Zenith Energy

Capital/Financing Update • Oct 24, 2019

Further Reduction of Debt

Further Reduction of Debt

October 24, 2019

ZENITH ENERGY LTD.

("Zenith" or the "Company")

Further Reduction of Debt

Zenith Energy Ltd., ("Zenith" or the "Company"), (LSE: ZEN; TSX.V: ZEE; OSE: ZENA-ME), the international oil & gas production company operating the largest onshore oilfield in Azerbaijan, is pleased to announce that it has successfully further reduced its debt position with a specific focus on the elimination of all short-term debt positions.

Loan Facility for US$1,485,000 and accrued interest

The Company can today confirm that it has repaid the first tranche of the settlement of this liability.

As announced on September 17, 2019, the Company entered negotiations with the lender to settle the liability at a significant discount.

On October 1, 2019, the Company announced that, following negotiations with the lender, it had successfully agreed to settle the aforementioned liability for a total amount of US$1,000,000, representing a profit of US$1,080,523.

Unsecured notes for £90,000 and accrued interest

On March 25, 2019, Zenith issued unsecured notes for a total amount of £90,000.

The Company can today confirm that it successfully repaid the unsecured notes for £90,000, with related accrued interest.

Conversions under Convertible Loan Facility

The Company has received three Conversion Notices ("Conversion") from the consortium of lenders (the "Lenders") for the US$1,500,000 Convertible Loan Facility ("Convertible Loan") announced on September 5, 2018.

The Conversion has been made in three different tranches during the months of September 2019 and October 2019:

1. 2,666,935 common shares (“Conversion Shares”) at a price of £0.0305 per Conversion Share;

2. 3,702,263 Conversion Shares at a price of £0.0221 per Conversion Share; and

3. 5,055,204 Conversion Shares at a price of £0.0221 per Conversion Share,

for a total of 11,421,402 Conversion Shares, equivalent to a total amount of US$340,000.

The total outstanding liability in relation to the Convertible Loan will now stand at US$420,000 following the completion of the Convertible Loan Facility and the Conversion.

On March 11, 2019, the Company announced that it had favourably renegotiated the Convertible Loan to include a fixed conversion price of £0.0505 ("Fixed Conversion Price") for the Convertible Loan Facility which expired on September 1, 2019.

The Company also announced that it had agreed with the Lenders to amend the terms of the Convertible Loan to include the possibility of optional redemptions (the "Optional Redemption") to be made by the Company in lieu of conversion of the Convertible Loan by the Lenders for set redemption amounts (the "Redemption Amounts") amortised across the duration of the Facility.

Zenith has paid a total of US$600,000 in Optional Redemptions to reduce the total outstanding liability in relation to the Convertible since the aforementioned revised terms were agreed.

Admission of Conversion Shares

An application will be made for the Conversion Shares to be admitted to the standard segment of the Financial Conduct Authority Official List and to trading on the Main Market for listed securities of the London Stock Exchange ("Admission").

The Conversion Shares will rank pari passu in all respects with the Company's existing common shares, and it is expected that Admission will become effective on October 30, 2019.

Total Voting Rights

The Company wishes to announce, in accordance with the Financial Conduct Authority's Disclosure Guidance and Transparency Rules, the information set out below following the completion of a Private Placement in Norway last announced on October 22, 2019 and the aforementioned Conversions.

Class of share

Total number of shares

Number of voting rights per share

Total number of voting rights per class of share

Common Shares in issue and admitted to trading on the Main Market of the London Stock Exchange 277,403,856 1 277,403,856

Common Shares in issue and admitted to trading on the TSXV 407,566,366 1 407,566,366

Common Shares in issue and admitted to trading on the Merkur Market of the Oslo Børs 407,566,366 1 407,566,366

No Common Shares are held in treasury. The above figure for total number of Common Shares may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the Company under the Financial Conduct Authority's Disclosure Guidance and Transparency Rules.

Andrea Cattaneo, Chief Executive Officer of Zenith, commented:

"In line with our key strategy of further strengthening our financial position we have taken targeted steps to significantly improve our balance sheet in recent months

It is important to underline that the Company made an exceptional profit of US$1,080,523 from the successful settlement at a sizeable discount of a Loan Facility.

We look forward to building upon this progress in due course in order to support Zenith’s successful development.”

Further Information:

Zenith Energy Ltd

Andrea Cattaneo, Chief Executive Officer Tel: +1 (587) 315 9031

E-mail: info@zenithenergy.ca

Peterhouse Capital - Joint Broker Tel: + 44 (0) 207 469 0930

Lucy Williams

Charles Goodfellow

Novum Securities Limited - Joint Broker Tel: + 44 (0) 207 399 9400

Charlie Brook-Partridge

Hugh McAlister

IFC Advisory Limited - Financial PR & IR Tel: + 44 (0) 203 934 6630

Graham Herring

Zach Cohen

Notes to Editors:

Zenith Energy Ltd. is an international oil and gas production company, listed on the TSX Venture Exchange (TSX.V:ZEE) and London Stock Exchange (LSE:ZEN). In addition, the Company's common share capital was admitted to trading on the Merkur Market of the Oslo Børs (ZENA:ME) on November 8, 2018. The Merkur Market is a multilateral trading facility owned and operated by the Oslo Børs.

The Company was assigned a medium to long-term issuer credit rating of "B+ with Positive Outlook" on October 9, 2019 by Arc Ratings, S.A.

The Company operates the largest onshore oilfield in Azerbaijan following the signing of a 25-year REDPSA, (Rehabilitation, Exploration, Development and Production Sharing Agreement), with SOCAR, State Oil Company of the Republic of Azerbaijan, in 2016.

The Company's primary focus