LONDON: Zenith Energy Ltd., an oil & gas production company focused on African development opportunities, announced that it is in advanced discussions to establish a commercial PPE manufacturing enterprise, specifically protective face masks, in the United Kingdom to combat the COVID-19 pandemic.

Rationale

• Zenith recognises the unprecedented challenges posed by the COVID-19 pandemic to populations across the world, especially in developing countries with limited intensive-care capacity and where fewer jobs can be performed remotely.
• The Company has observed publicly reported difficulties in the procurement and timely delivery of protective face masks across the world.
• Zenith intends to explore what kind of assistance may be provided by the UK government in terms of funding to support the establishment of PPE manufacturing in the United Kingdom.
• The key to success for junior oil and gas production companies such as Zenith will be the achievement of significant reductions in its production costs in reaction to the recent decline in oil prices, as well as the ability to safeguard the welfare of its employees and local communities in order to ensure unaffected oil and gas production operations.
• In the first instance, the Company intends to export PPE manufactured in the UK to African countries, specifically the Republic of the Congo and other African countries where Zenith is seeking to acquire oil and gas production assets. In a secondary phase, the Company may establish PPE manufacturing activities in the vicinity of its oil and gas production operations.
• The Company believes that, whilst the pandemic will likely slow in developed countries in the near-term, there is a probable danger it will accelerate in developing countries, who will therefore require sustained assistance to overcome COVID-19.
• There is consensus that there will be increasing global demand for PPE, including protective face masks, until an effective vaccine for COVID-19 becomes widely available, which most experts do not anticipate happening prior to mid-2021.

The Company can confirm that it has identified a suitable manufacturing facility location in Northern England and is currently in negotiations with a number of Chinese companies selling PPE manufacturing equipment.

In addition, a business plan is being formalised for its future UK PPE manufacturing operations to coordinate the procurement of the materials required for the manufacturing of PPE and identify suitable staff who will require training to operate the selected manufacturing equipment.

It is anticipated that an order for three protective mask manufacturing units, capable of producing up to 50,000 protective masks per day, will be completed during the month of May 2020. The indicative cost of each manufacturing unit is approximately US$25,000.

As announced on April 17, 2020, the Company has successfully renegotiated the terms for the acquisition from AIM listed Anglo African Oil & Gas plc of 100 per cent of its fully owned subsidiary in the Republic of the Congo, Anglo African Oil & Gas Congo S.A.U, (“AAOG Congo”) which has a 56 per cent interest in the Tilapia oilfield.

The Company is in discussions with a local partner in Pointe-Noire to finalise an agreement for the establishment of a manufacturing facility for medical grade hand sanitiser.

All the necessary equipment for the manufacturing of Disinfectant Gel has already been identified and will be provided by an Italian supplier.

Zenith expects to shortly finalise an understanding with its local partner in order to proceed with the identification of a suitable production location to begin production of Disinfectant Gel for the benefit of the local population.

It is expected that the local partner will provide a production facility location at no cost to Zenith.

Andrea Cattaneo, Chief Executive Officer, commented: “Our core focus is the acquisition and development of revenue generating oil and gas production assets in Africa. However, we recognise that the world is currently experiencing unprecedented challenges for which civil society and commercial enterprises must proactively find ways of adapting to successfully overcome the challenges at hand.

This is something oil majors such as ExxonMobil are doing and which we, at a much smaller scale and in a different way, are looking to emulate – without distraction from our primary objective of acquiring oil and gas production assets in Africa at advantageous terms in the current low oil price environment.

The manufacturing of face masks and sanitising gel presents a low-cost, relatively simple, both commercial and humanitarian opportunity to enhance Zenith’s settlement in Africa at a time of world crisis.”