Canada’s Zenith Energy Ltd has received the first two payments for invoices generated for producing Ural crude oil from the Muradkhanli-Zardab-Jafarli field in Azerbaijan during August and September 2016, said the message posted on the company’s website.
“The crude oil was sold to Azerbaijan’s state oil company SOCAR and payment was made in accordance with the company’s Oil World Market sales Agreement signed between Aran Oil Operating Company (“Aran”, the operating company within Zenith’s operations in Azerbaijan) and SOCAR,” said Zenith.
Payments were delivered to Zenith Aran on October 29 and November 15 in accordance with the company’s expectations, according to the message.
“Additional crude oil quantities have been formally delivered into the international pipeline network by Zenith Aran, creating additional invoices, and issued every 15 days,” said the company. “For the purpose of investor clarification, Zenith Aran’s crude oil is transported from the Shirvan oil terminal, domestically through the network of SOCAR pipelines, and then internationally, through Transneft, where it ultimately reaches the Novorossiysk port on the Black Sea.”
As an alternative, Aran may also choose to transport its crude oil to the Mediterranean Sea through the BTC (Baku-Tbilisi-Ceyhan) pipeline operated by BP British Petroleum, said the message.
CEO and president at Zenith Energy Ltd, Andrea Cattaneo said that the company is exceptionally pleased with the rapid progression of commercial activity in Azerbaijan and delighted to note that the first payment for crude oil from the Muradkhanli oil field was received two days in advance of the due date.
“The second payment further validates our confidence in the process. These are landmark events for the company as it signals the initiation of a new income stream with significant growth potential and confirms for shareholders that payment terms have been quickly and efficiently respected,” he said.
Already at a production rate of 300 barrels per day, these payments equate to approximately $360,000 per month, said Cattaneo.
“While management has always been confident in the quality and credibility of our buyer, SOCAR, we believe it is important to communicate these results to our international investors so that they may share our confidence,” he added.
The company’s CEO pointed out that given the region’s extensive energy infrastructure and its proven functionality, Zenith is prepared to increase the scale of its activities.
“It is our plan to reinvest significant operational cash flow to generate sustainable ongoing investment into the development and optimization of our fields,” said Cattaneo.
Zenith Aran Oil Company Limited is a fully owned affiliate of Zenith Energy Ltd. Zenith Energy Ltd focuses on the acquisition and further development of proven onshore oil and gas fields where production has declined over time, but which are capable of increased productivity following an injection of capital and optimization through its corporate engineering and technical expertise.
SOCAR and Zenith Aran Oil Company signed March 16 an agreement on production sharing, restoration, development and exploration at the block that includes Muradkhanli, Jafarli and Zardab oil fields. Muradkhanli, Jafarli and Zardab fields cover an area of 642.2 square kilometers.