BAKU, Azerbaijan, Jan.13
By Leman Zeynalova – Trend:
Canada’s Zenith Energy Ltd. has agreed with Anglo African Oil & Gas plc for its residual 20 percent holding in AAOG Congo, Trend reports citing the company.
Zenith Energy Ltd. has entered into a term sheet for a Put and Call Option Agreement with Anglo African Oil & Gas plc (AAOG) over the residual holding of 20 percent in Anglo African Oil & Gas Congo SAU (AAOG Congo) that AAOG will retain following the signing of a conditional share purchase agreement for Zenith's acquisition of an 80 percent interest in AAOG Congo.
As announced on December 27, 2019, the SPA is conditional, inter alia, on the passing of an ordinary resolution of shareholders in AAOG in a General Meeting, to be held on January 13, 2020, approving the Acquisition and certain regulatory requirements in the Republic of the Congo, including consent of the Minister of Hydrocarbons.
The term sheet for the put and call option provides for the following key provisions:
The Call Option over the Residual Shares may only be exercised by Zenith on January 16, 2021, and can only be exercised if, as at January 15, 2021, the total production from the Tilapia oilfield has never exceeded an average of at least 2,000 bopd for any period of 30 consecutive days prior to January 15, 2021.
If the Call Option is exercised, the consideration payable by Zenith for the Residual Shares shall be an amount of £1,000,000. The Call Option Consideration is to be settled by the issue of common shares in Zenith, the number of common shares to be issued being calculated on a 15-day VWAP (volume-weighted average price) of Zenith's common shares admitted to trading on the London Stock Exchange Main Market for listed securities in the 15-day period immediately prior to exercise of the Call Option.
The Put Option over the Residual Shares may only be exercised by AAOG on January 16, 2021 and can only be exercised if, as at January 15, 2021, the total production from the Tilapia oilfield has been an average of at least 4,000 bopd for any period of 30 consecutive days prior to January 15, 2021.
If the Put Option is exercised, the consideration payable by Zenith for the Residual Shares shall be an amount of £2,500,000. The Put Option Consideration is to be settled by the issue of common shares in Zenith, the number of common shares to be issued being calculated on a 15-day VWAP of Zenith's common shares admitted to trading on the London Stock Exchange Main Market for listed securities in the 15-day period immediately prior to exercise of the Put Option.
The Company is in the process of agreeing and entering into the final form of the Put and Call Option Agreement and a further announcement will be made on this in due course.
Zenith Energy is the operator for the development of Muradkanli-Jafarli-Zardab block of fields onshore Azerbaijan.
Azerbaijan’s state oil company SOCAR and Zenith Aran Oil Company signed a REDPSA in March 2016 for a block that includes the Muradkhanli, Jafarli and Zardab oil fields. Zenith Energy Ltd established its subsidiary company Zenith Aran Oil Company Ltd for production operations in these three fields. Production under the agreement began in August 2016.
Zenith holds an 80-percent participating interest in the three fields within the contract area, while SOCAR retains the remaining 20 percent. The agreement is for 25 years, with a potential extension by five additional years.
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