BAKU, Azerbaijan, Nov.4
By Leman Zeynalova - Trend:
Canada’s Zenith Energy company has formalized an offer to acquire a Norwegian oil & gas company, Nordic Petroleum AS (Nordic), by way of an exchange of equity, Trend reports citing the company.
The proposed acquisition is structured to be for a minimum of 90 percent of the outstanding shares in Nordic with a proposed equity exchange of 100 Nordic common shares for 1 Zenith common share (Proposed Terms).
The amount of outstanding fully diluted shares in Nordic is 905,045,166 common shares (nine hundred five million forty-five thousand one hundred sixty-six). Zenith will issue up to 9,050,452 common shares of no par value under the Proposed Terms.
Nordic was founded in Norway in 1996, where its shares are traded on the Norwegian OTC market, and has around 1,100 shareholders. Its primary activities have been in heavy oils in Alberta, Canada. In addition, it has significant tax credits in Norway, as well as an ongoing legal claim against a UK party.
The unaudited net value of Nordic’s equity presently stands at NOK 8,800,000 (equivalent to approximately CAD$1,270,000 or £750,000).
Nordic's Board of Directors has decided to recommend the Proposed Terms to its shareholders for approval provided certain conditions and practicalities in the Proposed Terms be resolved prior to the Formal Offer being submitted to shareholders.
Upon completion of the proposed acquisition of Nordic, Zenith intends to use Nordic as a vehicle to pursue the acquisition of mature energy production assets, as well as for potential participation in future licensing bids organised by the Norwegian Ministry of Petroleum and Energy.
The transaction further cements the Company's Norwegian presence in anticipation of attracting additional support from long-term Norwegian institutional investors.
Zenith Energy is the operator for development of Muradkhanli-Jafarli-Zardab block of oil fields onshore Azerbaijan.
Azerbaijan’s state oil company SOCAR and Zenith Aran Oil Company signed a Rehabilitation, Exploration, Development and Production Sharing Agreement (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.
The total area of the Muradkhanli, Jafarli and Zardab fields is 642.2 square kilometers, and according to the contract, it is divided into rehabilitation and exploration territories.
The Muradkhanli-Jafarli-Zardab block is located in the Yevlakh-Agjabadi oil and gas region of Imishli district of Azerbaijan. The Muradkhanli field was discovered in 1971, Jafarli - in 1984, and Zardab - in 1981.
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