Zenith Energy Share Discussion Threads

[ravin146] 17/2/2017 08:54

"ravin I'm not bothered about what comes down the line...."but you then talk about what could be down the line.

Lets agree to disagree here.

Not sure about 15p as effi' you are picking that number randomly...I'd prefer a gradual rise than a traders spike.

imo, dyor.

[zengas] 17/2/2017 08:52

ravin i'm not bothered about what comes down the line other than the success of the workovers. Short-medium term focus is if they can beat their own targets by Q1 next year - ie by production above their estimates and more workovers performed by the use of a 2nd rig - which could bring those targets forward by maybe 4-6 months - maybe Q3 or 4 this year instead.

Bottom line is they have a $20m loan facility already and it has never been used (runs out in May). The max they can draw anyway is $2m in any 1 tranche. What it does indicate is that they could re negotiate this facility at some point in the future when they really wish to start drilling those new wells backed hopefully with solid cash flow from the workovers. Couple that to $9m of warrant cash coming in at some point and that's the phase where the company could grow into a minimum £250m+ valuation as it starts to drill 5 new wells in 2019 and then 10 wells/yr thereafter. If these workovers are successful even on original production estimates but timescales are halved with the use of a second rig - then it's possible that the new well drilling could be much earlier - so worth bearing in mind that $9m warrant cash, cash flow and a $20m facility could mean the difference here between an initial workover target of 31p (Beaufort) and 42p (Align Research) being the makings of possibly 150p+ longer term/new drilling phase which would still be a moderate £250m value. (all subject to moderate level of success).

[effiert] 17/2/2017 08:45

can hardly buy any shares online. could see 15p+ today

[scotty666] 17/2/2017 08:41

I don't think they will use it and of course with the recent placing plus cash from existing wells have the luxury of managing their growth.

Andrea presenting is good engagement with shareholders and prospective new investors I agree - I only found out about the listing via another company I hold shares in that bought pre IPO

[bad gateway] 17/2/2017 08:34

re Darwin isn't it correct they've had this facility since Nov 2015 and its still unused?
If so they seem to have been very sensible with not using it so far and given it runs out in May, the CEO's being paid in shares and with the recent raise they're doubling up on drilling as they're cashrich I wouldn't personally expect them to go silly with it now.

[ravin146] 17/2/2017 08:33

aggie they are working hard on pr as that is what companies do when it is a new issuance unless you have an overnight success. They gain equity out of the ipo, but also required more equity via private placement, though they did quote, it was down to the shareholders request to fund then their require, if i read that rns correctly.

I'd like to continue to see the regular updates via twitter or the research firm...as frankly, I have seen other oil companies not update shareholders for months leaving the share price stagnant.

imo, gla.

[cpap man] 17/2/2017 08:30

It is always good when a company shouts about what it is working hard to do and therefore achieve aggieuk.

Out of interest how did you hear about ZEN?

[cashandcard] 17/2/2017 08:21

In order to properly exploit these fields - they need to shoot 3D and properly define the 3 fields extent. That'll give them the best chance of maximizing the oil resources in the fields. The risk to me is they are, out of necessity, relying on old seismic data, imaging will be poor, wells drilled in sub-optimal locations and without proper subsurface definition, the cause of those collapses will still be lurking in background.A little money spent on subsurface can go a long way.Cash

[aggieuk] 17/2/2017 08:21

The thing that's making me a little itchy though. Why is Zenith working so hard on the PR? They really have no need to unless it's purely to get the share price up for AC's payout next year? I'd be very surprised if he was doing this just for the shareholder base. Not that I'm complaining as I'm benefiting too, but being used to dodgy AIM shares and being burned several times, I'm a little wary of this type of thing now.

[cpap man] 17/2/2017 08:17

Whilst i respect your views very much ZENGAS we will have to agree to disagree with regards to DARWIN

[scotty666] 17/2/2017 08:16

Andrea will be presenting at momentus events and now confirmed at Master investor and U.K. Investor so clearly happy to talk to investors.

[ravin146] 17/2/2017 08:16

Zengas, let's worry about that later down the line. there is no doubt that down the line, funding will be required to go onto the next stage...warrants or loans.

Workovers need to be a success, most important part of this year, or even the first 1-2 months, as we will get an idea of the success rate on the best/or largest wells.

20 days from the 9 of feb until the first set of results according to the recent rns, so looking forward to that.

imo, dyor

[aggieuk] 17/2/2017 08:16

CPAP Man who do you think are the company employees here on advfn? I've not really spotted these people yet.

[zengas] 17/2/2017 08:08

nt - I agree with you, but I do think as things progress the use of additional rigs may be stepped up.

The company doesn't have full control over when the warrants will be exercised.

There's absolutely no difference in drawing down from the available Darwin loan facility "or the purchase of a new Chinese workover rig to be financed by the manufacturer". It's a loan whatever way you look at it and will depend what the interest charges are.

Also in the future - they intend to buy a drilling rig capable of reaching 4500m to drill 5 new wells in 2019. That's only 2 years away and was based on them only having the 1 workover rig. With 2 w/over rigs that could bring new well drilling closer ? That imo is likely to be financed and i'd prefer that rather than dilution to raise the funds to kick start it whenever that time comes.

[cpap man] 17/2/2017 07:35

Also totally agree with ravin146 - remembering that old saying....ROME WAS NOT BUILT IN ONE DAY

[cpap man] 17/2/2017 07:33

Totally agree with you there Divmad - as there are obviously some posters here closely associated with the company [by the way i see that as a positive not a negative] i for one would really appreciate the message getting back to the powers that be....

NO DARWIN PLEASE....just use the WARRANTS



EDIT: the are so many examples of where the likes of DARWIN have absolutely destroyed shareholder value so best NOT TO GO THERE

[nametrade] 16/2/2017 23:49

Zengas

I didn't read that as a third rig.
More that the company's preference was to work in house. Therefore a consideration is to buy another rig to replace the 'Team b' and so keep everything in house.

Regards,
nt

[ravin146] 16/2/2017 22:34

As I said earlier, let's learn to walk before we fly!Workovers planned this year. If the first few a ridiculously great. Then it could be accelerated quickly with share price flying and funding available.Gla

[divmad] 16/2/2017 21:50

Please, no Darwin drawdowns.

[sja123] 16/2/2017 20:02

They have a loan facility in place they could tap before May if required....or could probably extend...

Also, as mentioned earlier, there are something like 48m warrants to convert over time...

A combination of both income sources means they have options....some dilution is inevitable with those warrants anyway eventually...

The main thing is, should they wish to accelerate things even more than so far planned, they can do so in an orderly manner...

[cottoner] 16/2/2017 19:22

We know there can be NO further placings this year.

As ZEN is listed on the full market (not AIM) they're restricted to placing no more than 10% per year , which they've already done.

[sja123] 16/2/2017 17:06

From the prospectus....

£20,000,000 Loan Facility with Darwin Strategic Limited (acting on behalf of Darwin Capital
Limited)
On 13 November 2015, the Company entered into a £20,000,000 (circa CAD $37,200,000)
unsecured loan facility for general corporate purposes (the “Facility̶1;) with Darwin Strategic
Limited (acting on behalf of Darwin Capital Limited) (the “Lender”). Subject to a satisfaction of
certain conditions precedent and the approval of the Lender, a minimum sum of £100,000 and
up to a maximum sum of £2,000,000 for each tranche can be drawn at any time up to 13 May
2017. Each drawdown is at the Lender’s absolute discretion. The Loan accrues interest at the
rate of 12% per annum on the amount drawn and is payable quarterly in arrears. Each
outstanding drawdown is repayable on the third anniversary of the first drawdown date. The
Company may prepay the loan, in whole or in part, at any time and without penalty. A one-time
fee of £25,000 was payable to the Lender on signing of the facility letter (satisfied by issuing the
Lender with 526,705 Common Shares). Provided no monies are owing under the Facility, the
Company may terminate the Facility with immediate effect by written notice and the Lender may
terminate the facility on the one year anniversary of the date of the facility letter. The parties can
mutually agree in writing to terminate the Facility at any time. As at 21 December 2016, the
Company had not made any drawdowns under the Facility.

[zengas] 16/2/2017 16:54

Don't they still have an undrawn $20m loan facility with Darwin to May of this year for any funds to be drawn down if need be. Maybe they will renew it in due course.

They said last week that they are considering the use of a 3rd workover rig - either by buying a pre-owned rig or a new Chinese one to be financed by the manufacturer. Given their plans were based on 1 workover rig, they could possibly do in 1 year which would have taken 3 years.


Longer term they were planning to buy a drilling rig for new wells - but if they ramp up the workovers successfully, then new drilling on high impact wells could be a lot earlier than previously indicated.

[ravin146] 16/2/2017 16:48

That's a long term propect. Short/medium target is simple.Workover, workover and workover to get the first dozen or so wells producing multiples it's current bopd.Let's learn to walk before flying!