Zenith Energy (ZEN) H2 2024 earnings summary

Executive summary

• Focus shifted to US asset acquisitions, including majority control of Leopard Energy (formerly Cyber Apps World Inc.) and a 5% royalty in seven producing Eagle Ford Shale wells in Texas.

• Discontinued potential acquisitions in Kazakhstan, Benin, Yemen, and Congo to concentrate on more attractive opportunities.

• Initiated three major arbitrations against the Republic of Tunisia and ETAP, with cumulative claims of at least US$140.5 million.

• Operations now span Italy (natural gas, electricity, condensate) and the US (oil production).

Financial highlights

• Revenue dropped to CAD$1.8m for FY2024 from CAD$13.2m in FY2023, mainly due to reduced Tunisian operations and lower energy prices.

• After-tax loss widened to CAD$42.4m from CAD$12.8m year-over-year, impacted by non-recurring administrative and arbitration expenses.

• Cash balance at year-end was CAD$207k, down from CAD$1.4m in the prior year.

• Total equity attributable to shareholders fell to CAD$50.0m from CAD$91.7m.

• Inventory at year-end was CAD$2.0m, mainly unsold crude oil in Tunisia.

Outlook and guidance

• Further US asset acquisitions, especially royalty interests in non-operated oil and gas leases, are planned.

• Management expects arbitration outcomes to potentially transform shareholder value and is considering an extraordinary dividend if successful.

• Ongoing focus on optimizing Italian energy portfolio and expanding US presence.