Mr. Andrea Cattaneo reports

PLACING AND SUBSCRIPTION TO RAISE 2.02 MILLION POUNDS

Zenith Energy Ltd. has published a prospectus in connection with a placing and subscription to raise 2.02 million pounds sterling (before expenses) through the issue of 50.5 million new common shares of no par value in the capital of the company at an issue price of four pence per share.

The issue price is a discount of 21.6 per cent to the closing middle market price of 5.10 pence per existing common share on the London Stock Exchange on June 19, 2018, being the last business day prior to this announcement.

The prospectus, which includes full details on the group and the terms and conditions of the placing and subscription, has been approved by the U.K. Listing Authority. A copy of the prospectus will be available shortly from the company's website and a copy has been submitted to the National Storage Mechanism and will shortly be available for inspection.

The company highly values its retail investor base and is pleased to provide its private investors alongside institutional investors with the opportunity to participate in the subscription by applying for offer shares through the PrimaryBid website platform. A further announcement will be made providing further details however it is expected that PrimaryBid will launch an offer for subscription to raise up to 800,000 sterling pounds via PrimaryBid and that the PrimaryBid offer will remain open until, at the latest, 9 p.m. London time tonight. Subscriptions will be considered by the company on a first come, first served basis and are subject to the conditions set out in the prospectus. PrimaryBid will not charge commission for this service. The PrimaryBid offer has not been underwritten.

The company also announces that its shares have been placed in a trading halt on the TSX Venture Exchange with immediate effect pending the release of an announcement in relation to closing of the PrimaryBid offer.

Use of proceeds from the placing and subscription

The company's intention is to use the net proceeds from the placing and subscription as shown in the attached table.

Use                                                                           Amount (GBP)

Deposit for the leasing of a new drilling rig                                1.50 million
Working capital                                                              0.21 million
Details of the placing and subscription and PrimaryBid offer

Any net proceeds of the PrimaryBid offer will be applied for general working capital purposes.

The placing comprises a total of 46.5 million placing shares to be issued by the company at a placing price of four pence per new common share, to raise gross proceeds of approximately 1.86 million pounds sterling (before expenses). The estimated net proceeds of the placing amount to approximately 1,548,300 pounds sterling. Each prospective investor has been offered placing shares at the placing price and the placing shares have been conditionally subscribed for by investors. Investors have executed irrevocable placing letters undertaking to subscribe for 46.5 million common shares in aggregate at the placing price. The undertakings are conditional on admission.

The placing shares will be issued credited as fully paid and will, on admission, rank pari passu in all respects with all other common shares including the right to receive all dividends or other distributions declared, made or paid after admission. The placing shares to be issued by the company pursuant to the placing will represent approximately 22.1 per cent of the enlarged common shares in issue (excluding the offer shares).

The subscription is for four million subscription shares at the subscription price of four pence per common share.

The subscription shares will be issued credited as fully paid and will, on admission, rank pari passu in all respects with all other common shares including the right to receive all dividends or other distributions declared, made or paid after admission.

On admission, the company will have a market capitalization (at the placing price) of approximately 8.42 million pounds sterling assuming 46.5 million placing shares are issued at the placing price, and four million subscription shares are issued at the subscription price.

The PrimaryBid offer for up to 20 million offer shares at the offer price of four pence per common share will be open between 4:30 p.m. London time and 9 p.m. London time on June 20, 2018. This will raise gross proceeds of up to 800,000 pounds sterling. The PrimaryBid offer is not underwritten.

All offer shares will be issued, payable in full, at the offer price. The offer shares will be issued credited as fully paid and will, on admission, rank pari passu in all respects with all other common shares including the right to receive all dividends or other distributions declared, made or paid after admission.

The company expressly reserves the right to determine, at any time prior to admission, not to proceed with the placing, subscription and/or the PrimaryBid offer.

Following admission, the net proceeds from the placing and the subscription and the net proceeds of the PrimaryBid offer will be placed on deposit with the company's bankers.

Investors should make their own investigations into the merits of an investment in the company. Nothing in this announcement amounts to a recommendation to invest in the company or amounts to investment, taxation or legal advice.

It should be noted that a subscription for offer shares and investment in the company carries a number of risks. Investors should consider the risk factors set out in the prospectus before making a decision to subscribe for offer shares. Investors should take independent advice from a person experienced in advising on investment in securities such as the offer shares if they are in any doubt.

Andrea Cattaneo, chief executive officer of Zenith, commented: "The proceeds of the fundraising will be used almost entirely for our operational development, which remains our strategic focus given the scale of our asset in Azerbaijan. We have sought to keep the amount raised to the minimum necessary in order to mitigate the effects of dilution and enable the company to raise more capital to support Zenith's growth at a later date with far more favourable valuations of its stock on the back of the strong operational results we are hoping to achieve. Our current share price presents a highly attractive investment case on the basis of our existing production, our 2P reserves of 31.7 million barrels of oil in Azerbaijan and the near-term completion of our operations in the potentially prolific Zardab field."

We seek Safe Harbor.