Zenith Energy Share Discussion Threads

[sea7] 06/10/2017 16:57

tta,

That is almost how they were running it tta.

we have to consider the lay of the land and work with it. You burn half the workforce because really and truthfully a lot of them are excess, then those that remain, will either not be willing to do their mates job for no extra pay, or they will sympathise and disrupt things.

Look at a lot of mining companies and oilies that have to carry out community projects, build roads, schools, surgeries, houses and commit to supporting other local events just to get the licence to operate.

zeniths community engagement initiatives...

This approach can be seen in Zenith’s operations in the Imishli area of Azerbaijan where Zenith is the second largest employer. The Company has stimulated the local economy by employing approximately 200 people in areas including transportation, civil construction, oilfield operations and office administration.

A number of internally displaced persons living within Zenith’s contract area in Azerbaijan are provided with electricity by the electrical power station installed by the Company. Local farms and large agricultural areas are also provided with water using water pumps owned and serviced by Zenith. In addition, the Company’s oilfield firefighting team provides immediate emergency response to the surrounding areas as well as supporting local emergency services.

Zenith is evaluating a number of ways towards improving local infrastructure, including the construction of a new canteen for its staff and road repair work within the contract area, which will benefit the Company as well as local communities.

The Company recognizes its very important responsibility towards its host countries and considers this as one of the foundations towards the success of its operations. Zenith will always work in close partnership with local and national levels of government and act in accordance with the host country’s energy development programme.
.............................................

If they lose the support of the locals, then the project will get nowhere fast.

[sea7] 06/10/2017 16:33

annual field costs are $1m plus $3000 per well, per month.

same old story cash,

they will have been running this field for years in a very labour intensive way, as it had been under the old soviet regime. That will not have changed much and it will be a gradual reduction in headcount.

If they get rid of a load of staff, they may find others protest and cause problems.

This is one area that needs careful management, not a broad brush accountant style restructuring.

This is not the uk. Azerbaijan, despite having a good record for oil, is still heavily affected by corruption. The right wheels have to be greased in my view.

[cashandcard] 06/10/2017 16:28

Sea7,


In that case, we need every barrel of oil we can produce. That is a lot of mouths to feed. I do not see the value of keeping them if they do not contribute to operations in some way. I understand some must be pretty crucial for maintaining important relationships, but not all. Surely, there must be a way of reducing headcount?


Cash

[sea7] 06/10/2017 16:15

tta

all these employees were there before zenith took over. These are mainly field staff from the days before zenith. A lot are heading towards retirement ages and will not be replaced.

I think there is an element of ensuring local support for the project at this stage. The licence area is the size of Chicago.

If they start getting rid of many local workers who have probably been there most of their lives, then they may find that progressing the project may prove harder to achieve if local sentiment goes against them.

Andrea did state that he felt it is overstaffed, however, many are approaching retirement. I think he is wary of upsetting the locals, when they are the very people needed to make this work.

[thetoonarmy2] 06/10/2017 16:10

Wonder what Malcy will charge for his Independent analysis?:)

Cashcard: My only concern is the huge number of staff; 210 as per the website. Why employ so many people? What is the role of Arab gentlemen (hired months ago)? With the new equipment, do we really need that many folk on the payroll?

I agree this seems ridiculous we virtually have one employee for every barrel of oil?
Mind are my eyes deceiving me is the the shareprice moving up or do I need a trip to specsavers???

[ravin146] 06/10/2017 16:09

Finally some traction on the sp

[cashandcard] 06/10/2017 15:05

I think investors will start to take notice after 4 results on the trot. Since Mike joined the team, a track record of successful workovers. With Z28, we could well get our first big result here. If Z28 is successful they will build on it and go after the other two high impact Zardab wells.

Dare I say it, this is starting to look a well priced proposition amongst smallcap oil co's.


Cash

[ravin146] 06/10/2017 14:45

Sea7 agree with this?Zenith Energy Production Summary 6th Oct 2017 by ravin146, imoWorkover programme (total 194b):M195 - 149b (intl), awaiting ESP (Oct)M45 - 49b ESP (awaiting update)J2 - awaiting resultZ28 - awaiting resultZ21 - awaiting resultZ-4 - dependant on z28 & z21C26 - 70bM66 - 50b11 Rehab ESP - awaiting result (Nov)C21 - 15b (awaiting ESP)Field rehab (total 14b):M48 - abandonedC34, M67, C31 & M70 - 14bC39 - no result releasedTotal run rate in Azerbaijan: 365bopd

[sea7] 06/10/2017 13:53

conf call available.




Great result this morning, with more, potentially to come.

[cashandcard] 06/10/2017 12:40

"Zenith has successfully perforated a new unexploited production zone in well C-21 in the Jafarli field in Azerbaijan. This is producing 15 bopd and whilst that seems modest there are other pay zones to go after. The addition of a pump should also boost production. I am hoping to visit Zenith’s operations soon so may be able to add some more comments in due course"





Would be great if he included ZEN in his bucket list.


Cash

[cashandcard] 06/10/2017 12:24

tta2,


Fair points. Costs are a concern. However, it was costing us more when we were using old-age, substandard equipment and inexperienced drillers/graduates. There is really saving money and then there is Wastage in an attempt to save money. ZEN were previously doing the latter because the inexperience and old equipment did not deliver and also cratered the shareprice. My thoughts have always been, pay the money necessary and get the results - that is now happening.

My only concern is the huge number of staff; 210 as per the website. Why employ so many people? What is the role of Arab gentlemen (hired months ago)? With the new equipment, do we really need that many folk on the payroll?


Cash

[cashandcard] 06/10/2017 12:15

ravin146,


I agree, 15bopd is good news, but nothing to get excited about. However, at 80% wi, 50bopd would be. Its a substantial number (if they can achieve somewhere near it) given the fact it would be taken from a total of 7.1m of bypassed pay made up of wafer-thin sand zones of 1-2m each. Also, the low cost and Urals blend premium pricing (to Brent) help a lot.

Consider c21 as a test bed - I suspect they'll roll out the use of the tech to other wells, with greater potential payzones going forwards, that's where you'll see chunky numbers. Regardless, operational progress and results are improving.....


Cash

[ravin146] 06/10/2017 11:59

It's good news...15 is not good enough nor is 50...they need to be delivering 100s now or no point rns imo.1000 target, and put all hopes on z-28...well we all know what happened well195

[cashandcard] 06/10/2017 09:30

thetoonarmy2,


Going by the wording of todays update. It sounds very very familiar to this;


"Production increased at well M-66 in Azerbaijan (11/08/17)


Zenith Energy Ltd. ("Zenith" or the "Company") (LSE:Â ZEN;Â TSX.V:Â ZEE), the dual listed international oil & gas production company operating the largest onshore oilfield in Azerbaijan, is pleased to announce that production at well M-66 in the Muradkhanli field has been increased to 50 BOPD.

The Company announced on July 27, 2017 that Well M-66 had been returned to production after being cleaned out to a depth of 3011 metres with a coiled tubing unit (CTU) using nitrogen. A production of 15 BOPD was achieved and 150 barrels of oil, which had accumulated in the wellbore, were also recovered during the well intervention. Well M-66 had been shut-in since 1999.

After conducting post-workover analysis, it was noticed that the clean out exposed a pay zone that had not been perforated. As a result, an additional 6 metres of pay were perforated between the depth of 2970 and 2986 metres, specifically between 2970-2972, 2977.5-2979.5 and, finally, 2984-2986 metres. After these perforations were completed, a coiled tubing unit (CTU) using nitrogen was again employed to stimulate the well. Following this secondary well intervention, M-66 is now flowing at a rate of 50 BOPD"


C21 may well turn out like the above, went from initial flow of 15bopd to 50bopd.


Cash

[cashandcard] 06/10/2017 09:25

Previously they had the wrong crew attempting workovers, the workovers failed, they communicated abysmally, ended up missing targets. Since the arrival of Mike Palmer, a COO with years of in-country experience on other onshore fields, operations and results and progress have notably changed.

Its gone from zero to to 15bopd pre-ESP installment. The key is not to get fixated on any particular well. There are dozens of wells in their inventory that need working over.

The key for me is consistently achieving WO successes and adding to the daily bopd. Then it becomes a waiting game, it will not be ignored forever.


Cash

[thetoonarmy2] 06/10/2017 09:02

They have to be bloody joking 15 barrels a day? it cost more to issue the RNs than they will make on that a day, this has been a very disappointing share to be invested in the management seem to be very distracted and not focused on getting this producing.

[cashandcard] 06/10/2017 08:53

Good to see yet another well worked-over successfully, going from dormant to producing oil. It may not be much, even after ESP is installed, but its important to note they are actually making progress now and adding to the all important BOPD and revenue the company receives. We have all been waiting for a streak of successful WO's. Just need them to keep this up on higher impact wells.

I sent a pithy email to AC and MP the otherday, with two specific requests; an all-inclusive Azerbaijan production run-rate figure and an estimate of per/bbl metrics alongside it. I justified it from an investors point of view. It would seem atleast the first of the two requests is now well understood from this mornings update:

"The Company will release an Azerbaijan daily oil production update once the high-impact workover of well Z-28 in the Zardab field is completed in November 2017"


Nothing is a certainty in this business. But I can see this momentum continuing with Z28, hence why they are looking to release a production update after completing it. The difference has been MP and his experience of successful oil production in Azerbaijan.


Cash

[ravin146] 06/10/2017 08:41

Zenith Energy Production Summary 6th Oct 2017 by ravin146, imo

Workover programme (total 194b):

M195 - 149b (intl), awaiting ESP (Oct)
M45 - 49b ESP (awaiting update)
J2 - awaiting result
Z28 - awaiting result
Z21 - awaiting result
Z-4 - dependant on z28 & z21
C26 - 70b
M66 - 50b
11 Rehab ESP - awaiting result (Nov)
C21 - 15b (awaiting ESP)

Field rehab (total 14b):

M48 - abandoned
C34, M67, C31 & M70 - 14b
C39 - no result released

Total run rate in Azerbaijan: 365bopd

[ravin146] 05/10/2017 08:59

CPAP MAN - 05 Oct 2017 - 08:55 - 3106 of 3106 - 0LOL KNIGEL yet another loser for the well known TROLL [give you a clue....spends most of the day sitting in the Tower of London!]^cpap now gone mad, posting random posts on this thread, what a mess!Hope he looks in the mirror tonight, feel sorry for his family, sad individual and needs help!

[cpap man] 05/10/2017 08:55

LOL KNIGEL yet another loser for the well known TROLL [give you a clue....spends most of the day sitting in the Tower of London!]

[ravin146] 04/10/2017 22:35

Cpap is a moron btw, needs help and filtered by many!#CPAPCPUMPCDUMPERIf you filter me, how can you read this hehe

[cpap man] 04/10/2017 20:20

KIN



The best KIN thing that i ever did....



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