ZENITH ENERGY LTD.
("Zenith" or the "Company")
Workover rig operated by Team B moves to well M-45
Calgary, Alberta, June 8, 2017, Zenith Energy Ltd. ("Zenith" or the "Company") (LSE: ZEN; TSX.V: ZEE), the dual listed international oil & gas production company, is pleased to announce that, after completing successful sidetrack operations at well M-195, the local drilling contractor operating as 'Team B' has been assigned the task of completing the workover of well M-45.
'Team A', comprised of the Company's field personnel and operating Zenith's workover rig, will leave the well M-45 location and engage in a series of systematic pump replacement and repair operations at a number of wells. These pump replacement activities have already generated increased production, as announced by Zenith on April 10, 2017, and are expected to yield further incremental production increases as and when they are completed.
It has been determined that a more powerful workover rig, such as that operated by Team B, will more effectively complete the workover of M-45. Team A has successfully cleaned this well to 3568 meters. Team B will remove the remaining 162 meters of tubing, subsequently re-perforate the casing at the producing level and possibly perform an acid stimulation and/or hydraulic fracturing of the Cretaceous reservoir to improve the well's productivity.
In addition, the Company has decided to install an Electric Submersible Pump ("ESP") at well M-45 in order to further stimulate production which had been flowing due to the natural pressure of the reservoir.
As stated in the Company's announcement of April 18, 2017, well M-45 was drilled in 1980 and placed on production in July 1981 at rates varying between 74 and 86 barrels of oil per day. Production had decreased to approximately 1.5 barrels per day in early 2017 due to tubing problems.
The Company will make an announcement when workover operations at well M-45 have been completed.
Zenith CEO, Andrea Cattaneo, commented:
"Zenith's focus now turns to maximise the potential success of operations at well M-45 following the recent success of the sidetrack at well M-195. It is clear that the Zenith engine has had a slow start but is now gradually firing up cylinder by cylinder. The reasons for the Company's measured approach have been our low-cost model and the Company's aversion towards high operational expenditure. It is, however, also clear that as the positive results of our operations grow more apparent, the Company shall gradually increase its CAPEX in order to achieve its oil production objectives more quickly.
Now that Zenith has enhanced its technical and management skillset with the appointment of a highly experienced Chief Operating Officer ("COO") in Azerbaijan, the Company intends to make similar efforts towards upgrading its equipment. I am pleased to report that Zenith is in advanced negotiations for the renting of a second workover rig with similar specifications to that employed by Team B at M-195.
I am confident that the arrival of Team B's more powerful rig at M-45 will significantly accelerate the pace of operations at this well."
For further information, please contact:
José Ramón López-Portillo
Chairman
Andrea Cattaneo
CEO & President
Email: [email protected]
Telephone: +1 (587) 315 9031
Telefax: +1 (403) 775 4474
Allenby Capital Limited - (Joint Broker)
Nick Harriss
Nick Athanas
Richard Short
Telephone: + 44 (0) 203 328 5656
Optiva Securities - (Joint Broker)
Christian Dennis
Telephone: + 44 (0) 203 137 1903
