with good cash generation for further work, and will take the pressure off them.

IMO

[brasso3] 28/1/2018 16:33

They only need one of the three wells (Z28, Z21 or Z4) to produce to be in a very comfortable financial position. With 32m BOE reserves and ~600 BOPD produce ZEN will become a different animal.

[dipla] 28/1/2018 16:13

Yes each...so z-28 and z-21 must in total = 700bopd or this will be marked down at the start of April, amplified by more placing to fund the main drilling plan.I expect first funding could range between £5-10m...though could be done in batches.

[brasso3] 28/1/2018 15:44

Additional comments from intheno on LSE:-

SEA7 Thanks for bringing this to my attention; not a source I was aware of and an interesting insight into the historical context.

It is evident that in the 1980s the authors were postulating that from the geophysical evidence, the Zardab subsurface high had a geological structure similar to that of Muradkhanli, for which the Upper Cretaceous, Eocene and Maykop reservoir sources had already been identified [ref page 1, para 2 & page 2, para 1]. They also emphasise [page 5, paras 2 & 3] the prospective potential of the Zardab-Muradkhanli-Amirarikh subsurface highs, and 10 similar structures, forming the NE margin of the Yevlakh-Ardzhabedi trough, the likely generative source of the oil.

Presumably their recommendations led to the concentration of drilling and production at Muradkhanli, a programme which would have been extended to the adjacent highs including Zardab, Shakbagi and Jafarli if landward exploitation had been maintained. As they also highlight their conclusion of the existence of significant secondary porosity within the volcanoclastic highs and of stratigraphic traps both within the flanking strata and in the overlying Tertiary sediments, this is further evidence of the productive potential for ZENs Azer assets.

The map on page 3 appears to substantiate, as I have concluded in all my posts, that the Shakbagi Field is S of the Zardab Field (not the reverse), which corroborates the information on the Salmanov map and appears to confirm that the diagram on page 2 of the Feb 2017 Beaufort Report is incorrect. If I am wrong, my apologies to Mudstud for misdirections to find Z-21, as it would be 5.5km to the SE of Z-28, not to the NW!

I worked for three years defining the palaeogeographic and sedimentological characteristics of continental edge and slope channel-infill deposits, part of the effort which led to the identification of many new hydrocarbon provinces worldwide from the early 70s onwards. ZENs Azer assets appear to share some of those characteristics, the subsurface highs being remnants of volcanic island arcs on the edge of the then Cretaceous continental margin sloping off into the Tethyan ocean sedimentary basin to the SW. Hydrocarbons generated in that basin are probably rising through channel infill deposits up the palaeo-continental slope into the reservoir traps on the flanks and summits of those remnant volcanic island arcs. ZENs challenge is to identify those traps, both structural and lithographic, by geophysical means, and target them for drilling and production, a decade long programme at minimum.

That defines the time-frame of my investment in ZEN, so the issues which generate much of the BB debate, significant or otherwise as they may be in influencing short-term share price fluctuations, are for me of little consequence within the overall context.

[brasso3] 28/1/2018 15:43

from SEA7 on LSE:-

bit technical for me, however, page 1 onwards for a few pages seems to refer to our areas..it is from 1985



extracts.

The Zardob and Tarsdallyar were discovered and prepared for deep drilling by geophysical methods. The Zardob area is lo- cated to the northwest of the Muradkhanly field and has a geological structure similar t£ it. The Tarsdallyar field, a firstling in the interriverine area, is in the southeastern part of the Dzheyranchel synclinorium

and

In accordance with this concept, the morphological appearance of the volcano- genie base, the discovery of zones of the development of effusive uplifts and ridges on its surface, and the prediction that they are enveloped and over- lapped by Paleogene-Miocene sediments are important prospecting criteria. Geological and geophysical research that has been conducted has established that these favorable conditions are inherent for the whole raised portion of the northeastern side of the trough£the Muradkhanly-Zardob-Amirarkh belt.

......

I have not been through the whole document yet, as some of it is not relevant to our areas, however intheno might find some of it interesting, if he hasn't seen it before.

[ravin146] 28/1/2018 15:03

Assume you mean 250-350 each as it needs to get to 1000 by march or market will re rate this down

[dipla] 28/1/2018 14:59

Well z28 and z-21 need to be 250-350 bopd if this is to be a success.If they fail and this goes past April...straight into a drilling plan they will dilute this below IPO £5-10mBeware of AC, he is a good talker...btw anyone know why the old cfo left last year?

[buffythebuffoon] 28/1/2018 10:10

Grannyboy,

AC told me that four ESPs had been fitted, and the only reason we haven’t installed more is that Baker Hughes/Schlumberger hadn’t supplied them with what they ordered. He confirmed my comment that ZEN were low priority.

I assume that nobody else can fulfil the order.

Buffy

[coscos] 28/1/2018 09:52

It's been quite obvious for a while now that ZEN have been learning as they go along. After all, it wasn't that long ago they thought a good strategy was to have two teams on the ground competing for best workover awards! Glad all that nonsense has been stopped, however they now need to deliver on their spiel.

[grannyboy] 28/1/2018 09:22

No matter how much experience Mike Palmer has in Azerbaijan, it has still not avoided the debacle with the ESP's..where there were supposed to be TWO suppliers but could only get three pumps delivered..

Can only come to the conclusion that they have been disappointed with previous esp installations, and the miniscule improvements, if any at all,

[tadtech] 28/1/2018 09:20

It is clear Mr Cattaneo is very passionate about Zenith but seems to be rather misleading at times during his presentations (I have seen him present twice recently)

He regularly suggests that many other oil companies have billions of shares in issue (not true) and that Zenith have a low share count and do not dilute, I reminded him that he had diluted twice since September raising £1m which is a near 10% equity dilution.

On the issue of production he said that 1000 bopd would be reached by end Q1 but when pressed by a shareholder during Q&A he said this would be dependent on the outcome of operational success. This point was not made during his presentation.

Another aspect was in respect of well work-overs, a question was asked what was the production rate of the field before the work-overs (8-10 carried out if I recall correctly) he stated a number and said that the BOPD increase after was only 25 more. The questioner then implied was it worth it, Mr Cattaneo then suggested it was due to poor equipment and less able staff. Not very inspiring.

He confirmed the field had a annual 5% depletion rate, can this be believed I wonder.

The point I am trying to make is can the company deliver the numbers they suggest if during presentation events there appear to be statements that leave a lot to be desired. The recent event was recorded so the full presentation & Q&A will be on-line shortly.

I have had success in the sector with JOG and UEN recently and am looking for undervalued plays and am considering Zenith. I have added it to my watch-list.

[buffythebuffoon] 27/1/2018 23:35

muddy_40,

I assume you mean you were there. Clearly you weren’t paying attention.

I now have the presentation, and the slide with the production figures showed:

2019 : 1500
2020 : 3000
2021 : 4000

Buffy

[brasso3] 27/1/2018 23:00

I also notice MP has experience in Kazakhstan:-

Mike Palmer – Chief Operating Officer (Azerbaijan based)
After graduating from the University of Washington with a Bachelor of Science in Chemical Engineering Michael began his career in the oil industry at AMOCO, where he spent 18 years as a production engineer. He subsequently joined Karazhanbasmunai in Kazakhstan as First Vice President. He then joined Karasu Operating Company, an oil production company in onshore Azerbaijan, as President and transformed it to become Azerbaijan’s most successful onshore producer. He has held a number of senior executive positions in various oil production operations in the USA, Hungary, Ukraine, Indonesia, Syria and Malaysia prior to being appointed as Chief Operating Officer of Zenith’s Azerbaijan subsidiary in 2017.

[brasso3] 27/1/2018 22:18

Thanks for the presentation.

They are targeting some big numbers 2018 - 2020 but the growth is highly dependent on Z21 and Z28 coming in to achieve the 1000 BOPD. ~$87m in revenue for FY 2021 would be incredible! That is close to a 10 fold increase from todays turnover.

I think if they hit the 1000 BOPD (in April including Z4) then this could easily become a £100m market cap company within 12 months. I notice they are targeting 140 BOPD gross from Italy also in 2018.

The problem with AIM is that most investors chase the get rich quick (dreamer) stocks like UKOG and over look they steady Eddie's like ZEN. Worst case scenario for me is that ZEN exit 2018 on ~600 BOPD. The upside far outweighs the downside.

[ravin146] 27/1/2018 21:19

Wow they are still believe in this 1000bopd by end of march...They have excluded the production target slide?!They excluded the ESP programme update?!

[zengas] 27/1/2018 19:59

They are going to workover this well in in April. Flowed 1,000 bopd from the Eocene and Upper I-Marl. Lower I-Marl not so good. Well had mechanical difficulties. 19 years later will be interesting to see what they can do in this era.

" 18 October 2000

Ramco Energy plc (Ramco), the independent energy and oil services company
focused on exploration and production, today announces that following
perforating and testing the lowermost section of the main target reservoir,
the Middle Eocene I-Marl, it has decided to suspend temporarily the MOC-1z
well. The Company has demobilised the rig and other service companies in
order to minimise costs whilst it evaluates all the options to workover the
well to improve productivity of the perforated zone and to test the other
prospective intervals higher in the well.

The first well, MOC-1, was drilled to its planned total depth in April but
then the Company experienced a series of technical difficulties which
necessitated the drilling of the side-track, MOC-1z. The side-track also
experienced mechanical problems and, like MOC-1, oil inflows of up to 1000
bopd from the Upper Eocene and the top section of the I-Marl. To control
these inflows heavy muds were required and these sections were cased off. The
well was then drilled to TD, logged and a 4.5 inch liner run and cemented.
Logging showed a thicker section of oil-bearing reservoir than the original
hole.

The lowermost section of the I-Marl, behind the 4.5 inch liner was perforated
and flow tested. The results were disappointing and while methods to
stimulate this zone, and to perforate and test the upper zones, are being
examined, activities in the well have been suspended. "