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Zenith Energy. Compelling investment play on Azerbaijan

​Zenith Energy Limited is a TSX Venture Exchange listed company reportedly looking for an additional listing in another major market, be that Oslo, New York or London. Zenith has recently built up its existing portfolio by adding a substantial acquisition in Azerbaijan which we believe could propel the company towards a mid-cap oil valuation on a medium – long term investment timeframe.

• Acquisition in Azerbaijan potentially transformative

  Located in the Lower Kura Basin and around 240km inland from Baku, the Muradxanli Block is the largest onshore oil and gas concession in the country, covering 642.4km2 with three under-developed oil fields, the Muradxanli, Cafarli and Zardab Fields and offering both development and exploration upside.
  
  

• Italian assets offer value but Argentina on hold

  In Italy Zenith owns various gas production and exploration assets. It also owns interests in two small oil fields in Argentina where production has been curtailed after a recent storage tank collapse.
  
  

• Sum-of the parts valuation suggests significant value

  Valuing the Azerbaijan assets using a DCF model based on the new CPR report and adding in the Italian assets, excluding further capital issues, we have a sum of the parts valuation of 65.1c per share. The Italian assets alone cover the current market cap, with Azerbaijan providing significant potential value.
  
  

• DISCLAIMER

  Zenith Energy is a research client of Align Research. Align Research has an interest in Zenith Energy shares. For full disclaimer information please refer to the last page of the full document. This investment may not be suitable for your personal circumstances. If you are in any doubt as to its suitability you should seek professional advice. This note does not constitute advice and your capital is at risk. This is a marketing communication and cannot be considered independent research.