Gunsynd plc
("Gunsynd" or the "Company")
Investment in Zenith Energy
Gunsynd Plc (AIM: GUN, ISDX: GUN) is pleased to announce that it has signed a subscription agreement with Zenith Energy Limited ("Zenith"), a junior oil and gas E&P company quoted on the Toronto Venture Exchange in Canada with an oil production company based in Azerbaijan, to invest £100,000 by way of a convertible loan note, and as part of a wider fundaising from other investors of up to £500,000.
Highlights:
Zenith has acquired the Rehabilitation, Exploration and Development and Production Sharing Agreement ("REDPSA") for three fields in Azerbaijan. These fields are adjacent to one another although geologically separate and constitute a combined acreage position of 642.4 km2. The fields are located nearly 200 km to the west of the capital, Baku, close to the border with Iran. The fields are:
• Muradxanli field
• Carfarli field
• Zardab field
Current combined production is approximately 333 bopd of oil from approximately 87 wells although historical production was considerably higher prior to the collapse of the Soviet Union in 1991.
It is estimated that there are up to 100 additional inactive wells available for rehabilitation on the fields. No new wells have been drilled on the fields for five years. It is further estimated that only 20% of the estimated recoverable reserves of 87.7 mmbbls have been recovered to date.
Terms of the investment:
Gunsynd is investing £100,000 by way of a convertible unsecured loan note ("Note") paying interest of 3% per annum, payable in arrears, in quarterly installments. Subject to the Notes not having been converted in the meantime, Gunsynd will be repaid in full 36 months from the date of issuance.
At the option of the holder of the Notes, the principal of a Note may be converted into common shares of Zenith at any time prior to maturity (36 months from issuance) at a price equal to CDN$0.10 per common share or the initial listing price of the common shares if Zenith is listed on another senior stock exchange at the time of such conversion.
Hamish Harris, the Company's Chairman, commented:
"This initial investment by Gunsynd provides an excellent opportunity for the Company to participate in a proven low cost producing field with substantial upside from both workovers and new drilling. The Company looks forward to participating with Zenith Energy in optimising the potential of these three fields."
This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.
The directors of Gunsynd accept responsibility for this announcement.
For further information please contact:
Gunsynd plc: +44 (0) 20 7440 0640
Hamish Harris
Donald Strang
Nominated Adviser/ISDX Corporate Adviser: +44 (0) 20 7213 0880
Cairn Financial Advisers LLP
James Caithie / Liam Murray
