Zenith Energy - Capital/Financing Update 2021

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt about the contents of this Document or the action you should take, you are recommended to seek your own financial advice immediately from an appropriately authorised stockbroker, bank manager, solicitor, accountant or other independent financial adviser who, if you are taking advice in the United Kingdom, is duly authorised under the Financial Services and Markets Act 2000 (“FSMA”).

This document comprises a prospectus (the “Prospectus”) relating to Zenith Energy Ltd (the “Company”) prepared in accordance with the Prospectus Regulation Rules of the Financial Conduct Authority (the “FCA”) made under section 73A of FSMA and approved by the FCA under section 87A of FSMA. The Prospectus has been approved by the FCA, as competent authority under the UK version of Regulation (EU) No 2017/1129, which is part of UK law by virtue of the European Union (Withdrawal) Act 2018 (the “Prospectus Regulation”). The FCA only approves the Prospectus as meeting the standards of completeness, comprehensibility and consistency imposed by the Prospectus Regulation. Such approval shall not be considered as an endorsement of the issuer that it the subject of this Prospectus. Such approval should not be considered as an endorsement of the quality of the securities that are the subject of this Prospectus. Investors should make their own assessment as to the suitability of investing in the securities. The Prospectus has been drawn up as part of a simplified prospectus in accordance with Article 14 of the Prospectus Regulation. The Prospectus has been made available to the public in accordance with Rule 3.2 of the Prospectus Regulation Rules and Article 21 of the Prospectus Regulation.

Application has been made to the FCA for the Subscription Shares, Capitalisation and the Admission Shares to be admitted to the Official List maintained by the FCA (the “ Official List ”) (by way of a standard listing under Chapter 14 of the listing rules published by the UK Listing Authority under section 73A of FSMA as amended from time to time (the “ Listing Rules ”)) and to the London Stock Exchange plc (the “ London Stock Exchange ”) for the Subscription Shares, Capitalisation Shares and Admission Shares to be admitted to trading on the London Stock Exchange’s main market for listed securities (together, “ Admission ”). It is expected that Admission will become effective, and that unconditional dealings in the Admission Shares, Capitalisation Shares and Subscription Shares will commence, at 8.00 a.m. on 16 November 2021.

THE WHOLE OF THE TEXT OF THIS DOCUMENT SHOULD BE READ BY PROSPECTIVE INVESTORS. YOUR ATTENTION IS SPECIFICALLY DRAWN TO THE DISCUSSION OF CERTAIN RISKS AND OTHER FACTORS THAT SHOULD BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE COMMON SHARES, AS SET OUT IN THE SECTION ENTITLED “RISK FACTORS” BEGINNING ON PAGE 10 OF THIS DOCUMENT.

The Directors, whose names appear on page 28, and the Company accept responsibility for the information contained in the prospectus. To the best of the knowledge of the Company and the Directors, the information contained in this document is in accordance with the facts and this document makes no omission likely to affect the import of such information.

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Zenith Energy Ltd.

(Incorporated in British Columbia, Canada under the Business Corporations Act (British Columbia))

Subscription of 272,727,273 Subscription Shares at a Subscription Price of 1.1 pence per Common Share Admission to Trading on the Standard Segment of the Official List and the Main Market of the London Stock Exchange of the Subscription Shares, the Capitalisation Shares and the Admission Shares

COMMON SHARES IN ISSUE IMMEDIATELY FOLLOWING ADMISSION 1,792,574,449

Allenby Capital Limited

Financial Adviser & Broker

Allenby Capital Limited, who is authorised and regulated by the FCA in the United Kingdom, is acting exclusively as financial adviser the Company in relation to the Admission and no one else. Allenby Capital Limited will not regard any other person (whether or not a recipient of this Document) as its client in relation to the Admission and will not be responsible to anyone (other than the Company) for protections afforded to the clients of Allenby Capital Limited or for providing any advice in relation to the Admission, the Subscription, the contents of this Document or any transaction or arrangement referred to herein. No liability whatsoever is accepted by Allenby Capital Limited for the accuracy of any information or opinions contained in this Document or for the omission of any material information, for which it is not responsible. However, nothing in this paragraph excludes or limits any responsibility which Allenby Capital Limited may have under FSMA or the regulatory regime established thereunder, or which, by law or regulation cannot otherwise be limited or excluded.

This Document does not constitute an offer to sell or an invitation to subscribe for, or the solicitation of an offer or invitation to buy or subscribe for, Common Shares in any jurisdiction where such an offer or solicitation is unlawful or would impose any unfulfilled registration, publication or approval requirements on the Company.

The Common Shares are not listed on any exchange or market in Canada and this Document has not been approved by any securities regulatory authority in Canada.

The Common Shares have not been and will not be registered under the US Securities Act of 1933, as amended (the “ Securities Act ”), or the securities laws of any state or other jurisdiction of the United States or qualified for sale under applicable securities laws of Australia, Canada, Japan or the Republic of South Africa. Subject to certain exceptions, the Common Shares may not be, offered, sold, resold, transferred or distributed, directly or indirectly, within, into or in the United States or to or for the account or benefit of U.S. persons (as defined in Rule 902 under the Securities Act) or to persons in the United States, Australia, Canada (other than pursuant to exemptions from the prospectus requirement under Canadian securities legislation), Japan, the Republic of South Africa or any other jurisdiction where such offer or sale would violate the relevant securities laws of such jurisdiction. The Subscription Shares may not be resold in Canada or to a resident of Canada for a period of four months and one day following Admission.

The distribution of this Document in or into jurisdictions other than the United Kingdom may be restricted by law and therefore persons into whose possession this Document comes should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

Application has been made for the Subscription Shares, the Capitalisation Shares and the Admission Shares to be admitted to the standard list segment of the Official List. The Company’s existing Common Shares (apart from the Admission Shares) are currently admitted to the standard list segment of the Official List. A Standard Listing affords investors in the Company a lower level of regulatory protection than that afforded to investors in companies with Premium Listings on the Official List, which are subject to additional obligations under the Listing Rules.

It should be noted that the FCA does not and will not have the authority to (and will not) monitor the Company’s compliance with any of the Listing Rules which the Company has indicated herein that it intends to comply with on a voluntary basis, nor to impose sanctions in respect of any failure by the Company so to comply. However, the FCA would be able to impose sanctions for non�compliance where the statements regarding compliance in this Document are themselves misleading, false or deceptive.

Without prejudice to any obligation of the Company to publish a supplementary prospectus pursuant to section 87G of FSMA or Rule 3.4 of the Prospectus Regulation Rules, the publication of this Document does not create any implication that there has been no change in the affairs of the Group since, or that the information contained herein is correct at any time subsequent to, the date of this Document. Notwithstanding any reference herein to the Company’s website, the information on the Company’s website does not form part of this Document.

Notice to Distributors

Solely for the purposes of the temporary product intervention rules made under sections S137D and 138M of the FSMA and the FCA Product Intervention and Product Governance Sourcebook (together, the “ Product Governance Requirements ”), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any “manufacturer” (for the purposes of the Product Governance Requirements) may otherwise have with respect thereto, the Subscription Shares have been subject to a product approval process, which has determined that the Subscription Shares are: (i) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, as defined under the FCA Conduct of Business Sourcebook COBS 3 Client categorisation, and are eligible for distribution through all distribution channels as are permitted by the FCA Product Intervention and Product Governance Sourcebook (the “ Target Market Assessment ”).

Notwithstanding the Target Market Assessment, distributors should note that: the price of the Subscription Shares may decline and investors could lose all or part of their investment; the Common Shares offer no guaranteed income and no capital protection; and an investment in the Common Shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Subscription. Furthermore, it is noted that, notwithstanding the Target Market Assessment, Allenby Capital Limited will only procure investors who meet the criteria of professional clients and eligible counterparties. For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of the FCA Conduct of Business Sourcebook COBS 9A and 10A respectively; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the Subscription Shares.

Each distributor is responsible for undertaking its own target market assessment in respect of the Subscription Shares and determining appropriate distribution channels.

This prospectus is dated 12 November 2021.

			Page
PART	1	SUMMARY............................................................................................................	4
PART	2	RISK FACTORS ......................................................................................................	10
PART	3	CONSEQUENCES OF A STANDARD LISTING........................................................	21
PART	4	IMPORTANT INFORMATION ................................................................................	23
PART	5	EXPECTED TIMETABLE OF PRINCIPAL EVENTS....................................................	26
PART	6	SUBSCRIPTION STATISTICS ..................................................................................	27
PART	7	DIRECTORS AND ADVISERS ................................................................................	28
PART	8	INFORMATION ON THE GROUP ..........................................................................	30
PART	9	DIRECTORS, KEY PERSONNEL AND CORPORATE GOVERNANCE ......................	55
PART	10	THE SUBSCRIPTION ..............................................................................................	59
PART	11	HISTORICAL FINANCIAL INFORMATION OF THE COMPANY..............................	61
PART	12	CAPITALISATION AND INDEBTEDNESS................................................................	62
PART	13	TAXATION ............................................................................................................	64
PART	14	ADDITIONAL INFORMATION................................................................................	68
PART	15	NOTICES TO INVESTORS......................................................................................	99
PART	16	CREST AND DEPOSITORY INTERESTS..................................................................	101
PART	17	DEFINITIONS..........................................................................................................	104
PART	18	GLOSSARY OF TECHNICAL TERMS......................................................................	111
PART	19	COMPETENT PERSON’S REPORT..........................................................................	114

PART 1 SUMMARY

Introduction and Warnings

This document is issued by Zenith Energy Ltd, whose legal entity identification number (LEI) is 213800AYTYOYD61S4569 and relates to the admission to trading of new common shares of no par value, whose international securities identification number (ISIN) is CA98936C1068.

The Company can be contacted in writing at Zenith Energy (O&G) Ltd., 52 Grosvenor Gardens, London, England, SW1W 0AU, by telephone on +44 2038070649, and by email at [email protected]

This Document was approved on 12 November 2021 by the Financial Conduct Authority, who can be contacted in writing at 12 Endeavour Square, London E20 1JN UK.

This summary should be read as an introduction to this Document. Any decision to invest in the Common Shares should be based on consideration of this Document as a whole. Civil liability attaches only to those persons who have tabled this summary, including any translation thereof, but only if this summary is misleading, inaccurate or inconsistent when read together with the other parts of this Document, or if this summary does not provide, when read together with the other parts of this Document, key information in order to aid investors when considering whether to invest in the Common Shares. Investors could lose all or part of their invested capital in Common Shares.

Key Information on the Issuer

Who is the issuer of the securities?

The legal and commercial name of the issuer is Zenith Energy Ltd, whose LEI is 213800AYTYOYD61S4569, and is registered and domiciled in British Columbia, Canada under the Business Corporations Act (British Columbia) as a corporation with registered number BC0803216.

The Company’s primary activity is an international oil and gas exploration, development and production business. The Company has a portfolio of oil and gas assets in Italy and Africa. The Group’s principal assets are held through:

(i) its wholly owned subsidiary, Zenith Energy Netherlands BV (“ Zenith Netherlands ”), which holds a 45% interest in the Sidi El Kilani Concession in Tunisia (subject to Tunisian government approval of the acquisitions);
(ii) its wholly owned subsidiary, Zenith Energy Africa Limited (“ Zenith Africa ”), which holds a 45% interest in the Tunisian onshore Ezzaouia Concession (“ Ezzaouia ”);
(iii) its wholly owned subsidiary, Compagnie Du Desert Ltd (“ CDD ”), which holds a 100% interest in the El Bibane and Robbana concessions in Tunisia;
(iv) its wholly owned subsidiary, Zenith Congo SA (“ Zenith Congo ”) which has received (subject to final approval and negotiation of a production sharing agreement) a 25�year licence for the Tilapia oilfield in the Republic of the Congo, in which it holds an anticipated 60% interest (subject to final licence terms); and
(v) Canoel Italia S.r.l. (in which the Company has a 98.64% shareholding), which holds various working interests in 13 onshore exploration and production properties in Italy.

The Company is seeking to acquire further oil and gas assets in West Africa to complement its existing assets in Italy, Congo and Tunisia.

On March 2, 2020, the Company announced that, in view of Zenith’s strategic focus on pursuing large�scale oil production and development opportunities in Africa, it will hand over the Contract Rehabilitation Area, operated under the REDSPA, to SOCAR. Zenith announced its final exit from Azerbaijan on 10 November 2020 and received final payment for oil produced in December 2020.

The Company decided to exit Azerbaijan as, after several years and more than USD 5 million invested, the challenging geology of the oilfield and its production reservoirs, the unreliability of historical field data and the poor condition of many of the Soviet�era wells made it economically undesirable to continue.

The REDSPA was terminated in May 2020 and the handover of all production infrastructure and employees in Azerbaijan completed in June 2020. Zenith received a payment for oil production of approximately US$508,000 from SOCAR corresponding to material revenues for the months of April, May and part of June 2020.

During the financial year ended March 31, 2020, the Company produced 74,290 bbls of oil and sold 70,005 bbls of oil from its assets in Azerbaijan. During the financial year ended March 31, 2020, the Company sold 17,660 mcf of natural gas and 214 bbls of condensate from its Italian assets and sold 10,500 MWh of electricity in Italy.

As at 21 September 2021, the following persons required disclosure under the DTR:

	Number of	% of Issued
Name	Shares held	Shares held
Andrea Cattaneo	63,438,512	4.51%

The Company’s key executive officers are Andrea Cattaneo, President and Chief Executive Officer and Luca Benedetto, Chief Financial Officer.

The Company’s statutory auditors are Jeffreys Henry LLP of 5�7 Cranwood Street, London EC1V 9EE UK, whose audit registration number is C001108797.

What is the key financial information regarding the issuer?

The table below sets out summary audited consolidated statements of financial position for the Financial Year ended 31 March 2021 and 2020, and for the interim six months ended 30 September 2020 and 2019.

Audited financial year ended 31 March 31 March 2021 2020 CAD$’000 CAD$’000	Unaudited financial six months ended	Unaudited financial six months ended
31 March 2021 CAD$’000	30 September 2020 CAD$’000	30 September 2019 CAD$’000
		1,080,311 408
		1,080,719 4,000 1,681
		5,681
		1,086,400
		571,845 571,845 10,731 857 1,866 13,454 9,905 8,807 482,389
		501,101

The table below sets out the audited consolidated Statement of Comprehensive Income or the Financial Year ended 31 March 2021 and 2020, and for the interim six months ended 30 September 2020 and 2019.

	Audited financial year ended 31 March 31 March 2021 2020 CAD$’000 CAD$’000	Audited financial year ended 31 March 31 March 2021 2020 CAD$’000 CAD$’000	Unaudited financial six months ended 30 September 30 September 2020 2019 CAD$’000 CAD$’000 145 344 (854) (1,361) (709) (1,017) (3,548) (1,989) (4,257) (3,006) — — (284) 1,038 (4,541) (1,968) (3) — (4,544) (1,968) — — (4,544) (1,968) 563 (5) (3,981) (1,973) (0.01) (0.01) (0.01) (0.01)
	31 March 2021 CAD$’000		30 September 2020 CAD$’000
Continuing operations Revenue Cost of Sales Gross Profit/(Loss) Administrative expenses Operating Profit/(Loss) Gain on business combination Other gain/(losses) Finance Expense Profit/(loss) for the year before Taxation Taxation Gain/(loss) from continuing operations Loss from discontinued operations Profit/(loss) for the year attributable to owners of the Parent Other Comprehensive Income Comprehensive Income for the year attributable to owners of the Parent Earnings per share (CAD) Basic Diluted	596 (2,441) (1,845) (16,201) (18,046) 36,491 (13,466) (1,451) 3,528 (3) 3,525 — 3,525 1,054 4,579 0.004 0.003	735 (3,210) (2,475) (6,991) (9,466) 20,111 1425 (1,742) 10,328 (4) 10,324 (580,633) (570,309) (651) (570,960) (1.42) (1.42)	145 (854) (709) (3,548) (4,257) — (284) (4,541) (3) (4,544) — (4,544) 563 (3,981) (0.01) (0.01)

The table below sets out extracts from the audited consolidated Statement of cash flows of the Group for the or the Financial Year ended 31 March 2021 and 2020, and for the interim six months ended 30 September 2020 and 2019.

	Audited financial year ended 31 March 31 March 2021 2020 CAD$’000 CAD$’000	Unaudited financial six months ended 30 September 30 September 2020 2019 CAD$’000 CAD$’000 (12,517) (11,065) (8) (1,951) 12,297 10,500 (228) (2,516) 1,681 4,197 1,453 1,681
Net cash flows from operating activities Net cash flows from investing activities Net cash flows from financing activities Net (decrease)/increase in cash Cash and cash equivalents at beginning of period Cash and cash equivalent at end of year	(9,813) (12,061) (202) (1,242) 10,426 11,465 411 (1,838) 1,220 3,058 1,631 1,220

No pro forma financial information is included in this prospectus.

There are no qualifications in the audit opinions on the historical financial information the years ended 31 March 2018, 2019 and 2020 that are incorporated by reference. For the year ended 31 March 2021, the audit opinion includes a material uncertainty in relation to going concern.

What are the key risks that are specific to the issuer?

The impact of global oil prices on the Company

Demand for oil and gas is closely related to the health of the world economy while supply is determined more by political matters. The price of oil and gas is set at a global level with small variances for local conditions. Zenith is a very small producer and the price it receives for the oil and gas it produces is determined by global supply and demand factors beyond its control. The Company’s financial performance may therefore be substantially impacted both positively and negatively by factors beyond its control. Changes in global prices for oil and gas may result in the Company no longer being able to produce oil and/or gas on a profitable basis. Historically, international crude oil and natural gas prices have fluctuated widely. A material decline in the price of crude oil or natural gas would have a material adverse effect on the Company’s financial results and reserves estimates.

Zenith’s oil and natural gas reserves data presented in this prospectus are only estimates which may vary significantly from the actual quantities of oil and gas reserves that may be recovered

The reserves data set forth in this prospectus represent only estimates and should not be construed as exact quantities. Numerous uncertainties are inherent in estimating quantities of proved reserves, future rates of production, and the timing of development expenditures. The reliability of proven reserve estimates depends on a number of factors, assumptions and variables, many of which are beyond Zenith’s control. Results of drilling, testing and production after the date of the estimates may require substantial downward revisions in Zenith’s reserve data. Any downward adjustment could lead to lower future production and higher depreciation charges, and thus adversely affect Zenith’s results of operations, financial condition and future prospects.

Activities in the oil and gas sectors can be dangerous, posing health, safety and environmental risks

Oil and natural gas exploration, development and production operations are subject to all the risks and hazards typically associated with such operations, including hazards such as fire, explosion, blowouts, cratering, sour gas releases and spills, each of which could result in substantial damage to oil and natural gas wells, production facilities, other property as well as the environment or personal injury. In particular, Zenith may produce sour natural gas in certain areas. An unintentional leak of sour natural gas could result in personal injury, loss of life or damage to property and may necessitate an evacuation of populated areas, all of which could result in liability to the Group. In accordance with industry practice, Zenith is not fully insured against all of these risks, nor are all such risks insurable. Although Zenith maintains liability insurance in an amount that it considers consistent with industry practice, the nature of these risks is such that liabilities could exceed policy limits, in which event Zenith could incur significant costs.

Government intervention and regulation may have a material adverse effect on Zenith’s business. Zenith might not be able to comply with its obligations under licences.

The oil and gas industry is subject to regulation and intervention by governments, in particular in matters such as the award of exploration and production interests, restrictions on production and exports, environmental measures, control over the development and abandonment of fields and installations, the nationalisation or renationalisation of assets, imposition of specific drilling obligations, environmental and health and safety protection controls and other risks relating to changes in local government regimes and policies. In addition, Zenith has to comply with conditions contained in licences, such as operating permits. A failure by Zenith to comply with substantial conditions might lead to governmental intervention. Any violations of substantial conditions may therefore have a material adverse effect on Zenith’s business, results of operations and financial condition.

Zenith is subject to general operational risks

Zenith is subject to going concern risks

We draw attention to the yearly audit report in the financial statements as of 31 March 2021, which explains that the Group is dependent upon additional fund raises within the going concern period in order to continue developing its oil and gas projects and to simultaneously satisfy loan repayments which are due within the going concern period. The Group has secured additional funds from the Subscription, which combined with the improved prices being received for oil, gas and electricity, the Board believes will be sufficient to meet all its contracted requirements during the forthcoming 12 months.

Key Information on the Securities

What are the main features of the securities?

The Company is seeking admission to trading of a further 1,467,751,863 Common Shares, made up of 272,727,273 Subscription Shares, 108,181,818 Capitalisation Shares and 1,086,842,772 Admission Shares. The ISIN for the Common Shares is CA98936C1068, the SEDOL is BYNXNZ9 and the TIDM is ZEN. Each of the Subscription Shares and Admission Shares carries one voting right and rank pari passu with the existing Common Shares. The Subscription Price is payable in Pounds Sterling. The Common Shares have no nominal value and their term is perpetual. The Common Shares are the ordinary equity of the Company and rank at the bottom of the Company’s capital structure in the event of insolvency, with all creditors being paid out first. The Company only has one class of shares, the Common Shares. The Common Shares are freely transferable. Currently the Company does not pay a dividend and there are no plans to do so in the foreseeable future. There is no guarantee attached to the Common Shares.

Where will the securities be traded?

The Admission Shares, the Capitalisation Shares and the Subscription Shares will be admitted to trading on the Main Market of the London Stock Exchange, alongside the Existing Common Shares. The Common Shares are also admitted to trading on the Euronext Growth Market of the Oslo Børs, and the Subscription Shares and Capitalisation Shares will be admitted to trading on this market.

What are the key risks that are specific to the securities?

Further issues of securities will dilute existing holders

The Company is likely to make further issues of Common Shares in the future either to finance the development of its existing assets or to acquire new assets. Such issues of new Common Shares would cause dilution to existing Shareholders and may not necessarily be priced at a premium to the price which Shareholders may have purchased their Common Shares.

No history of paying dividends

The Company has never paid a dividend and is unlikely to do so in the foreseeable future. There can be no certainty that the Company will ever pay a dividend. This will impact on the future value of the Common Shares if no dividend is ever paid.

Key information on the admission to trading on a regulated market

Under which conditions and timetable can I invest in this security?

This Prospectus does not constitute an offer or an invitation to any person to subscribe for or purchase any Common Shares. The Subscription Shares are not being offered to the public.

Why is a prospectus being produced?

The Company’s Existing Common Shares are admitted to trading on the Main Market of the London Stock Exchange. This Document is required to admit the Subscription Shares, the Capitalisation Shares and the Admission Shares to the Main Market of the London Stock Exchange. There are no material conflicts of interest relating to the admission to trading of the Subscription Shares, Capitalisation Shares or the Admission Shares. There is no underwriting agreement. The proceeds of the subscription will be £3,000,000,000 (the Net Proceeds will be £2,850,000) and will be utilised as follows:

Net Proceeds will be £2,850,000) and will be utilised as follows:
Use	Amount (£) £1,300,000 £600,000 £300,000 £250,000 £150,000 £400,000 £3,000,000,000
Work on Ezzaouia concession, Tunisia Drilling well in Robbana concession, Tunisia Transportation of Zenith’s drilling rig to Africa Work on Tilapia II, Congo (subject to licence grant) Prospectus and associated costs General working capital Total

PART 2 RISK FACTORS

Investing in and holding the Common Shares involves financial risk. Accordingly, investors in the Common Shares should carefully review all of the information contained in this Prospectus and should pay particular attention to the risks associated with an investment in the Common Shares, the Group’s business and the industries in which the Group participates. Further, the following risks should be considered together with all other information contained in this Prospectus.

In addition, prospective investors should note that the risks relating to the Group, its industries and the Common Shares summarised beginning on page 4 of this Document in the section of this Prospectus headed “Summary” are the risks that the Company believes to be the most essential to an assessment by a prospective investor of whether to consider an investment in the Common Shares. However, as the risks which the Group faces relate to events and depend on circumstances that may or may not occur in the future, prospective investors should consider not only the information on key risks summarised in the section of this Prospectus headed “Summary” but also, among other things, the risks and uncertainties described below.

The risks and uncertainties described below are not an exhaustive list and do not necessarily comprise all, or explain all, of the risks associated with the Group and the industries within which it operates or an investment in the Common Shares. However, they do comprise the material risks and uncertainties in this regard that are known to the Directors. Additional risks and uncertainties relating to the Group and/or the Common Shares that are not currently known to the Directors, or which the Directors currently deem immaterial, may arise or become (individually or collectively) material in the future and may have a material adverse effect on the Group’s business, results of operations or financial condition and, if any such risk or risks should occur, the price of the Common Shares may decline and investors could lose part or all of their investment.

Prospective investors should consider carefully whether an investment in the Common Shares is suitable for them in light of the information in this Prospectus and their personal circumstances. Investors should consult a legal adviser, an independent financial adviser or a tax adviser for legal, financial or tax advice if they do not understand this Prospectus (or any part of it).

Risks related to Zenith’s business Activities

The impact of global oil prices on the Company

Zenith’s oil and natural gas reserves data presented in this prospectus are only estimates which may vary significantly from the actual quantities of oil and gas reserves that may be recovered

The reserves data set forth in this prospectus represent only estimates and should not be construed as exact quantities. Numerous uncertainties are inherent in estimating quantities of proved reserves, future rates of production, and the timing of development expenditures. The reliability of proved reserve estimates depends on a number of factors, assumptions and variables, many of which are beyond Zenith’s control. Results of drilling, testing and production after the date of the estimates may require substantial downward revisions in Zenith’s reserve data. Any downward adjustment could lead to lower future production and higher depreciation charges, and thus adversely affect Zenith’s results of operations, financial condition and future prospects.

Zenith faces competition from other oil and gas companies in all areas of its operations

The petroleum industry is competitive and investing in Zenith contains an inherent level of risk. Zenith will compete with numerous other organizations in the search for, and the acquisition of, oil and natural gas properties and in the marketing of oil and natural gas. Zenith’s competitors will include oil and natural gas companies that have substantially greater financial resources, staff and facilities than those of Zenith. Zenith’s ability to increase its reserves in the future will depend not only on its ability to explore and develop its present properties, but also on its ability to select and acquire other suitable producing properties or prospects for exploratory drilling. The Issuer is looking to acquire new oil and gas fields. There is a risk that competitors of the Issuer’s, who have greater financial resources, staff and facilities, are more successful in the selection and acquisition of new suitable producing properties or prospects for exploratory drilling. The selection by the Issuer of a property which is not suitable for producing and exploratory drilling, or the granting of suitable producing properties to competitors of the Issuer can significantly worsen the future cash flow assumptions of the Group and the overall financial outlook of the Issuer in the future.

The economic, legal and political position in its countries of operation may negatively impact on Zenith’s business

Zenith operates in a number of different jurisdictions, which, with the exception of Italy, would be described as “emerging economies”. In such emerging economies, the economic, legal and political infrastructures are often less developed and more volatile than in a jurisdiction such as the United Kingdom. These factors may therefore have a detrimental impact on the business of Zenith, including, but not limited to: the risk of partial or full nationalisation; the imposition of punitive taxation or royalty regimes; degraded physical infrastructure; inconsistent or capricious application of laws and regulations; revocation of business or mineral licences on changes of governments; civil disturbances or military action.

Country Specific Risks

Italy

The non�renewal of Italian gas production concessions could impact the Issuer’s business activities negatively

The gas concession regarding the production and exploration properties of Torrente Cigno, Masseria Grottavecchia, San Teodoro, Misano Adriatico and San Mauro were scheduled to expire between 2018 and 2020; the Issuer requested an extension of the concession regarding these properties. Under Italian law, if the authority does not serve its decision within ninety days from the filing of an application, the application is considered as accepted/granted (concept of silent approval). While the concept of silent approval does not apply in all areas of administrative law, this is the standard practice in relation to oil and gas concessions, and thus these concessions are considered extended and are scheduled to expire between 2029 and 2030. While there is legal uncertainty with silent approval that could lead to negative impacts on the Issuer, such as in case of an unprocessed application, this risk is considered to be low, however if it did come to pass, it would be material since the majority of the Issuer’s revenues currently derive from the Italian gas production. Thus, a non�renewal of the concessions would have a significant negative impact on the Issuer’s revenues. In particular, the non�renewal of the Torrente Cigno exploration property would affect the Issuer significantly since this property currently is responsible for approximately 13 per cent of the Group’s production.

Tunisia

Approval for the acquisition of a 45% working interest in the North Kairouan permit and the Sidi El Kilani concession might not be granted

Zenith Netherlands has signed two conditional sale and purchase agreements with KUFPEC and CNPC respectively as sellers for the acquisition of their working interest of each 22.5 per cent in, inter alia , the North Kairouan permit and the Sidi El Kilani concession (together the “Tunisian Acquisition”).The completion of the Tunisian Acquisition remains conditional on the approval being granted by the Comité Consultatif des Hydrocarbures of the Republic of Tunisia in respect of the transfer of the sellers’ rights, title and interest in and under the Tunisian Acquisition to Zenith Netherlands. The Issuer looks forward to receiving regulatory approval from the Comité Consultatif des Hydrocarbures of the Republic of Tunisia in respect of the transfer of ownership for both acquisitions in the second half of the current financial year. In the case that the Comité Consultatif des Hydrocarbures of the Republic of Tunisia will deny the approval of this acquisition, Zenith will lose its investments made in Tunisia and the probable reserves mentioned in the Chapman Report 2021 – Tunisia will not be accessible for the Group.

Insufficient data is an obstacle to support reserves for future locations

The Issuer relies on finding new fields and evaluating their potential correctly. Insufficient information and data in some regions may prevent the Issuer from evaluating the potential of certain fields correctly and the Issuer may consequently lose business or invest in unprofitable fields.

Economic and political developments in Tunisia may negatively affect the development of Zenith’s business

Political unrest in Tunisia would expose the Issuer to political risks, including expropriation and nationalisation of property, civil strife and acts of war or terrorism, which could, in turn, have a significant adverse effect on the country’s economy. Political unrest may lead to danger of attacks on employees and/or facilities, social unrest, including strikes and political protests and demonstrations. Next to the overall security concern regarding the safety of employees and/or facilities, there is a risk that political unrest may lead to interruptions in the production of oil. Any interruption to the Issuer’s drilling operations affects the production and therefore the revenue of the Issuer significantly.

Republic of the Congo

The Ministry of Hydrocarbons of the Republic of the Congo might not award a new 25�year license for the Tilapia oilfield to the group

The existing license of the Group for the Tilapia oilfield expired on 18 July 2020. Zenith has made a commercial and technical offer to the Ministry of Hydrocarbons of the Republic of the Congo for the award of a new 25�year license for the Tilapia oilfield. On 23 December 2020, the Issuer announced that Zenith Congo has been selected as the successful bidder for the award of a new 25�year license to operate the Tilapia II oilfield. In accordance with Congolese procedures for the award of new hydrocarbon licenses, the award of the Tilapia II license is subject to the completion of an inquiry of public utility to be organised and performed by the Ministry of Hydrocarbons. On 10 February 2021, the Issuer announced that that it has received formal confirmation regarding the successful completion of the inquiry of public utility. The final award of the license is subject to the finalization and ratification of a production contract to operate the Tilapia II oilfield.

In the case that the Ministry of Hydrocarbons of the Republic of the Congo will deny the award of the operating license, Zenith will lose its investments made in the Republic of the Congo and the probable reserves mentioned in the Chapman Report 2021 – Congo will not be accessible for the Group. The non�acquisition of the new 25�year license for the Tilapia oilfield would therefore significantly worsen the future cash flow assumptions of the Group, the overall outlook of the Issuer in the future and would make a change in the business strategy necessary.

The Issuer has no proven reserves in the Republic of the Congo

According to the Chapman Report 2021 – Congo, as of the date of this Prospectus the Issuer has no proven oil reserves in the Republic of the Congo. All reserves mentioned in the Chapman Report 2021 – Congo are shown as probable reserves. Probable reserves are reserves that are less certain to be recovered than proven reserves. Since all Congolese reserves attributed to the Issuer are probable, there is a risk that the actual remaining quantities are significantly lower than or cannot be recovered in the amount shown in the Chapman Report 2021 – Congo. The future cash flow assumptions, the expected revenue and the overall business strategy of the Group would have to be adapted considerably if the actual remaining quantities are significantly lower than or cannot be recovered in the amount shown in the Chapman Report 2021 – Congo. Furthermore, the reserve values of the properties in the Republic of the Congo have to be devaluated, which would have a negative impact on the Issuer’s financial statements. Any devaluation of the reserve values of the Issuer’s properties could lead to lower future production, lower future cash flow and higher depreciation charges and thus adversely affect the Issuer’s results of operations, financial condition and future prospects.

Insufficient data is an obstacle to support reserves for future locations

The Issuer relies on finding new fields and evaluating their potential correctly. Insufficient information and data in some regions may prevent the Issuer to evaluate the potential of certain fields correctly and the Issuer may consequently lose business or invest in unprofitable fields.

Deteriorating economic conditions in emerging markets such as the Republic of the Congo may adversely affect Zenith’s business

The Issuer is invested in the Republic of the Congo since spring 2020. As an emerging market, this country is subject to greater risks than more developed markets, including significant legal, economic and political risks. Investors should also note that an emerging economy, such as the Republic of the Congo’s, is subject to rapid change and that the information set out may become outdated relatively quickly. The disruptions recently experienced in the international capital markets have led to reduced liquidity and increased credit risk premiums for certain market participants and have resulted in a reduction of available financing. Companies located in countries in the emerging markets may be particularly susceptible to these disruptions and reductions in the availability of credit or increases in financing costs, which could result in them experiencing financial difficulty. In addition, the availability of credit to entities operating within the emerging markets is significantly influenced by levels of investor confidence in such markets as a whole and so any factors that impact market confidence (for example, a decrease in credit ratings or state or central bank intervention in one market) could affect the price or availability of funding for entities within any of these markets.

Economic and political developments in the Republic of the Congo may negatively affect the development of Zenith’s business

Political unrest in the Republic of the Congo would expose the Issuer to political risks, including expropriation and nationalisation of property, civil strife and acts of war or terrorism, which could, in turn, have a significant adverse effect on the countries’ economy. Political unrest may lead to danger of attacks on employees and/or facilities, social unrest, including strikes, political protests and demonstrations. Next to the overall security concern regarding the safety of employees and/or facilities, there is a risk that political unrest may lead to interruptions in the production of oil. Any interruption to the Issuer’s drilling operations affects the production and therefore the revenue of the Issuer significantly. In Transparency International’s 2019 Corruption Perceptions Index the Republic of the Congo ranked 165 out of 180. The Issuer’s operations could be adversely affected by illegal activities, corruption or claims implicating the Issuer in illegal activities. There is a risk that the Issuer is not able to secure new assets and investments, which are subject to regulatory approval, despite submitting the best offer.

Risks associated with COVID�19

As a consequence of the COVID�19 pandemic, significantly adverse market conditions have occurred, which had a negative impact on the Company, particularly due to the fall in oil prices that followed the initial lock downs in industrial countries. Quarantines, curfews and further restrictions of business and social life have been imposed for several countries of the world, including those where the Issuer has its operations (Italy, Tunisia and the Republic of the Congo). The principal impact on the issuer has involved the restrictions in international travel which have inhibited the ability of the Company’s management and external specialists to visit the Company’s operating sites, potential suppliers and acquisition opportunities. The length of the COVID�19 pandemic cannot reasonably be predicted at this stage, though the introduction of vaccines in late 2020 will help reduce the spread of the virus and businesses around the world have adjusted to the revised circumstances; the Company has experienced far fewer issues in the second and third waves of the virus than it did in the first. However, a repeated material decline in the demand for oil and natural gas products comparable to the one caused by the outbreak of the COVID�19 pandemic will increase the competition between suppliers and lead to a sharp decline in prices.

Risks related to the environment

Activities in the oil and gas sectors can be dangerous, posing health, safety and environmental risks

operations are also subject to all the risks typically associated with such operations, including encountering unexpected formations or pressures, premature decline of reservoirs and the invasion of water into producing formations. Losses resulting from the occurrence of any of these risks may have a material adverse effect on Zenith’s business, financial condition, results of operations and prospects.

Future climate change and carbon pricing may result in increased expenditure and reduced profitability

Compliance with laws, regulations and obligations relating to climate change and carbon pricing could result in substantial capital expenditure and reduced profitability from higher operating costs and lower revenues and may have a material adverse effect on Zenith’s business, results of operations and financial condition. This is most likely to impact on Zenith’s operations in Italy where it is engaged in domestic energy production as the political environment to reduce carbon emissions is greatest in Western Europe. Italy, Congo and Tunisia are signatories to the United Nations Framework Convention on Climate Change and has ratified the Kyoto Protocol, and is thus required to establish legally binding targets to reduce nation�wide emissions of carbon dioxide, methane, nitrous oxide and other “greenhouse gases”. There is the risk that Zenith may be subject to legislation in Italy regulating emissions of greenhouse gases. The direct and indirect costs of complying with these emissions regulations may adversely affect the business of Zenith.

Zenith is subject to stringent environmental and health and safety regulations which result in costs relating to compliance and remediation that may adversely affect its results of operations and financial condition

Zenith is subject to significant environmental regulations in respect of its operational activities in all jurisdictions and seeks to conduct its operations in an environmentally responsible manner and to maintain the productivity goals achieved. All phases of the oil and natural gas business present environmental risks and hazards and are subject to environmental regulation pursuant to a variety of federal, provincial and local laws and regulations. Environmental legislation provides for, among other things, restrictions and prohibitions on spills, releases or emissions of various substances produced in association with oil and natural gas operations. The legislation also requires that wells and facility sites be operated, maintained, abandoned and reclaimed to the satisfaction of applicable regulatory authorities. Compliance with such legislation can require significant expenditures and a breach of applicable environmental legislation may result in the imposition of fines and penalties, some of which may be material. Should Zenith be unable to fully fund the cost of remedying an environmental problem, Zenith might be required to suspend operations or enter into interim compliance measures pending completion of the required remedy. Environmental legislation is evolving in a manner expected to result in stricter standards and enforcement, larger fines and liability and potentially increased capital expenditures and operating costs. The discharge of oil, natural gas or other pollutants into the air, soil or water may give rise to liabilities to governments and third parties and may require Zenith to incur costs to remedy such discharge. No assurance can be given that environmental laws will not result in a curtailment of production or a material increase in the costs of production, development or exploration activities or otherwise have a material adverse effect on Zenith´s business, financial condition, results of operations and prospects.

Aging infrastructure in Zenith’s operations, improper waste management and operational incidents may lead to spills, leakages and other contamination. Such incidents may cause substantial environmental clean�up, decommissioning and restoration costs and damage not only the environment but also affect communities and Zenith’s reputation

Zenith´s facilities and pipeline operations require regular monitoring, maintenance and renewal. Aging facilities may not always be replaced and upgraded in due time. This could, among other things, result in spills and leakages. Spills, leakages and other contamination resulting from aging infrastructure and other contamination, e.g. as a result of improper waste management, may result in substantial environmental decommissioning and restoration costs and could cause damages to communities and Zenith’s reputation. In addition, spills, leakages and contamination can result from operational incidents, and may be particularly severe in the case of offshore drilling. Any operational incident resulting in environmental contamination could result in substantial financial and reputational damages, considering the limitations of insurances. In addition, international regulations and insurance requirements may increase as a result of an accident, and offshore operations could become more difficult and expensive in the future. This would have a material adverse effect on Zenith’s business, results of operations and financial condition.

Compliance and control risks

Government intervention and regulation may have a material adverse effect on Zenith’s business. Zenith might not be able to comply with its obligations under licences.

In addition, Zenith has to comply with conditions contained in licences, such as operating permits. A failure by Zenith to comply with substantial conditions might lead to governmental intervention. Any violations of substantial conditions may therefore have a material adverse effect on Zenith’s business, results of operations and financial condition.

Incidents of non�compliance with applicable laws and regulations could be damaging to Zenith’s reputation and shareholder value.

Zenith’s reputation is critical to Zenith’s ability to maintain its licences to operate and secure new resources. Zenith’s code of conduct defines its commitment to integrity, compliance with all applicable legal requirements, ethical standards and the behaviours and actions Zenith expects of its businesses and employees. Non�compliance with applicable laws and regulations or Zenith’s code of conduct could be damaging to Zenith’s reputation and shareholder value. Multiple events of non�compliance could call into question the integrity of Zenith’s operations and may have a material adverse effect on Zenith’s business, results of operations and financial condition, including the revocation of licences to operate. The highly regulated sector that Zenith operates in requires compliance to a plethora of laws and regulations. Incidents of non�compliance to applicable laws may be a result of accidental failure to comply with any enforced regulations, such as related to environmental regulations or country specific political expectations. This probability is increased due to the sometimes capricious nature of laws and regulations in developing countries which Zenith operate in (specifically Tunisia and Congo).

Operational risks

Zenith is subject to general operational risks

Zenith is subject to general operational risks such as the risk of loss due to errors, infringements, interruptions or damages caused by internal processes, personnel, systems or due to external events. The Group is exposed to many types of operational risk, including the risk of fraud by employees and external parties, the risk of unauthorized transactions carried out by employees and the risk of operational errors, including those resulting from defects or malfunctions of the computer or telecommunication systems, and the risk of accidental events making unusable plants and equipment used in production processes. The systems and methods of management of operational risks are designed to ensure that such risks associated with the Group’s activities are kept adequately under control. However, any inconvenience or defect of such systems, plant and machinery could adversely affect the financial position and operation results of the Group. These factors, particularly in times of economic and financial crisis, could lead the Group to incur losses, increases in financing costs, reductions in the value of the Group’s assets, with a potential negative impact on the liquidity of the Group and on its own capital strength. As oil and gas production is always a physically hazardous activity, the operational risks for Zenith are greater than for most industries.

Zenith is subject to operational risks relating to the production, transportation and storage of oil and gas, crude refining and processing and, in the future, power generation. Some of these risks may be uninsured or uninsurable

Oil, gas, power and chemical activities involve significant hazards. Zenith’s operations are subject to risks generally relating to the exploration for and production of oil and gas, including blowouts, fires, equipment failure, tanker accidents, damage or destruction of key assets and other risks that can result in personal injuries, loss of life and property and environmental damage. Offshore operations, in particular, are subject to a wide range of hazards, including capsizing, collision, bad weather and environmental pollution (see also “ —Risks related to the environment ” above). In addition, Zenith’s operations of gas transportation and compression facilities, refinery and petrochemical complexes, oil pipeline systems, storage and loading facilities, chemical facilities and, in the future, power plants subject Zenith to the risks generally relating to such operations. In certain circumstances, Zenith’s insurance may not cover or be adequate to cover the

consequences of such events, or insurance coverage may not be available. Moreover, Zenith may not be able to maintain adequate insurance in the future at rates that it considers reasonable. The occurrence of any event that is not fully covered by insurance could have a material adverse effect on Zenith’s business, results of operations and financial condition.

Zenith may experience operational and/or technological problems which may delay or hinder the progress of ongoing and planned projects

Zenith develops its business in part through investments in projects designed to improve its competitive position, such as construction of pipelines or upgrading various facilities. Zenith may experience operational, technological or other problems beyond Zenith´s control, both of its own and of its contractual partners, which may delay or hinder the progress of its projects and lead to increased costs, and consequently may have a material adverse effect on Zenith’s business, results of operations and financial condition. Zenith is a small company compared to many operators of oil and gas production facilities, and therefore does not have the depth of human and technical resources that would be available to a large operator.

Zenith may be required to curtail, delay or cancel drilling operations

Exploration and production require high levels of investment and are subject to natural hazards and other uncertainties, including those relating to the physical characteristics of an oil or natural gas field. The cost of drilling, completing or operating wells is often uncertain. Zenith may be required to curtail, delay or cancel drilling operations because of a variety of factors, including unexpected drilling conditions, pressure or irregularities in geological formations, equipment failures or accidents, adverse weather conditions and compliance with governmental requirements, such as drilling moratoria following an accident. The realization of any of these risks may have a material adverse effect on Zenith’s business, results of operations and financial condition.

Shortcomings or failures in Zenith’s systems, risk management, internal controls processes or personnel could lead to disruption of its business

In the normal course of business, Zenith is subject to operational risk around its treasury and trading activities. Controls over these activities are dependent on Zenith’s ability to process, manage and monitor a large number of complex transactions across many markets and currencies. Shortcomings or failures in its systems, risk management, internal controls processes or personnel could lead to disruption of Zenith’s business, financial loss, regulatory intervention or damage to its reputation and may have a material adverse effect on Zenith’s business, results of operation and financial condition. Zenith is a small company compared to many operators of oil and gas production facilities, and therefore does not have the depth of human and technical resources that would be available to a large operator.

Major disruption of Zenith’s information technology systems may have a material adverse effect on Zenith’s business

Zenith’s activities are increasingly dependent on sophisticated information technology (“IT”) systems. IT systems are vulnerable to a number of problems, such as software or hardware malfunctions, malicious hacking, physical damage to vital IT centres and computer virus infection. IT systems need regular upgrading to meet the needs of changing business and regulatory requirements and to keep pace with the requirements of Zenith’s existing operations and possible expansion into new markets. Zenith may not be able to implement necessary upgrades on a timely basis, and upgrades may fail to function as planned. Consequently, any major disruption of its existing IT systems may have a material adverse effect on Zenith’s business, results of operations and financial condition.

Zenith is dependent on its key personnel

Zenith’s future success depends to a significant extent upon the leadership and performance of the members of the executive board as well as certain other key employees. The Issuer may not be able to retain its executive officers and key personnel or attract additional qualified members to its management team in the future. The loss of the services of members of the executive board could have a material adverse effect on Zenith’s business, results of operations and financial condition.

Litigation and disputes may have a material adverse effect on Zenith’s business

Zenith may face litigation and disputes worldwide; however, it is not currently engaged in any material litigation nor has been in the last 12 months. From time to time, cultural and political factors may lead to unprecedented and unanticipated judicial outcomes, which may sometimes even be contrary to local and international law. In addition, certain governments, state and regulatory bodies have, in the opinion of Zenith, exceeded their constitutional authority by attempting unilaterally to amend or cancel existing agreements or arrangements, by failing to honour existing contractual commitments and by seeking to adjudicate disputes between private litigants. Litigation and disputes may have a material adverse effect on Zenith’s business, results of operations and financial condition.

Expiration of permits, licenses and leases

Zenith’s properties are held in the form of permits, licenses, leases and working interests in permits, licenses and leases. If Zenith or the holder of the permit, license or lease fails to meet the specific requirement of a permit, license or lease, the permit, license or lease may terminate or expire. There can be no assurance that any of the obligations required maintaining each permit, license or lease will be met. The termination or expiration of Zenith’s permits, licenses or leases or the working interests relating to a permit, license or lease may have a material adverse effect on Zenith’s results of operations and business.

Financial risks

The Company will likely need to raise further capital for expansion

The Company does not generate sufficient cash to fund its planned capital expenditure programme. It is also likely that the Company will identify additional capital expenditure and acquisition opportunities. It therefore will need to raise expansion capital through the issue of further Common Shares or by borrowing. There can be no surety that the Company will be able to raise the required additional capital, or at what price. The Company has a successful history of raising external capital, both equity and debt, but this cannot be relied upon for the future. There is no requirement to raise additional capital for its immediate (within the next 12 months) working capital requirements, and all these expansion capital requirements are discretionary; this also applies for months 13�18. The Group produces sufficient cash flows to finance its maintenance costs and for any capital expenditure that is a requirement of any of its current licences and concessions. The Company may need to raise additional capital to further develop its existing assets beyond the next 12 months, depending on the results of its exploration programme, but all these requirements are discretionary and non�contracted.

Economic and political dislocations could have a rare but material adverse effect on Zenith’s business, results of operations and financial condition

The financial position of Zenith could be affected by the inability to sell its products, by unexpected outgoing cash flows, by the obligation to provide additional guarantees or by the inability to access money and/or capital markets. This situation could arise due to rare but serious circumstances beyond Zenith´s control, such as a general market disruption or an operational problem affecting Zenith or third parties or also by the expectation, among the market participants, that Zenith or other market participants are having a greater financial risk. For Zenith this would most likely happen due to either a sharp fall in oil prices due to a demand slump, such as the Covid�19 lockdowns in 1H2020, the 2008 financial crisis, or through local political instability due to the less developed nature of economies such as the Republic of Congo and Tunisia, as happened during the “Arab Spring” uprisings. Should Zenith be unable to ensure that it retains the necessary financial flexibility and maintains sufficient cash reserves, this could have a material adverse effect on Zenith’s business, results of operations and financial position.

Movements in foreign currency exchange rates and interest rates can have a material effect on Zenith’s results of operations and financial condition

World oil and gas prices are quoted in United States Dollars, while the Company accounts are prepared in Canadian Dollars, and is therefore affected by the Canadian/US dollar exchange rate. A significant portion of Zenith´s international activities are conducted in Euros in Italy, while it has material costs in Norwegian Kronor and Pounds Sterling from having its Common Shares traded on markets in Norway and the UK, so it is exposed to changes in foreign exchange rates as operating expenses, capital expenditures, and financial instruments fluctuate due to changes in exchange rates. Zenith is increasing its activities in Africa, where the local currencies are not freely exchangeable on international markets. Zenith has never used derivative instruments to hedge

its exposure to foreign exchange risks. For the reason stated, the Company is therefore subject to material levels of exchange rate risk. Any currency risks may have adverse effects on Zenith´s cash flow, income statement or balance sheet. To the extent that Zenith engages in risk management activities related to foreign exchange rates, there is a credit risk associated with counterparties with which Zenith may contract. An increase in interest rates could result in a significant increase in the amount Zenith pays to service debt.

Adverse financial market conditions may affect Zenith’s ability to refinance

The costs and availability of financing have been adversely affected by the crisis in the financial markets. Zenith may encounter difficulties in refinancing its financial obligations or may be able to refinance only at increased market rates. It might especially be difficult to borrow funds from banks. The inability of Zenith to refinance would have a material adverse effect on its liquidity position and might, in a worst case, result in its insolvency.

Delay of cash receipts could have a material adverse effect on Zenith’s business, results of operation and financial condition

In addition to the expected time�lags in payment by producers of oil and natural gas to the operators of Zenith’s properties, and by the operators to Zenith, payments between any of such parties may also be delayed by restrictions imposed by lenders, delays in the sale or delivery of products, delays in the connection of wells to a gathering system, blowouts or other accidents, recovery by the operator of expenses incurred in the operation of Zenith’s properties or the establishment by the operator of reserves for such expense. Zenith is a small company compared to many operators of oil and gas production facilities, and therefore does not have the depth of capital resources that would be available to a large operator.

Borrowing levels, leverage and restrictive covenants could have a material adverse effect on Zenith´s ability to finance expansion of its business

The ability of Zenith to finance capital expenditures or acquisitions in the future may be limited if it is unable to raise additional debt finance, which may be impacted by its debt levels, general economic conditions and the requirements of lenders. This includes if it is unable to find purchasers for their 25,000,000 Euro Medium Term Note Programme which is anticipated to be used to finance its developments in Republic of Congo.

Limited insurance cover can lead to financial problems for Zenith

Zenith’s involvement in the exploration for and development of oil and natural gas properties may result in Zenith becoming subject to liability for pollution, blow outs, leaks of sour natural gas, property damage, personal injury or other hazards. Although Zenith maintains insurance in accordance with industry standards to address certain of these risks, such insurance has limitations on liability and may not be sufficient to cover the full extent of such liabilities. In addition, such risks are not, in all circumstances, insurable or, in certain circumstances, Zenith may elect not to obtain insurance to deal with specific risks due to the high premiums associated with such insurance or other reasons. The payment of any uninsured liabilities would reduce the funds available to Zenith. The occurrence of a significant event that the Company is not fully insured against, or the insolvency of the insurer of such event, leads to the risk of a material adverse effect on Zenith’s business, financial condition, results of operations and prospects.

Zenith is subject to going concern risks

Risks Relating to the Securities

Further issues of securities will dilute existing holders

No history of paying dividends

The Common Shares are listed on the Standard Segment of the UK Official List which affords investors a lower level of protection than a listing on the Premium Segment

The Existing Common Shares are admitted to the Standard Segment of the UK Official List. An application will be made also to admit the SubscriptionShares and the Admission Shares to the Standard Segment of the UK Official List. A Standard Listing affords investors in the Company a lower level of regulatory protection than that afforded to investors in a company with a Premium Listing, which is subject to additional obligations under the Listing Rules. A Standard Listing will not permit the Company to gain a FTSE indexation, which may have an adverse effect on the valuation of the Common Shares.

Shareholders will not have the Opportunity to vote to approve transactions

Unless such approval is required by law or other regulatory process, Shareholders will not have the opportunity to vote on transactions even if Common Shares are being issued as consideration for the transaction. Chapter 10 of the Listing Rules relating to significant transactions will not apply to the Company while the Company has a Standard Listing. The Company does not expect that Shareholder approval will be required in connection with transactions, and therefore, investors will be relying on the Company’s and the Directors’ ability to identify potential targets, evaluate their merits, conduct or monitor diligence and conduct negotiations.

Shareholders will not be entitled to protections provided by the City Code

The City Code applies, inter alia , to offers for all listed public companies considered by the Panel on Takeovers and Mergers to be incorporated or resident in the United Kingdom, the Channel Islands or the Isle of Man. The Company is not so incorporated or resident and therefore Shareholders will not receive the benefit of the takeover offer protections provided by the City Code. As the Company is a reporting issuer in Alberta and British Columbia, certain offers to purchase outstanding shares of the Company may be subject to the application of Canadian securities laws which require the making of an offer on identical terms to all shareholders in the local jurisdiction (with limited exceptions). Such rules are not necessarily equivalent to the rules under the City Code. Moreover, such laws may not necessarily apply where an offer is not made to a shareholder in Canada. Canadian securities laws provide that a person or company (the “offeror”) that offers to purchase equity or voting securities (such as the Company’s Common Shares) of a reporting issuer from security holders in Canada and resulting in an offeror owning or exercising control or direction, directly or indirectly, over equity or voting securities representing 20% or more of the outstanding securities of the class (including securities that the person or company has the right or obligation to acquire within 60 days, with or without conditions) must, subject to certain exemptions, make the offer, on identical terms, to all security holders in Canada in accordance with a number of requirements (referred to as “Canadian takeover bid rules”). Exemptions from the Canadian takeover bid rules are available in certain circumstances, including in the case of certain private transactions involving five or fewer vendors where the purchase price does not exceed 115% of the market price of the shares. Another exemption is available in the case of purchases on the open market where the aggregate number of shares pursuant to this exemption together with other acquisitions does not exceed 5% of the issued and outstanding shares over a twelve�month period.

The Canadian takeover bid rules apply where purchases are made from shareholders in Canada. Although Canadian securities regulatory authorities do have discretion to commence regulatory proceedings on the basis of public interest notwithstanding the fact that the relevant parties are not residents of Canada, the purchase and sale of securities from or by shareholders who are not in Canada may not necessarily be afforded the protection of the Canadian takeover bid rules.

The Company is incorporated in Canada, and as such is subject to Canadian company law

The Company is a company incorporated under the Business Corporations Act (British Columbia), and as such its corporate structure, the rights and obligations of Shareholders and its corporate bodies may be different from those of the home countries of international investors. Furthermore, non�Canadian residents may find it more difficult and costly to exercise shareholder rights. International investors may also find it costly and difficult to effect service of process and enforce their civil liabilities against the Company or some of its directors, controlling persons or officers.

Risks Relating to Taxation

The treatment of Zenith’s group entities is subject to changes in tax regulation or practices in territories in which Group entities are resident for tax purposes (that includes at the date of this Prospectus inter alia Canada, the United Kingdom, Italy, Africa, Switzerland, the Netherlands, Norway and the British Virgin Islands). Such changes may include (but are not limited to) the taxation of operating income, investment income, dividends received or (in the specific context of withholding tax) dividends paid. Any changes to tax legislation in territories in which Group entities are resident for tax purposes may have a material adverse effect on the financial position of Zenith. In many jurisdictions, the resources sector is subject to particular taxation regimes which sometimes impose a comparatively heavy burden on activities within the sector. Such particular taxation regimes, that are – due to their specific and narrow nature – more likely to be subject to changes, are in place in both countries, in which the Group produces oil and gas (Italy and Africa).

PART 3 CONSEQUENCES OF A STANDARD LISTING

Application has been made for the Subscription Shares, Capitalisation Shares and Admission Shares to be admitted to listing on the standard segment of the Official List pursuant to Chapter 14 of the Listing Rules, which sets out the requirements for Standard Listings. The existing Common Shares (other than the Admission Shares) are already listed on the standard segment of the Official List. A Standard Listing affords Shareholders and investors in the Company a lower level of regulatory protection than that afforded to investors in companies whose securities are admitted to a Premium Listing, which are subject to additional obligations under the Listing Rules.

Listing Principles 1 and 2, as set out in Chapter 7 of the Listing Rules, also apply to the Company, and the Company complies with such Listing Principles.

Chapter 14 of the Listing Rules sets out the requirements for Standard Listings and does not require the Company to comply with, inter alia , the provisions of Chapters 6 to 13 of the Listing Rules, which includes, in particular:

Chapter 8 of the Listing Rules regarding the appointment of a listing sponsor to guide the Company in understanding and meeting its responsibilities under the Listing Rules in connection with certain matters. The Company has not appointed and does not intend to appoint such a sponsor in connection with the Subscription and Admission;
Chapter 9 of the Listing Rules relating to further issues of shares, issuing shares at a discount in excess of 10% of market value, notifications and contents of financial information;
Chapter 10 of the Listing Rules relating to significant transactions. It should be noted therefore that transactions will not require Shareholder consent, even if Common Shares are being issued as consideration for such transactions. However, the Company will seek Shareholder consent at a general meeting for transactions if it would constitute a reverse takeover;
Chapter 11 of the Listing Rules regarding related party transactions. It should be noted therefore that related party transactions will not require Shareholder consent, however the related party transaction requirements of Chapter 7 of the Disclosure Guidance and Transparency Rules will apply;
Chapter 12 of the Listing Rules regarding purchases by the Company of its Common Shares. In particular, the Company has not adopted a policy consistent with the provisions of Listing Rules 12.4.1 and 12.4.2. The Company will have unlimited authority to purchase Common Shares; and
Chapter 13 of the Listing Rules regarding the form and content of circulars to be sent to Shareholders.

There are, however, a number of continuing obligations set out in Chapter 14 of the Listing Rules that will be applicable to the Company. These include requirements as to:

the forwarding of circulars and other documentation to the FCA for publication through the document viewing facility and related notification to a regulatory information service;
the provision of contact details of appropriate persons nominated to act as a first point of contact with the FCA in relation to compliance with the Listing Rules and the Disclosure Guidance and Transparency Rules;
the form and content of temporary and definitive documents of title;
the appointment of a registrar;
the making of regulatory information service notifications in relation to a range of debt and equity capital issues; and
at least 25% of the Common Shares being held by the public.

In addition, as a company whose securities are admitted to trading on a regulated market, the Company will be required to comply with the Disclosure Guidance and Transparency Rules and the Market Abuse Regulation.

There are no provisions in the Articles that require new Common Shares to be issued on a pre�emptive basis to existing Shareholders and there are no statutory pre�emption rights.

It should be noted that the Common Shares are, and will continue to be, admitted for trading on the Euronext Growth Market of the Oslo Stock Exchange and consequently obligations arising from applicable securities legislation in Norway, as well as the rules of the Euronext Growth Market, will continue to apply to the Company. The Company is incorporated in British Columbia, Canada, and is therefore subject to the corporate and securities legislation at both a provincial and federal level.

PART 4 IMPORTANT INFORMATION

In deciding whether or not to invest in Common Shares, prospective investors should rely only on the information contained in this Document. No person has been authorised to give any information or make any representations other than as contained in this Document and, if given or made, such information or representations must not be relied on as having been authorised by the Company or the Directors. Without prejudice to the Company’s obligations under FSMA, the Prospectus Regulation Rules, Listing Rules and Disclosure Guidance and Transparency Rules, the delivery of this Document shall not, under any circumstances, create any implication that there has been no change in the affairs of the Company since the date of this Document or that the information contained herein is correct as at any time after its date.

Prospective investors must not treat the contents of this Document or any subsequent communications from the Company, the Directors, or any of their respective affiliates, officers, directors, employees or agents as advice relating to legal, taxation, accounting, regulatory, investment or any other matters.

The section headed “Summary” should be read as an introduction to this Document. Any decision to invest in the Common Shares should be based on consideration of this Document as a whole by the investor. In particular, investors must read the section headed “Section D—Risks” of the Summary together with the risks set out in the section headed “Risk Factors” beginning on page 10 of this Document.

Any reproduction or distribution of this Document, in whole or in part, and any disclosure of its contents or use of any information herein for any purpose other than considering an investment in the Common Shares offered hereby is prohibited.

This Document does not constitute, and may not be used for the purposes of, an offer to sell or an invitation or the solicitation of an offer or invitation to subscribe for or buy, any Common Shares by any person in any jurisdiction (i) in which such offer or invitation is not authorised; (ii) in which the person making such offer or invitation is not qualified to do so; or (iii) in which, or to any person to whom, it is unlawful to make such offer, solicitation or invitation. The distribution of this Document and the offering of the Common Shares in certain jurisdictions may be restricted. Accordingly, persons outside the United Kingdom who obtain possession of this Document are required by the Company, and the Directors to inform themselves about, and to observe any restrictions as to the offer or sale of Common Shares and the distribution of, this Document under the laws and regulations of any territory in connection with any applications for Common Shares, including obtaining any requisite governmental or other consent and observing any other formality prescribed in such territory. No action has been taken or will be taken in any jurisdiction by the Company or the Directors, that would permit a public offering of the Common Shares in any jurisdiction where action for that purpose is required, nor has any such action been taken with respect to the possession or distribution of this Document other than in any jurisdiction where action for that purpose is required. Neither the Company, nor the Directors accepts any responsibility for any violation of any of these restrictions by any other person.

The Common Shares have not been and will not be registered under the Securities Act, or the securities laws of any state or other jurisdiction of the United States or qualified for sale or distribution under applicable securities laws of Australia, Canada, Japan or the Republic of South Africa. Subject to certain exceptions, the Common Shares may not be offered, sold, resold, reoffered, pledged, transferred, distributed or delivered, directly or indirectly, within, into or in the United States or to or for the account or benefit of U.S. persons (as defined in Rule 902 under the Securities Act) or to persons in the United States, Australia, Canada (other than pursuant to exemptions from the prospectus requirement under Canadian securities legislation), Japan, the Republic of South Africa or any other jurisdiction where such offer or sale would violate the relevant securities laws of such jurisdiction. The Subscription Shares may not be resold in Canada or to a resident of Canada for a period of four months and one day following Admission, unless a trade is permitted under Canadian securities laws.

Data Protection

The Company may delegate certain administrative functions in relation to the Company to third parties and will require such third parties to comply with data protection and regulatory requirements of any jurisdiction in which data processing occurs. Such information will be held and processed by the Company (or any third party, functionary or agent appointed by the Company) for the following purposes:

a) verifying the identity of the prospective investor to comply with statutory and regulatory requirements in relation to anti�money laundering procedures;
b) carrying out the business of the Company and the administering of interests in the Company;
c) meeting the legal, regulatory, reporting and/or financial obligations of the Company in Canada, the United Kingdom or elsewhere; and
d) disclosing personal data to other functionaries of, or advisers to, the Company to operate and/or administer the Company.

Where appropriate it may be necessary for the Company (or any third party, functionary or agent appointed by the Company) to:

a) disclose personal data to third party service providers, agents or functionaries appointed by the Company to provide services to prospective investors; and
b) transfer personal data outside of the EEA to countries or territories which do not offer the same level of protection for the rights and freedoms of prospective investors as the United Kingdom.

If the Company (or any third party, functionary or agent appointed by the Company) discloses personal data to such a third party, agent or functionary and/or makes such a transfer of personal data it will use reasonable endeavours to ensure that any third party, agent or functionary to whom the relevant personal data is disclosed or transferred is contractually bound to provide an adequate level of protection in respect of such personal data.

In providing such personal data, investors will be deemed to have agreed to the processing of such personal data in the manner described above. Prospective investors are responsible for informing any third�party individual to whom the personal data relates of the disclosure and use of such data in accordance with these provisions.

Selling and Transfer Restrictions

Prospective investors should consider (to the extent relevant to them) the notices to residents of various countries set out in Part 19: “ Notices to Investors ”.

Investment Considerations

In making an investment decision, prospective investors must rely on their own examination, analysis and enquiry of the Company, this Document and the terms of the Subscription, including the merits and risks involved. The contents of this Document are not to be construed as advice relating to legal, financial, taxation, investment decisions or any other matter. Prospective investors should inform themselves as to:

the legal requirements within their own countries for the purchase, holding, transfer or other disposal of the Common Shares;
any foreign exchange restrictions applicable to the purchase, holding, transfer or other disposal of the Common Shares which they might encounter; and
the income and other tax consequences which may apply in their own countries as a result of the purchase, holding, transfer or other disposal of the Common Shares or distributions by the Company, either on a liquidation and distribution or otherwise. Prospective investors must rely upon their own representatives, including their own legal advisers and accountants, as to legal, tax, investment or any other related matters concerning the Company and an investment therein.

An investment in the Company should be regarded as a long�term investment. There can be no assurance that the Company’s objective will be achieved.

It should be remembered that the price of the Common Shares, and any income from such Common Shares can go down as well as up.

This Document should be read in its entirety before making any investment in the Common Shares. All Shareholders are entitled to the benefit of, are bound by, and are deemed to have notice of, the provisions of the Notice of Articles and Articles of the Company, which investors should review.

PART 5 EXPECTED TIMETABLE OF PRINCIPAL EVENTS

Publication of this Document 12 November 2021 Admission and commencement of unconditional dealings in Subscription Shares 8.00 a.m. on 16 November 2021 CREST members’ accounts credited in respect of Depository Interests 8.00 a.m. on 16 November 2021 Despatch of definitive share certificates for Shares no later than 30 November 2021

These dates and times are indicative only, subject to change and may be brought forward as well as moved back, in which case new dates and times will be announced. All references to time in this Document are to London, UK time unless otherwise stated and each of the times and dates are indicative only and may be subject to change.

For the purposes of this Document, the exchange rates applicable are, unless otherwise disclosed, as follows:

From USD GBP EUR GBP CAD CAD CAD GBP EUR USD	To GBP USD GBP EUR GBP USD NOK NOK NOK NOK	Exchange Rate
		0.722 1.385 1.169 0.855 0.580 0.804 6.911 11.908 10.185 8.598

PART 6 ADMISSION STATISTICS

Number of Common Shares in issue as at the date of this document	1,411,665,358
Number of Admission Shares	1,086,842,772
Number of Subscription Shares	272,727,273
Number of Capitalisation Shares	108,181,818
Total number of Common Shares in issue on Admission	1,792,574,449
Subscription Price per Subscription Share	1.1 pence
Market capitalisation at the Subscription Price	£19.72m
Number of Options outstanding at 30 September 2021	140,771,165
Number of Warrants outstanding at 30 September 2021	382,123,972
Convertible Loan Notes outstanding at 30 September 2021	100,000,000
Fully diluted Share Capital on Admission	2,415,469,586
The Subscription Proceeds receivable by the Company	£3,000,000
Estimated transaction costs	£150,000
The Net Proceeds available to the Company	£2,850,000

PART 7 DIRECTORS AND ADVISERS

Directors	Jose Ramon Lopez�Portillo_(Chairman and Non�Executive Director)_
	Andrea Cattaneo_(President, CEO and Director)_
	Luca Benedetto_(Chief Financial Officer)_
	Dario E. Sodero_(Non�Executive Director)_
	Sergey Borovskiy_(Non�Executive Director)_
Registered Office	20th Floor
	250 Howe Street Vancouver
	BC V6C 3R8
	Canada
Head Office	Suite 1500, 15th Floor
	Bankers Court
	850 – 2nd Street S.W. Calgary, Alberta
	T2P 0R8
	Canada
	Telephone Number: +1 (587) 315 9031
Website	www.zenithenergy.ca
Auditors to the Company	Jeffreys Henry LLP
	5�7 Cranwood Street
	London
	EC1V 9EE
	United Kingdom
Reporting Accountants	Jeffreys Henry LLP
	5�7 Cranwood Street
	London
	EC1V 9EE
	United Kingdom
Financial Adviser	Allenby Capital Limited
	5 St Helen’s Place
	London
	EC3A 6AB
	United Kingdom
Competent Person	Chapman Petroleum Engineering Ltd
	1122 4th Street S.W.
	Suite 700 Calgary Alberta T2R M1
	Canada
Depositary and Registrar	Computershare Investor Services Plc
	The Pavilions
	Bridgewater Road
	Bristol
	BS99 6ZZ
	United Kingdom
	Computershare Trust Company of Canada
	100 University Avenue
	8th Floor Toronto
	ON M5J 2Y1
	Canada

Legal adviser (UK)

Legal adviser (Canada)

Fladgate LLP 16 Great Queen Street London WC2B 5DG United Kingdom McCarthy Tétrault LLP 421 7th Avenue SW Suite 4000, Calgary AB T2P 4K9, Canada

PART 8 INFORMATION ON THE GROUP

1. Introduction and Background

The Company is an international oil and gas exploration, development and production company that is incorporated and domiciled in Canada.

The last year has seen a substantial change in the Company’s business, with its exit from its operations in Azerbaijan and a new focus on assets in Africa. The current prime focus is on Tunisia, where the Company holds a majority working interest, subject to final regulatory approval, in a producing field. The Company is also seeking to progress a production licence application in the Republic of Congo while exploring other opportunities in Africa to complement the Company’s interests in Tunisia and the Republic of Congo. The Company retains its long�standing gas and electricity production activities in Italy. The Company’s financial position and performance remains materially unchanged from that described in the annual report for the year to 31 March 2021 that is incorporated by reference in Part 11. Revenues are expected to remain modest until the licence processes in both Tunisia and Republic of Congo are concluded.

2. History and Development of the Issuer

Overview

The Issuer is a corporation domiciled in British Columbia, Canada, and was incorporated and registered as Canoel International Energy Ltd. under the Business Corporations Act (British Columbia) on 20 September 2007 and changed its name to “Zenith Energy Ltd.” on 2 October 2014.

The Issuer is the holding company of the Group which engages in the oil production as well as natural gas and electricity production. The Group’s operations are carried out through operating subsidiaries. As of the date of this Prospectus, the Group is operating in Italy, in Tunisia and will start operations in the Republic of the Congo once the pending license has been granted.

The main subsidiaries of the Group are:

Canoel Italia S.r.l.

On 11 November 2010, Zenith established Canoel Italia S.r.l. (“ Canoel Italia ”) an Italian subsidiary of the Company, in order to enable the Issuer to have an Italian operating entity and thereby have the possibility to be awarded oil and gas production and exploration assets posted for auction by the Italian Ministry for Economic Development. The Issuer owns 98.64 per cent of Canoel Italia. Canoel Italia. is specialised in the gas and electricity production in Italy.

Zenith Energy Congo SA

Zenith Energy Congo SA (“ Zenith Congo ”), a fully owned subsidiary of Zenith, was established on 13 August 2020 under the laws of the Republic of the Congo. The purpose of Zenith Congo is to receive a new 25�year license to operate the Tilapia oilfield named “Tilapia II”. The offer for the granting of such license was submitted on 20 July 2020. On 23 December 2020, the Issuer announced that it has received official confirmation from the Ministry of Hydrocarbons of the Republic of the Congo that Zenith Congo has been selected as the successful bidder for the award of a new 25�year license to operate the Tilapia II oilfield. The Issuer announced on 10 February 2021 that it has successfully completed the inquiry of public utility. The final step is the finalization and ratification of a production contract to operate the Tilapia II oilfield. With the finalization and ratification of a production contract, Zenith Congo will be granted a drilling license by the Congolese Ministry of Hydrocarbons. The Groups drilling operations in the Republic of the Congo can start after the granting of the drilling license by the Congolese Ministry of Hydrocarbons.

Anglo African Oil & Gas Congo S.A.U.

In spring 2020, the Group acquired the Anglo African Oil & Gas Congo S.A.U. (“ AAOG Congo ”). AAOG Congo is now a fully owned subsidiary of the Issuer. It held a 56 per cent majority interest in the now expired Tilapia oilfield in the Republic of the Congo. The other 44 per cent were held through Société Nationale des Pétroles du Congo (“ SNPC ”). SNPC owes the Issuer total receivables in the amount of approximately

USD 5.3 million. As a result, and in agreement with the Ministry of Hydrocarbons, the Group has terminated the cooperation with SNPC regarding the Tilapia oilfield in August 2020 and returned the operatorship of the original Tilapia license from AAOG Congo to a subsidiary of SNPC. As of the day of this Prospectus, the purpose of AAOG Congo is to collect the outstanding amount of USD 5.3 million from SNPC. After receiving the USD 5.3 million and after the settlement of the ongoing lawsuit (described on page 42), AAOG Congo will be liquidated since Zenith Congo has been established as the new operating entity for the operations in the Republic of the Congo and expects a new 25�year license for the operations regarding the Tilapia II oilfield.

Zenith Energy Netherlands B.V.

Zenith Energy Netherlands B.V. (“ Zenith Netherlands ”) has its corporate seat in Amsterdam and was incorporated on 8 April 2020. Zenith Energy Netherlands B.V is a fully owned subsidiary of the Issuer and is developing the Tunisian market since May 2020. Currently, the Group has no established company in Tunisia. On 20 April 2020, the Zenith Netherlands had signed a conditional sale and purchase agreement with KUFPEC (Tunisia) Limited (a 100 per cent subsidiary of Kuwait Foreign Petroleum Exploration Company K.S.C.C, a subsidiary of the State of Kuwait’s national oil company), for the acquisition of a working interest of 22.5 per cent in, inter alia , the North Kairouan permit and the Sidi El Kilani concession (the “ Tunisian Acquisition Part I ”), which contains the Sidi El Kilani oilfield (“ SLK ”) and covers an area of 204 square kilometres, located onshore, in the Pelagian Basin, Eastern Tunisia. On 8 September 2020, Zenith Netherlands signed a conditional sale and purchase agreement with the China National Petroleum Corporation (“ CNPC “) as seller for the acquisition of its working interest of 22.5 per cent in, inter alia , the North Kairouan permit and the Sidi El Kilani concession (the “ Tunisian Acquisition Part II ”, together with the Tunisian Acquisition Part I “ Tunisian Acquisition ”). The completion of the Tunisian Acquisition remains conditional on the approval being granted by the Comité Consultatif des Hydrocarbures of the Republic of Tunisia in respect of the transfer of the sellers’ rights, title and interest in and under the Tunisian Acquisition to Zenith Netherlands. Despite the pending approval, Zenith Netherlands already has the right to exploit the Tunisian assets.

Zena Drilling Limited

Zena Drilling Limited (“ Zena ”) was incorporated in the United Arab Emirates on 29 July 2017. Zena is a fully owned subsidiary of the Issuer, providing international oilfield services.

History

Initially, in 2010 the Issuer acquired two oilfields in Argentina. As of June 2011, the Issuer started its operations in Italy by establishing its Italian subsidiary Canoel Italia S.r.l. By August 2013, Zenith’s Italian subsidiary started the production of natural gas and natural gas condensate. In October 2015, Zenith purchased a “gas to power” plant, to start producing electricity from its Torrente Cigno concession, in Italy, and announced the beginning of electricity production activities at Torrente Cigno concession following the acquisition of gas�powered electricity generation infrastructure.

In January 2016, the Issuer established a fully owned subsidiary, Zenith Aran Oil Company Limited (“ Zenith Aran ”), to operate in Azerbaijan. Soon after that in March 2016, Zenith announced the signing of Rehabilitation, Exploration, Development and Production Sharing Agreement (“ REDPSA ”) with the State Oil Company of the Azerbaijan Republic (“ SOCAR ”). The Parliament of the Republic of Azerbaijan unanimously ratified the REDPSA between SOCAR and Zenith and enacted this agreement into statutory law. By August 2016, Zenith started the production of first oil under the Zenith banner in Azerbaijan following completion of the handover process from SOCAR to Aran Oil Operating Company Limited (“ Aran Oil ”), an entity jointly created and owned by Zenith Aran (80 per cent) and SOCAR (20 per cent).

The Issuer’s common share capital was admitted to trading on the Main Market of the London Stock Exchange on 11 January 2017.

In February 2017, Zenith performed divestment of its operations in Argentina. This was a strategic move with the primary intention of directing management focus towards the transformational opportunities in Azerbaijan and the consolidation of energy production interests in Italy. In addition, due to a series of circumstances beyond the Issuer’s control, caused by the collapse of a major storage tank owned by Argentina’s national oil company, Zenith’s Argentinian operations were suspended. Until the date of disinvestment, the issues affecting the transportation of oil were not fully resolved and a persisting

uncertainty on the recommencement of operations led the Issuer to reconsider the operational involvement in Argentina. The sale of the Group’s Argentinian subsidiary was fixed at a nominal sum in recognition of the costs the new owner was expected to incur to return the affected field to production. In addition, the Group was no longer liable for any environmental responsibilities or future well abandonment obligations in regard of the Argentinian wells or fields.

By March 2018, the gross oil production revenues of the Issuer’s subsidiary in Azerbaijan peaked since the beginning of operations in the country, with a daily production of 260 barrels of oil a day and due to the higher oil selling price obtained from the market. The Group had been unsuccessful in achieving material increases in its daily production of oil. The primary reasons for not increasing the daily production of oil included the poor condition of many of the Issuer’s existing wells, the challenging geology of the Issuer’s field, as well as the unreliability of well data and historical records from the Soviet�era which have rendered workovers in some of the Issuer’s wells extremely challenging.

On 8 November 2018, the Issuer’s common share capital was admitted to trading on the Euronext Growth Market (at that time called the Merkur Market) of the Oslo Børs.

On 2 March 2020, the Issuer announced that, in view of Zenith’s strategic focus on pursuing large�scale oil production and development opportunities in Africa, it would hand over the Contract Rehabilitation Area to SOCAR. Zenith continued to operate the Contract Rehabilitation Area until the handover of the Contract Rehabilitation Area which was completed during the month of June 2020.

In Spring 2020, the Issuer entered the markets of the Republic of the Congo and Tunisia. Terminating the activities of the Issuer in Azerbaijan had set free financial and operative resources to develop the activities in the new markets Congo and Tunisia.

With effect as of 29 May 2020 (close of business), the common shares of the Issuer were delisted from the TSX�V (Toronto Stock Exchange�Venture) at the Issuer’s request. At the date of this Prospectus, the shares of the Issuer are listed on the Main Market of the London Stock Exchange and the Euronext Growth Market of the Oslo Børs.

3. Principal Activities of the Group

The Issuer is a holding company with a number of subsidiary companies whose principal activities of are the exploration and production of hydrocarbons for energy which include a variety of different projects in Italy (where it also produces electricity directly from the natural gas it produces), the Republic of the Congo (since spring 2020) and Tunisia (since spring 2020). Until the end of June 2020, the Issuer was also invested in Azerbaijan.

The articles of association of the Issuer contain no restrictions on the Issuer’s principal objects or the type of business that may be carried out by the Issuer.

4. Organisational Structure of the Group

The Issuer, as the parent company of the Group, is a holding company and the operations of the Group are carried out through the operating subsidiaries of the Issuer.

Below is an organization chart of the Group which includes the main subsidiaries relevant for its operations:

==> picture [455 x 242] intentionally omitted <==

----- Start of picture text -----

Zenith Energy Ltd.
Calgary, Canada
Listed on the London Stock Exchange (ZEE) and
Oslo Bors (ZENA-ME)
Canoel ItaliaS.r.l. Netherlands BVZenith Energy Amsterdam, UAE Ras Al Khalmah Zena Drilling Ltd Duibai AAOG CongoSAS Compagnie du DesertHoldings Zenith AfricaHoldings Ltd Zenith EnergyCongo SAS
Genova, Italy Netherlands Pointe Noire Congo London, UK London, UK Pointe Noire Congo
Operator Holding Company Oilfield Service Operator Holding Company Holding Company Operator
Company
98.64% 100% 100% 100% 100% 100% 100%
Compagnie du Zenith Energy
Desert Ltd Africa Ltd
London, UK London, UK
100% Holding Company Holding Company 100%
Ecumed Petroleum Ecumed Petroleum
Tunisia Zarzis
Tunisia Tunisia
Operator Operator
100% 100%
----- End of picture text -----

Source: Internal information of the Issuer as of 28 May 2021.

5. Activities in Italy

In Italy, the Group owns various working interests in 13 onshore exploration and production properties and two gas concessions currently shut�in. The two gas concessions (Canaldente and Torrente Vulgano) were assigned to Canoel Italia S.r.l. from the Ministry of Economic Development in 2011, whilst the other onshore exploration and production properties were acquired from Medoilgas Italia S.P.A. and Medoilgas Civita Limited, each a subsidiary of Mediterranean Oil and Gas Plc, in June 2013. The concessions have various expiration dates.

6. Reserves and Concessions in Italy

A detailed evaluation of the oil reserves and the value of future net revenue for Zenith in Italy as at 30 September 2021 can be found in the CPR section “ Chapman Report 2021 – Italy ”; Part 19 (A) to this Prospectus. This estimates the Proved Developed Producing Reserves at 876 MMscf (gross & net) for natural gas and 11 Mbbls (gross & net) for natural gas liquids; Proved Developed Non�Producing Reserves at 115 MMscf (gross & net) for natural gas; the Probable Developed Producing Reserves at 1,480 MMscf (gross & net) for natural gas and 25 Mbbls (gross & net) for natural gas liquids; the Probable Developed Non�Producing Reserves at 28 MMscf (gross & net) for natural gas; and the Probable Undeveloped Reserves at 13,413 MMscf (gross & net) for natural gas and 241 Mbbls (gross & net) for natural gas liquids.

All of the Issuer’s currently producing gas wells are located onshore in three concessions of Italy: Torrente Cigno, Misano Adriatico and San Mauro. The Misano Adriatico and Torrente Cigno concessions each have one producing well. The Lucera concession had problems with gas treatment plant and the production is temporarily suspended. Production in the Lucera concession is expected to resume in December 2021. There is an additional horizontal location in the Torrente Cigno concession, which is expected to be drilled in 2023.

The production and exploration properties comprise the following concessions, permits and applications, further details of which are set out below:

6 operated onshore gas production concessions:
Torrente Cigno (45% working interest)
Massseria Grottavecchia (20% working interest)
San Teodoro (100% working interest)
Misano Adriatico (100% working interest)
Sant’ Andrea (40% working interest)
Masseria Petrilli (50% working interest)

3 non�operated onshore gas production concessions:
Masseria Acquasalsa (8.8% working interest)
Lucera (13.6% working interest)
San Mauro (18% working interest)
1 operated exploration permit:
Montalbano (57.15% working interest)
1 non�operated exploration permit:
Colle dei nidi (25% working interest)
2 exploration applications:
Serra dei Gatti (100% working interest)
o Villa Carbone (50% working interest)

The Company owns a 45% working interest in the Torrente Cigno gas and condensate concession covering approximately 38,163 acres and located onshore in southern Italy, along the Adriatic coast. From 1 October 2015, the Company has used the gas produced to generate electricity which is sold directly to the national electrical grid in Italy. As at March 2021, production at Torrente Cigno (from one well) was approximately 462 Mscf/d. (13,089 stmc/d)). This concession is scheduled to expire in 2029.

The Company owns a 20% working interest in the Masseria Grottavecchia gas concession covering approximately 13,160 acres and located onshore in southern Italy, along the Adriatic coast. This concession is not currently producing, but development plans are in progress. This concession is scheduled to expire in 2028.

The Company owns a 100% working interest in the San Teodoro gas concession covering approximately 14,640 acres and located onshore in southern Italy, along the Adriatic coast. This concession is not currently producing, but development plans are in progress. This concession is scheduled to expire in 2029.

The Company owns a 100% working interest in the Misano Adriatico gas concession covering approximately 18,610 acres and located onshore in central Italy, along the Adriatic coast. As at December 2020, production at Misano Adriatico (from one well) was approximately 35 Mscf/d. (989 stmc/d). This concession is scheduled to expire in 2030.

The Company owns a 40% working interest in the Sant’Andrea gas concession covering approximately 40,605 acres and located onshore in northern Italy, along the Adriatic coast. This concession is not currently producing. This concession is scheduled to expire in 2022, with the intention that it be renewed to align with the Company’s additional development plans.

The Company owns a 50% working interest in the Masseria Petrilli gas concession covering approximately 29,227 acres and is located onshore in southern Italy, along the Adriatic coast. This concession is not currently producing. On June 14, 2019, a request to renounce the Concession was presented to the Ministry of Economic Development.

The Company owns a 8.8% working interest in the Masseria Acquasalsa gas concession covering approximately 10,200 acres and located onshore in southern Italy, along the Adriatic coast. This concession is not currently producing. In June 2018 a request to renounce the Concession was presented to the Ministry of Economic Development.

The Company owns a 13.6% working interest in the Lucera gas concession covering approximately 38,514 acres and located onshore in southern Italy, along the Adriatic coast. This concession is not currently producing. This concession is scheduled to expire in 2022, with the intention that it be renewed to align with the Company’s additional development plans.

The Company owns a 18% working interest in the San Mauro gas concession covering approximately 6,257 acres and located onshore in southern Italy, along the Adriatic coast. This concession is not currently producing. This concession is scheduled to expire in 2030.

Production Estimates

The following table sets forth the volume of production estimated by the Issuer for 2021 based on proved reserves and before the deduction of royalties payable to others (i.e. gross values):

reserves and before the deduction of royalties payable to others (i.e. gross values):
	Natural Gas (MMscf)	Natural Gas Liquids (Mbbl) 2
Italy Source: internal information of the Issuer as of 31 March 2021	170

The following table sets forth the volume of production estimated by the Issuer for 2021 based on proved plus probable reserves and before the deduction of royalties payable to others (i.e. gross values):

		Natural Gas
	Natural Gas	Liquids
	(MMscf)	(Mbbl)
Italy	172	2

Source: internal information of the Issuer as of 31 March 2021.

7. Information on the Oil and Gas Industry in Italy

Italy produces small volumes of natural gas and oil and virtually no coal. Therefore, most of the country’s fossil�fuel supplies (as well as a significant share of its electricity) are imported. They are augmented by local production of energy from renewable sources resulting in an increasing local dependence on imports in recent years.

In 2013, after more than twenty years, the Italian Government released a new National Energy Strategy. The four main pillars of the National Energy Strategy are:

fostering the competitiveness of the Italian economic system;
protecting the environment;
strengthening the security of energy supply; and
promoting green economic growth.

Natural gas and other fossil fuels are central elements in the National Energy Strategy policy. Specific measures include the promotion of a competitive natural gas market, the development of a European� integrated electricity market, an increase in the national production of fossil fuels and the restructuring of the downstream oil market.

Italy has liberalised its electricity and gas sectors progressively in conformance with EU directives. Transmission and distribution of natural gas and electricity have been unbundled and a regulator, Autorità per l’Energia Elettrica e il Gas, set up to supervise access to networks and to regulate tariffs. The Italian oil market is fully liberalised, and the Italian Government intervenes only to protect competition or to prevent an abuse of a dominant position.

The prices of all forms of energy except electricity are set freely by the market. Additionally, electricity and gas productions are exempt from VAT for producers, except for the final seller to consumers. Gas consumers have a choice of supply from incumbent suppliers at regulated tariffs or from alternative suppliers at market rates. The choice is non�binding and consumers can change from one service to another at no additional cost.

In Italy, for onshore permits, the state royalty on production of both oil and gas is a maximum of 10%, with a provision that no royalties are paid on yearly production below 125,000 bbls of oil and approximately 700 MMcf of gas, per field (or approximately 340 bbls/d and 1.9 MMcf/d). At the present time, the Group does not pay any state royalties since all its producing fields fall below the minimum royalty threshold.

Italy applies different rates of VAT and excise tax on energy at the national level. Oil products are subject to excise tax and VAT (at a rate of 22%) for gasoline, diesel, light fuel oil and LPG. Natural gas is subject to an excise tax, VAT and additional taxes at the regional level; together they represent approximately 37.4% of the final price paid by end�consumers. A lower rate of VAT, currently 10%, is applied to sales of

natural gas up to 480 cubic metres a year, and 22% for the remaining consumption. Different rates of excise tax are levied on gas according to whether the consumer is a business or a household and to the level of consumption.

In Italy, for onshore permits, the state royalty on the production of oil and gas is a maximum of 10 percent, with a provision that no royalties are to be paid on yearly production less than 125,000 bbls of oil and approximately 700 MMcf of gas, per field (or approximately 340 bbls/d and 1.9 MMcf/d). At the present time, the Group does not pay any state royalties since all its producing fields fall below the minimum royalty threshold. The corporate tax is a maximum of 28 percent and there are no restrictions on repatriation of profits. Going forward, there is the risk that potential changes in the tax and/or royalty system, such as the abolition of exemptions or an increase in royalties payable could have a significant impact on the tax payable by the Group and therefore on the rentability of oil and gas wells operated by the Group in Italy.

8. Activities in Tunisia

8.1 North Kairouan permit and SLK

Through its wholly owned subsidiary Zenith Netherlands, Zenith holds, subject to final regulatory approval, a 45% working interest in the North Kairouan permit and SLK, covering an area of circa 204 square kilometres, located onshore in the Pelagian Basin in Eastern Tunisia, which is operated by CTKCP. SLK currently (December 2020) produces 505 barrels per day of 39 API gravity oil from a fractured carbonate reservoir (Abiod Formation), at a depth of c. 1,600 metres. Facilities include a permanent Gas Oil Separation Plant (“ GOSP ”) and a Pipeline of 125 km x 8” diameter, 22,000 bpd capacity from the field to La Skhira terminal. The Company’s assets in Tunisia were acquired during 2020 and the acquisition remains subject to the approval of Comité Consultatif des Hydrocarbures of the Republic of Tunisia. This approval is expected during 4Q2021 but cannot be guaranteed. Prior to this approval, the share of the production that accrues to Zenith Netherlands since acquisitions is in oil held in storage in Tunisia, so currently no revenues are generated from this asset.

The Sale and Purchase Agreement for the acquisition of KUFPEC Tunisia Ltd’s working interest in the SLK concession had had a revised long stop date of 31 October 2021. It has not proved possible to obtain the required regulatory approvals within that timescale. The parties are currently in discussion regarding restructuring the nature of the transaction, however there can be no guarantee that this will be successfully completed. The revised agreement may or may not include the accumulated oil production since the original agreement was agreed. The Company’s financial plan has not included any revenues from SLK.

The steadily improving level of oil prices since 1H2020 have significantly improved the economics of the Company’s Tunisian assets since their acquisition earlier in the year.

8.2 Ezzaouia concession

On March 15, 2021, the Company announced that Zenith Energy Africa Limited (“ZEAL”), its newly incorporated fully owned subsidiary, has entered into a share purchase agreement (“SPA”) with Candax Energy Limited (“Candax”) for the acquisition of a 100 percent interest in Candax’s fully owned subsidiary in Barbados, Ecumed Petroleum Zarzis Ltd (“EPZ”) (the “Acquisition”), which holds a 45% interest in the Ezzaouia Concession (“Ezzaouia”).

Pursuant to the terms of the SPA, ZEAL has agreed to acquire 100% of the issued share capital of EPZ for the aggregate amount of US$150,000, paid by the Company at completion, as well an additional US$100,000 to be satisfied by the issue of ordinary shares in the share capital of Zenith to be issued within sixty days of completion (“Consideration Shares”) and a royalty payable and calculated as US$0.35 per each barrel of hydrocarbons produced from the Ezzaouia oilfield and allocable to EPZ, with the royalty not being less than an amount of US$50,000 per annum for a period of ten years.

Acquisition Highlights

Ezzaouia is located in onshore Tunisia on the Zarzis peninsula, south of the island of Djerba in the southern Gulf of Gabes.
First discovered by Marathon Petroleum Corporation in 1986, with production activities starting in 1990 with a peak production being achieved of 35,000 barrels of oil per day in 1991.

Ezzaouia produces an average of 40 API gravity oil from the Zebbag (Lower Cretaceous) and Mrabatine (Upper Jurassic) formations.
It is operated by MARETAP, a joint operating company owned in partnership with the national oil company of Tunisia, ETAP (Entreprise Tunisienne d’Activités Pétrolières) on a 50:50 basis, which holds a 55 percent interest in Ezzaouia.
It produced at a rate of approximately of 551 bopd (approximately 248 bopd net to Zenith) during March 2021
Approximately 25,000 barrels of oil were held in storage at the acquisition date, with a commercial value of approximately US$1,250,000.
Planned field production optimisation and workover activities are expected to increase Ezzaouia gross production to 1,000 bopd (potentially resulting in a production of 450 bopd net to Zenith).
The Acquisition has certain development obligations during the course of the new 20�year concession including the drilling of a side�track, the drilling of a replacement well and that of a development well.
On April 19, 2019, the Tunisian State represented by the Ministry of Industry and Small & Medium Enterprises informed ETAP and EPZ that the Comité Consultatif des Hydrocarbures (“CCH”) had provided a favourable opinion to the application submitted by ETAP and EPZ for a new 20�year concession to be called “Ezzaouia” (the “New Concession”).
A Convention for the New Concession (the agreed work programme between ETAP and EPZ) has been signed by both parties.
The New Concession is currently awaiting parliamentary approval.
Ezzaouia has modern oil treatment and storage facilities with a total field storage capacity of approximately 20,000 barrels of oil.
MARETAP, the joint operating company, operates an oil storage terminal, connected to Ezzaouia by way of two pipelines (one for gas and one for oil respectively), at the port of Zarzis, with a storage capacity of approximately 200,000 barrels of oil, from which all oil production from Ezzaouia is exported to the international markets.
8.3 Robbana and El Bibanea concessions

On April 30, 2021, the Company announced that Compagnie Du Desert Ltd (“CDD”), its recently incorporated fully owned subsidiary, has entered into a share purchase agreement (“SPA”) with Candax Energy Limited (“Candax”) for the acquisition of a 100 percent interest in Candax’s fully owned subsidiary in Barbados, Ecumed Petroleum Tunisia Ltd (“EPT”) (the “Acquisitions”), which holds a 100% interest in the El Bibane and Robbana concessions in Tunisia.

Pursuant to the terms of the SPA, CDD has agreed to acquire 100% of the issued share capital of EPT for a nominal consideration of US$100 payable at completion, as well an additional consideration of approximately USD$200,000 in the form of assumption of debt payable by the close of May 2021.

El Bibane Highlights

The El Bibane concession (“El Bibane”) is located 16 kilometres offshore from the port of Zarzis in the Gulf of Gabes, covering an area of approximately 228 square kilometres and in approximately 7�8 meters water depth. The field was discovered by Marathon Oil Corporation in 1982. However, it was not developed until 1998. Upon initial development, a peak production of 4,500 bopd was achieved. The reservoir is located in the cretaceous Zebbag fractured dolomite formation at approximately 2,150 metres below surface.
Zenith has acquired a 100% working interest in El Bibane.
A total of three wells remain active within El Bibane: EBB�5, EBB�4 and EBB�3RE2. A total of 6 wells plus 4 sidetracks have been drilled.

EBB�5 currently produces approximately 80�100 barrels of condensate per day (API 49/50) with 5.5�6 MMSCF of natural gas from well EBB�5, which is re�injected into the formation via well EBB�4.
It is expected that, by utilising new technologies, well EBB�4 may achieve commercial production of natural gas in addition to its current use as an injector well.
EBB�3 suffered string damage and has been temporarily shut�in, having previously produced at a rate of between approximately 500�600 barrels of oil per day (35 API) prior to production being suspended. The low oil price environment during 2020 and the material investment required to restore production from this well have prevented the necessary repair work from being implemented.
Zenith has already obtained market quotations for the well intervention required to restore production from well EBB�3 for an amount of approximately US$3.5 million.
In the event of a successful well intervention in EBB�3, the Company expects to produce approximately 500 barrels of oil equivalent per day from El Bibane.
Candax commissioned an independent reserves evaluation, as of December 31, 2019, for the contingent reserves (1C) of El Bibane which evaluated remaining oil in place as 25.7 MMSTBO and 6.5 BCF of natural gas.
Zenith has commissioned a new Competent Person’s Report, in compliance with Canadian securities laws, specifically the COGE Handbook and National Instrument 51�101 – Standards of Disclosure for Oil and Gas Activities, in order to obtain an updated reserves evaluation for the El Bibane concession.
El Bibane expires on December 31, 2033.

Robbana Highlights

The Robbana concession (“Robbana”), covering 48 square kilometres and located onshore in the island of Djerba in the southern Gulf of Gabes, was discovered in 1988, achieving a peak production of 500 bopd in 1994. The ROB�1 well encountered two hydrocarbon�bearing reservoirs in the Cretaceous Upper Meloussi Sandstone formation. Only two wells have been drilled in Robbana since discovery, ROB�1 which is still in production and ROB�2 which is temporarily abandoned.
Robbana currently produces approximately 25 barrels of oil per day from ROB�1, having previously produced approximately 50 barrels of oil per day prior to an unsuccessful well intervention.
Studies have suggested that an infill well, to be drilled in the proximity of well ROB�1, is expected to produce approximately 200 barrels of oil per day.
Candax commissioned an independent reserves evaluation, as of December 31, 2019, for the contingent reserves (1C) of Robbana which evaluated remaining oil in place as 10.99 MMSTBO. The study noted specifically noted that the “Middle Triassic sandstones of the Ras Hamra formation present a very significant ‘high�risk/high reward’ exploration objective.”
Zenith has commissioned a new Competent Person’s Report, in compliance with Canadian securities laws, specifically the COGE Handbook and National Instrument 51�101 – Standards of Disclosure for Oil and Gas Activities, in order to obtain an updated reserves evaluation for Robbana.
Robbana expires on November 4, 2034.

During July 2021, the Company agreed to the sale of oil production from its Tunisian assets of approximately 68,000 barrels net to Zenith (including approximately 20,000 barrels of domestic market sales) for total receivables of approximately US$4.5 million. This production was from the El Bibane, Robbana and Ezzaouia Concessions.

9. Reserves in Tunisia

A detailed evaluation of the oil reserves and the value of future net revenue for Zenith in Tunisia as at 30 September 2021 can be found in the CPR sections “ Chapman Report 2021 – Tunisia (Sidi El Kilani Concession) ”; Part 19 (B) to this Prospectus and “ Chapman Report 2021 – Tunisia (El Bibane, Robbana and Ezzaouia Concessions) ”; Part 19 (C) to this Prospectus. For the Sidi El Kilani concession, this estimates the Proved Developed Producing Reserves at 787 MSTB (gross) and 695 MSTB (net), with the Probable Undeveloped Reserves at 1,644 MSTB (gross) and 1,445 MSTB (net). For the El Bibane concession, this estimates the Proved Developed Producing Reserves at 37 MSTB (gross) and 34 MSTB (net). For the Ezzaouia concession, this estimates the Proved Developed Producing Reserves at 260 MSTB (gross) and 242 MSTB (net); the Probable Developed Producing Reserves at 241 MSTB (gross) and 219 MSTB (net); and the Probable Undeveloped Reserves at 2,869 MSTB (gross) and 2,593 MSTB (net). For the Robbana concession, this estimates the Probable Undeveloped Reserves at 746 MSTB (gross) and 723 MSTB (net), with the Possible Reserves at 281 MSTB (gross) and 262 MSTB (net).

10. Information on the Oil and Gas Industry in Tunisia

Tunisia is a small but well�established producer of oil and natural gas, with oil first being discovered in 1966[1] , with production peaking at 120,000 barrels per day during the mid�1980s but declining to 39,000 barrels per day by 2019[2] . The country has been a net importer of oil since 2000. The country’s largest deposit is located at El Borma on the Tunisia�Algeria border, while offshore fields were first discovered in 1971 and brought into production in 1974[3] . Natural gas production was 45bcf in 2018, a fall from a peak of 105bcf in 2008[4] . While the industry has been in decline in terms of production levels, the new Nawara gas field is hoped to help reverse this.

The Tunisian government created the country’s state�owned oil company, Enterprises Tunisienne d’Activities Petrolieres (“ ETAP ”), in 1972. ETAP’s mission is to manage the oil and natural gas exploration and production activities for the Tunisian government. ETAP has the right to participate in the development of any oil and gas field. This participation normally takes the form of either a production sharing agreement or joint venture. Typically, the Tunisian’s government share of profit, through a combination of participation and taxation is around 60�70%[5] .

The Hydrocarbon Law of 1999 governs oil and gas exploration and production in Tunisia, with permits being granted by the Minister for Hydrocarbons.

In Tunisia, Zenith will be subject to the fiscal provisions set forth by decree�law 85�9 dated 14 September 1985 as ratified as amended by subsequent regulations. The holders are subject to the payment of a royalty on the production and the income tax on the profit made on the exploitation of the concession.

The proportional royalty and Company Income tax are, for every co�holders, function of the ratio (R) of accrued net earnings to total accrued expenditures relative to every exploitation concession and to the parent exploration permit.

Because of the present R factor being actually in the range of 1.5�2, the SLK holders are subject to

a royalty rate of 12%
a company income tax rate of 55%

For the application of the present:

The term “accrued net earnings” means the sum of the sales of all fiscal years, including the present one, minus the amount of tax and levies due or paid during all the fiscal years previous to the present one and relative to the considered concession.
The term “accrued total expenditures” means the sum of all the expenses relative to the exploration activities performed in the permit in addition to the prospecting expenses if any, and all the development and exploitation costs for the considered concession, except for taxes and levies due or paid by the Holder for the exploitation thereof.

1 KeyFacts Energy

2 US Energy Information Administration

3 Societe de Recherches et d’Exploitation des Petroles en Tunisie

4 US Energy Information Administration

5 KeyFacts Energy

The exploration expenses incurred in the permit including the prospecting expenses, if any, considered for the determination of the (R) factor for a given concession shall not be considered for the determination of the said (R) factor for other concessions.

Any changes to the tax regimes that currently apply in Tunisia may have an adverse effect on the financial position of the Group.

11. Activities in the Republic of Congo

The Company completed the acquisition of AAOG Congo on May 5, 2020. AAOG Congo held Congo Licence I, which expired on 18 July 2020. The Company, through its new wholly owned subsidiary, Zenith Congo, applied for Congo Licence II, a new 25�year licence over the Tilapia II oilfield, for which it was the successful bidder, in December 2020. The granting of this new licence is subject to a public enquiry on Zenith, which was successfully completed in February 2021. The negotiation of a new production sharing contract and final legislative approval; the timing of the final granting of the licence remains uncertain and cannot be guaranteed. Zenith Congo is expected to hold a 60% interest in the new Congo Licence II once issued, with the remaining 40% held by SNPC, however this is subject to the final licence conditions. AAOG Congo has assets that are expected to be very useful if the new Congo Licence II once issued, having previously operated the same asset for several years. In addition, AAOG Congo holds outstanding receivables from SNPC totalling $5.7m, which it expects to receive payment for during 2021 and 2022, however this cannot be guaranteed.

Zenith Congo expects to commence production at the Tilapia II oilfield during 2H2021, as well as further exploration drilling, subject to the successful issue of the licence. During 2019, the Tilapia I oilfield had an average production of 30 bopd, which Zenith Congo believe they will rapidly be able to emulate and then exceed, once the licence is issued.

12. Reserves in the Republic of Congo

A detailed evaluation of the oil reserves and the value of future net revenue for Zenith in the Republic of the Congo as at 30 September 2021 can be found in the CPR section “ Chapman Report 2021 – Congo ”; Part 19 (D) to this Prospectus. This estimates the Probable Undeveloped Reserves at 6,000 MSTB (gross). A net reserves figure cannot be calculated currently as the final licence terms and production sharing contract terms have not yet been finalised.

13. Information on the Oil and Gas Industry in the Republic of Congo

The Republic of the Congo (“Congo”) is a significant oil producer, predominantly from offshore fields, and the country is a member of OPEC. While Congo emerged as a significant oil producer in the late 1970s, the coming online of the deep�water Moho�Bilondo oil field in 2008 increased production significantly. Production increased from 65,000 barrels per day in 1980 to 280,000 barrels per day in 2000. While it subsequently declined to 207,000 barrels per day in 2007, the new deep�water fields saw this increase to 330,000 barrels per day by 2019. Natural gas production was a rather more modest 49bcf in 2018 and is mainly utilised by the oil production sector. In 2014 the country’s total crude oil reserves were estimated at 1.6bn barrels. On 22 June 2018, the Republic of the Congo, Africa’s third largest oil producer, joined the Organisation for Petroleum Exporting Countries (OPEC). Congo Brazzaville became the fifteenth member of OPEC and the seventh African member nation.

Historically, the petroleum industry accounts for an estimated 60% of the State budget. The Congolese government has initiated political and economic actions to diversify its revenue stream in a bid to reduce its dependence on hydrocarbon and increase the contribution of tax�based revenue. The provisions of the 2016 Congolese Hydrocarbon Code aim to valorize both the oil and the gas sectors. Incentives are also granted for the development of other sectors such as agriculture, forestry, tourism, etc. The 2020 Finance Act, as well as numerous decrees were published to change the Congo oil environment from a regulatory perspective. The 2020 Finance Act has inserted numerous provisions relating to the Exploration and Production (E&P) sector, as well as to the Energy and utilities sectors.

Congolese�registered companies are taxed on the territoriality principle. As a result, Congolese companies engaged in business outside of the Republic of Congo are not taxed in the Republic of Congo on the related profits.

In the absence of a tax treaty stating otherwise, a non�resident company is liable for CIT on income realised in the Republic of Congo or derived from or resulting from work/services of any nature supplied or used in the Republic of Congo.

The standard CIT rate in the Republic of Congo is 30%, with certain exceptions.

A withholding tax of 15% or 20% is imposed on income sourced in the Republic of Congo that is derived by foreign companies not necessarily engaged in activities in the Republic of Congo (see the Withholding taxes section for more information).

The minimum tax payable is 1% of the annual turnover and cannot be less than 1 million CFA francs (XAF) (XAF 500,000 if annual turnover is less than XAF 10 million).

A 2% minimum tax is payable by companies showing losses during two consecutive fiscal years. The 2% rate is applied to the sum of gross turnovers, products, and benefits realised by the company in the most recent year in which it earned a profit. The 2% tax is not deductible for CIT purposes. However, in a company’s first profit�making year after incurring the losses, half of the 2% tax is deductible.

The minimum tax is 2% of the taxable base, with a minimum amount payable of XAF 2 million, for companies that are totally exempt from CIT during the extension of their Convention of Establishment and/or any specific agreement.

The Congolese VAT rate is 18%. In addition to VAT, a surtax calculated at the rate of 5% applies to the amount of VAT, which must be invoiced and paid at the same time as the VAT. Therefore, the VAT rate is globally 18.9%. The surtax is not deductible (final cost).

A reduced VAT at the rate of 5% is levied on importation and cement produced locally.

Under the provisions of the VAT Law, all economic activities conducted in the Republic of Congo are subject to VAT, regardless of their purpose, profitability, or the legal status of the business performing them, and irrespective of whether these activities are habitual, occasional, or originate in the Republic of Congo or from a foreign country. Therefore, any person, natural or legal, engaged in an industrial, commercial, or professional activity is subject to VAT unless specifically exempt by law.

Section 8 of the VAT Law states that a service is considered as provided in the Republic of Congo when the service is used or exploited in the Republic of Congo.

The following fees for the registration of contracts are due within three months from date of signature:

Purchase orders for public contracts at the rate of 2% for contracts with a value exceeding XAF 10 million.
Subcontracts in the building construction and public work sector at a fixed fee of XAF 100,000.
A fixed fee of XAF 1 million for the registration of every oil services contract with foreign companies and their sub�contractors before the execution of the contract.
All insurance policies carried out by oil, mining, and telephone companies are subject to registration free of charge; failure to register will result in penalties that total XAF 3 million.

Specific rules and caps apply for the upstream (production) oil and gas industry.

The tax on pollution is payable by petroleum and mining extracting companies in the production phase, at the rate of 0.2% on the annual turnover.

This tax constitutes a non�deductible expense for the extracting mining/hydrocarbon company in the production phase.

This tax is due in the course of the year and payable quarterly by instalment, proportionally to the production realised during the just�ended quarter and not later than the 20th day of the month following the end of the quarter.

For the energy sector, the royalty rate is as follows:

1% on turnover for independent producers.
0.75% on turnover for self�producers.

For the hydraulic sector, the fee ranges to XAF 400 per cubic metre of water withdrawn, depending on the usage (i.e. mining, industrial, agropastoral, etc.).

Any delay in the payment of the royalty is subject to 10% penalty, and omission to pay is subject to penalty at 100%.

An environmental risk contribution is due for the prevention of environmental risk. The contribution is at the rate of 0.05% of the oil production of an oil field multiplied by the fixed rate.

The contribution constitutes petroleum cost.

Any changes to the tax regimes that currently apply in Congo may have an adverse effect on the financial position of the Group.

14. Description of the Development and Expected Financing of the Issuer’s Activities

The drilling and enhancement of oil and gas wells is a capital�intensive activity, and currently the Company does not generate sufficient cashflow to fund all these capital expenditures, and thus this typically requires the Issuer to raise additional funds in order to continue developing its oil and gas projects. These capital expenditures are of an expansionary nature and are discretionary; the Group produces sufficient cashflow to finance maintenance costs and any expenditure that is a requirement of any of its current licences and concessions. The funding can, and has in the past, been achieved through issuing equity or by borrowings by way of either loans or note issuance.

During 2021 and 2022, the focus of the Company’s developments is expected to be in Tunisia and the Republic of Congo, with the Tilapia II licence in the latter expected to require the majority of the investment. These developments are intended to increase the Group’s level of oil production.

All the development and production plans will be significantly influenced by the success of drilling, the existence of estimated reserves and the presence or absence of structural impediments, geological and operational risks that are inherent in the oil & gas industry.

Republic of the Congo

The Tilapia II licence will be subject to the terms of the finalised production sharing contract and licence terms, which remain outstanding at this point; the timing of this capital investment is still somewhat uncertain due to this. It is anticipated that the net amount (see point 3 below) will be financed by the issue of notes under the Company’s Euro Medium Term Note Programme, details of which can be found in section 25.10 of Part 14, the Group’s working capital (including £250,000 of the Net Proceeds) and the proceeds from the collection of the outstanding receivable from SNPC (see 1 below). The following steps are required in order to reach the production capacities as listed in the CPR:

Action required in the Republic of the Congo:

Collection of the outstanding amount of USD$5.3 million from SNPC by AAOGC. The Issuer and SNPC are in discussions in order to settle this issue, and all capital expenditure will be deferred until the proceeds are received.
Completion of the drilling of the Tilapia II well. The previous owner of the Tilapia II oilfield completed the drilling well at 80 per cent. Geological studies affirmed that by expanding the completion level to 100 per cent, a considerable additional oil production can be expected. The respective costs amount to a total of approximately USD$5 million. The Group intends to invest an additional amount of USD$2.2 million to increase the level of completion of the drilling, i.e. a total of USD$7.2m. This expenditure is at the discretion of the Group, is not contracted, and will be conditional on receipt of the receivable set out in 1 above.

The net requirement is therefore approximately USD$1.9m. An initial £250,000 of which has been allocated from the Subscription.
The Issuer estimates that the production from the developed well will stand at 2,000/2,500 barrels of oil per day.

Tunisia

The capital investment requirements in Tunisia, which are set out in point 3 below, will be financed from the Company’s existing cash resources and the Net Proceeds of the Subscription, and are expected to be primarily fall due within the forthcoming 12 months.

Action required in Tunisia:

Completion of the regulatory approval regarding the acquisition of the 45 per cent interest in the North Kairouan permit and the Sidi El Kilani concession. The completion of this Tunisian Acquisition remains conditional on the approval of the Comité Consultatif des Hydrocarbures of the Republic of Tunisia in respect of the transfer of the sellers’ rights, title and interest to Zenith Netherlands. The timing of this approval is currently uncertain and alternative ways for completing the acquisition are currently under discussion.
The Issuer expects to run a daily oil production ranging between 550 – 600 barrels of oil per day.
Producing operations from the Ezzaouia Concession, acquired on 15/03/2021, and it is expected to spend an aggregate amount of £1,300,000 for 3 workover interventions and two sidetracks in non� producing wells during the next 18 months, financed from the Group’s working capital resulting from local production and the Subscription.
Producing from the Robbana and El Bibane concessions, acquired on 29/04/2021, will continue during the next 18 months without capital expenditure interventions.
The planned drilling of the ROB�3 well in the Robanna concession on which the Company plans to spend £600,000, plus £300,000 for the cost of transporting the Company’s drilling rig to Africa, financed from the Subscription.

Italy

The Company does not expect to make any material capital expenditure in Italy during 2021 or 2022. The financing of the planned capital expenditure requirement for 2023 (as set out in point 1 below) will be evaluated closer to the time but is provisionally expected to be financed by the issue of notes under the Company’s Euro Medium Term Note Programme, details of which can be found in section 25.10 of Part 14.

Action required in Italy:

The Issuer plans to drill an offset horizontal well (Masseria Vincelli 2) in the year 2023, when the Company expects current production to have fallen to uneconomic levels. The drilling will require 4 months of work and an investment of approx. EUR 6 million, to be shared between the partners. Out of this amount, the investment of the Group should amount to approx. USD $2.7 million, and a decision as to how to fund this will be made closer to the time.
The Lucera gas concession is currently not producing, because some compressors need extraordinary maintenance or to be substituted. Production is expected to resume in June 2021.
The Masseria Vincelli 2 well will approximately produce at a rate of 1,000 Mscf/d which will maintain the operation of the electrical generation facility for the next years.
The Issuer is currently not planning to develop the concessions in “Montalbano” and “Colle dei Nidi”. Therefore, no further action or investments are required.

15. Market Overview

The Group operates in the energy and oil market in Italy, the Republic of the Congo and Tunisia. The overview of the global energy and oil market is set out below, and should be read in conjunction with the earlier sections in this part of the Prospectus on the energy and oil markets in Italy, in the Republic of the Congo and in Tunisia respectively.

The Global Energy Market

The world energy consumption has seen a steady increase since the industrial revolution and is expected to continue to do so in the years to come. Fossil fuels continue to supply more than 84 per cent of the world’s energy of which 33 per cent is oil, according to the BP Statistical Review of World Energy in June 2020. In 2019 oil remains the most used fuel in the energy mix (Source: Statistical Review of World Energy – British Petroleum, 2020)[6] .

The world consumption of primary energy – including oil, natural gas, coal, nuclear, hydropower and other renewable energy – increased by 1.3 per cent in 2019, according to the BP Statistical Review of World Energy June 2020. This is less than half the rate of growth in 2018.[7]

The Oil and Gas Prices

Oil prices traded at all�time high levels (in terms of annual average) for most of 2011, 2012, 2013 and the first half of 2014. The Brent oil price stayed commonly in a range of USD 100�125/bbl. However, since the summer of 2014, oil prices have declined steeply, and Brent reached USD 28/bbl in mid�January 2016. The price decline was a result of high oil prices for an extended period of time, which helped unlock technological breakthroughs in US onshore production, combined with relatively weak global oil demand growth and the return of Libyan production. The prolonged oil crisis resulted in a reduction in upstream investment in 2015 and 2016, respectively 25 per cent and 26 per cent, according to the International Energy Agency (“ IEA ”) 2018 Oil Information Overview. This was the first occurrence of two consecutive years of declining investments since the 1980s. In 2016, oil prices remained low and were strongly affected by resilient US producers. The oil price began creeping upwards during 2017 and the Brent oil price reached the USD 60/bbl mark during the third quarter. IEA’s World Energy Report 2017 highlights underinvestment in conventional projects and the possibility for a shortfall of new supply post�2020.

According to the IEA Oil Information Overview 2020, world oil production stood at 98.1 mb/d in 2019.[8] However, geopolitical uncertainty continues to influence the supply side, especially related to Iran and Venezuela. The same applies to the situation in Saudi Arabia due to the latest incidents in September 2019. High oil prices combined with a strong dollar are projected to contribute to slower demand growth. Although, reduced economic confidence may weaken demand, supply side risks will most likely underpin oil prices moving forward.

As evidenced by the oil crisis and recent market developments, the oil price is highly dependent on the current and expected future supply and demand of oil. In addition, the oil price is influenced by global macroeconomic conditions and may experience material fluctuations on the basis of economic indicators, material economic events and geopolitical events. Historically, oil prices have also been heavily influenced by organizational and national policies, most significantly the implementation of OPEC and subsequent production policies announced by the organization.

The first quarter of 2020 saw the worst performance on record for the market as the impact of the Covid19 pandemic became apparent, a trend that continued until late Spring. Oil prices went from over USD 110 per barrel in June 2014 to around USD 17 in April 2020. However, since that low point they have been on general rising trend, reaching USD 80 per barrel for the first time since October 2018 (Brent Crude Oil futures for the year and 5 years to 20 July 2021, charts below, Source: BBC ), however oil prices are inherently volatile, so no assurance can be made that this upward trend will continue.

6 Available at https://www.bp.com/content/dam/bp/business�sites/en/global/corporate/pdfs/energy�economics/statistical�review/bp� stats�review�2020�full�report.pdf.

7 Available at https://www.bp.com/content/dam/bp/business�sites/en/global/corporate/pdfs/energy�economics/statistical�review/bp� stats�review�2020�full�report.pdf.

8 Available at https://webstore.iea.org/oil�information�overview�2020�edition (free registration required).

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In addition to the recent rising trend in oil prices, European natural gas prices have shown an even stronger trend. From a 5�year low point in May 2020 of under 10p per therm, UK Natural Gas futures prices (Source: BBC – chart below) have risen by more the 20 times to over 210p per therm. This has benefited Zenith’s natural gas business in Italy, both directly from gas sales, and from increases in electricity prices that the Company generates on site from its gas production.

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16. Recent Developments

508,519,038 of the Admission Shares, which are currently traded on the Euronext Growth Market of the Oslo Børs, were issued over 12 months ago. As these shares will not be admitted to trading on the Main Market of the London Stock Exchange until Admission, the Company has not been in compliance with section 14.3.4 of the Listing Rules since 7 November 2019 until Admission. The publication of this Prospectus and Admission will address the Company’s non�compliance with section 14.3.4 of the Listing Rules. The Company announced that it was preparing this Prospectus for that purpose on 18 May 2021.

10 November – Termination of Exploration in Azerbaijan

The Company agreed with SOCAR to terminate its remaining interests in Azerbaijan, involving exploration in parts of the licence area covered by the REDSPA. The Company received US$85,000 for past oil sales from SOCAR.

30 November 2020 – Half�Year Results

The Company published its interim unaudited results for the six�months to 30 September 2020.

18 December 2020 – Change of Auditor and Board Appointment

Jeffreys Henry LLP replace PKF Littlejohn LLP as statutory auditor of the Company. Luca Benedetto, the Chief Financial Officer of the Company was appointed a director of the Company.

23 December 2020 – Award of Tilapia Licence in Republic of Congo

The Group was the successful bidder for a 25�year licence over the Tilapia oilfield, subject to completion of an inquiry of public utility (Enquête d’Utilité Publique) (“ IPU ”) to be organised and performed by the Ministry of Hydrocarbons during the month of January 2021, as well as the subsequent potential finalisation and ratification of the Production Sharing Contract (“ PSC ”), the timing of which is uncertain. SNPC will be the partner in the new licence.

29 December 2020 – Payment for Oil Production

SOCAR made a final payment of US$480,000 for past oil production in Azerbaijan.

30 December 2020 – Granting of Stock Options

The Company granted options over 50,000,000 Common Shares at a price of NOK 0.20 with a term of 5 years to certain directors and employees.

6 January 2021 – Debt Reduction & Warrant Exercise

The Company paid off bank borrowings totalling US$442,000 owed to banks in Azerbaijan. US$54,650 remains outstanding. 28,571,429 warrants were exercised at NOK 0.15 per Common Share for a total value of NOK 4,285,714.

11 January 2021 – Sale of Treasury Shares

The Company sold 25,395,828 Common Shares held in Treasury at NOK 0.148 for total proceeds of NOK 3,758,582 (approximately £328,000).

18 January 2021 – Result of AGM, Board Changes and Grant of Stock Options

All resolutions were passed at the Annual General Meeting (“ AGM ”) of the Company. Luigi Regis Milano and Erik Sture Larre stepped down as directors at the AGM. The Company granted options over 45,414,775 Common Shares at NOK 0.20 and a term of 5 years to certain directors and employees.

29 January 2021 – Bond Coupon Payments

Confirmation that all coupon payments have been made on the Company’s outstanding bonds.

10 February 2021 – Successful Completion of IPU

Confirmation that the IPU described in the announcement of 23 December 2020 has been successfully completed.

24 February 2021 – Credit Line Agreement and Debt Settlement

The Company has been granted a €1.5m one�year revolving credit facility for general working capital purposes. The lender has been issued 85m warrants with a one�year life and an exercise price of NOK0.20 and 85m warrants with a one�year life and an exercise price of NOK0.25. The Company has issued 1,816,410 Common Shares at NOK0.145 in settlement of a debt.

15 March 2021 – Acquisition of Oil Production and Development Asset in Tunisia

Zenith Energy Africa Limited (“ ZEAL ”), its newly incorporated fully owned subsidiary, has entered into a share purchase agreement (“ SPA ”) with Candax Energy Limited (“ Candax ”) for the acquisition of a 100 percent interest in Candax’s fully owned subsidiary in Barbados, Ecumed Petroleum Zarzis Ltd (“ EPZ ”) (the “ Acquisition ”), which holds a 45% interest in the Ezzaouia Concession (“ Ezzaouia ”).

Pursuant to the terms of the SPA, ZEAL has agreed to acquire 100% of the issued share capital of EPZ for the aggregate amount of US$150,000 payable at completion, as well an additional US$100,000 to be satisfied by the issue of ordinary shares in the share capital of Zenith to be issued within sixty days of completion (“ Consideration Shares ”) and a royalty payable and calculated as US$0.35 per each barrel of hydrocarbons produced from the Ezzaouia oilfield and allocable to EPZ, with the royalty not being less than an amount of US$50,000 per annum for a period of ten years.

Ezzaouia is located in onshore Tunisia on the Zarzis peninsula, south of the island of Djerba in the southern Gulf of Gabes. First discovered by Marathon Petroleum Corporation in 1986, with production activities starting in 1990 with a peak production being achieved of 35,000 barrels of oil per day in 1991.

Ezzaouia produces an average of 40 API gravity oil from the Zebbag (Lower Cretaceous) and Mrabatine (Upper Jurassic) formations. It is operated by MARETAP, a joint operating company owned in partnership with the national oil company of Tunisia, ETAP (Entreprise Tunisienne d’Activités Pétrolières) on a 50:50 basis, which holds a 55 percent interest in Ezzaouia.

It currently produces at a rate of approximately of 465 bopd (approximately 210 bopd net to Zenith). Approximately 25,000 barrels of oil are currently held in storage with a commercial value of approximately US$1,250,000.

Planned field production optimisation and workover activities are expected to increase Ezzaouia gross production to 1,000 bopd (potentially resulting in a production of 450 bopd net to Zenith). The Acquisition has certain development obligations during the course of the new 20�year concession including the drilling of a side�track, the drilling of a replacement well and that of a development well. On April 19, 2019, the Tunisian State represented by the Ministry of Industry and Small & Medium Enterprises informed ETAP and EPZ that the Comité Consultatif des Hydrocarbures (“ CCH ”) had provided a favourable opinion to the application submitted by ETAP and EPZ for a new 20�year concession to be called “Ezzaouia” (the “ New Concession ”). A Convention for the New Concession (the agreed work programme between ETAP and EPZ) has been signed by both parties. The New Concession is currently awaiting parliamentary approval.

Ezzaouia has modern oil treatment and storage facilities with a total field storage capacity of approximately 20,000 barrels of oil. MARETAP, the joint operating company, operates an oil storage terminal, connected to Ezzaouia by way of two pipelines (one for gas and one for oil respectively), at the port of Zarzis, with a storage capacity of approximately 200,000 barrels of oil, from which all oil production from Ezzaouia is exported to the international markets.

17 March 2021 – Extension of SPA for acquisition of SLK from CNPC

Zenith Netherlands B.V. signed an extension agreement (the “ Extension ”) in respect of the conditional sale and purchase agreement (“ SPA ”) it signed with CNPC International (Tunisia) Ltd., (“ CNPCI ”), a 100% subsidiary of CNPCI, CNPC International Ltd., for the acquisition of a participation in, inter alia , the North Kairouan permit and the Sidi El Kilani Concession (the “ Tunisian Acquisition ”), which includes the Sidi El Kilani oilfield (“ SLK ”). The SPA was announced to the market on September 8, 2020.

CNPCI holds an undivided 22.5% interest in the Tunisian Acquisition, together with 25 Class B shares in Compagnie Tuniso�Koweito�Chinoise de Pétrole (CTKCP), the operator, representing 25% of the issued share capital of the company.

Completion of the SPA remains conditional on a favourable opinion being granted by the Comité Consultatif des Hydrocarbures (“ CCH ”) of the Republic of Tunisia and the approval of the Tunisian State represented by the Ministry of Industry and Energy in respect of the transfer of CNPCI’s right, title and interest in and under the SLK Concession to Zenith Netherlands (“ Completion ”).

The Extension has been granted in view of the difficulties caused by the ongoing COVID�19 pandemic which have not enabled Completion to be achieved. The new Longstop date for Completion of the SPA is November 30, 2021.

19 March 2021 – Exercise of Warrants

An investor in the Company exercised warrants to acquire a total of 16,428,571 new Common Shares with an exercise price of NOK 0.15 (equivalent to approximately £0.013) for a total consideration of 2,464,286 NOK (approximately £209,600).

22 March 2021 – Private Placement in Norway

A Private Placement for the issuance of 75 million new Common Shares for a total consideration of NOK 8,625,000 (approximately £ 725,000 or EUR 846,000).

The subscription price of the new Common Shares was NOK 0.115 (equivalent to approximately £0.01), a discount of approximately 8.7% in respect of the closing price of the Company’s Common Shares admitted to trading on the Euronext Growth of the Oslo Stock Exchange on March 19, 2021.

Proceeds from the private placement will be deployed to fund planned field development activities to be performed in the Ezzaouia Concession following the acquisition of Ecumed Petroleum Zarzis Ltd (“ EPZ ”), announced to the market on March 15, 2021, as well as providing additional general working capital to support Zenith’s development activities.

24 March 2021 – Completion of Acquisition

ZEAL completed the acquisition of a 100 percent interest in the fully owned subsidiary of Candax, which holds a 45% interest in the Ezzaouia Concession.

8 April 2021 – Extension of SPA for acquisition of SLK from KUFPEC

Zenith Netherlands signed an extension agreement (the “ Extension ”) in respect of the conditional sale and purchase agreement (“ SPA ”) it signed with KUFPEC (Tunisia) Limited (“ KUFPEC ”), a 100% subsidiary of Kuwait Foreign Petroleum Exploration Company K.S.C.C, a subsidiary of the State of Kuwait’s national oil company, for a participation in, inter alia , the North Kairouan permit and the Sidi El Kilani Concession (the “ Tunisian Acquisition ”), which includes the Sidi El Kilani oilfield (“ SLK ”). The SPA was announced to the market on April 20, 2020.

KUFPEC holds an undivided 22.5% interest in the Tunisian Acquisition, together with 25 Class B shares in Compagnie Tuniso�Koweito�Chinoise de Pétrole (CTKCP), the operator, representing 25% of the issued share capital of the company.

Completion of the SPA remains conditional on a favourable opinion being granted by the Comité Consultatif des Hydrocarbures (“ CCH ”) of the Republic of Tunisia and the approval of the Tunisian State represented by the Ministry of Industry and Energy in respect of the transfer of KUFPEC’s right, title and interest in and under the SLK Concession to Zenith Netherlands (“ Completion ”).

21 April 2021 – Binding Offer to acquire oil production and development assets in Tunisia

Zenith announced that it had made a binding offer (the “ Offer ”) to wholly acquire a company holding a 100% interest in two hydrocarbons production and development concessions in Tunisia (the “ Potential Acquisitions ”), which has now been accepted.

The Offer is represented by a mix of cash payments and assumption of debt by Zenith for a total consideration of approximately USD$200,000.

The Potential Acquisitions currently produce approximately 80�100 barrels of condensate per day with 5.5�6 MMSCF of natural gas, which is re�injected into the formation, from the first Potential Acquisition concession, and approximately 25 barrels of oil per day from the second Potential Acquisition concession. One well within the first Potential Acquisition concession suffered tubing string damage and has been temporarily shut�in, having had a stabilised production range of between approximately 500�600 barrels of oil per day prior to production being suspended. The low oil price environment during 2020 and the material investment required to restore production from this well have prevented the necessary repair work from being implemented.

A recent study carried out by seller in respect of the second Potential Acquisition, comprising production, cost�effectiveness and feasibility evaluations, concluded that the current production of approximately 25 barrels of oil per day could be increased to up to approximately 200 barrels of oil per day via drilling activities. The seller did not implement the recommendations of the study due to the low oil price environment during 2020 and the emergence of financing difficulties.

Both Potential Acquisitions will be acquired with a 100% working interest. The Company can confirm that the Potential Acquisitions are due to expire during the years 2033 and 2034 respectively.

23 April 2021 – Debt reduction, amendment of terms and issue of warrants

Zenith announced that it has reduced its liabilities, extended the maturity date of two existing loans and issued share purchase warrants to certain lenders of the Company.

On February 14, 2020, the Company announced that, in relation to its US$2.5 million convertible loan facility (the “ Facility ”) it had reduced its liability to US$1.05 million. The Company confirmed that, following recent repayments, the current liability in relation to the Facility stands at US$0.7 million.

As last announced on January 6, 2021, the Company had an outstanding credit agreement with a financial institution in Azerbaijan for an amount US$54,650.00 plus accrued interest payable by June 30, 2021. This liability has now been reduced to a total amount of US$25,000.

The Company confirms that it has amended the terms of the US$2.5 million convertible loan facility and of an existing revolving credit line, extending the current repayment terms. In connection with these loan extensions, Zenith has issued:

45,000,000 share purchase warrants exercisable at NOK 0.12 (approximately £0.01) per common share payable in full in cash on subscription, and expiring within six months from the date of issue; and,
13,593,113 share purchase warrants to the lenders exercisable at NOK 0.156 (approximately £0.013) per common share payable in full in cash on subscription expiring three years from the date of issue.

30 April 2021 – Acquisition of Robbana and El Bibane in Tunisia

Zenith announced that, following its market announcement dated April 21, 2021, Compagnie Du Desert Ltd (“ CDD ”), its recently incorporated fully owned subsidiary, has entered into a share purchase agreement (“ SPA ”) with Candax Energy Limited (“ Candax ”) for the acquisition of a 100 percent interest in Candax’s fully owned subsidiary in Barbados, Ecumed Petroleum Tunisia Ltd (“ EPT ”) (the “ Acquisitions ”), which holds a 100% interest in the El Bibane and Robbana concessions in Tunisia.

The El Bibane concession (“ El Bibane ”) is located 16 kilometres offshore from the port of Zarzis in the Gulf of Gabes, covering an area of approximately 228 square kilometres and in approximately 7�8 meters water depth. The field was discovered by Marathon Oil Corporation in 1982. However, it was not developed until 1998. Upon initial development, a peak production of 4,500 bopd was achieved. The reservoir is located in the cretaceous Zebbag fractured dolomite formation at approximately 2,150 metres below surface. Zenith has acquired a 100% working interest in El Bibane. A total of three wells remain active. A total of 6 wells plus 4 sidetracks have been drilled. El Bibane expires on December 31, 2033.

The Robbana concession (“ Robbana ”), covering 48 square kilometres and located onshore in the island of Djerba in the southern Gulf of Gabes, was discovered in 1988, achieving a peak production of 500 bopd in 1994. The ROB�1 well encountered two hydrocarbon�bearing reservoirs in the Cretaceous Upper Meloussi Sandstone formation. Only two wells have been drilled in Robbana since discovery, ROB�1 which is still in production and ROB�2 which is temporarily abandoned. Robbana expires on November 4, 2034.

30 April 2021 – Exercise of Options

Zenith announced the exercise of warrants to acquire a total of 45,000,000 new Common with an exercise price of NOK 0.12 (approximately £0.01) for a total consideration of 5,400,000 NOK (approximately £450,000).

10 May 2021 – Norwegian institutional investment

Zenith announced that it had secured Norwegian institutional investment in Zenith by way of a private placement in Norway which has also attracted the participation of a high�net�worth private investor (the “ Private Placement ”).

The Private Placement has resulted in the issuance of 60 million new common shares in the share capital of the Company (the “ Private Placement Shares ”) for a total consideration of NOK 6,000,000 (approximately 522,000 or EUR 600,000).

The subscription price of the Placement Shares was NOK 0.10 (equivalent to approximately £0.087), a discount of approximately 8.75 percent in respect of the closing price of the Company’s common shares admitted to trading on the Euronext Growth of the Oslo Stock Exchange on May 7, 2021.

The Company issued the following share purchase warrants (“ Warrants ”) as part of the Private Placement:

34,284,000 Warrants with an exercise price of NOK 0.25 expiring on July 1, 2022
25,716,000 Warrants with an exercise price of NOK 0.325 expiring on July 1, 2023

Each Warrant will provide the investor the right to one new common share in the share capital of Zenith upon exercise.

Proceeds from the Private Placement will be deployed to fund planned field development activities to be performed in the recently acquired Ezzaouia, El Bibane and Robbana concessions in Tunisia, as well as providing additional general working capital to support Zenith’s broader development activities in Africa.

26 May 2021 – Loan for Tunisian Development

Zenith announced that it has entered into a loan agreement with Winance, a Dubai registered single�family office (the “ Lender ”), for a total amount of EUR 2.1 million (approximately £1.8 million or approximately NOK 21.4 million) (the “ Loan Agreement ”).

The Loan Agreement has a duration of six months, does not attract interest and an upfront arrangement fee, equal to 5 percent of the total drawdown amount, has been paid to the Lender in accordance with the terms of the Loan Agreement.

During each month prior to the maturity date, Zenith shall make repayments in accordance with the Loan Agreement (“ Instalments ”), with the first Instalment being payable during the month of July 2021.

100,000,000 new common shares of no par value (the “ Reserve Shares ”) have been issued to the Lender to be held in a depositary institution designated by the Lender.

Under the terms of the Loan Agreement, Zenith may elect to pay each Instalment either by cash or by utilising the Reserve Shares, by delivering to the Lender an amount of Reserves Shares equivalent to the quotient obtained by dividing the Instalment Amount by 95 percent of the applicable VWAP (volume weighted average price) for the period of ten business days prior to the due date for each Instalment.

The Company has also issued a total of 8,400,000 new common shares at a price of NOK 0.10 (equivalent to approximately £0.085) to be held in Treasury (the “ Treasury Shares ”).

1 June 2021 – Debt reduction

As announced on January 6, 2021, the Company had an outstanding credit agreement with a financial institution in Azerbaijan for US$54,650.00 plus accrued interest payable by June 30, 2021. This liability was reduced to a total amount of US$25,000 as per announcement dated April 23,2021 and on May 31, 2021, the Company announced that it completely repaid this facility.

The Company also announced that, in relation to the loan agreement announced on May 26, 2021, issued 89,053,125 warrants at an exercise price of NOK 0.12 and an expiry date of two years from the issue.

10 June 2021 – Drilling activities in Robbana, onshore Tunisia

The Company announced that it is in the process of finalising plans to commence drilling activities in the recently acquired Robbana concession (“ Robbana ”) in onshore Tunisia.

The Company intends to drill ROB�3, an infill vertical well, in the proximity of the producing Robbana�1 well (“ROB�1”), to a total depth of approximately 2,400 metres.

ROB�3 will target two proven hydrocarbon�bearing reservoirs in the Cretaceous Upper Meloussi sandstone formation, from which successful production has been achieved from Robbana�1 for many years.

A production of approximately 100�150 barrels of oil per day is expected in the event of a successful drilling operation, with a P10 probability of success of approximately 150�170 barrels of oil per day being achieved.

Robbana currently produces approximately 25 barrels of oil per day from ROB�1.

25 June 2021 – Extension of SPA longstop date for acquisition from KUFPEC, Eurobond coupon payments and new appointments to Advisory Committee

The Company announced

that its wholly owned subsidiary Zenith Energy Netherlands B.V. signed an extension agreement of the longstop date in respect of the conditional sale and purchase agreement it signed with KUFPEC

(Tunisia) Limited, a 100% subsidiary of Kuwait Foreign Petroleum Exploration Company K.S.C.C, a subsidiary of the State of Kuwait’s national oil company, for a participation in, inter alia , the North Kairouan permit and the Sidi El Kilani Concession. The signing of the SPA was announced to the market on April 20, 2020. The new longstop date for Completion of the SPA is October 31, 2021.

The coupon payments, in full and on time, in relation to its bonds Zenith Energy Ltd 8% Dec 2021 AT0000A23S79 the Company has issued.
The appointment of Messieurs Jacky Fleschen and Mohamed Bouleymen to its Advisory Committee.
Mr Fleschen is a civil engineer with a degree from the École Spéciale des Travaux Publics, du bâtiment et de l’industrie (ESTP Paris). He has 40 years’ experience in major transactions, specifically in the construction and infrastructure sector, with responsibility for the signing of contracts for a value in excess of 10 billion US$, and has advised companies including Alston, Groupe ADP, Siemens, Sinopec and China Power.
- He has formerly served as Director of KAIC (Kuwaiti Algerian Investment Company SA) FLAVELAB SA in France, and Aston SA in Luxembourg. He is a French citizen based in Dubai.
Mr Bouleymen is a former Mayor of Tunis, the capital city of the Republic of Tunisia, having served for two terms (1986�1988 and 1990�2000), during which time he was awarded the UNESCO (United Nations Educational, Scientific and Cultural Organization) award for the best managed Arab city.
- Since his mayoral tenure, he has held a number of positions including serving as President and Director of SITEP (Société Italo�Tunisienne d’Exploitation Pétrolière), a company that operates the El Borma oilfield in Tunisia, one of the most productive oilfields in the country, and is jointly owned by Italian oil major ENI and the State of Tunisia.
The settlement of a liability by providing a total of 8,400,000 common shares held in treasury to a creditor wishing to be paid in equity at a price of NOK 0.12 (equivalent to approximately £0.0124).

8 July 2021 – Sale of Tunisian Oil Production

The Company announced that it had agreed an international crude oil lifting, scheduled to take place during the month of July 2021, of approximately 68,000 barrels net to Zenith (including approximately 20,000 barrels of domestic market sales) for total receivables of approximately US$4.5 million.

29 July 2021 – Debt settlement

On July 29, 2021, the Company announced that it had concluded a debt settlement agreement (the “Debt Settlement”) in respect of the drawdown of EUR 500,000 (approximately £426k or CAD$742k) (the “CreditFacility”) made following the signing of a revolving line of credit agreement with a financial institution announced on February 24, 2021.

The Company has issued a total of 30,422,319 new common shares at a price of NOK 0.1725 (equivalent to approximately £0.01412 or CAD$0.025) to settle the Credit Facility in full.

In connection with the Debt Settlement, the Company has issued the Lender the following Warrants with a duration of two years:

20 million Warrants to acquire one common share for each Warrant at an exercise price of NOK 0.16 (equivalent to approximately £0.01310 or CAD$ 0.023).
23 million Warrants to acquire one common share for each Warrant at an exercise price of NOK 0.20 (equivalent to approximately £0.01637 or CAD$0.028).

20 August 2021 – Receipt of payment from SNPC subsidiary in Congo

On August 20, 2021, the Company announced that one of its fully owned subsidiaries in the Republic of the Congo, Anglo African Oil & Gas Congo S.A.U. (“AAOG Congo”), has received a payment for an amount of approximately US$128,000, in respect of past oil production produced during the now expired Tilapia I licence by AAOG Congo from Congolaise de Raffinage, a subsidiary of the national oil company of the Republic of the Congo, Société Nationale des Pétroles du Congo.

23 August 2021 – Payment of multi�currency bond coupon

On August 23, 2021, the Company announced that it had recently made coupon payments, in full and on time, in respect of its multi�currency Euro Medium Term Notes the Company has issued on the Vienna MTF of the Vienna Stock Exchange.

August 31, 2021 – Filing of 2021 FY annual audited results

On August 31, 2021, the Company:

published its independently audited financial results for the financial year ended March 31, 2021.
announced that it has entered into an exclusivity agreement (the “Exclusivity”) with Noble Hill�Network Limited (“NHNL”), a private Nigerian oil and gas company, that holds 100% of the Risk Service Contract (“RSC”) for the development of the North�West Corner of OML 141 (“NW OML 141”).

September 6, 2021 – Commencement of ROB�1 workover, Tunisia

On September 6, 2021, the Company announced the commencement of workover activities in well Robbana�1 (“ROB�1”) in the Robbana concession, onshore Tunisia.

September 9, 2021 �Granting of Stock Options

On September 9, 2021, the Company announced that it had granted a total of 13,882,232 stock options (the “Options”) to certain Directors and employees of the Company in accordance with the Company’s Stock Option Plan.

September 14, 2021 – Credit Rating Upgrade

On September 14, 2021, the Company announced that BCRA Credit Rating Agency AD (“BCRA”) has upgraded Zenith’s long�term debt issuer credit rating to ‘B�with Positive Outlook’.

September 16, 2021 – Electricity Production Revenue

The Company has been generating an average of approximately 900 MWh per month at the Torrente Cigno concession, where low�grade natural gas production is used to generate electricity. Electricity has been sold at an average sale price of approximately EUR 110 per MWh resulting in net revenues of approximately EUR 110,000 per month. The current net production costs are approximately EUR 35,000 per month.

October 5, 2021 – Electricity Production Revenue

During the month of September 2021, the Company produced a total of approximately 920 MWh, a small increase in respect of the previous month. Electricity prices during the month of September 2021 have averaged approximately EUR 157 per MWh, resulting in net revenues of approximately EUR 150,000 per month. The current net production costs remain fixed at approximately EUR 35,000 per month.

October 12, 2021 – Workover of Well in Tunisia

Zenith reported that the workover of ROB�1 is progressing successfully. As last announced on September 6, 2021, ROB�1 has not undergone any form of well intervention since 2012 and was producing at a stabilised rate of approximately 20 bopd prior to the commencement of workover operations.

The well completion string has been fully pulled out of the wellbore, encountering approximately 200 hundred meters of paraffin and wax deposits cleared by way of reverse circulation using diesel fuel. The Company will now proceed with bottom hole cleaning and scraping of the casing to be followed by the installation of a new tubing anchor and sucker rod pump supplied by Weatherford.

October 25, 2021 – Workover of Well in Tunisia

Zenith reported the successful workover of the ROB�1 well in Tunisia.

October 29, 2021 – Significant production uplift from ROB�1

The Company reported that following its workover, production at the ROB�1 well has increased from 20 to 124 bopd.

November 2, 2021 – Subscription for £3m

The Company announced that it had raised £3m through the issue of 272,727,273 Common Shares through a subscription at 1.1 pence per Common Shares. This is the “ Subscription ” detailed in Part 10 of this Prospectus.

November 2, 2021 – Credit Rating Upgrade

The Company announced that Rating�Agentur Expert RA (“RAEX”) has upgraded its debt issuer credit rating to ‘B’ with ‘Stable Outlook’, from B�.

PART 9 DIRECTORS, KEY PERSONNEL AND CORPORATE GOVERNANCE

1. The Directors

The Directors believe the Board comprises a knowledgeable and experienced group of professionals with relevant experience for sourcing, evaluating, structuring and executing the business strategy of the Company. The Board will have full responsibility for its activities.

Details of the current Directors are listed below.

2. Jose Ramon Lopez�Portillo (Non�Executive Chairman, aged 67)

Mr. Lopez�Portillo has been Managing Director and then Chairman of the Board since 24 September 2007. He is an economist with a large network of business contacts worldwide, and who previously served as Mexican Permanent Representative in Rome, Italy. Mr. Lopez�Portillo is a leading researcher in the energy security of Mexico and acts as Deputy Minister at Mexico’s Planning and Budget Secretariat. Mr. Lopez�Portillo holds a Doctorate degree in Political Sciences and International Relations from the University of Oxford.

3. Andrea Cattaneo Della Volta Cattaneo Adorno (President and Chief Executive Officer, aged 65)

Mr. Cattaneo has been a Director of the Company since 9 December 2008 and has served as President and CEO of the Group since 2009. He is an energy specialist with a focus on emerging countries and has 30 years’ experience in advising governments in financial, industrial and energy�related matters. Mr. Cattaneo has strong expertise and experience in structuring and negotiating contracts in the international markets, specifically the oil industry. He also has significant experience in former socialist countries and arranged the first US$ loan to Vietnam in 1985. Mr. Cattaneo holds an undergraduate degree in Economics from the University of Genoa and a postgraduate degree in Taxation Law from the University of Bologna. He currently serves as Non�Executive Member of the Anglo�Azerbaijan Society, Partner of the Buenos Aires Stock Exchange and Member of the IADC Caspian Chapter Steering Committee. He is a former member of the Business Advisory Council to the Great Tumen Initiative, a United Nations project for regional economic cooperation in Northeast Asia. He is one of Zenith’s founders.

4. Dario Ezio Sodero (Non�Executive Director, aged 80)

Mr. Sodero was appointed to the Board on 24 June 2009. As an experienced energy industry executive with 47 years of experience in North America, the Sub�Arctic, North Africa and the Middle East, Mr. Sodero has strong geological, exploration and technical expertise. Mr. Sodero has formerly acted as director and executive of several other TSX�and TSXV�listed exploration and production companies. Mr. Sodero holds a Doctorate degree in Geology from the University of Turin, Italy.

5. Sergey Borovskiy (Non�Executive Director, aged 48)

Sergey Borovskiy has over 25 years of experience in business management in China and Hong Kong. He has lived and worked in China since 1991 and is fluent in Russian, English and Mandarin.

He is CEO of Sanju Environmental Protection (Hong Kong) Limited, overseeing the international projects of controlling shareholder Sanju Group (sanju.cn), a company specialized in energy purification and environmental protection technologies listed on the Shenzhen Stock Exchange. He is CEO and Chairman of General Transactions Inc., an oil & gas consulting, engineering, trading, seismic research and exploration services company. Sergey also serves as Chairman of the Board of Directors at Petro Chemical Solutions and South China Heavy Industries Group. Sergey Borovskiy studied in both China and Russia and holds a degree in economics.

6. Luca Benedetto (Chief Financial Officer and Executive Director, aged 50)

Luca Benedetto is an Italian national, trained in Italy as a registered accountant with further education in IFRS accounting and consolidation at IPSOA Milan. He has more than twenty�five years of accounting, auditing and financial administration experience. Mr. Benedetto began his professional career as an accountant and computer programmer responsible for financial software development and worked for the Italian division of IBM as an internal auditor and accountant as well as providing staff training in these aforementioned fields. He also served for seven years as a financial and administrative officer in a well�established Italian company specialising in the construction of fuel and water storage tanks.

He joined the Zenith Energy Ltd. group in 2013 as Chief Financial Officer of the Group’s Italian subsidiary, Canoel Italia S.r.l., and has since progressed to also hold the position of Group Financial Controller. In this capacity he has been directly involved in the monitoring of business performance, cash flow management, budgetary oversight, accounts team supervision, accounts preparation and strategic planning. Since January 2016, he has also been responsible for compiling and reviewing of the quarterly Consolidated Financial Statements and Management’s Discussion and Analysis of the Group. Mr Benedetto was appointed to the Board of Directors in December 2020.

7. Independence of the Board

Jose Ramon Lopez�Portillo, Dario Ezio Sodero and Sergey Borovskiy are currently deemed “independent” members of the Board, however the Company does not subscribe to either the UK or QCA Corporate Governance Codes.

8. Directors’ Fees and Other Remuneration

For the financial year ending 31 March 2021, the fees payable to the Directors were as follows:

Jose Ramon Lopez�Portillo – no fee provided
Andrea Cattaneo – CAD $694,000
Luigi Regis Milano – CAD $30,000 (ceased to be a director 15 January 2021)
Dario Sodero – CAD $3,000
Erik Larre – no fee provided (ceased to be a director 15 January 2021)
Sergey Borovskiy – no fee provided
Luca Benedetto – CAD$232,000 (Luca Benedetto became a director on 18 December 2020)

Andrea Cattaneo was appointed President and Chief Executive Officer effective 01 January 2009. As proposed by the Compensation Committee, Mr. Cattaneo’s annual consulting fee payment is approximately £210k (CAD $364k), payable in equal monthly instalments, plus an annual bonus compensation of CAD$200k from the parent Company.

In addition, Andrea Cattaneo also received other benefits for the year ended March 31, 2021, of CAD$130k for health insurance and accommodation.

Mr. Luigi Regis Milano had a yearly compensation of CAD$30k (Euro 20k equivalent) from subsidiary undertakings for the year ended March 31, 2021

Mr. Sodero received a fee for professional consulting services of approximately CAD$3k during the year ended March 31, 2021.

Mr. Luca Benedetto was appointed as Chief Financial Officer from April 2017 and received compensation of CAD$166k from the parent Company and CAD$62k from subsidiary undertakings, and other benefits for CAD$4k for health insurance, during the year ended March 31, 2021.

Further details of the Directors’ service agreements and letters of appointment (as the case may be) are set out in Part 14.

9. Corporate Governance

The Directors are responsible for carrying out the Company’s objectives, setting its business strategy and conducting its overall supervision. Acquisitions, divestment and other strategic decisions will all be considered and determined by the Board.

The Board has established the corporate governance framework of the Company and will have overall responsibility for setting the Company’s strategic aims, defining the business plan and strategy and managing the financial and operational resources of the Company. No Shareholder approval will be sought by the Company in relation to transactions following Admission unless it constitutes a reverse takeover under the Listing Rules or is otherwise acquired under applicable law or regulation.

The Board is committed to the highest standards of corporate governance. On and following Admission, the Board will continue to comply with the corporate governance requirements imposed on the Company as a result of the Company’s continued listing on the standard segment of the London Stock Exchange

The Board will schedule meetings every two months and will hold additional meetings as and when required. The expectation is that this will result in more than six meetings of the Board each year.

The Company currently complies with the corporate governance regime applicable to the Company pursuant to the laws of British Columbia, the securities law in Canada and the standard segment of the Official List. Directors are considered to be independent if they have no direct or indirect material relationship with the Company. A “material relationship” is a relationship which could, in the view of the Company’s Board of Directors, be reasonably expected to interfere with the exercise of a director’s independent judgment.

Management has been delegated the responsibility for meeting defined corporate objectives, implementing approved strategic and operating plans, carrying on the Company’s business in the ordinary course, managing cash flow, evaluating new business opportunities, recruiting staff and complying with applicable regulatory requirements. The Board of Directors facilitates its independent supervision over management by reviewing and approving long�term strategic, business and capital plans, material contracts and business transactions, and all debt and equity financing transactions.

The Board has established an audit committee, a remuneration committee and a corporate governance committee with formally delegated duties and responsibilities. The composition of these committees may change with time and if there are changes in the composition of Zenith’s Board of Directors.

The Audit Committee comprises Jose Ramon Lopez�Portillo, Dario Sodero and Sergey Borovskiy and is chaired by Dario Sodero. The Audit Committee meets at least three times a year and otherwise as required. It has responsibility for ensuring that the financial performance of the Issuer is properly reported on and reviewed, and its role includes monitoring the integrity of the financial statements of the Issuer (including annual and interim accounts and results announcements), reviewing the effectiveness of the Issuer’s internal control review function and risk management systems, reviewing any changes to accounting policies, reviewing and monitoring the extent of the non�audit services undertaken by external auditors and advising on the appointment of external auditors. The Audit Committee has unrestricted access to the Issuer’s external auditors. The ultimate responsibility for reviewing and approving the annual reports and accounts and the interim reports remains with the Board. The Audit Committee gives due consideration to laws and regulations and the requirements of the Listing Rules. The Issuer has an Audit Committee Charter.

The Remuneration Committee comprises Jose Ramon Lopez�Portillo, Dario Sodero and Sergey Borovskiy and is chaired by Sergey Borovskiy. The Remuneration Committee has not met during the year ended 31 March 2020. The Remuneration Committee has responsibility for determining the Issuer’s policy on the remuneration packages of the Issuer’s chief executive, the chairman, the executive and non�executive directors and other senior executives. The Remuneration Committee also has responsibility for (i) recommending to the Board a compensation policy for directors and executives and monitoring its implementation; (ii) approving and recommending to the Board and the Issuer’s Shareholders the total individual remuneration package of the chairman, each executive and non�executive director and the chief executive officer (including bonuses, incentive payments and share options or other share awards); and (iii) approving and recommending to the Board the total individual remuneration package of all other senior executives (including bonuses, incentive payments and share options or other share awards), in each case within the terms of the Issuer’s remuneration policy and in consultation with the chairman of the Board and/or the chief executive officer. No Director or manager may be involved in any discussions as to their own remuneration.

The Corporate Governance Committee comprises Sergey Borovskiy, Dario Sodero and Jose Ramon Lopez�Portillo and is chaired by Jose Ramon Lopez�Portillo. The Corporate Governance Committee did not meet during the year ended 31 March 2020. The Corporate Governance Committee ensures that the Issuer has in place sufficient procedures, resources and controls to enable it to comply with its continuing obligations as a company admitted to the Standard Segment of the Official List.

The Corporate Governance Committee also monitors the Issuer’s procedures to approve (a) announcements to ensure that the information disclosed by the Issuer is timely, accurate, comprehensive and relevant to the business of the Issuer and (b) any share dealings by directors or employees or announcements made by the Issuer to ensure compliance with the Issuer’s policies, the Market Abuse Regulation, the Disclosure Guidance and Transparency Rules and the Listing Rules and such other regulations to which the Issuer is subject from time to time.

The Company has adopted an anti�bribery and corruption policy and also implemented appropriate procedures to ensure that the Board, employees and consultants comply with the UK Bribery Act 2010.

The Company has adopted a media policy to ensure that the information disclosed by the Company is timely, accurate, comprehensive and relevant to the business of the Company. Adherence to this policy is intended to provide an effective and efficient framework to facilitate the timely dissemination of information. The media policy applies to all employees of the Company and its subsidiaries and divisions, as well as the members of its Board of Directors.

Andrea Cattaneo is designated as the Company’s principal media contact and Company spokesperson. Depending on the situation, an individual external to the Group (e.g. an external technical consultant) may be asked to be a spokesperson on a particular issue due to their knowledge, experience and technical expertise.

PART 10 THE SUBSCRIPTION

1. Description of the Subscription

Under the Subscription, 272,727,273 Subscription Shares have been unconditionally subscribed for by investors at the Subscription Price of 1.1 pence per new Common Share, which has raised gross proceeds of £3,000,000. There are no commissions payable on the Subscription. The Subscription and Admission are subject to estimated total expenses of £150,000. The Net Proceeds are approximately £2,850,000. The Subscription Shares will be issued credited as fully paid and will 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 their issue. The Subscription will result in the Existing Shares being diluted so as to constitute 78.75% of the Enlarged Common Shares in Issue at Admission. The Subscription was not underwritten. The Subscription is unconditional and the commitments received under the Subscription are irrevocable.

The Subscription Shares have been made available primarily to institutional investors in the European Economic Area, Switzerland and in the UK. In accordance with Listing Rule 14.3, at Admission, at least 25% of the Common Shares of the listed class will be in public hands (as defined in the Listing Rules). No expenses and taxes are charged to the subscribers.

Completion of the Subscription has been announced via a regulatory information service on 2 November 2021.

2. Allocation

Allocations under the Subscriptionhave been determined by the Company following receipt of indications of interest from prospective investors. A number of factors were considered in deciding the basis of allocation under the Subscription, including the level and nature of the demand for the Subscription Shares and the objective of establishing an investor profile consistent with the long�term objective of the Company. The Company has notified investors of their allocations.

All Subscription Shares issued pursuant to the Subscription have been issued, fully paid, at the Subscription Price.

The Common Shares issued pursuant to the Subscription have been issued in registered form. The Common Shares were issued pursuant to the Subscription on 2 November 2021.

3. Dealing arrangements

Application has been made to the FCA for the Subscription Shares, Capitalisation Shares and Admission Shares to be listed on the standard segment of the Official List and an application has been made to the London Stock Exchange for the Subscription Shares, Capitalisation Shares and Admission Shares to be admitted to trading on the London Stock Exchange’s Main Market for listed securities. The Subscription Shares and Capitalisation Shares will also be admitted to trading on the Euronext Growth Market of the Oslo Børs.

It is expected that Admission will take place and unconditional dealings in the Subscription Shares, Capitalisation and Admission Shares will commence on the London Stock Exchange at 8.00 a.m. on 16 November 2021. This date and time may change.

It is intended that settlement of Subscription Shares allocated to investors will take place by means of crediting Depositary Interests to relevant CREST stock accounts on Admission. When admitted to trading, the Subscription Shares will be registered with ISIN number CA98936C1068, SEDOL number BYNXNZ9 and TIDM code ZEN. The Common Shares have no par value. The Company prepares its accounts in Canadian Dollars.

4. CREST

CREST is the system for paperless settlement of trades in listed securities operated by Euroclear. CREST allows securities to be transferred from one person’s CREST account to another’s without the need to use share certificates or written instruments of transfer.

The Depositary Interests are admitted to CREST. Accordingly, settlement of transactions in the Depositary Interests may take place within the CREST System if any Shareholder (as applicable) so wishes. CREST is a voluntary system and holders of Shares who wish to receive and retain share certificates will be able to do so. Any investor who applied for Subscription Shares in the Subscription may elect to receive Subscription Shares in uncertificated form in the form of Depositary Interests if the investor is a system member (as defined in the CREST Regulations) in relation to CREST.

5. Use of Proceeds

The Proceeds of the Subscription are £3,000,000, and costs of approximately £150,000 have been incurred in relation to the Subscription and Admission.

The Company’s intention is to use the Proceeds (including costs associated with the Subscription and Admission, which are included below) as follows:

Admission, which are included below) as follows:
Use	Amount (£) £1,300,000 £600,000 £300,000 £250,000 £150,000 £400,000 £3,000,000,000
Work on Ezzaouia concession, Tunisia Drilling well in Robbana concession, Tunisia Transportation of Zenith’s drilling rig to Africa Work on Tilapia II, Congo (subject to licence grant) Prospectus and associated costs General working capital Total

6. Issue of additional Common Shares in Settlement of Debts

The Company has contracted to issue 8,181,818 new Common Shares at the Subscription Price in full and final settlement of an existing liability of £90,000 on Admission. In addition, the Company has agreed to issue 100,000,000 Common Shares in full and final settlement of the €1m outstanding liability as set out in section 25.17 of Part 14 on Admission. (Collectively the “ Capitalisation Shares ”). The 108,181,818 Capitalisation Shares will be issued fully paid at Admission.

PART 11 HISTORICAL FINANCIAL INFORMATION OF THE COMPANY

On 29 October 2020 the Company published the Financial Statements 2020, which were audited by PKF Litttlejohn LLP and prepared in accordance with International Financial Report Standards. The Audit Report was without qualification. The Financial Statements 2020 are being incorporated by reference in accordance with the Prospectus Regulation Rule 2.7.1.

On 2 July 2019 the Company published the Financial Statements 2019, which were audited by PKF Litttlejohn LLP and prepared in accordance with International Financial Report Standards. The Audit Report was without qualification. The Financial Statements 2019 are being incorporated by reference in accordance with the Prospectus Regulation Rule 2.7.1.

On 2 July 2018 the Company published the Financial Statements 2018, which were audited by PKF Litttlejohn LLP and prepared in accordance with International Financial Report Standards. The Audit Report was without qualification. The Financial Statements 2018 are being incorporated by reference in accordance with the Prospectus Regulation Rule 2.7.1.

On 30 November 2020 the Company published the Interim Financial Statements 2020/2021, which were prepared in accordance with International Financial Report Standards. The Interim Financial Statements 2020/2021 are being incorporated by reference in accordance with the Prospectus Regulation Rule 2.7.1.

This document should be read in conjunction with the Financial Statements 2021, Financial Statements 2020, Financial Statements 2019, Financial Statements 2018 and Interim Financial Statements 2020/2021, links to which on the Company’s website can be found below.

Financial Statements 2021

https://wp�zenith�2020.s3.eu�west�2.amazonaws.com/media/2021/08/31090954/Zenith�Energy�Ltd� 31.3.21�Signed�accounts.pdf

Financial Statements 2020

https://wp�zenith�2020.s3.eu�west�2.amazonaws.com/media/2020/10/29105540/Zenith�Energy�audited� results�2020�FY�Final�28.10.2020.pdf

Financial Statement 2019

https://wp�zenith�2020.s3.eu�west�2.amazonaws.com/media/2020/03/24134459/Zenith�Energy�Ltd�FS� FY2019�signed.pdf

Financial Statements 2018

https://wp�zenith�2020.s3.eu�west�2.amazonaws.com/media/2020/03/26130149/Zenith�Energy�Ltd.�annual� report�financial�statements�year�ended�31.03.2018�final�.pdf

Interim Financial Statements 2020/2021

https://wp�zenith�2020.s3.eu�west�2.amazonaws.com/media/2020/12/01094058/Zenith�FS�30.09.2020.pdf

PART 12 CAPITALISATION AND INDEBTEDNESS

The following table shows the capitalisation and indebtedness of the Company, extracted without material adjustment from the Group’s consolidated management accounts as at 31 August 2021. The Company confirms that there has not been a material change in the capitalisation and indebtedness of the Company since 31 August 2021, other than is set out below.

All the amounts are expressed in thousand Canadian Dollars (CAD$’000).

CAPITALISATION AND INDEBTEDNESS

CAPITALISATION AND INDEBTEDNESS
Total Current debt Guaranteed Secured Unguaranteed/Unsecured Total Non�Current debt Guaranteed Secured Unguaranteed/Unsecured Shareholder’s equity: Share capital Legal Reserve Other Reserves Total Cash Receivables Trading securities Liquidity Current Financial Receivable Current Bank debt Current portion of non current debt Other current financial debt Current Financial Debt Net Current Financial Indebtedness Non current Bank loans Bonds Issued Other non current loans Non current Financial Indebtedness Net Financial Indebtedness	August 31, 2021
	— 35,856 4,792 — 44,246 20,866 51,237 — 80,515 5,639 22,510 — 4,792 — 35,856 745 2,500 3,045	40,648 65,112 131,752 237,512



		28,149

		6,424
		40,648

		6,075
		6,290

		12,365

LOAN SITUATION		Amount outstanding (CAD$’000) as of the Repayment date of this of the Maturity 31/03/2021 document principal date	Amount outstanding (CAD$’000) as of the Repayment date of this of the Maturity 31/03/2021 document principal date
		31/03/2021
Euro bank debt USD $200,000 General line of credit agreement Swiss loan CHF 837,500 Convertible loan USD 1,500,000 Convertible loan GBP 1,000,000 EUR 1,500,000 Credit Line Agreement & Debt Settlement Euro 200,000 Revolving facility Loan in Tunisia SACE/SIMEST Loan in Italy Euro 126,100 TOTAL		16 96 801 938 561 595 297 1,788 187 5,279	— repaid — repaid — repaid 568 Equity 31/12/2021 sharing agreement 561 — repaid 238 1,788 31/07/2022 187 07/08/2026 3,342

PART 13 TAXATION

1 United Kingdom taxation

The following statements are intended only as a general guide to current UK tax legislation and to the current practice of HMRC and may not apply to certain shareholders in the Company, such as dealers in securities, insurance companies and collective investment schemes. They relate (except where stated otherwise) to persons who are resident and domiciled in the UK for UK tax purposes, who are beneficial owners of Common Shares (and any dividends paid on them) and who hold their Common Shares as an investment (and not as employment�related securities and other than via an individual savings account). They are based on current UK legislation and what is understood to be the current practice of HMRC as at the date of this Document, both of which may change, possibly with retroactive effect. The tax position of certain categories of shareholders who are subject to special rules (such as persons acquiring their Common Shares in connection with employment, dealers in securities, insurance companies and collective investment schemes or those who, either alone or together with connected parties, hold 5% or more of the Common Shares) is not considered.

Any person who is in any doubt as to his or her tax position, or who is subject to taxation in any jurisdiction other than that of the UK, should consult his or her own professional advisers immediately.

2 Taxation of dividends

Under UK tax legislation, the Company is not required to withhold tax at source from dividend payments it makes.

For the current tax year, the rate of income tax applied to dividends received by an individual Shareholder liable to income tax at the higher rate will be 32.5%. In the case of a dividend received by an individual Shareholder liable to income tax at the additional rate, the rate of income tax will be 38.1%. With effect from 6 April 2016, the UK dividend tax credit (formerly 1/9th of the dividend received) no longer applies but individual shareholders may be entitled to a tax�free dividend allowance of £5,000 per tax year.

Dividends paid to a UK resident corporate Shareholder will be taxable income of the UK corporate Shareholder unless the dividends fall within an exempt class and certain other conditions are met. It is, however, expected that dividends paid by the Company to a UK resident corporate Shareholder would generally be exempt, provided certain anti�avoidance provisions are not triggered.

To the extent that dividends are not exempt, UK resident corporate Shareholders may be able to obtain credit for any withholding tax and any underlying tax paid by the Company, subject to certain conditions. The UK has complex double tax relief rules where UK resident companies receive dividends from non�UK resident companies and therefore UK resident corporate Shareholders should seek further advice on these issues.

Trustees who are liable to income tax at the rate applicable to trusts (currently 45.0%) will pay tax on the gross dividend at the dividend trust rate of 38.1% for the current tax year.

United Kingdom pension funds and charities are generally exempt from tax on dividends which they receive.

Other Shareholders who are not resident in the UK for tax purposes should consult their own advisers concerning their tax liabilities on dividends received.

3 Chargeable gains

Shareholders who are resident in the UK for tax purposes and who dispose of their Common Shares at a gain will ordinarily be liable to UK taxation on chargeable gains, subject to any available exemptions or reliefs. The gain will be calculated as the difference between the sale proceeds and any allowable costs and expenses, including the original acquisition cost of the Common Shares.

Shareholders who are not resident in the UK for tax purposes but who carry on a trade, profession or vocation in the UK through a branch, agency or fixed place of business in the UK may be liable to UK taxation on chargeable gains on any gain on a disposal of their Common Shares, if those shares are or have been held, used or acquired for the purposes of that trade, profession or vocation or for the purposes of that branch, agency or fixed place of business.

If an individual Shareholder ceases to be resident in the UK and subsequently disposes of Common Shares, in certain circumstances any gain on that disposal may be liable to UK capital gains tax upon that Shareholder becoming once again resident in the UK.

4 Stamp duty and Stamp Duty Reserve Tax (“SDRT”)

The statements below are intended as a general guide to the current position under UK tax law. They do not apply to certain intermediaries who may be eligible for relief from stamp duty or SDRT, or to persons connected with depository arrangements or clearance services (or, in either case, their nominees or agents), who may be liable to stamp duty or SDRT at a higher rate.

Admission of the Common Shares to the standard segment of the Official List will not give rise to a liability to stamp duty or SDRT on the basis that the Admission does not involve a change in title to the Common Shares for consideration. (The definition of consideration for stamp duty purposes is restricted to consideration in the form of cash, shares or debt. However, the definition for SDRT purposes is broader and will include anything in money or money’s worth.)

The central management and control of the Company currently takes place outside the UK and the shareholders’ register is currently maintained outside the UK. As such, upon the admission of the Common Shares to the Official List and to trading on the London Stock Exchange’s Main Market for listed securities, any transfer of Depositary Interests should no longer attract SDRT.

Provided that the shareholders’ register continues to be maintained outside the UK, there will be no SDRT on any agreement to transfer the Common Shares themselves. However, any document transferring title to the Common Shares will attract stamp duty at the rate of 0.5% (rounded to the nearest £5 if necessary) if it is executed in the UK or relates (wheresoever executed) to any matter or thing done or to be done in the UK.

Where a document transfers title to non�UK shares, but the transfer has such a UK nexus, it may not be relied upon as evidence in civil proceedings within the UK unless it is exempt or has been duly stamped by the UK tax authorities.

5 Inheritance Tax

If any individual Shareholder is regarded as domiciled in the UK for inheritance tax purposes, inheritance tax may be payable in respect of the Common Shares on the death of the Shareholder or on certain gifts of the Common Shares during their lifetime, subject to any allowances, exemptions or reliefs. This is the case regardless of their residence status. In the case of an individual Shareholder who is not regarded as domiciled in the UK for inheritance tax purposes at the date of death, their liability is limited to assets situated in the UK.

A transfer of Common Shares at less than market value may be treated for inheritance tax purposes as a gift of the Common Shares. Special rules may apply to close companies and to trustees of certain settlements who hold Common Shares, which may bring them into the charge to inheritance tax.

Non�UK domiciled individual Shareholders may be regarded as deemed domiciled for inheritance tax purposes only following a long period of residence in the UK.

Situs of shares for inheritance tax purposes is a complex matter and is governed by case law. To the extent the Common Shares are not already treated as UK assets for inheritance tax purposes, then admittance of the Common Shares to the standard segment of the Official List may result in the Common Shares being treated as UK assets for UK inheritance tax purposes. Admission of the Common Shares to the Official List will not constitute a disposal of the Common Shares held by existing Shareholders. However, if the Common Shares are considered UK situs, this could have an adverse impact on the reliefs available from inheritance tax to individual Shareholders.

UK inheritance tax is a complex area and individuals should obtain their own advice in respect of this.

6 Certain Canadian Federal Income Tax Considerations

The following summary describes, as of the date hereof, the principal Canadian federal income tax considerations under the Income Tax Act (Canada) and the regulations promulgated thereunder (the “ Tax Act ”) generally applicable to an investor who acquires, as beneficial owner, Common Shares pursuant to the Subscription who, at all relevant times and for purposes of the Tax Act is not, and is not deemed to be, resident in Canada, holds the Common Shares as capital property, does not, and will not be deemed to use or hold the Common Shares in the course of carrying on a business in Canada, and deals at arm’s length with, and is not affiliated with, the Company (a “ Holder ”).

Common Shares will generally be considered to be capital property to a Holder unless the Holder acquires or holds such Common Shares in the course of carrying on a business or in one or more transactions considered to be an adventure or concern in the nature of trade. Special rules, which are not discussed below, may apply to a Holder that is an insurer that carries on business in Canada and elsewhere. Such Holders should consult their own tax advisers.

This summary is based on the provisions of the Tax Act in force on the date hereof and the current administrative policies and assessing practices of the Canada Revenue Agency (the “ CRA ”) published in writing and publicly available prior to the date hereof. This summary takes into account all specific proposals to amend the Tax Act which have been publicly announced by or on behalf of the Minister of Finance (Canada) prior to the date hereof (the “ Proposed Amendments ”) and assumes that all such Proposed Amendments will be enacted in the form proposed. However, no assurance can be given that the Proposed Amendments will be enacted in the form proposed, or at all. This summary does not otherwise take into account or anticipate any changes in law, whether by judicial, governmental or legislative decision or action or changes in the administrative policies and assessing practices of the CRA, nor does it take into account the laws of any province or territory of Canada or of any jurisdiction outside of Canada, which may differ from those discussed in this summary.

This summary is of a general nature only, is not exhaustive of all possible Canadian federal income tax considerations and is not intended to be, nor should it be construed to be, legal or tax advice to any particular Holder. Holders should consult their own tax advisors having regard to their own particular circumstances.

6.1 Currency Conversion

Generally, for purposes of the Tax Act, all amounts relating to the acquisition, holding or disposition of the Common Shares must be determined in Canadian dollars. Any such amount that is expressed or denominated in a currency other than Canadian dollars must be converted into Canadian dollars using the relevant exchange rate quoted by the Bank of Canada on the relevant day or such other rate of exchange acceptable to the Minister of National Revenue (Canada).

6.2 Dividends

A dividend paid or credited (or deemed under the Tax Act to be paid or credited) on the Common Shares to a Holder will generally be subject to Canadian withholding tax under the Tax Act at a rate of 25%, subject to any reduction in the rate of such withholding under the provisions of an applicable income tax treaty or convention.

6.3 Disposition of Shares

A Holder will generally not be subject to tax under the Tax Act in respect of any capital gain realized on a disposition or deemed disposition of Common Shares unless the Common Shares constitute “taxable Canadian property” (as defined in the Tax Act) to the Holder at the time of the disposition and the Holder is not entitled to relief under an applicable income tax treaty or convention.

Provided the Common Shares are listed on a designated stock exchange for purposes of the Tax Act at the time of disposition, which currently includes the TSXV and the London Stock Exchange, the Common Shares will generally not constitute taxable Canadian property to a Holder at that time, unless at any time during the 60�month period immediately preceding the disposition of the Common Shares: (a) one or any combination of (i) the Non�Resident Holder, (ii) persons with whom the Holder does not deal at arm’s length, (iii) partnerships in which the Holder or a person described in (ii) holds a membership interest directly or indirectly through one or more partnerships, has owned 25% or

more of the issued shares of any class of the Company, and (b) more than 50% of the fair market value of the Common Shares was derived directly or indirectly from one or any combination of: (i) real or immovable property situated in Canada; (ii) Canadian resource properties; (iii) timber resource properties; and (iv) options in respect of, or interests in or for civil law rights in, property in any of the foregoing whether or not the property exists. Common Shares may also be deemed to be taxable Canadian property to a Holder in certain circumstances.

A Holder whose Common Shares may constitute taxable Canadian property to such Holder should consult its own tax advisers.

This summary is for general information only and it is not intended to be, nor should it be construed to be, legal advice to any Shareholder or prospective investor.

PART 14 ADDITIONAL INFORMATION

1 Responsibility

1.1 The Directors, whose names appear on page 28, and the Company accept responsibility for the information contained in the prospectus. To the best of the knowledge of the Company and the Directors, the information contained in this document is in accordance with the facts and this document makes no omission likely to affect the import of such information.
1.2 Chapman Petroleum Engineering Ltd. (“Chapman Petroleum”), of 1122 4th Street SW, Suite 700, Calgary, AB Canada T2R 1M1, in its capacity as Competent Person, accepts responsibility for the information contained in its Competent Person’s Reports as set out in Part 19 this Document. To the best of the knowledge of Chapman Petroleum, the Competent Person’s Report is in accordance with the facts and the Competent Person’s Reports makes no omission likely to affect the import of such information. Chapman Petroleum have consented to the inclusion of this responsibility statement and the Competent Person’s Reports in this Prospectus. Mr C W Chapman, the President of Chapman Petroleum, is a registered Professional Engineer in the Province of Alberta, Canada, and a member of the Australasian Institute of Mining and Metallurgy. Chapman Petroleum have no material interest in Zenith Energy Ltd.
1.3 Where information has been sourced from a third party, the Directors confirm that this information has been accurately reproduced and that as far as the issuer is aware and is able to ascertain from information published by that third party, no facts have been omitted which would render the reproduced information inaccurate or misleading, and the sources of this information have been identified.

2 The Company

2.1 The Company was incorporated and registered in British Columbia on 20 September 2007 under the Business Corporations Act (British Columbia) as a corporation with the name Canoel International Energy Ltd. and with registered corporation number BC0803216. Pursuant to a shareholders’ resolution dated 30 September 2014, the Company’s name was changed to Zenith Energy Limited, which is both its legal and commercial name. Its Common Shares were admitted to trading on the TSXV on 10 April 2008.
2.2 The Company is domiciled in British Columbia, Canada. The Company’s head office is located in Calgary, Alberta, Canada. The head office of the Company and business address for all the Directors and the Senior Manager, as at the date of this Document, is at 15th Floor, Bankers Court, 850 – 2nd Street S.W. Calgary, Alberta, T2P 0R8, Canada. The principal legislation under which the Company operates is the Business Corporations Act (British Columbia). The liability of the Shareholders of the Company is limited. The Company’s Legal Entity Identification (LEI) is 213800AYTYOYD61S4569.
2.3 The Company is regulated by the Alberta Securities Commission as its principal regulator, but it is not regulated by the FCA or any financial services regulator. The Company is subject to the Listing Rules and the Disclosure Guidance and Transparency Rules (and the resulting jurisdiction of the FCA), to the extent such rules apply to companies with a Standard Listing.
2.4 The Company’s auditors for the period covered by the historical financial information (years ended 31 March 2018�2020) were PKF Littlejohn LLP , which is a Registered Auditor and is regulated in the conduct of its services by the Financial Reporting Council and the Institute of Chartered Accountants in England & Wales (ICAEW). The Company’s auditors for the period covered by the historical financial information (years ended 31 March 2021) were Jeffreys Henry LLP, who remain as auditors subsequent to the period covered by the historical financial information. Jeffreys Henry LLP is a Registered Auditor and is regulated in the conduct of its services by the Financial Reporting Council and the Institute of Chartered Accountants in England & Wales (ICAEW).

3 Share Capital

3.1 As at 2 November 2021, (being the latest practicable date before publication of this Document) the Company is authorised to issue an unlimited number of Common Shares and Preferred Shares (issued in a series) and 1,411,665,358 common shares are issued, outstanding, all fully paid, and admitted to trading on Euronext Growth Oslo, of which 313,400,824 fully paid common shares are issued, outstanding, all fully paid, and admitted to trading on the Main Market of the London Stock Exchange. All the Common Shares carry one vote each and there are no restrictions on transfer.
3.2 The Subscription Shares, Capitalisation Shares and the Admission Shares (whose ISIN is CA98936C1068) will be listed on the Official List and will be traded on the main market of the London Stock Exchange. The Subscription Shares and Capitalisation Shares will also be admitted to trading on Euronext Growth Oslo. Save for the forgoing, the Common Shares are not listed or traded on, and no application has been or is being made for the admission of the Common Shares to listing or trading on any other stock exchange or securities market.
3.3 During the period of the historical financial information, there have been the following changes in the issued and authorised share capital of the Company:
I. On April 2, 2019, the Group announced that it had completed two offerings with a consortium of private and institutional investors and raised an aggregate total amount of approximately £1,020k (approximately CAD$1,794k).

Canadian Financing

Zenith issued a total of 20,000,000 common shares of no�par value in the capital of the Group (“ Common Shares ”) at a price of CAD$0.05 in connection with the Canadian Financing to raise gross proceeds of CAD$1,000k (approximately £570k). The Company also paid related Issue costs for CAD$40k.

UK Financing

Zenith issued a total of 17,647,059 Common Shares of no�par value in the capital of the Group at a price of £0.0255 (approximately CAD$0.045) in connection with the UK Financing and raised gross proceeds of £450k (approximately CAD$794k). The Company also paid related Issue costs for CAD$63k.

II. On May 3, 2019 the Group announced that it had completed a placing of new common shares of no�par value in the capital of the Group (“ Common Shares ”) in the United Kingdom (the “ Financing ”).

Zenith issued a total of 14,334,602 Common Shares at a price of £0.028 (approximately CAD$0.049) in connection with the Financing to raise gross proceeds of £401k (approximately CAD$702k). The Company also paid related Issue costs for CAD$42k.

III. On July 3, 2019, the Chief Executive Officer & President of the Company, Mr. Andrea Cattaneo exercised stock options to acquire 622,407 common shares of no�par value in the capital of the Company, at an exercise price of CAD$0.12 per New Share.
IV. On July 4, 2019 the Chief Executive Officer & President of the Company, Mr. Andrea Cattaneo, exercised stock options to acquire 688,797 common shares of no�par value in the capital of the Company, at an exercise price of CAD$0.12 per New Share.
V. On August 2, 2019, the Company completed a placing in Canada issuing a total of 47,812,500 Common Shares, at a price of CAD$0.04 per unit, consisting of one common share of no par value in the capital of the Company (“ Common Shares ”) and one full common share purchase warrant (“ Warrants ”), exercisable within 12 months at an exercise price of CAD$0.10, raising gross proceeds of CAD$1,912,500 (approximately £1,195,000 or NOK 12,856,000). The Company paid Issue costs for CAD$34k.
VI. On September 17, 2019 the Company has agreed to issue 6,589,678 common shares at an average price of CAD$0.05 per common share, to settle debts of CAD$303k owed by the Company.

VII. On October 24, 2019, the Company announced that It had 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. A total of 11,421,402 Conversion Shares, equivalent to a total amount of US$340,000, were issued.
VIII. On November 1, 2019, the Company announced the fully closing of the private placing on Euronext Growth Oslo. The aggregate number of common shares issued as part of the private placement was 37,000,000 and the private placement was completed at a subscription price of NOK 0.35 per share (£0.03 or CAD$0.02). The Company also paid Issue costs for CAD$97k.
IX. On December 17, 2019, the Company announced a Private Placement on Euronext Growth Oslo. The Company has successfully raised gross proceeds of NOK 7,700,000 (approximately £638,000 or CAD$1,123,430) to subscribe for 35,000,000 common shares of no�par value in the capital of the Company (“New Common Shares”) at a price of NOK 0.22 per New Common Share (approximately £0.02 or CAD$0.03).
X. On January 29, 2020, the Company successfully raised gross proceeds of NOK 11,105,882 (approximately £935,000 or CAD$1,610,000) to subscribe for 55,529,412 common shares of no�par value in the capital of the Company at a price of NOK 0.20 per New Common Share (approximately £0.02 or CAD$0.03).
XI. On February 14, 2020, the Company completed an offering in the United Kingdom with a significant existing institutional shareholder, as well as a selection of high net�worth private investors, to issue 9,000,000 new common shares in the capital of the company to raise gross proceeds of £135,000 (approximately CAD$232,000). The issue price of the UK Financing is £0.015, representing a premium of 5.26% over the closing mid�market price of Zenith’s common shares admitted to trading on the London Stock Exchange on February 13, 2020.
XII. On February 14, 2020, the Company announced that it has entered into an equity sharing agreement, with a consortium of institutional investors, for a total amount of NOK 9,700,000 (approximately £810,000 or US$1,051,000), by a subscription for 50,000,000 new common shares, an issue price of NOK 0.194 per share, (approximately £0.02 or CAD$0.03).
XIII. On February 17, 2020, the Company issued 11,000,000 new common shares in Norway at a price of NOK 0.18. to raise gross proceeds of NOK 1,980,000 (approximately CAD$284,000 or £165,000).
3.4 During the period from 1 April 2020 to the date of this Document, there have been the following changes in the issued and authorised share capital of the Company:
I. On April 8, 2020, the Company completed an offering in the United Kingdom, and an offering in Norway (the “ Financings ”). Zenith raised an aggregate total amount of approximately £525k or NOK 6,750k or CAD$921k, issuing 75,000,000 new Common shares at a price of £0.007 (0.7 pence), CAD$0.012 or NOK 0.09.
II. On April 30, 2020, the Company announced the issue of 60,000,000 new common shares, raising gross proceeds of approximately £540k or NOK 6,600k or CAD$900k (the “ Private Placement ”). The issue price of the new common shares issued under the Private Placement is £0.009 (0.90 pence), NOK0.11 or CAD$0.015.
III. On June 9, 2020, the Company announced that it had completed a private placement in Norway, to raise an aggregate total amount of approximately NOK 7,600k (approximately £645k or CAD$1,098k), issuing a total of 80,000,000 common shares of no�par value in the capital of the Company at an issue price of NOK 0.095, equivalent to approximately £0.008 (0.8 pence) or CAD$0.013.
IV. On July 10, 2020, the Company announced that it has completed a private placement in Norway, to raise an aggregate total amount of approximately NOK 3,120k (approximately £260k or CAD$449k), issuing a total of 60,000,000 common shares of no�par value in the capital of the Company at an issue price of NOK 0.08, equivalent to approximately £0.007 (0.7 pence) or CAD$0.012 per share.

V. On August 6, 2020, the Company announced that it has completed a private placement in Norway, to raise an aggregate total amount of approximately NOK 7,200k (approximately £604k or CAD$1,060k). The issue price of the Financing was NOK 0.08 per common share of no�par value in the capital of the Company (“ Common Shares ”), equivalent to approximately £0.007 (0.7 pence) or CAD$0.012.

Zenith has issued a total of 90,000,000 new Common Share units (“ Units ”). Each Unit comprises 1 Common Share and half a warrant. The Company therefore issued 90,000,000 new Common Shares in connection with the Financing and 45,000,000 Common Share purchase warrants (the “Warrants”) exercisable within 12 months at an exercise price of NOK 0.15 (approximately CAD$0.022).

VI. On September 25, 2020, the Company announced that it has completed a private placement in Norway, to raise an aggregate total amount of approximately NOK 4,520k (approximately £409k or CAD$ 635k), issuing a total of 100,000,000 common shares of no�par value in the capital of the Company at an issue price of NOK 0.045, equivalent to approximately £0.004 (0.4 pence) or CAD$0.01 per share.
VII. On January 6, 2021, the Company announced that an investor in the Company had exercised warrants to acquire a total of 28,571,429 new common shares of no par value (the “Common Shares”) in the capital of the Company with an exercise price of NOK 0.15 (equivalent to approximately £0.013) for a total consideration of NOK 4,285k NOK (approximately £371k or CAD$641k).
VIII. On February 24, 2021, Zenith issued a total of 1,816,410 new common shares (“Debt Settlement Shares”) at a price of NOK 0.145 (equivalent to approximately £0.0124) to settle an amount owed by the Company to a creditor wishing to be paid in equity.
IX. On March 19, 2021, an investor in the Company exercised warrants to acquire a total of 16,428,571 new common shares of no par value the capital of the Company with an exercise price of NOK 0.15 (equivalent to approximately £0.013) for a total consideration of 2,464,286 NOK (approximately £209,600
X. On March 22, 2021, the Company announced that it had completed a private placement in Norway, to raise an aggregate total amount of approximately NOK 8,6250k (approximately £725k or EUR 846k), issuing a total of 75,000,000 common shares of no�par value in the capital of the Company at an issue price of NOK 0.115, equivalent to approximately £0.01 (1 pence) or CAD$0.02 per share.
XI. On April 30, 2021, The Company announced that an investor in the Company had exercised warrants to acquire a total of 45,000,000 new common shares of no par value (the “ Warrant Shares ”) in the capital of the Company with an exercise price of NOK 0.12 (approximately £0.01) for a total consideration of 5,400,000 NOK (approximately £450,000)
XII. On May 10, 2021, the Company announced that it had secured Norwegian institutional investment in Zenith by way of a private placement in Norway which has also attracted the participation of a high�net�worth private investor (the “ Private Placement ”).

The Private Placement has resulted in the issuance of 60 million new common shares in the share capital of the Company, at ac subscription price of the Placement Shares was NOK 0.10 (equivalent to approximately £0.087) (the “ Private Placement Shares ”), for a total consideration of NOK 6,000,000 (approximately £522,000 or EUR 600,000).

In connection with this private placement the Company issued 60,000,000 share purchase warrants, of which 45 million warrants with an exercise price of NOK 0.25 expiring on 01/07/20222 and 15,000,000 warrants with an exercise price of NOK 0.325 expiring on 07/07/2023.

XIII. On May 26, 2021, Zenith announced that it had entered into a loan agreement with Winance, a Dubai registered single�family office (the “ Lender ”), for a total amount of EUR 2.1 million (approximately £1.8 million or approximately NOK 21.4 million) (the “ Loan Agreement ”).

100,000,000 new common shares of no par value (the “ Reserve Shares ”) have been issued to the Lender to be held in a depositary institution designated by the Lender.

The Company has also issued a total of 8,400,000 new common shares at a price of NOK 0.10 (equivalent to approximately £0.085) to be held in Treasury (the “ Treasury Shares ”).

XIV. On July 29, 2021, the Company announced that it had concluded a debt settlement agreement (the “Debt Settlement”) in respect of the drawdown of EUR 500,000 (approximately £426k or CAD$742k) (the “Credit Facility”) made following the signing of a revolving line of credit agreement with a financial institution announced on February 24, 2021.

The Company has issued a total of 30,422,319 new common shares at a price of NOK 0.1725 (equivalent to approximately £0.01412 or CAD$0.025) to settle the Credit Facility in full.

4 Outstanding Warrants

As of September 30, 2021 the Group had 382,123,972 (2020 – 52,851,484) warrants outstanding relating to 382,123,972 shares and exercisable at a weighted average exercise price of CAD$0.03 per share with a weighted average life remaining of 0.93 years.

The fair value of the warrants was calculated using the Black�Scholes pricing model calculations based on the following significant assumptions:

Risk�free interest rate 0.50% – 0.70% Expected volatility 75�100% Expected life 2 years Dividends Nil

During the six�month period to September 30, 2021, the Company issued 250,646,238 warrants (2020 – 45,000,000), 450,000,000 warrants were exercised (2020 – Nil) and 1,373,750 (2020 – 47,812,500) warrants expired.

The issue of 250,646,238 warrants (2020 – 45,000,000) during the six months ended 30 September 2020, originated a fair value amount of CAD$892k (2019 – CAD$48k) that was debited as share�based payment, non�cash item cost, in the P&L.

The expiry of 45,000,000 (2020 – 47,812,500) warrants during the year was recognised in the contributed surplus amount of Equity section.

Type Grant Date	Number of Price per Expiry Warrants unit CAD$ Date
Warrants April�18 Warrants June�19 Warrants October�19 Warrants August 20 Total warrants at 30 September 2020 Warrants Oct�19 Warrants Feb�21 Warrants Feb�21 Warrants Apr�21 Warrants May�21 Warrants May�21 Warrants May�21 Warrants Jul�21 Warrants Jul�21 Total warrants at 30 September 2021	93,750 0.40 May�21 1,280,000 0.07 June�21 6,477,734 0.06 October�22 45,000,000 0.022 August 21 52,851,484 6,477,734 $0.06 Oct�22 85,000,000 $0.03 Feb�22 85,000,000 $0.04 Feb�22 13,593,113 $0.02 Apr�24 34,284,000 $0.04 Jul�22 25,716,000 $0.05 Jul�22 89,053,125 $0.02 May�23 20,000,000 $0.02 Jul�23 23,000,000 $0.03 Jul�23 382,123,972

5 Loans

5.1 Euro 220,000 GBM Banca of Rome Loan

On August 6, 2015, the Group obtained a €220k loan (CAD$349k) from the GBM Banca of Rome. The loan is unsecured, bears fixed interest at 7% per annum and is repayable in 60 monthly payments of principal and interest until August 6, 2020.

This loan has been repaid in full.

5.2 Convertible loan USD 1,500,000

On 5 September 2018, the Company entered into a US$1,500,000 unsecured convertible loan facility, with YA II PN Ltd and Riverfort Global Opportunities PCC Ltd with a term of 18 months starting from August 30, 2018. Zenith shall pay interest on the outstanding amount of the convertible loans at the rate of 0% per annum. The Facility includes an initial immediate advance of US$1,300,000 and a further advance of US$200,000, to be provided at a later time and only at the discretion of the Lenders.

On January 7, 2019, the Company successfully renegotiated the terms of this unsecured Convertible Loan Facility, that now is also repaid in cash.

On September 17, 2019, a Conversion was made for a total of 5,343,774 common shares (the “Conversion Shares”) at a price of £0.021 per Conversion Share equivalent to a total amount of US$140,000.

As announced on April 23, 2021, the Company extended the maturity date for this loan that, now is repayable at the end of the year 2021 and following recent repayments, the current liability in relation to the Facility stands at US$0.5 million.

5.3 Convertible loan up to GBP 1,000,000

On January 7, 2019, the Company entered into a new unsecured convertible loan facility with Charles Street Securities Europe LLP, for an aggregate total amount of up to £1 million with a consortium of lenders. The loan facility had a term of 24 months, and the Company pays interest on the outstanding amount of the loan facility at the rate of 8% per annum. The loan facility was repayable on January 15, 2021. On January 2021, the loan repayment terms were amended and now the loan is repayable on January 15, 2022, and the Company repaid the 50% of the outstanding principal amount for £323,747 (approximately CAD$ 562,000). With certain limitations, the Convertible Loan Notes (“CLNs”) is convertible into Common Shares of the Company. To date, the current liability in relation to the Facility stands at £323,747 (approximately CAD$ 562,000).

5.4 Summary of the Notice of Articles and Articles of the Company

The following summarizes certain provisions in respect of the amended and restated articles of the Company (together with the Notice of Articles of the Company, the “Articles”). This summary of the Articles does not purport to be complete and is subject to and is qualified in its entirety by the Articles.

5.5 Restrictions on objects/business

The Articles contain no restrictions on the Company’s principal objects or the type of business that may be carried out by the Company.

5.6 Shares

The Company is authorized to issue an unlimited number of common shares and preferred shares (issuable in series), having attached thereto the rights, privileges, restrictions hereinafter set forth.

The authorized share structure of the Company consists of shares of the class and series, if any, described in the Notice of Articles of the Company.

Each share certificate issued by the Company must comply with, and be signed as required by, the Business Corporations Act (British Columbia).

5.7 Articles

The rights attaching to the Common Shares, as set out in the Articles, contain, amongst others, the following provisions:

(a) Rights of Shareholders
(i) The holders of Common Shares shall be entitled to receive notice of, and to vote at every meeting of the shareholders of the Company and shall have one (1) vote thereat for each such Common Share so held.
(ii) Subject to the rights, privileges, restrictions and conditions attached to any preferred shares of the Company, the holders of Common Shares shall be entitled to receive such dividends as the Directors may from time to time, by resolution declare.
(iii) Subject to the rights, privileges, restrictions and conditions attached to any preferred shares of the Company, in the event of liquidation, dissolution or winding up of the Company or upon any distribution of the assets of the Company among shareholders being made (other than by way of dividend out of the monies properly applicable to the payment of dividends) the holders of Common Shares shall be entitled to share pro rata .
(b) Variation of rights

Subject to the Business Corporation Act, the Company may by special resolution:

(i) create special rights or restrictions for, and attach those special rights or restrictions to, the shares of any class or series of shares, whether or not any or all of those shares have been issued; or
(ii) vary or delete any special rights or restriction attached to the shares of any class or series of shares, whether or not any or all of those shares have been issued.
(c) Transfers of Common Shares

A transfer of a Common Share of the Company must not be registered unless:

(i) a duly signed instrument of transfer in respect of the share has been received by the Company;
(ii) if a share certificate has been issued by the Company in respect of the share to be transferred, that share certificate has been surrendered to the Company; and
(iii) if a non�transferable written acknowledgment of the shareholder’s right to obtain a share certificate has been issued by the Company in respect of the share to be transferred, that acknowledgment has been surrendered to the Company.

Other than described above, there are no provisions in the Company’s Articles limiting the transfer of the Common Shares.

(d) Payment of dividends

Subject to the Business Corporations Act (British Columbia), the Directors may from time to time declare and authorize payment of such dividends as they may deem advisable.

The Directors may set a date as the record date for the purpose of determining shareholder entitled to receive payment of a dividend. The record date must not precede the date on which the dividend is to be paid by more than two months. If no record date is set, the record date is 5 p.m. on the date on which the Directors pass the resolution declaring the dividend.

All dividends on shares of any class or series of shares must be declared and paid according to the number of such shares held.

No dividends bear interest against the Company.

Any dividend or other distribution payable in cash in respect of shares may be paid by cheque, made payable to the order of the person to whom is sent, and mailed to the address of the shareholder.

(e) Borrowing powers

The Company, if authorized by the Directors, may:

(i) borrow money in the manner and amount, on the security, from the sources and on the terms and conditions that they consider appropriate;
(ii) issue bonds, debentures and other debt obligations either outright or as security for any liability of obligation of the Company or any other person and at such discounts or premiums and on such other terms as they consider appropriate;
(iii) guarantee the repayment of money by any other person or the performance of any obligation of any other person; and
(iv) mortgage, charge, whether by way of specific or floating charge, grant a security interest in, or give other security on, the whole or any part of the present and future assets and undertaking of the Company.
(f) Directors
(i) Directors shall be elected by an ordinary resolution of Shareholders or approved by a resolution of the Directors.
(ii) The minimum number of Directors is three and there is no maximum number of Directors.
(iii) Each Director ceases to hold office prior to the election of Directors at an annual general meeting.
(iv) The Directors may, at any time, appoint a person to be a Director either to fill a vacancy or as an addition to the existing Directors. Where a person is appointed to fill a vacancy, or as an additional Director (provided that the number of additional Directors must not exceed one third of the number of Directors elected at the last annual general meeting), the term shall not exceed the term that remained when the person who has ceased to be a Director ceased to hold office.
(v) A Director may be removed from office:
- (A) with or without cause, by a special resolution of Shareholders passed at a meeting of Shareholders called for the purposes of removing the Director or for purposes including the removal of the Director; or
- (B) if a Director is no longer qualified to act.

(vi) No shareholding qualification is required by a Director.
(vii) The Directors may by resolution of the Directors appoint officers of the Company at such times as may be considered necessary or expedient.

(g)

Meetings of Shareholders

The Directors may call meetings of the Shareholders at such times and in such manner and at such places as they consider necessary or desirable, subject to the provisions of the Articles and the Business Corporations Act (British Columbia). In addition, the Directors will convene a meeting of Shareholders upon the written requisition of Shareholders entitled to exercise 5% or more of the issued shares that carry the right to vote at the meeting.

An annual general meeting of the Shareholders shall be called by at least 21 days’ notice.

The accidental omission to give notice of a meeting to a Shareholder or another Director, or the fact that a Shareholder or another Director has not received notice, does not invalidate the meeting. A Shareholder may be represented at a meeting of Shareholders by a proxy who may speak and vote on behalf of the Shareholder. The instrument appointing a proxy shall be produced at the place designated for the meeting before the time for holding the meeting at which the person named in such instrument proposes to vote. The notice of the meeting may specify an alternative or additional place or time at or by which the proxy shall be presented.

(h) Pre�emption rights of Shareholders

There are no provisions in the Articles that require new Common Shares to be issued on a pre� emptive basis to existing Shareholders.

6 Stock Option Plan

6.1 Background

The purpose of the Stock Option Plan is to provide an incentive to the directors, officers, employees, consultants and other personnel of the Company or any of its subsidiaries to achieve the longer�term objectives of the Company, to give suitable recognition to the ability and industry of such persons who contribute materially to the success of the Company and to attract and retain persons of experience and ability by providing them with the opportunity to acquire an increased proprietary interest in the Company.

6.2 Administration

The Directors are responsible for administering the Stock Option Plan and have full and final discretion to interpret its provisions and to prescribe, amend, rescind and waive the rules and regulations governing its administration and operation.

6.3 Eligibility

The Directors can designate those directors, officers, employees, consultants or other personnel of the Company or its subsidiaries who are granted Options (“Optionholders”) pursuant to the Stock Option Plan. Subject to the policies (the “Exchange Policies”) of the TSXV or any other stock exchange on which the Common Shares are listed (the “Exchange”) and certain other limitations, the Directors are authorized to provide for the grant and exercise of Options on such terms (which may vary as between Options) as they shall determine. No Option may be granted to any person except upon recommendation of the Board.

6.4 Participation

Participation in the Stock Option Plan is entirely voluntary and any decision not to participate shall not affect an individual’s relationship or employment with the Company. The granting of an Option pursuant to the Stock Option Plan shall in no way be construed as conferring on any Optionholder any right with respect to continuance as a director, officer, employee or consultant of the Company or any of its subsidiaries. Options are not affected by any change of employment of the Optionholder or by the Optionholder ceasing to be a director, officer or a consultant of the Company or any of its subsidiaries where the Optionholder at the same time becomes or continues to be a director, officer, full�time employee or consultant of the Company or any of its subsidiaries.

6.5 Shares subject to Options

The number of authorized but unissued Common Shares that may be issued upon the exercise of Options granted under the Stock Option Plan at any time plus the number of Common Shares reserved for issuance under outstanding incentive stock options otherwise granted by the Company shall not exceed 10% of the issued and outstanding Common Shares as at the closing of the initial public offering of the Common Shares on the TSXV.

In addition, unless the Company receives the permission of the stock exchange or exchanges on which the Common Shares are listed to exceed such threshold, the Options granted under the Stock Option Plan together with all of the Company’s other previously established stock option plans or grants, must not result at any time in:

(a) the number of Common Shares reserved for issuance pursuant to Options granted to insiders (as defined in the Exchange Policies) exceeding 10% of the issued and outstanding Common Shares;
(b) the grant to insiders (as defined in the Exchange Policies) within a 12�month period, of a number of Options exceeding 10% of the outstanding Common Shares; or
(c) the grant to any one Optionholder within a 12�month period, of a number of Options exceeding 5% of the issued and outstanding Common Shares.

6.6 Option price and exercise price

Subject to prior termination under the Stock Option Plan, each Option and all rights thereunder expire on the date set out in the stock option agreement entered into between the Company and each Optionholder, which shall be the date of expiry of the period determined by the Board of Directors during which the Optionholder may exercise the Option (the “Option Period”). The Option Period cannot exceed a period of 5 years from the date the relevant Option is granted unless the Company receives the permission of the stock exchange or exchanges on which the Common Shares are then listed, and, in any event, no Option can be exercisable for a period exceeding 10 years from the date it is granted.

Subject to Exchange Policies and any limitations imposed by any relevant regulatory authority, the exercise price of an Option granted under the Stock Option Plan shall be as determined by the Board of Directors when such Option is granted and shall be an amount at least equal to the last per share closing price for the Common Shares on the Exchange before the date of grant of the Option (less any applicable discount under the Exchange Policies).

6.7 Exercise of Options

Subject to Exchange Policies, the Board of Directors may, in its sole discretion, determine the time during which an Option shall vest and the method of vesting, or that no vesting restriction shall exist.

Subject to any vesting limitations which may be imposed by the Directors at the time of grant of an Option, an Optionholder is generally entitled to exercise an Option granted to him at any time prior to the expiry of the Option Period. If an Optionholder ceases to be a director, officer, employee or consultant of the Company or its subsidiaries for any reason other than death, the Optionholder may within 90 days or prior to the expiry of the Option Period, whichever is earlier, exercise any Option held. If an Optionholder dies, the Option previously granted to him is exercisable within one year following the date of the death or prior to the expiry of the Option Period, whichever is earlier, by the person or persons to whom the Optionholder’s rights under the Option pass.

6.8 Anti�dilution

On certain variations to the share capital of the Company, the number of Common Shares comprised in existing Options may be adjusted so as to avoid the dilution of such Options.

6.9 Transferability of Options

No right or interest of any Optionholder under the Stock Option Plan is assignable or transferable.

6.10 Options granted to the Directors and Senior Managers

As at September 21, 2021, (being the latest practicable date prior to publication of this Document) the outstanding Options that have been granted to the Directors and Senior Managers or any member of their immediate families (“Connected Persons”), are as follows:

*Options granted to the Directors and Senior Managers* As at September 21, 2021, (being the latest practicable date prior to publication of this Document) the outstanding Options that have been granted to the Directors and Senior Managers or any member of their immediate families (“Connected Persons”), are as follows:	*Options granted to the Directors and Senior Managers* As at September 21, 2021, (being the latest practicable date prior to publication of this Document) the outstanding Options that have been granted to the Directors and Senior Managers or any member of their immediate families (“Connected Persons”), are as follows:
Number of Exercise options over price Name Date of grant Common shares CAD$ Expiry date
Sodero Dario 18 November 2016 Lopez�Portillo Jose Ramon 18 November 2016 Lopez�Portillo Jose Ramon 5 April 2018 Sodero Dario 5 April 2018 Borovskiy Sergey 5 April 2018 Benedetto Luca 5 April 2018 Cattaneo Andrea 5 April 2018 Sodero Dario 30 December 2020 Lopez�Portillo Jose Ramon 30 December 2020 Borovskiy Sergey 30 December 2020 Benedetto Luca 30 December 2020 Cattaneo Andrea 30 December 2020 Ippolito Cattaneo 30 December 2020 Sodero Dario 18 January 2021 Lopez�Portillo Jose Ramon 18 January 2021 Borovskiy Sergey 18 January 2021 Benedetto Luca 18 January 2021 Cattaneo Andrea 18 January 2021 Ippolito Cattaneo 18 January 2021 Cattaneo Andrea 13 May 2021 Ippolito Cattaneo 13 May 2021 Benedetto Luca 13 May 2021 Cattaneo Andrea 06 September 2021 Ippolito Cattaneo 06 September 2021 Benedetto Luca 06 September 2021 TOTAL	500,000 $ 0.10 18 November 2021 600,000 $ 0.10 18 November 2021 244,286 $ 0.12 5 April 2023 203,571 $ 0.12 5 April 2023 703,571 $ 0.12 5 April 2023 1,312,858 $ 0.12 5 April 2023 3,910,225 $ 0.12 5 April 2023 4,285,714 $ 0.03 30 December 2025 4,285,714 $ 0.03 30 December 2025 4,285,714 $ 0.03 30 December 2025 4,285,714 $ 0.03 30 December 2025 20,000,002 $ 0.03 30 December 2025 4,285,714 $ 0.03 30 December 2025 5,449,773 $ 0.03 18 January 2026 5,449,773 $ 0.03 18 January 2026 5,449,773 $ 0.03 18 January 2026 5,449,773 $ 0.03 18 January 2026 18,165,910 $ 0.03 18 January 2026 5,449,773 $ 0.03 18 January 2026 19,542,645 $ 0.02 13 May 2026 6,514,215 $ 0.02 13 May 2026 6,514,215 $ 0.02 13 May 2026 8,329,340 $ 0.02 06 September 2026 2,776,446 $ 0.02 06 September 2026 2,776,446 $ 0.02 06 September 2026 140,771,165

Options granted to the Directors and Senior Managers
As at September 21, 2021, (being the latest practicable date prior to publication of this Document)
the outstanding Options that have been granted to the Directors and Senior Managers or any member
of their immediate families (“Connected Persons”), are as follows:

Number of
Exercise
options over
price
Name
Date of grant
Common shares
CAD$
Expiry date

Sodero Dario
18 November 2016
Lopez�Portillo Jose Ramon
18 November 2016
Lopez�Portillo Jose Ramon
5 April 2018
Sodero Dario
5 April 2018
Borovskiy Sergey
5 April 2018
Benedetto Luca
5 April 2018
Cattaneo Andrea
5 April 2018
Sodero Dario
30 December 2020
Lopez�Portillo Jose Ramon
30 December 2020
Borovskiy Sergey
30 December 2020
Benedetto Luca
30 December 2020
Cattaneo Andrea
30 December 2020
Ippolito Cattaneo
30 December 2020
Sodero Dario
18 January 2021
Lopez�Portillo Jose Ramon
18 January 2021
Borovskiy Sergey
18 January 2021
Benedetto Luca
18 January 2021
Cattaneo Andrea
18 January 2021
Ippolito Cattaneo
18 January 2021
Cattaneo Andrea
13 May 2021
Ippolito Cattaneo
13 May 2021
Benedetto Luca
13 May 2021
Cattaneo Andrea
06 September 2021
Ippolito Cattaneo
06 September 2021
Benedetto Luca
06 September 2021
TOTAL

500,000
$ 0.10
18 November 2021
600,000
$ 0.10
18 November 2021
244,286
$ 0.12
5 April 2023
203,571
$ 0.12
5 April 2023
703,571
$ 0.12
5 April 2023
1,312,858
$ 0.12
5 April 2023
3,910,225
$ 0.12
5 April 2023
4,285,714
$ 0.03
30 December 2025
4,285,714
$ 0.03
30 December 2025
4,285,714
$ 0.03
30 December 2025
4,285,714
$ 0.03
30 December 2025
20,000,002
$ 0.03
30 December 2025
4,285,714
$ 0.03
30 December 2025
5,449,773
$ 0.03
18 January 2026
5,449,773
$ 0.03
18 January 2026
5,449,773
$ 0.03
18 January 2026
5,449,773
$ 0.03
18 January 2026
18,165,910
$ 0.03
18 January 2026
5,449,773
$ 0.03
18 January 2026
19,542,645
$ 0.02
13 May 2026
6,514,215
$ 0.02
13 May 2026
6,514,215
$ 0.02
13 May 2026
8,329,340
$ 0.02
06 September 2026
2,776,446
$ 0.02
06 September 2026
2,776,446
$ 0.02
06 September 2026
140,771,165

7 Financial assistance to purchase Common Shares of the Company or its holding company

The Company may give financial assistance to any person in connection with the acquisition of its own Common Shares, subject to applicable law.

8 Purchase of Common Shares

A company may, subject to applicable law and its articles, purchase, redeem or otherwise acquire and hold its own shares in the manner provided for under its articles.

Subject to any limitations in the memorandum or articles, shares that a company purchases, redeems or otherwise acquires may be cancelled or retained.

A company is not prohibited from purchasing and may purchase its own warrants subject to applicable laws and in accordance with the terms and conditions of the relevant warrant instrument or certificate. There is no requirement under British Columbia law that a company’s articles contain a specific provision enabling such purchases and the directors of a company may rely upon the general power contained in its articles.

9 Protection of minorities

The Business Corporations Act (British Columbia) provides certain statutory remedies to Shareholders including derivative actions, personal actions and representative actions. The courts may consider claims by shareholders alleging that a company has acted in a manner aggressive or unfairly prejudicial to a shareholder.

The Business Corporations Act (British Columbia) further provides that any shareholder of a company is entitled to payment of the fair value of his shares upon dissenting from any of the following:

(a) certain amendments to the articles of the Company;
(b) a merger, if the company is a constituent company, unless the company is the surviving company and the shareholder continues to hold the same or similar class of shares;
(c) an amalgamation, other than in the case of certain wholly�owned companies;
(d) any sale, transfer, lease or other disposition of all or substantially all of the Company’s undertaking other than in the orderly course of business;
(e) a continuation to a jurisdiction other than British Columbia; or
(f) an arrangement, if permitted by the court.

Generally, any other claims against a company by its shareholders must be based on the general laws of contract or tort applicable in the British Columbia.

Amalgamations and arrangements generally require the approval of two thirds of the votes entitled to vote and voted at a meeting to approve the transaction.

Any sale, transfer, lease or other disposition of all or substantially all of the undertaking of the company other than in the ordinary course of business, requires the approval of two thirds of the votes entitled to vote and voted at a meeting to approve the transaction.

Shareholders dissenting from the proposal to dispose of 50% or more of the assets or from any arrangement (which may cover other types of reorganization or reconstruction of a company) are entitled to require the company to pay the fair value of their shares, in accordance with the procedures and conditions laid down by the Business Corporations Act (British Columbia).

In addition, the Company is subject to Multilateral Instrument 61�101 Protection of Minority Security Holders in Special Transactions, that regulates transactions such as “insider bids”, “issuer bids,” “business combinations” and “related party transactions” in order to ensure equal treatment of shareholders. Pursuant to the rule, certain transactions may be subject to valuation and shareholder voting requirements that are in addition to those imposed by the Business Corporations Act (British Columbia) and the rules of the TSXV.

10 Management

The Company is managed by its Directors, consisting of not less than three directors. Directors are required under the Business Corporations Act (British Columbia) to act honestly and in good faith with a view to the best interests of the company, and to exercise the care, diligence and skill that a reasonably prudent individual would exercise in comparable circumstances. As outlined above, certain actions require prior approval of the Shareholders, as a matter of statute. While the Company may provide certain indemnity for its Directors, the Business Corporations Act (British Columbia) precludes the Directors from taking advantage of such indemnities unless they act honestly and in good faith and in what they believed to be in the best interests of the Company, and in the case of criminal proceedings, where the Director had no reasonable cause to believe that his conduct was unlawful.

11 Inspection of corporate records

Shareholders are entitled to inspect the Articles, the register of directors and other documents listed in the Business Corporation Act at the records office.

12 Winding up

The Business Corporations Act (British Columbia) makes provision for both voluntary and compulsory winding up of a company. The shareholders may resolve to appoint a voluntary liquidator.

13 Takeovers

The Business Corporations Act (British Columbia) and Canadian securities legislation govern takeover bids for Canadian companies incorporated in the Province of British Columbia. A takeover bid is generally defined as an offer to acquire outstanding voting or equity securities of a class, made to any holder in the local jurisdiction of the securities, if such securities, together with the securities held by the offeror and any person acting jointly or in concert with the offeror would constitute 20% or more of the outstanding securities of that class, in the aggregate, at the date of the offer. A takeover bid must be made to all holders of securities of the class subject to the bid who are in the local jurisdiction (with limited exceptions) and must allow those holders at least 105 days to deposit securities pursuant to the bid. Notwithstanding the foregoing, the Canadian Securities Administrators have adopted a policy permitting them to issue a cease trade order in the event the takeover offer is not made to all Canadian security holders.

The availability of a takeover bid to shareholders residing outside Canada will be dependent on whether such takeover bid may be made to such non�Canadian shareholders pursuant to applicable legislation of the jurisdiction in which the non�Canadian shareholders resides and the actions of the offeror.

A takeover bid circular will be delivered to the security holders by the offeror detailing the terms of the bid. The directors of the reporting issuer (in this case, the Company) would then be required to deliver a directors’ circular within 15 days of the date of the bid. The directors’ circular would set out the Board’s recommendation to accept or reject the bid, including reasons therefor or a statement that the Board is unable to comment and providing reasons in support of that position.

The Business Corporations Act (British Columbia) permits an acquiror who has been successful in acquiring 90% of the shares of a company (excluding those shares already held by the acquiror), to, within four months of making the offer to acquire such shares, send written notice to any shareholder who did not accept the offer, compelling them to sell their shares on the same terms as contained in the original offer. The tendering obligation is subject to the right of the shareholder to make application to the court, which may set the terms of the transaction and make any other consequential orders it deems fit. There is no reciprocal mechanism under Canadian law permitting a shareholder who refuses the original offer to compel the acquiror to acquire its shares on the terms of the original offer.

Significant amendments to the takeover bid regime in Canada came into force on 9 May 2016. Among other things the amendments:

(a) have a mandatory tender condition that a minimum of more than 50% of all outstanding securities of the class subject to the bid be tendered and not withdrawn before the bidder can take up any securities under the bid (the “New Mandatory Minimum Tender Condition”);
(b) the bid must be extended by the bidder for at least 10 days once the New Mandatory Minimum Tender Condition has been satisfied and all other terms and conditions of the bid have been complied with or waived; and
(c) the bid must remain open for a minimum deposit period of 105 days. A target company will be allowed to reduce the deposit period to not less than 35 days in certain circumstances and subject to certain conditions.

14 Disclosure of Interests in Common Shares

The Company is a reporting issuer in Canada and is subject to Canadian securities laws. Pursuant to such laws, when a person (an “Acquiror”) acquires beneficial ownership of, or the power to exercise control or direction over, or securities convertible into, voting or equity securities of any class of a reporting issuer (such as the Company) that, together with such Acquiror’s securities would constitute 10% or more of the outstanding securities of that class, the Acquiror must immediately issue and file a press release announcing the acquisition and file a report of the acquisition with the applicable securities regulatory authority within two business days thereafter. Certain institutional investors may elect an alternate reporting system. The Acquiror has a continuing obligation to disclose each further acquisition or disposition of a beneficial ownership of, the power to exercise direction or control over, or securities convertible into an additional 2% or more of the outstanding securities of the applicable class.

The Company is required by Form 51�102F5 of National Instrument 51�102 – Continuous Disclosure Obligations, to disclose in its information circulars whether, to the knowledge of the Company’s Directors or executive officers, any person or company beneficially owns, or controls or directs, directly or indirectly, voting securities carrying 10% or more of the voting rights attached to any class of voting securities of the Company.

15 Directorships and partnerships

In addition to their respective roles and directorships at the Company and its subsidiaries, the Directors have been, members of the administrative, management or supervisory bodies (the “directorships”) or partners of the following companies or partnerships, at any time in the five years prior to the date of this Document.

Name	Current directorships/partnerships	Previous directorships/partnerships
Jose Ramon Lopez�Portillo	Hybridair Ltd	—
	World SkyCat Ltd
Luca Benedetto	—	—
Andrea Cattaneo	—	Belpeso Ltd.
Dario Ezio Sodero	Planaval Resources Ltd	Cygam Energy Inc.
		Rockbridge Resources Inc
Sergey Borovskiy	ITI Capital Asia	Sanju Hong Kong
	Kaisun Holdings	PetroChemical Solution
	General Transactions Inc.
	National Agency for Direct Investment (NAPI).
	South China Heavy Industries Group

16 Directors’ confirmations

16.1 Save as set out below and as at the date of this Document, none of the Directors have, at any time within the last five years:
(a) had any convictions in relation to fraudulent offences;
(b) been associated with any bankruptcy, receivership or liquidation while acting in the capacity of a member of the administrative, management or supervisory body or senior management of any company or other entity;
(c) been subject to any official public incrimination and/or sanctions by any statutory or regulatory authorities (including any designated professional bodies); or
(d) ever been disqualified by a court from acting as a director of a company or from acting as a member of the administrative, management or supervisory bodies of an issuer or from acting in the management or conduct of the affairs of any issuer.

Andrea Cattaneo was appointed as a director of PEX Plc on 20 December 1995, a company listed on the main market of the London Stock Exchange, manufacturing socks, holder of the brands Pex and Bridgedale. Following a severe deterioration of the market in which PEX Plc operated, on 5 November 1999 PEX Plc was placed into administration ultimately resulting in its insolvent liquidation.

16.2 Certain Directors of the Company are also directors of other oil and gas companies and as such may, in certain circumstances, have a conflict of interest requiring them to abstain from certain decisions. Conflicts, if any, will be subject to the procedures and remedies set out in the Articles and the Business Corporations Act (British Columbia). Save as set out below, as at the date of this Document there are no potential conflicts of interest between any duties owed by the Directors, the Proposed Director or the Senior Manager of the Company and their private interests or other duties:
(a) Dario Sodero is the is the President and sole director of Planaval Resources Ltd, an oil and gas company.

17 Directors’ and other interests

17.1 In addition to the Options and Warrants referred to in paragraphs 17.2 and 17.3 below, respectively, the interests (beneficial or non�beneficial) in the shares of the Company or any of its subsidiaries held by the Directors and their respective Connected Persons as at the date of this Document, as well as the anticipated interests of such persons immediately following Admission, are as follows:

Name	As at the date of this Document Percentage of issued Number of Common Shares Shares (%)	Immediately following the Subscription and the Admission
		Percentage of Enlarged Number of Common Shares Shares in issue
Jose Ramon Lopez�Portillo Andrea Cattaneo Dario E. Sodero(1) Sergey Borowskiy	48,000 0.01 61,484,115 4.46 77,500 0.01 3,849,289 0.28	48,000 0.01 61,484,115 4.46 77,500 0.01 3,849,289 0.28

Notes:

(1) The 77,500 Common Shares in which Dario Sodero has a beneficial interest are held by Planaval Resources Ltd., a company controlled by Mr Sodero. Mr Sodero owns 100% of the share capital of Planaval Resources Ltd.
17.2 As at May 31, 2021, (being the latest practicable date prior to publication of this Document) the Warrants held by the Directors and their respective Connected Persons, are as follows:

		Number
		of shares
		covered by	Exercise Price
	Grant date	the warrants	(CAD$)	Expiry Date
Andrea Cattaneo	—	—	—	—
Dario Sodero	—	—	—	—
Jose Ramon Lopez�Portillo	—	—	—	—
Sergey Borowskiy	—	—	—	—

17.3 As at the date of this Document, the Options set out in paragraph 6.10 above have been granted to the current Directors pursuant to the Stock Option Plan.

As at the date of this Document, the Options set out in paragraph 6.10 above have been granted to the current Directors pursuant to the Stock Option Plan.	As at the date of this Document, the Options set out in paragraph 6.10 above have been granted to the current Directors pursuant to the Stock Option Plan.
Number of Exercise options over price Name Date of grant Common shares CAD$ Expiry date
Sodero Dario 18 November 2016 Lopez�Portillo Jose Ramon 18 November 2016 Lopez�Portillo Jose Ramon 5 April 2018 Sodero Dario 5 April 2018 Borovskiy Sergey 5 April 2018 Benedetto Luca 5 April 2018 Cattaneo Andrea 5 April 2018 Sodero Dario 30 December 2020 Lopez�Portillo Jose Ramon 30 December 2020 Borovskiy Sergey 30 December 2020 Benedetto Luca 30 December 2020 Cattaneo Andrea 30 December 2020 Ippolito Cattaneo 30 December 2020 Sodero Dario 18 January 2021 Lopez�Portillo Jose Ramon 18 January 2021 Borovskiy Sergey 18 January 2021 Benedetto Luca 18 January 2021 Cattaneo Andrea 18 January 2021 Ippolito Cattaneo 18 January 2021 Cattaneo Andrea 13 May 2021 Ippolito Cattaneo 13 May 2021 Benedetto Luca 13 May 2021 TOTAL	500,000 $ 0.10 18 November 2021 600,000 $ 0.10 18 November 2021 244,286 $ 0.12 5 April 2023 203,571 $ 0.12 5 April 2023 703,571 $ 0.12 5 April 2023 1,312,858 $ 0.12 5 April 2023 3,910,225 $ 0.12 5 April 2023 4,285,714 $ 0.03 30 December 2025 4,285,714 $ 0.03 30 December 2025 4,285,714 $ 0.03 30 December 2025 4,285,714 $ 0.03 30 December 2025 20,000,002 $ 0.03 30 December 2025 4,285,714 $ 0.03 30 December 2025 5,449,773 $ 0.03 18 January 2026 5,449,773 $ 0.03 18 January 2026 5,449,773 $ 0.03 18 January 2026 5,449,773 $ 0.03 18 January 2026 18,165,910 $ 0.03 18 January 2026 5,449,773 $ 0.03 18 January 2026 19,542,645 $ 0.02 13 May 2026 6,514,215 $ 0.02 13 May 2026 6,514,215 $ 0.02 13 May 2026 126,888,933

As at the date of this Document, the Options set out in paragraph 6.10 above have been granted to
the current Directors pursuant to the Stock Option Plan.

Number of
Exercise
options over
price
Name
Date of grant
Common shares
CAD$
Expiry date

17.4 Save as disclosed in paragraphs 17.1, 17.2 and 17.3 above, no Director or their respective Connected Persons has, nor will they have immediately following Admission, any interest (whether beneficial or non�beneficial) in the share or loan capital of the Company or any of its subsidiary undertakings.
17.5 Under Canadian law, any person or company that has beneficial ownership of, or control or direction over, whether direct or indirect, or a combination of beneficial ownership of, and control or direction over, whether direct or indirect, securities of an issuer carrying more than 10% of the voting rights attached to all the issuer’s outstanding voting securities, including securities (issued and unissued) that the person or company is the beneficial owner of, which are convertible into voting securities within 60 days following that date, or has a right or obligation permitting or requiring the person or company, whether or not on conditions, to acquire beneficial ownership of the security within 60 days, by a single transaction or a series of linked transactions, is required to notify their holdings publicly. As at 31 March 2021 (being the latest practicable date before publication of this Document), in addition to the interests of the Directors, the Proposed Director and the Senior Manager and their respective Connected Persons disclosed in paragraphs 17.1, 17.2 and 17.3 above, the Company is not aware of any Shareholders that have a notifiable interest under Canadian law (“Major Shareholders”).
17.6 The Company is not aware of any Major Shareholders that intend to participate in the Subscription and the Directors and the Senior Managers have not made any applications in respect of the offer of Subscription Shares.
17.7 Immediately following Admission, as a result of the Subscription, the Directors expect that a number of persons will have an interest, directly or indirectly, in at least 3% of the voting rights attached to the Company’s issued Common Shares. Such persons will be required to notify such interests to the Company in accordance with the provisions of Chapter 5 of the Disclosure Guidance and Transparency Rules sourcebook, and such interests will be notified by the Company to the public.
17.8 As at May 31, 2021, (being the latest practicable date prior to the publication of this Document), the Company was not aware of any person or persons who, directly or indirectly, jointly or severally, exercise or could exercise control over the Company nor is it aware of any arrangements, the operation of which may at a subsequent date result in a change in control of the Company.
17.9 Those interested, directly or indirectly, in 3% or more of the issued Common Shares of the Company do not now and, following the Subscription and Admission, will not have, different voting rights from other holders of Common Shares.

18 Directors’ terms of employment

The Directors and their functions are set out in Part 11: “Directors, Senior Management and Corporate Governance”. The Directors are appointed at each annual general meeting of the Shareholders (each an “AGM”) and may also be appointed at a special meeting of shareholders if one of the purposes for which the meeting was called was the election of directors. Directors will hold office until the close of the next AGM or until a successor is duly elected or appointed or his or her office is earlier vacated in accordance with the Business Corporations Act (British Columbia) and the Articles of the Company.

The Directors’ may receive an annual retainer, meeting fees plus options (which options are set within the guidelines prescribed by the TSXV) and expense reimbursements. The Remuneration Committee is responsible for reviewing and recommending to the Board the retainer and fees to be paid to members of the Board.

A Director’s term of office is terminable in accordance with the provisions of the Business Corporations Act (British Columbia). Pursuant to the Business Corporations Act (British Columbia), a director will cease to hold office by reason of: (i) death or resignation; (ii) expiration of his or her term of office; or

(i) removal or disqualification in accordance with the provisions of the Business Corporations Act (British Columbia). A director may be removed from office if the shareholders of a corporation so vote by special resolution or otherwise as provided for in the Articles. A director may become disqualified if:
(ii) he is less than 18 years of age; (ii) is found by a court to be of unsound mind; (iii) is an undischarged bankrupt; or (iv) is convicted of an offense involving fraud. Further details of the terms of employment of each Director are set out below.

The Company has a Board that it believes has the expertise to identify, select and complete successful acquisitions and to manage the Group.

For the current financial year, the Directors will be entitled to receive a fee to be determined by the Remuneration Committee following Admission.

The Directors are subject to the Canadian common law fiduciary duty in respect of the Company which obliges them not to disclose the confidential information of the Company and to act honestly and in good faith, with a view to the best interests of the Company. Mr Lopez�Portillo, and Mr Sodero do not have a service contract with the Company or any other member of the Group. Details of the Directors are set out at paragraph 2.1 of Part 11 of the Prospectus.

19 Personnel

19.1 As at May 31, 2021, (being the latest practicable date prior to publication of this Document) the Company and its subsidiaries had 41 full time employees based in its offices in London in the UK, Point Noire (Republic of the Congo), Tunisia and Genoa in Italy.
19.2 The daily operations and maintenance of producing fields in Italy are managed, on behalf of Canoel Italia S.r.l., by a leading service company that employs more than 12 work units for the management of the wells. These numbers are not included in the roster of the Company’s employees.

20 Working Capital

The Company is of the opinion that, taking into account the Net Proceeds receivable by the Company, the Company will have sufficient working capital for its present requirements, that is for the next 12 months from the date of this Document.

21 Significant changes

Financial performance

There has been no significant change in the financial performance of the Group since 31 March 2021, being the end of the last financial period for which the annual financial information to have been published.

Financial Position

Save for the following changes, there has been no significant change in the financial position of the Group since 31 March 2021, being the end of the last financial period for which the annual financial information to have been published:

The Subscription to raise £3m announced on 2 November 2021 (and as set out in Part 10).
The issue of the Capitalisation Shares in settlement of liabilities of €1m and £90k (as set out in Part 10).
The Sale of Tunisian oil production for approximately US$4.5m announced on 8 July 2021.
The Loan for Tunisian Development of €2.1m announced on 26 May 2021.
The Placing of new Common Shares of NOK6m announced on 11 May 2021.

22 Litigation

There are no governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which the Group is aware) since the Company’s incorporation which may have, or have had in the recent past, significant effects on the financial position or profitability of the Group.

23 Dividends

The Company has never paid a dividend and currently has no plans to do so.

24 City Code

The City Code does not apply to the Company. There are no Canadian laws relating to the Common Shares and squeeze�out and/or sell�out rules, save as provided by the Business Corporations Act (British Columbia) and Canadian securities laws (as to which see the paragraph 14 of this Part 18).

25 Material contracts

The following are all of the contracts (not being contracts entered into in the ordinary course of business) that have been entered into by the Group which (i) are, or may be, material to the Group; or (ii) contain obligations or entitlements which are, or may be, material to the Group as at the date of this Document.

25.1 Share Purchase Agreement (“ SPA ”) with Anglo African Oil & Gas plc

On December 27, 2019, the Company announced that it had signed a conditional share purchase agreement (“ SPA ”) with AIM quoted Anglo African Oil & Gas plc (“ AAOG ”) for the acquisition of an 80 percent interest in AAOG’s fully owned subsidiary in the Republic of the Congo, Anglo African Oil & Gas Congo S.A.U (“ AAOG Congo ”) (“ Acquisition ”).

The SPA is conditional, inter alia , on the passing of an ordinary resolution of shareholders in AAOG in a General Meeting approving the Acquisition and certain regulatory requirements in the Republic of the Congo including consent of the Minister of Hydrocarbons (“ Completion ”).

This SPA was subject to modification, in the subsequent months and, on 5 May 2020, Zenith announced the successful completion of the acquisition from the AIM listed Anglo African Oil & Gas PLC of a 100 per cent interest in its fully owned subsidiary in the Republic of the Congo, AAOG Congo. The total consideration paid to Anglo African Oil & Gas PLC amounted to GBP 200,000.

The transfer of ownership of AAOG Congo is subject to a regulatory approval in the Republic of the Congo.

AAOG Congo held a 56 per cent majority interest in, and was the operator of the Tilapia oilfield in the Republic of the Congo (the “Congo License I”). The remaining 44 per cent were held by the national oil company, Société Nationale des Pétroles du Congo (“SNPC”). The Congo License I is located in the Lower Republic of the Congo Basin, West African Atlantic Margin, which extends from Gabon down to Angola, a prolific hydrocarbon region in which certain individual wells have recorded production rates of up to 5,000 barrels of oil per day. It is situated 1.8 kilometres offshore and entered into production in 2008. Having been drilled from onshore, there is no requirement for offshore drilling equipment. Oil storage and processing facilities are a 45�minute drive from Pointe Noire and 17 kilometres from the nearest refinery.

25.2 Agreement regarding the publication of a prospectus with Allenby Capital Limited
Pursuant to an agreement dated 23 July 2020 between the Company and Allenby Capital Limited, the Company engaged Allenby Capital Limited as the Company’s exclusive financial adviser in connection with the proposed publication of this Document.

In consideration for its services in relation to the appointment, Allenby Capital Limited will be paid: (i) 3 payments of £7,500, with the first payment to be paid on signing the engagement letter and the 2 further payments to be paid for each month for 2 months thereafter; and (ii) £52,500 on the approval of the prospectus by the FCA. The Company agreed to reimburse Allenby Capital Limited for all expenses incurred in connection with its services including Allenby Capital Limited’s legal fees and the Company will be liable for certain abortive fees if the engagement is terminated for a reason other than a material breach by Allenby Capital Limited.

This agreement was put on hold in December 2019 and recommenced with certain amendments on 1 August 2020, including two additional payments of £7,500 each based on progress with the Prospectus.

25.3 Transfer Agency and Registrarship Agreement

The Company entered into a transfer agency and registrarship agreement (the “Registrar Agreement”) with Olympia Trust Company (“Olympia”) on 5 March 2008. On 11 July 2014, the

Company consented to the assignment and transfer by Olympia to Computershare Trust Company of Canada (the “Registrar”) of all of the right, title and interest of Olympia in the Registrar Agreement. The formal assignment and transfer to the Registrar occurred on such date as was determined by the Registrar on or before 30 November 2014.

Pursuant to the Registrar Agreement, the Company appoints the Registrar to act as registrar and transfer agent to the Company, to keep, inter alia , the registers of holders and the registers of transfers for the Common Shares in the capital of the Company at its principal office in Calgary, Canada and to provide certain other administrative services to the Company in relation to its business and affairs.

The Company is required to pay for the services provided in accordance with a tariff or schedule of fees, which fees are subject to revision from time to time during the term of the agreement. The Company is also required to reimburse all costs and expenses, including the fees, disbursements and expenses of any sub�agents, advisors and legal counsel, if applicable, incurred in carrying out the duties under the Registrar Agreement.

If the Company defaults in its payment obligations under the Registrar Agreement, the Registrar has the right to immediately terminate the agreement. In addition, the Registrar Agreement may be terminated by either party upon three months’ written notice.

Under the Registrar Agreement the Company indemnifies the Registrar (provided it has acted in good faith and without negligence), its directors, officers, employees, agents and assigns against all liabilities, losses, claims, damages, penalties, actions, suits, demands, costs, expenses and disbursements (including legal and advisor fees and disbursements) howsoever arising from or out of any act or omission of the Registrar pursuant to or in relation to the Registrar Agreement.

25.4 Depositary Agreement

A depositary agreement dated 3 January 2017 (the “Depositary Agreement”) between the Company and Computershare Investor Services PLC (the “Depositary”) under which the Company appoints the Depositary to constitute and issue from time to time, upon the terms of the deed poll executed by Computershare on or about the date of the Depositary Agreement (the “Deed Poll”), a series of uncertificated depositary interests (“Depositary Interests”) representing securities issued by the Company and to provide certain other services in connection with such Depositary Interests with a view to facilitating the indirect holding by participants in CREST. Computershare agrees that it will comply with the terms of the Deed Poll and that it will perform its obligations with reasonable care and skill. Computershare assumes certain specific obligations, including the obligation to issue to a CREST member Depositary Interests in uncertificated form and to maintain the register of Depositary Interests. Computershare undertakes to provide the depositary services in compliance with the requirements of the Financial Services and Markets Act 2000. Computershare will either itself or through its appointed Custodian as bare trustee hold the deposited property (which includes, inter alia , the securities represented by the Depositary Interests) as may be designated from time to time by the Depositary. The Company agrees to provide such assistance, information and documentation to Computershare as is reasonably required by Computershare for the purposes of performing its duties, responsibilities and obligations under the Deed Poll and the Depositary Agreement, including (to the extent available to the Company) information, which concerns or relates to Computershare’s obligations under the Depositary Agreement. The agreement sets out the procedures to be followed where the Company is to pay or make a dividend or other distribution. The Company is to indemnify Computershare for any loss it may suffer as a result of the performance of the Depositary Agreement except to the extent that any losses result from Computershare’s own negligence, fraud or wilful default. Computershare is to indemnify the Company for any loss the Company may suffer as a result of or in connection with Computershare’s fraud, negligence or wilful default save that the aggregate liability of the Depositary to the Company over any 12�month period shall in no circumstances whatsoever exceed twice the amount of the fees payable to the Depositary in any 12�month period in respect of a single claim or in the aggregate. Subject to earlier termination, the Depositary is appointed for a fixed term of one year and thereafter until terminated by either party giving not less than six months’ notice. In the event of termination, the parties agree to phase out the Depositary’s operations in an efficient manner without adverse effect on the members of the Company and the Depositary shall deliver to the Company (or as it may direct) all documents, papers and other records relating to the Depositary Interests which are in its possession and which is the property of the Company. The Company is to pay certain fees and charges, including an annual fee, a fee based on the number of Depositary Interests per year and certain CREST related fees. Computershare is also entitled to recover reasonable out of pocket fees and expenses.

25.5 REDPSA

On 16 March 2016, the Company’s wholly owned subsidiary, Zenith Aran, entered into the REDPSA with SOCAR and SOA, a wholly owned subsidiary of SOCAR (Zenith Aran and SOA being referred to herein as the “Contractor Parties”). The REDPSA covers 642 square kilometers which include the active Muradkhanli, Jafarli and Zardab oil fields (the “Contract Area”). Zenith Aran will hold an 80% participating interest in the REDPSA while SOA holds the remaining 20%. The delivery of the capital assets previously used in respect of the petroleum operations at the three fields in Azerbaijan from the previous operating company to Aran Oil Operating Company Limited, a wholly owned subsidiary of the Contractor Parties, officially completed on 11 August 2016 (the “Effective Date”).

Under the REDPSA, the Contractor Parties must provide all necessary funds to explore, appraise, evaluate, and develop the crude oil and natural gas resources within the Contract Area.

The Contract Area includes areas where the existing production needs to be improved (the “Contract Rehabilitation Area”) and where new production needs to be developed (the “Contract Exploration Area”). The Contractor Parties have different obligations in respect of each area.

Rehabilitation and production programme

The Rehabilitation and Production programme was signed on 3 October 2017 and approved by SOCAR on the same date. It provides for a maximum production of approximately 2,382 barrels of crude oil per day. The programme involved drilling 26 development wells: 21 in Muradkhanli and 5 in Jafarli with the cost per well, being $4.3million. Therefore, a total of $111.8 million would be spent on drilling. The programme also involved the workover of 44 wells, which includes 12 old well reactivations, with the cost per workover being $150,000. Therefore, a total of $6.85 million would be spent on the workovers. Additionally, the programme provided for facility upgrades of $2.5million and involved running a 64km2 3D exploration seismic and drilling a 1�5000m exploration well. The total net cash flow for the programme was $176 million and the total OPEX of $122.5 million and total CAPEX of $121.15 million.

The wholly owned subsidiary of Zenith Energy Ltd., Zenith Aran has acquired the exclusive rights to conduct petroleum operations in three petroleum producing onshore fields in Azerbaijan.

Termination

The REDPSA can be terminated at any time by either party if the other party commits a material breach of the REDPSA or the “Government Guarantee” in the form attached to the REDPSA and fails to remedy such breach within 90 days of written notice from the other party. SOCAR may terminate by 90 days written notice for, inter alia , certain insolvency events. The Contractor Parties may voluntarily relinquish the Contract Area by giving 90 days written notice to SOCAR.

Compensatory petroleum

The Contractor Parties have an obligation to:

within one year following the Effective Date, deliver at no charge to SOCAR 5% of the total production of petroleum produced from the contract rehabilitation area in each calendar quarter; and
commencing on the first anniversary of the Effective Date, start delivering at no charge to SOCAR 15% of the total production of petroleum produced from the contract rehabilitation area in each calendar quarter,
until the amount delivered is the equivalent of approximately 315,000 barrels of “compensatory” crude oil to SOCAR (“Compensatory Petroleum”).

The balance of production remaining after (i) the relevant Compensatory Petroleum has been delivered and (ii) quantities to enable recovery of certain operating and capital costs are deducted, is calculated on a quarterly basis and is shared between SOCAR and the Contractor Parties according to a detailed “R factor” model.

The REDPSA was terminated in accordance with its terms on 18 May 2020.

25.6 Convertible loan USD 1,500,000

On 5 September 2018, the Company entered into a US$1,500,000 unsecured convertible loan facility, with the lenders, YA II PN Ltd and Riverfort Global Opportunities PCC Ltd, with a term of 18 months starting from August 30, 2018. Zenith shall pay interest on the outstanding amount of the convertible loans at the rate of 0% per annum. The Facility includes an initial immediate advance of US$1,300,000 and a further advance of US$200,000, to be provided at a later time and only at the discretion of the Lenders.

On January 7, 2019, the Company successful renegotiated the terms of this unsecured Convertible Loan Facility, that now is also repaid in cash.

On September 17, 2019, conversion has been made for a total of 5,343,774 common shares (the “Conversion Shares”) at a price of £0.021 per Conversion Share equivalent to a total amount of US$140,000.

As announced on April 23, 2021, the Company extended the maturity date for this loan that now is repayable at the end of the year 2021 and following recent repayments, the liability in relation to the Facility stands at US$0.45 million as at the date of this document.

25.7 Convertible loan up to GBP 1,000,000

25.8 USD $320,000 and USD $200,000 General Line of Credit Agreements

As disclosed in the latest audited accounts for the financial year ended March 31,2020, the Company had two general line of credit agreements (the “Credit Agreements”) for an outstanding combined principal amount of US$480,000 on which interest continued to accrue.

These facilities were partially repaid on January 6, 2021 and April 23, 2021 and the final repayment was completed on June 1, 2021, as announced by the Company to the market. The Credit Agreements are no longer in place and no amounts are oustanding.

25.9 Zenith 8% EMTN – Loan Notes

Commencing 11 January 2019, the Issuer issued Loan Notes with the duration of 2 years. The maturity date of the Notes is 20 December 2021, and they carry an interest charge of 8 per cent per annum, payable semi�annually. As at the date of this document, the Issuer sold an aggregate amount of EUR 2,960,000 of the loan notes. These loan notes will be settled on maturity from a combination of the Company’s existing cash resources and an exchange for Medium Term Notes (as set out in 25.10 below).

The Loan Notes listed on the Third Market (MTF) of the Vienna Stock Exchange (“Wiener Borse AG”) This issuance is part of an approval to list up to EURO 10 million in several tranches. The Notes are governed by Austrian law and, since the Notes are not convertible into equity of Zenith.

25.10 Zenith Multi�Currency Medium Term Note Programme

On 6 November 2019, the Company had its prospectus approved for a EUR 25m Euro Medium Term Note programme, allowing notes to be issued in multiple currencies including EUR, CAD, GBP, USD and CHF. The notes are governed by Austrian law and traded on the Vienna Stock Exchange (“Wiener Borse AG”). The notes mature on 27 January 2024. As of the date of this document, the Company had sold notes for

Currency	Quantity	CAD$ equivalent	ISIN	Description
EUR	506,000	729,674	XS2108546735	ZEEX 10.125 01/27/24 MTN
USD	1,954,000	2,194,792	XS2108546651	ZEEX 10.300 01/27/24 MTN
GBP	1,352,000	2,449,313	XS2108546578	ZEEX 10.375 01/27/24 MTN

, all of which were held in treasury. The Notes are governed by Austrian law and, since the Notes are not convertible into equity of Zenith.

25.11 Equity Sharing Agreement

On February 14, 2020, the Company entered into an equity sharing agreement (“ ESA ”) with a consortium of institutional investors (“ Investors ”) for a total amount of NOK 9,700,000 (approximately £810,000 or US$1,051,000)

The Investors conditionally agreed to subscribe for 50,000,000 ESA Shares at the issue price of NOK 0.194 for gross proceeds of NOK 9,700,000. The ESA proceeds will be pledged to the Investors under the ESA pursuant to which the Company is entitled to receive back those proceeds on a pro rata monthly basis over a period of 12 months, subject to adjustment upwards or downwards each month depending on the Company’s share price at the time. As a result of entering into the ESA, the aggregate amount received by the Company under the ESA may be more or less than NOK 9,700,000, as further explained below.

There is no upper limit placed on the additional proceeds receivable by the Company as part of the monthly settlements and the amount available in subsequent months is not affected. At the same time, the Company notes the corresponding risk that a fall in Zenith’s share price could reduce the amount of proceeds received by the Company.

In accordance with the terms of the ESA, the Company will enter into the ESA, pursuant to which Zenith will return the NOK 9,700,000 proceeds of the ESA to the Investors. The ESA will enable the Company to benefit from any share price appreciation over the Benchmark Price of NOK 0.2231 (as defined below). However, if the Company’s share price is less than the Benchmark Price then the amount received by the Company under the ESA will be less than the gross proceeds of the ESA which were pledged by the Company to the Investors at the outset.

The ESA provides that the Company will receive 12 equal monthly settlement amounts as measured against a benchmark share price of NOK 0.2231 per ESA Share (the “ Benchmark Price ”). The monthly settlement amounts for the Sharing Agreement are structured to commence one month following the signature of the Sharing agreement.

If the measured share price (the “ Measured Price ”), calculated as the average of the 10 lowest daily VWAP of the Company’s ordinary shares for the calendar month of each settlement date, exceeds the Benchmark Price, the Company will receive more than 100 per cent. of that monthly settlement due on a pro rata basis according to the excess of the Measured Price over the Benchmark Price. There is no upper limit placed on the additional proceeds receivable by the Company as part of the monthly settlements and the amount available in subsequent months is not affected. Should the Measured Price be below the Benchmark Price, the Company will receive less than 100 per cent. of the monthly settlement calculated on a pro rata basis and the Company will not be entitled to receive the shortfall at any later date.

In no event will fluctuations in the Company’s share price result in any increase in the number of ESA Shares issued by the Company or received by the Investors. A decline in the Company’s share price would not result in any advantage accruing to the Investors and the ESA allows both the Investors and the Company to benefit from future share price appreciation.

According to an agreement between the parties, this facility is currently suspended due to the market difficulties subsequent to the pandemic covid�19 emergency. This facility will recommence on Admission. Prior to suspension of the agreement, 3 monthly pro rata entitlements of proceeds had been paid to the Company; the new termination date of the agreement following its recommencement from Admission it will be June 2022.

25.12 Share Purchase Agreement (“ SPA ”) with KUFPEC Tunisia Limited

On April 20, 2020, the Company’s newly created wholly owned subsidiary Zenith Energy Netherlands B.V. (“Zenith Netherlands”) has signed a conditional sale and purchase agreement (“SPA”) with KUFPEC (Tunisia) Limited (“Seller”), a 100% subsidiary of Kuwait Foreign Petroleum Exploration Company K.S.C.C, a subsidiary of the State of Kuwait’s national oil company, for the acquisition of a working interest in, inter alia , the North Kairouan permit and the Sidi El Kilani Concession (the “Tunisian Acquisition”), which contains the Sidi El Kilani oilfield (“SLK”).

The Seller holds an undivided 22.5% interest in the Tunisian Acquisition, together with 25 Class B shares in Compagnie Tuniso�Koweito�Chinoise de Pétrole (CTKCP), the operator, representing 22.5% of the issued share capital of the company.

Zenith’s partners in the Tunisian Acquisition will include the national oil company of Tunisia, Entreprise Tunisienne d’Activités Pétrolières (ETAP) with a 55% interest and CNPC, China National Petroleum Corporation with a 22.5% interest.

The Seller has agreed to sell, assign and transfer to Zenith Netherlands the Tunisian Acquisition on the terms and subject to the conditions set out in the SPA.

The consideration payable by Zenith Netherlands under the SPA is US$500,000 (equivalent to CAD$700k).

On June 11, 2020, the Company announced that it had made payment for a total of US$250,000 to Kuwait Foreign Petroleum Exploration Company K.S.C.C (“ KUFPEC ”), in relation to the Tunisian Acquisition .

Completion of the Tunisian Acquisition remains conditional on approval being granted from the Comité Consultatif des Hydrocarbures of the Republic of Tunisia in respect of the transfer of the Seller’s right, title and interest in and under the Tunisian Acquisition to Zenith Netherlands. Zenith has initiated the necessary formalities in relation to the aforementioned approval process and a final decision is expected by 3Q2021.

On June 25, 2021, the Companies agreed for an extension agreement of the longstop date for the completion, which is now 31 October 2021.

The SPA for the acquisition of KUFPEC Tunisia Ltd’s working interest in the SLK concession had had a revised long stop date of 31 October 2021. It has not proved possible to obtain the required regulatory approvals within that timescale. The parties are currently in discussion regarding restructuring the nature of the transaction, however there can be no guarantee that this will be successfully completed. The revised agreement may or may not include the accumulated oil production since the original agreement was agreed. The Company’s financial plan has not included any revenues from SLK.

25.13 Share Purchase Agreement (“SPA”) with CNPC International (Tunisia) Ltd.

On September 8, 2020, the Company’s wholly owned subsidiary, Zenith Energy Netherlands B.V. signed a conditional sale and purchase agreement (“ SPA ”) with CNPC International (Tunisia) Ltd., (“ Seller ”), a 100% subsidiary of CNPCI, China National Petroleum Corporation International Ltd., for the acquisition of a working interest in, inter alia , the North Kairouan permit and the Sidi El Kilani Concession (the “ Tunisian Acquisition “), which contains the producing Sidi El Kilani oilfield (“ SLK ”).

The Seller agreed to sell, assign and transfer to Zenith Netherlands the Tunisian Acquisition on the terms and subject to the conditions set out in the SPA. The consideration payable by Zenith Netherlands under the terms of the SPA is US$300,000 (the “ Consideration ”).

Completion of the SPA is conditional on approval being granted by the Comité Consultatif des Hydrocarbures (“ CCH ”) of the Republic of Tunisia in respect of the transfer of the Seller’s right, title and interest in and under the SLK Concession to Zenith Netherlands (“ Completion ”), which is expected by 4Q2021 (long stop date 30 November 2021).

25.14 Swiss Loan CHF 837,500

On 30 March 2017, the Group acquired the Swiss based company Altasol SA, and assumed a loan subscribed for the former owner on 21 December 2015 for the initial amount of CHF 838,000 The loan bears interest at a rate of 2.32 per cent per annum. The loan is repayable in anticipated quarterly tranches of CHF 12,500 (plus accrued interest) and the maturity date is 7 July 2022.

As at the date of this document, this loan has been repaid in full, in advance of the scheduled repayment.

25.15 Share Purchase Agreement (“SPA”) with Candax Energy Limited for the acquisition of Ecumed Petroleum Zarzis Ltd in Tunisia.

Acquisition Highlights

Ezzaouia is located in onshore Tunisia on the Zarzis peninsula, south of the island of Djerba in the southern Gulf of Gabes.
First discovered by Marathon Petroleum Corporation in 1986, with production activities starting in 1990 with a peak production being achieved of 35,000 barrels of oil per day in 1991.
Ezzaouia produces an average of 40 API gravity oil from the Zebbag (Lower Cretaceous) and Mrabatine (Upper Jurassic) formations.
It is operated by MARETAP, a joint operating company owned in partnership with the national oil company of Tunisia, ETAP (Entreprise Tunisienne d’Activités Pétrolières) on a 50:50 basis, which holds a 55 percent interest in Ezzaouia.
It produced at a rate of approximately of 551 bopd (approximately 248 bopd net to Zenith) during March 2021
Approximately 25,000 barrels of oil were held in storage at the acquisition date, with a commercial value of approximately US$1,250,000.
Planned field production optimisation and workover activities are expected to increase Ezzaouia gross production to 1,000 bopd (potentially resulting in a production of 450 bopd net to Zenith).
The Acquisition has certain development obligations during the course of the new 20�year concession including the drilling of a side�track, the drilling of a replacement well and that of a development well.

On April 19, 2019, the Tunisian State represented by the Ministry of Industry and Small & Medium Enterprises informed ETAP and EPZ that the Comité Consultatif des Hydrocarbures (“CCH”) had provided a favourable opinion to the application submitted by ETAP and EPZ for a new 20�year concession to be called “Ezzaouia” (the “New Concession”).
A Convention for the New Concession (the agreed work programme between ETAP and EPZ) has been signed by both parties.
The New Concession is currently awaiting parliamentary approval.
Ezzaouia has modern oil treatment and storage facilities with a total field storage capacity of approximately 20,000 barrels of oil.
MARETAP, the joint operating company, operates an oil storage terminal, connected to Ezzaouia by way of two pipelines (one for gas and one for oil respectively), at the port of Zarzis, with a storage capacity of approximately 200,000 barrels of oil, from which all oil production from Ezzaouia is exported to the international markets.
25.16 Share Purchase Agreement (“SPA”) with Candax Energy Limited for the acquisition of Ecumed Petroleum Tunisia Ltd in Tunisia.

El Bibane Highlights

The El Bibane concession (“El Bibane”) is located 16 kilometres offshore from the port of Zarzis in the Gulf of Gabes, covering an area of approximately 228 square kilometres and in approximately 7�8 meters water depth. The field was discovered by Marathon Oil Corporation in 1982. However, it was not developed until 1998. Upon initial development, a peak production of 4,500 bopd was achieved. The reservoir is located in the cretaceous Zebbag fractured dolomite formation at approximately 2,150 metres below surface.
Zenith has acquired a 100% working interest in El Bibane.
A total of three wells remain active within El Bibane: EBB�5, EBB�4 and EBB�3RE2. A total of 6 wells plus 4 sidetracks have been drilled.
EBB�5 currently produces approximately 80�100 barrels of condensate per day (API 49/50) with 5.5�6 MMSCF of natural gas from well EBB�5, which is re�injected into the formation via well EBB�4.
It is expected that, by utilising new technologies, well EBB�4 may achieve commercial production of natural gas in addition to its current use as an injector well.
EBB�3 suffered string damage and has been temporarily shut�in, having previously produced at a rate of between approximately 500�600 barrels of oil per day (35 API) prior to production being suspended. The low oil price environment during 2020 and the material investment required to restore production from this well have prevented the necessary repair work from being implemented.
Zenith has already obtained market quotations for the well intervention required to restore production from well EBB�3 for an amount of approximately US$3.5 million.
In the event of a successful well intervention in EBB�3, the Company expects to produce approximately 500 barrels of oil equivalent per day from El Bibane.

Candax commissioned an independent reserves evaluation, as of December 31, 2019, for the contingent reserves (1C) of El Bibane which evaluated remaining oil in place as 25.7 MMSTBO and 6.5 BCF of natural gas.
Zenith has commissioned a new Competent Person’s Report, in compliance with Canadian securities laws, specifically the C OGE Handbook and National Instrument 51�101 – Standards of Disclosure for Oil and Gas Activities, in order to obtain an updated reserves evaluation for the El Bibane concession.
El Bibane expires on December 31, 2033.

Robbana Highlights

The Robbana concession (“Robbana”), covering 48 square kilometres and located onshore in the island of Djerba in the southern Gulf of Gabes, was discovered in 1988, achieving a peak production of 500 bopd in 1994. The ROB�1 well encountered two hydrocarbon�bearing reservoirs in the Cretaceous Upper Meloussi Sandstone formation. Only two wells have been drilled in Robbana since discovery, ROB�1 which is still in production and ROB�2 which is temporarily abandoned.
Robbana currently produces approximately 25 barrels of oil per day from ROB�1, having previously produced approximately 50 barrels of oil per day prior to an unsuccessful well intervention.
Studies have suggested that an infill well, to be drilled in the proximity of well ROB�1, is expected to produce approximately 200 barrels of oil per day.
Candax commissioned an independent reserves evaluation, as of December 31, 2019, for the contingent reserves (1C) of Robbana which evaluated remaining oil in place as 10.99 MMSTBO. The study noted specifically noted that the “Middle Triassic sandstones of the Ras Hamra formation present a very significant ‘high�risk/high reward’ exploration objective.”
Zenith has commissioned a new Competent Person’s Report, in compliance with Canadian securities laws, specifically the COGE Handbook and National Instrument 51�101 – Standards of Disclosure for Oil and Gas Activities, in order to obtain an updated reserves evaluation for Robbana.
Robbana expires on November 4, 2034.
25.17 Loan for Tunisian Development with Winance for a total amount of EUR 2.1 million

On May 26, 2021, Zenith entered into a loan agreement with Winance, a Dubai registered single� family office (the “ Lender ”), for a total amount of EUR 2.1 million (approximately £1.8 million or approximately NOK 21.4 million) (the “ Loan Agreement ”), including fees.

The Loan Agreement has a duration of six months, does not attract interest and an upfront arrangement fee, equal to 5 percent (€0.1m) of the total drawdown amount of €2.0m, has been paid to the Lender in accordance with the terms of the Loan Agreement.

During each month prior to the maturity date, Zenith shall make repayments in accordance with the Loan Agreement (“ Instalments ”), with the first Instalment was paid on the month of July 2021. The required amount of each monthly repayment Instalment will be of Euro250,000.

100,000,000 new common shares of no par value (the “ Reserve Shares ”) have been issued to the Lender to be held in a depositary institution designated by the Lender.

Under the terms of the Loan Agreement, Zenith may elect to pay each Instalment either by cash or by utilising the Reserve Shares, by delivering to the Lender an amount of Reserve Shares equivalent to the quotient obtained by dividing the Instalment Amount by 95 percent of the applicable VWAP (volume weighted average price) for the period of ten business days prior to the due date for each Instalment.

As of the date of this document, the outstanding balance to be repaid stands at Euro 1,000,000, with all four monthly repayments to date having been settled by the transfer of the Reserve Shares to the Lender. The Company has agreed with the Lender regarding an issue of 100,000,000 further Common Shares in full and final settlement, to be issued on Admission.

25.18 EUR 1,500,000 Credit Line Agreement & Debt Settlement

On 24 February 2021, the Issuer announced that it has entered into a credit line agreement with the lender, Orca Capital GmbH, for a period of one year for an amount of up to EUR 1,500,000. The credit line bears interest at a rate of 9 per cent per annum in respect of any amount advanced by the lender. This facility was repaid during 2021, with the final payment being made on 29 July 2021.

25.19 Subscription agreement with Investors

On 27 October 2021 the Company entered into identical subscription agreements with certain existing shareholders in both the UK and Norway, who wished to invest in the Common Shares of the Company.

Under these Subscription Agreements, the Company issued a total of 272,727,273 Common Shares at a price of £0.011 (equivalent to approximately NOK 0.13), a discount of approximately 7% to Zenith’s London Stock Exchange closing share price on November 1, 2021, to raise gross proceeds of approximately £3 million (equivalent to approximately 34,500,000 NOK). No commissions were payable under the Subscription Agreements.

26 Related party transactions

Details of related party transactions entered into by the Company or members of the Group during the period covered by the historic financial information are set out in note 24 of the consolidated financial statements of the Company for the years ended 31 March 2021, and note 25 of those for 2020 and 2019 and in note 21 to the unaudited condensed consolidated interim financial statements of the Company for the six months ended 30 September 2020 and comparative period (30 September 2019), all of which are incorporate by reference in Part 11: “Historical Financial Information” of this Document.

Save as set out above, there are no related party transactions that were entered into (and still subsist) during the period covered by the consolidated historical financial information and during the period from 1 October 2020 to the date of this Document.

27 Remuneration and benefits – named executive officers

Key management compensation

Key management personnel are those people having authority and responsibility for planning, directing and controlling the activities of an entity, either directly or indirectly. The following table summarizes annual compensation and long�term compensation of the Group’s “Named Executive Officers” for the two most recently completed financial years that ended on March 31, 2020. The named executive officers equate to key management personnel:

		Short term	Other	Other	Share
		employee	short�term	long�term	based	Other
		benefit	benefits	benefits	payments	benefits	Total
Name	Year(2)	CAD $’000	CAD $’000	CAD $’000	CAD $’000	CAD $’000	CAD $’000
Andrea Cattaneo(1)	2020	567	—	—	—	724	1,291
	2021	564	—	—	—	130	694
Luigi Regis Milano(2)	2020	61	—	—	—	31	92
	2021	30	—	—	—	—	30
Jose Ramon Lopez�Portillo	2020	—	—	—	—	31	31
	2021	—	—	—	—	—	—
Dario Ezio Sodero(3)	2020	19	—	—	—	31	50
	2021	3	—	—	—	—	3
Erik Larre	2020	—	—	—	—	—	—
	2021	—	—	—	—	—	—
Sergey Borovskiy	2020	—	—	—	—	31	31
	2021	—	—	—	—	—	—
Luca(4) Benedetto	2020	231	—	—	—	38	269
	2021	228	—	—	—	4	232

Notes:

Andrea Cattaneo was appointed President and Chief Executive Officer effective 01 January 2009. As proposed by the Compensation Committee, Mr. Cattaneo’s annual consulting fee payment is approximately £210k (CAD $364k), payable in equal monthly instalments, plus an annual bonus compensation of CAD$200k from the parent Company. In addition, Andrea Cattaneo also received other benefits for the year ended March 31, 2021, of CAD$130k for health insurance and accommodation.
Mr. Luigi Regis Milano had a yearly compensation of CAD$30k (Euro 20k equivalent) from subsidiary undertakings for the year ended March 31, 2021
Mr. Sodero received a fee for professional consulting services of approximately CAD$3k during the year ended March 31, 2021.
Mr. Luca Benedetto was appointed as Chief Financial Officer from April 2017 and received compensation of CAD$166k from the parent Company and CAD$62k from subsidiary undertakings, and other benefits for CAD$4k for health insurance, during the year ended March 31, 2021.

The Group has a stock options plan (the “ Plan ”) for its directors, employees and consultants. The maximum number of shares available under the Plan is limited to 10% of the issued and outstanding common shares at the time of granting options. Granted options are fully vested on the date of grant, at which time all related share�based payment expense is recognised in the consolidated statement of comprehensive income. Share options expire five years from the date of granting.

The table below represent the movement of the options during the FY 2021, and the comparative period 2020.

2020.
Grant Date	September 30, 2021 Number of Exercise price options per unit CAD$		September 30, 2020 Number of Exercise price options per unit CAD$ Expiry Date
	Number of options
November 2016 November 2017 April 2018 December 2020 January 2021 May 2021 September 2021 TOTAL	1,100,000 — 6,374,511 41,428,572 45,414,775 32,571,075 13,882,232 140,771,165	$0.10 — $0.12 $0.03 $0.03 $0.02 $0.02 $0.03	1,100,000 500,000 7,485,225 — — — — 9,085,225	$0.10 November 2021 $0.18 November 2022 $0.12 April 2023 — December 2025 — January 2026 — May 2026 — September 2026 0.12

The table below represent the movement of the options during the 6 months ended 30 September 2021, and the comparative period 2020.

The table below represent the movement of the options during the 6 months ended 30 September 2021, and the comparative period 2020.	The table below represent the movement of the options during the 6 months ended 30 September 2021, and the comparative period 2020.
Number of options
Balance – April 1, 2020 Options issued Options exercised Options expired Balance – September 30, 2020 Balance – April 1, 2021 Options issued Options exercised Options expired Balance – September 30, 2021	9,085,225
	— — —
	9,085,225
	94,317,858
	46,453,307 — —
	140,771,165

As of September 30, 2021, the Group had 140,771,165 (2019 – 9,085,225) stock options outstanding relating to 140,771,165 shares and exercisable at a weighted average exercise price of CAD$ 0.03 (2020 – CAD$ 0.12) per share with a weighted average life remaining of 3.51 years.

The fair value of the options was calculated using the Black�Scholes pricing model calculations based on the following significant assumptions:

Risk�free interest rate 0.50% – 0.70%

Expected volatility	100%
Expected life	5 years
Dividends	Nil

Granting of options

On December 30, 2020, the Board of Directors resolved to grant its directors, certain employees and consultants a total of 50,000,000 stock options (the “Options”), in accordance with the Company’s Stock Option Plan. The Options have an exercise price of NOK 0.20 per Option (approximately £0.017 or CAD$0.03), a premium of approximately 30% to December 29, 2020’s, closing price on the Euronext Growth of the Oslo Stock Exchange. The Options are fully vested and have an expiry date of five years from the date of granting.
On January 18, 2021, the Board of Directors resolved to grant its directors, certain employees and consultants a total of 45,414,775 stock options (the “Options”), in accordance with the Company’s Stock Option Plan. The Options have an exercise price of NOK 0.20 per Option (approximately equivalent to £0.017/CAD$0.03), a premium of approximately 47% to the last closing price on the Euronext Growth of the Oslo Stock Exchange (15.01.2021). The Options are fully vested and have an expiry date of five years from the date of granting.
On May 13, 2021, the Board of Directors resolved to grant its directors, certain employees and consultants a total of 32,571,075 stock options, in accordance with the Company’s Stock Option Plan. The Options will have an exercise price of NOK 0.12 per Option (approximately equivalent to £0.01), a premium of approximately 12% in respect of the last closing price on Euronext Growth Oslo (12.05.2021). The Options are fully vested and have the duration of five years from the date of granting.
On September 9, 2021, the Board of Directors resolved to grant its directors, certain employees and consultants a total of 13,882,232 stock options, in accordance with the Company’s Stock Option Plan. The Options will have an exercise price of NOK 0.125 per Option (approximately equivalent to £0.01). The Options are fully vested and have the duration of five years from the date of granting.

Exercise of options

There was no exercise of options during the period.

Expiry of options

There were no options expired during the period.

28 Accounts

The Company’s annual report and accounts will be made up to 31 March in each year. It is expected that the Company will make public its annual report and accounts within 120 days of each financial year end and within 60 days for the interim six�months (or earlier if possible) and that copies of the annual report and accounts will be sent to Shareholders within six months of each financial year end (or earlier if possible).

29 Issues of new Common Shares

The Directors are authorised to issue an unlimited number of Common Shares. There are no statutory pre�emption rights.

30 Consents

30.1 PKF Littlejohn LLP has given and has not withdrawn its written consent to the inclusion in this Document of its reports set out in Part 11 “Historical Financial Information” and that to the best of their knowledge, the information contained in the registration document is in accordance with the facts and that the registration document makes no omission likely to affect its import and has authorised the contents of those parts of this Document which comprise its reports for the purposes of Annex 3 sections 1.2 and 1.3 of the Prospectus Regulation Rules.
30.2 Chapman Petroleum, in its capacity as Competent Person, has given and has not withdrawn its written consent to the inclusion in this Document of its Competent Person’s Reports in Part 19 of this Document, that Chapman Petroleum accepts responsibility for the information contained in its Competent Person’s Reports as set out in Part 19 this Document, and that to the best of their knowledge, the information contained in the registration document is in accordance with the facts and that the registration document makes no omission likely to affect its import and has authorised the contents of those parts of this Document which comprise its reports for the purposes of Annex 3 sections 1.2 and 1.3, and Rule 5.3.2R(2)(f) of the Prospectus Regulation Rules.
30.3 Allenby Capital Limited has given and not withdrawn its written consent to the inclusion in this Document of its name in the form and context in which it is included.
30.4 Thomson Reuters (Professional) UK Limited (trading as Practical Law) has given and not withdrawn its written consent to the extraction of information from its publications:
(a) Energy and Natural Resources Multi�Jurisdictional Guide 2014 (Oil and gas regulation in Argentina: overview); and
(b) Energy and Natural Resources Global Guide 2015 (Oil and gas regulation in Azerbaijan: overview),

as reproduced in Part 8: “Information on the Group”.

31 General

31.1 The total expenses incurred (or to be incurred) by the Company in connection with Admission and the Subscription are approximately £150,000. The estimated Net Proceeds, after deducting fees and expenses in connection with the Subscription, are approximately £2,850,000.
31.2 No material changes have occurred since the effective date of the Competent Person’s Report, the omission of which would make the Competent Person’s Report misleading.

32 Documents available for inspection

Copies of the following documents will be available for inspection in physical form during usual business hours on any day (except Saturdays, Sundays and public holidays) at the offices of Zenith Energy Limited for a period of 12 months following Admission:

(i) the Articles;
(ii) the historical financial information of the Group in respect of the years ended 31 March 2021, 2020, 2019 and 2018, together with the related accountant’s report from PKF Littlejohn LLP, which is set out in Part 11: “Historical Financial Information” of this Document;
(iii) the CPR;
(iv) the consent letters referred to in paragraph 30 of this Part 18; and
(v) this Document.

In addition, for the purposes of Rule 3.2.4R(3) of the Prospectus Regulation Rules, this Document will be published in electronic form and be available on the Company’s website at www.zenithenergy.ca subject to certain access restrictions applicable to persons located or resident outside the United Kingdom.

The date of this Document is 12 November 2021.

PART 15 NOTICES TO INVESTORS

The distribution of this Document and the Subscription may be restricted by law in certain jurisdictions and therefore persons into whose possession this Document comes should inform themselves about and observe any restrictions, including those set out below. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

1. General

No action has been or will be taken in any jurisdiction that would permit a public offering of the Common Shares, or possession or distribution of this Document or any other offering material in any country or jurisdiction where action for that purpose is required. Accordingly, the Common Shares may not be offered or sold, directly or indirectly, and neither this Document nor any other offering material or advertisement in connection with the Common Shares may be distributed or published in or from any country or jurisdiction except under circumstances that will result in compliance with any and all applicable rules and regulations of any such country or jurisdiction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction. This Document does not constitute an offer to subscribe for any of the Common Shares offered hereby to any person in any jurisdiction to whom it is unlawful to make such offer or solicitation in such jurisdiction.

This Document has been approved by the FCA as a prospectus for the purposes of section 85 of FSMA, and of the Prospectus Regulation Rules. No arrangement has been made with the competent authority in any EEA State (or any other jurisdiction) for the use of this Document as an approved prospectus in such jurisdiction and accordingly no public offer is to be made in any EEA state (or in any other jurisdiction). Issue or circulation of this Document may be prohibited in countries other than those in relation to which notices are given below.

2. For the attention of Canadian investors

The Subscription Shares will be subject to resale restrictions imposed by, and subscribers for Subscription Shares may not be able to resell such Subscription Shares except in accordance with, applicable Canadian securities law and subscribers for Subscription Shares have undertaken that (i) they will not offer, sell or deliver, directly or indirectly, any of the Subscription Shares in Canada or to or for the benefit of any person resident in Canada until the expiry of any relevant hold period under applicable Canadian securities laws of four months and one day from Admission, unless a trade is permitted under Canadian securities laws; and (ii) they will notify any transferee of Subscription Shares of the applicable resale restrictions.

Under Canadian securities law, subject to certain exceptions, securities which are not distributed under a Canadian prospectus are subject to a restricted period in Canada of four months and one day after the distribution date. The Common Shares to be issued outside of Canada pursuant to the Subscription will not be distributed under a Canadian prospectus and will be subject to a four month and a day restricted period in Canada (beginning on the date the Common Shares are issued by the Company) which will prevent such Common Shares from being resold in Canada during the restricted period unless a trade is permitted under Canadian securities laws.

3. For the attention of European Economic Area investors

In relation to each member state of the European Economic Area which has implemented the Prospectus Regulation (each, a “ Relevant Member State ”), an offer to the public of the Common Shares may only be made once the prospectus has been approved or passported in such Relevant Member State in accordance with the Prospectus Regulation as implemented by such Relevant Member State. No application has or will be made for the prospectus to be approved or passported under the Prospectus Regulation. For the other Relevant Member States an offer to the public in that Relevant Member State of any Common Shares may only be made at any time under the following exemptions under the Prospectus Regulation, if they have been implemented in that Relevant Member State:

to any legal entity which is a qualified investor as defined under the Prospectus Regulation Rules;

to fewer than 150, natural or legal persons (other than qualified investors as defined in the Prospectus Regulation) in such Relevant Member State subject to obtaining prior consent of the Company for any such offer; or
in any other circumstances falling within Article 1(4) of the Prospectus Regulation Rules,

provided that no such offer of Common Shares shall result in a requirement for the publication by the Company of a prospectus pursuant to Article 3 of the Prospectus Regulation. For the purposes of this provision, the expression an “offer to the public” in relation to any offer of Common Shares in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and any Common Shares to be offered so as to enable an investor to decide to purchase or subscribe for the Common Shares, as the same may be varied in that Relevant Member State by any measure implementing the Prospectus Regulation in that Relevant Member State and the expression “Prospectus Regulation” means Regulation (EU) 2017/1129 (and any amendments, thereto, to the extent implemented in the Relevant Member State) and includes any relevant implementing measure in each Relevant Member State.

During the period up to but excluding the date on which the Prospectus Regulation is implemented in member states of the EEA, this Document may not be used for, or in connection with, and does not constitute, any offer of Common Shares or an invitation to purchase or subscribe for any Common Shares in any member state of the EEA in which such offer or invitation would be unlawful.

The distribution of this Document in other jurisdictions may be restricted by law and therefore persons into whose possession this Document comes should inform themselves about and observe any such restrictions.

4. For the attention of UK investors

This Document comprises a prospectus relating to the Company prepared in accordance with the Prospectus Regulation Rules and approved by the FCA under section 87A of FSMA. This Document has been filed with the FCA and made available to the public in accordance with Rule 3.2 of the Prospectus Regulation Rules.

In the United Kingdom this Document is for distribution to, and is directed only at, legal entities which are qualified investors as defined under the Prospectus Regulation Rules and are (i) persons having professional experience in matters relating to investments who fall within the definition of investment professionals in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “ Order ”); or (ii) high net worth bodies corporate, unincorporated associations and partnerships and trustees of high value trusts as described in Article 49(2) of the Order; or (iii) persons to whom it may otherwise be lawfully distributed under the Order, (all such persons together being “ Relevant Persons ”). In the United Kingdom, any investment or investment activity to which this Document relates is only available to and will only be engaged in with Relevant Persons. Persons who are not Relevant Persons should not act or rely on this Document or any of its contents.

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PART 16 CREST AND DEPOSITORY INTERESTS

1. CREST and Depositary Arrangements

The Company has established arrangements to enable investors to settle interests in the Common Shares through the CREST system. CREST is a paperless settlement system allowing securities to be transferred from one person’s CREST account to another without the need to use share certificates or written instruments of transfer. Securities issued by non�UK companies, such as the Company, cannot be held or transferred electronically in the CREST system. However, depositary interests allow such securities to be dematerialised and settled electronically through CREST. Where investors choose to settle interests in the Common Shares through the CREST system, and pursuant to depositary arrangements established by the Company, Computershare Investor Services plc (the “ Depositary ”) will hold the Common Shares and issue dematerialised depositary interests (the “ Depositary Interests ”) representing the underlying Common Shares, which will be held on trust for the holders of the Depositary Interests. The Depositary Interests will be independent securities constituted under English law which may be held and transferred through the CREST system. Investors should note that it is the Depositary Interests which are and will be admitted to and settled through CREST and not the Common Shares.

The Depositary has and will issue the dematerialised Depositary Interests. The Depositary Interests will be independent securities constituted under English law which may be held and transferred through the CREST system.

The Depositary Interests have and will be created pursuant to and issued on the terms of a deed poll dated 29 November 2016 and executed by the Depositary in favour of the holders of the Depositary Interests from time to time (the “ Deed Poll ”). Prospective holders of Depositary Interests should note that they will have no rights against CRESTCo or its subsidiaries in respect of the underlying Common Shares or the Depositary Interests representing them.

The Common Shares have and will be transferred to the Custodian and the Depositary will issue Depositary Interests to participating members and provide the necessary custodial services. In relation to those Common Shares held by Shareholders in uncertificated form, although the Company’s register shows the Custodian as the legal holder of the Common Shares, the beneficial interest in the Common Shares remains with the holder of Depositary Interests, who has the benefit of all the rights attaching to the Common Shares as if the holder of Depositary Interests were named on the certificated Common Share register itself.

Each Depositary Interest is and will be represented as one Common Share, for the purposes of determining, for example, in the case of Common Shares, eligibility for any dividends. The Depositary Interests do and will have the same ISIN number as the underlying Common Shares and will not require a separate listing on the Official List. The Depositary Interests are traded and settled within the CREST system in the same way as any other CREST securities.

2. Deed Poll

In summary, the Deed Poll contains provisions to the following effect, which are binding on holders of Depositary Interests:

Holders of Depositary Interests warrant, inter alia , that Common Shares held by the Depositary or the Custodian (on behalf of the Depositary) are free and clear of all liens, charges, encumbrances or third�party interests and that such transfers or issues are not in contravention of the Company’s constitutional documents or any contractual obligation, law or regulation. Each holder of Depositary Interests indemnifies the Depositary for any losses the Depositary incurs as a result of a breach of this warranty.

The Depositary and any Custodian must pass on to holders of Depositary Interests and, so far as they are reasonably able, exercise on behalf of holders of Depositary Interests all rights and entitlements received or to which they are entitled in respect of the underlying Common Shares which are capable of being passed on or exercised. Rights and entitlements to cash distributions, to information, to make choices and elections and to attend and vote at meetings shall, subject to the Deed Poll, be passed on in the form in which they are received together with amendments and additional documentation necessary to effect such passing�on, or, as the case may be, exercised in accordance with the Deed Poll.

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The Depositary will be entitled to cancel Depositary Interests and withdraw the underlying Common Shares in certain circumstances including where a holder of Depositary Interests has failed to perform any obligation under the Deed Poll or any other agreement or instrument with respect to the Depositary Interests.

The Deed Poll contains provisions excluding and limiting the Depositary’s liability. For example, the Depositary shall not be liable to any holder of Depositary Interests or any other person for liabilities in connection with the performance or non�performance of obligations under the Deed Poll or otherwise except as may result from its negligence or wilful default or fraud. Furthermore, except in the case of personal injury or death, the Depositary’s liability to a holder of Depositary Interests will be limited to the lesser of:

a. the value of the Common Shares and other deposited property properly attributable to the Depositary Interests to which the liability relates; and
b. that proportion of £5 million which corresponds to the proportion which the amount the Depositary would otherwise be liable to pay to the holder of Depositary Interests bears to the aggregate of the amounts the Depositary would otherwise be liable to pay to all such holders in respect of the same act, omission or event which gave rise to such liability or, if there are no such amounts, £5 million.

The Depositary is not liable for any losses attributable to or resulting from the Company’s negligence or wilful default or fraud or that of the CREST operator.

The Depositary is entitled to charge holders of Depositary Interests fees and expenses for the provision of its services under the Deed Poll.

Each holder of Depositary Interests is liable to indemnify the Depositary and any Custodian (and their agents, officers and employees) against all liabilities arising from or incurred in connection with, or arising from any act related to, the Deed Poll so far as they relate to the property held for the account of Depositary Interests held by that holder, other than those resulting from the wilful default, negligence or fraud of the Depositary, or the Custodian or any agent, if such Custodian or agent is a member of the Depositary’s group, or, if not being a member of the same group, the Depositary shall have failed to exercise reasonable care in the appointment and continued use of such Custodian or agent.

The Depositary may terminate the Deed Poll by giving not less than 30 days’ prior notice. During such notice period, holders may cancel their Depositary Interests and withdraw their deposited property and, if any Depositary Interests remain outstanding after termination, the Depositary must as soon as reasonably practicable, among other things, deliver the deposited property in respect of the Depositary Interests to the relevant holder of Depositary Interests or, at its discretion sell all or part of such deposited property. It shall, as soon as reasonably practicable deliver the net proceeds of any such sale, after deducting any sums due to the Depositary, together with any other cash held by it under the Deed Poll pro rata to holders of Depositary Interests in respect of their Depositary Interests.

The Depositary or the Custodian may require from any holder, or former or prospective holder, information as to the capacity in which Depositary Interests are owned or held and the identity of any other person with any interest of any kind in such Depositary Interests or the underlying Common Shares and holders are bound to provide such information requested. Furthermore, to the extent that the Company’s constitutional documents require disclosure to the Company of, or limitations in relation to, beneficial or other ownership of, or interests of any kind whatsoever, in the Common Shares, the holders of Depositary Interests are to comply with such provisions and with the Company’s instructions with respect thereto.

It should also be noted that holders of Depositary Interests may not have the opportunity to exercise all of the rights and entitlements available to holders of Common Shares in the Company, including, for example, in the case of Shareholders, the ability to vote on a show of hands. In relation to voting, it will be important for holders of Depositary Interests to give prompt instructions to the Depositary or its nominated Custodian, in accordance with any voting arrangements made available to them, to vote the underlying Common Shares on their behalf or, to the extent possible, to take advantage of any arrangements enabling holders of Depositary Interests to vote such Common Shares as a proxy of the Depositary or its nominated Custodian.

A copy of the Deed Poll can be obtained on request in writing to the Depositary.

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3. Depositary Agreement

The Depositary Agreement between the Company and the Depositary under which the Company appoints the Depositary to constitute and issue from time to time, upon the terms of the Deed Poll, a series of Depositary Interests representing securities issued by the Company and to provide certain other services in connection with such Depositary Interests with a view to facilitating the indirect holding by participants in CREST. The Depository agrees that it will comply with the terms of the Deed Poll and that it will perform its obligations with reasonable care and skill. The Depository assumes certain specific obligations, including the obligation to issue to a CREST member Depositary Interests in uncertificated form and to maintain the register of Depositary Interests. The Depository undertakes to provide the depositary services in compliance with the requirements of the Financial Services and Markets Act 2000. Computershare will either itself or through its appointed Custodian as bare trustee hold the deposited property (which includes, inter alia , the securities represented by the Depositary Interests) as may be designated from time to time by the Depositary. The Company agrees to provide such assistance, information and documentation to the Depository as is reasonably required by the Depository for the purposes of performing its duties, responsibilities and obligations under the Deed Poll and the Depositary Agreement, including (to the extent available to the Company) information, which concerns or relates to the Depository’s obligations under the Depositary Agreement. The agreement sets out the procedures to be followed where the Company is to pay or make a dividend or other distribution. The Company is to indemnify Depository for any loss it may suffer as a result of the performance of the Depositary Agreement except to the extent that any losses result from the Depository’s own negligence, fraud or wilful default. The Depository is to indemnify the Company for any loss the Company may suffer as a result of or in connection with the Depository’s fraud, negligence or wilful default save that the aggregate liability of the Depositary to the Company over any 12�month period shall in no circumstances whatsoever exceed twice the amount of the fees payable to the Depositary in any 12� month period in respect of a single claim or in the aggregate. Subject to earlier termination, the Depositary is appointed for a fixed term of one year and thereafter until terminated by either party giving not less than six months’ notice. In the event of termination, the parties agree to phase out the Depositary’s operations in an efficient manner without adverse effect on the members of the Company and the Depositary shall deliver to the Company (or as it may direct) all documents, papers and other records relating to the Depositary Interests which are in its possession and which is the property of the Company. The Company is to pay certain fees and charges, including an annual fee, a fee based on the number of Depositary Interests per year and certain CREST related fees. Computershare is also entitled to recover reasonable out of pocket fees and expenses.

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PART 17 DEFINITIONS

The following definitions apply throughout this Document unless the context requires otherwise:

“AAOG Congo” Anglo African Oil & Gas Congo S.A.U., a company established under the laws of the Republic of the Congo;
“Admission” means admission of the Subscription Shares, Admission Shares and Capitalisation Shares to the standard segment of the Official List and to trading on the Main Market of the London Stock Exchange;
“Admission Shares” means the 1,086,842,772 Common Shares in issue but not yet admitted the standard segment of the Official List and to trading to the Main Market of the London Stock Exchange;
“Altasol SA” a company established under the laws of Switzerland with its corporate seat in Lausanne, Switzerland;
“Aran Oil” Aran Oil Operating Company Limited, a company established under the laws of British Virgin Islands. Aran Oil Operating Company Limited has registered a branch in Baku, Azerbaijan;
“ARC Ratings” ARC Ratings, S.A., a company established under the laws of Portugal with its corporate seat in Lisbon, Portugal;
“Articles” means the Notice of Articles and Articles of the Company in force from time to time;
“BCRA Ratings” BCRA – Credit Rating Agency AD; “BD�260 drilling rig” The BD�260 is a 1200 horsepower drilling rig with a static hook load capacity of 260 metric tonnes and will be used to complete the planned workover and drilling activities;
“Business Corporations Act”
means the Business Corporations Act (British Columbia), SBC 2002, c 57;
“Business Day” means a day (other than a Saturday or a Sunday) on which banks are open for business in London and British Columbia;

“Canadian Placing Shares” means the 47,812,500 Common Shares issued under the Canadian private placing announced on 2 August 2019;

“Canoel Italia S.r.l.” a company established under the laws of Italy with its corporate seat in Genoa, Italy;

“Capitalisation Shares”
“certificated” or “in certificated form”
“Chairman”
“Chapman Petroleum” , “Chapman” or the “Competent Person”

the 108,181,818 Common Shares being issued in settlement of outstanding liabilities, as set out in Part 10(6) of this document;

means in relation to a share, warrant or other security, a share, warrant or other security, title to which is recorded in the relevant register of the share, warrant or other security concerned as being held in certificated form (that is, not in CREST);

means the Chairman of the Board from time to time, as the context requires;

means Chapman Petroleum Engineering Ltd., a company established under the laws of Alberta, Canada with its corporate seat in Calgary, Alberta, Canada, which operates as an independent and qualified reserves evaluator and auditor;

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“Chapman Report 2021 – Italy” report about the oil and natural gas reserves and the value of future net revenue of Zenith Energy Ltd. in Italy as evaluated by Chapman Petroleum Engineering Ltd. as at 30 September 2021, and dated 1 October 2021; Part 19 (A) to this Prospectus;
“Chapman Report 2021 – Congo”
report about the oil reserves and the value of future net revenue of Zenith Energy Ltd. in the Republic of the Congo as evaluated by Chapman Petroleum Engineering Ltd. as of 30 September 2021, and dated 1 October 2021; Part 19 (D) to this Prospectus;

“Chapman Report 2021 – Tunisia report about the oil reserves and the value of future net revenue of (Sidi El Kilani Concession)” Zenith Energy Ltd. in Tunisia as evaluated by Chapman Petroleum Engineering Ltd. as of 30 September 2021, and dated 1 October 2021; Part 19 (B) to this Prospectus;

“Chapman Report 2021 – Tunisia report about the oil reserves and the value of future net revenue of (El Bibane, Robbana and Zenith Energy Ltd. in Tunisia as evaluated by Chapman Petroleum Ezzaouia Concessions)” Engineering Ltd. as of 30 September 2021, and dated 1 October 2021; Part 19 (C) to this Prospectus;
“Chapman Reports 2021” collectively, The Chapman Report 2021 – Italy, the Chapman Report 2021 – Congo, the Chapman Report 2021 – Tunisia (Sidi El Kilani Concession) and the Chapman Report 2021 – Tunisia (El Bibane, Robbana and Ezzaouia Concessions)

“City Code” means the UK City Code on Takeovers and Mergers;

“CNPC” China National Petroleum Corporation;

“Common Shares” means the common shares of no par value in the capital of the Company including, if the context requires, the Admission Shares, Capitalisation Shares and the Subscription Shares;

“Company” , “Issuer” or “Zenith”
means Zenith Energy Ltd., a corporation incorporated in British Columbia under the British Corporations Act (British Columbia) on 20 September 2007, with number BC0803216;

“Convertible Loan Notes” means the GBP unsecured convertible loan notes unsecured convertible loan notes issued by the Company as described in paragraph 5.3 of Part 14 (Additional Information) of this document;

“Congo License I” a 56 per cent majority interest in the Tilapia oilfield in the Republic of the Congo, previously held by AAOG Congo. The Congo License I expired on 18 July 2020;

“Congo License II” a 60 per cent interest in the Tilapia II oilfield in the Republic of the Congo, which has not yet been awarded to Zenith Congo;

“CTKCP” Compagnie Tuniso – Koweito Chinoise de Petrole is located in Tunisia and is operating the North Kairouan permit and the Sidi El Kilani concession;

“CPR” or “Competent Person’s means the Chapman Reports 2021; Report”

“CREST” or “CREST System” means the paperless settlement system operated by Euroclear enabling securities to be evidenced otherwise than by certificates and transferred otherwise than by written instruments;

“CREST Manual” means the compendium of documents entitled “CREST Manual” issued by Euroclear from time to time and comprising the CREST Reference Manual, the CREST Central Counterparty Service Manual, the CREST International Manual, the CREST Rules, the CSS Operations Manual and the CREST Glossary of Terms;

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“CREST Regulations” means The Uncertified Securities Regulations 2001 (SI 2001 No. 3755), as amended; “CREST Requirements” means the rules and requirements of Euroclear as may be applicable to issuers from time to time, including those specified in the CREST Manual; “CRESTCo” means CRESTCo Limited, the operator (as defined in the Uncertificated Regulations) of CREST; “Custodian” means the custodian nominated by the Depositary; “Deed Poll” means the Deed Poll as defined on page 101; “Depositary” means Computershare Investor Services plc; “Depositary Agreement” means the Depositary Agreement as defined on page 103; “Depositary Interests” means the dematerialised depositary interests (denominated in Pounds Sterling) in respect of the Shares issued or to be issued by the Depositary;

“DGH” General Directorate for Hydrocarbons (Tunisia) “Directors” or “Board” or “Board means the board of directors of the Company as at the date of this of Directors” Document, whose names are set out on page 28 of this Document, or the board of directors from time to time of the Company, as the context requires, and “Director” is to be construed accordingly;

“Directors’ Letters of Appointment” means the letters of appointment for each of the Directors, details of which are set out in Part 14: “ Additional Information ”;

“Disclosure Guidance and means the disclosure guidance and transparency rules sourcebook Transparency Rules” or “DTR” of the FCA made pursuant to section 73A of FSMA as amended from time to time; “Document” or “this Document” means this document comprising a prospectus relating to the or “Prospectus ” or “this Company prepared in accordance with the Prospectus Regulation Prospectus” Rules made under section 73A of FSMA and approved by the FCA under section 87A of FSMA;

“EEA” means the European Economic Area; “EEA States” means the member states of the European Union and the European Economic Area, each an “EEA State”; “Effective Date” means 11 August 2016

“Effective Date”
“Enlarged Common Shares in Issue” means the Existing Shares, the Admission Shares, the Capitalisation Shares and the Subscription Shares;

“EU” means the Member States of the European Union; “Euroclear” means Euroclear UK & Ireland Limited; “Euronext Growth Market of the Euronext Growth Market is a Multilateral trading facility (MTF) Oslo Børs” operated by the Oslo Børs, Norway; “Exchange Act” means the US Securities Exchange Act of 1934, as amended; “Existing Shares” means the existing Common Shares (excluding the Admission Shares, the Subscription Shares and the Capitalisation Shares) as at the date of this Document;

“FCA” means the UK Financial Conduct Authority;

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“Financial Statements 2018” the audited financial statements of the Issuer in respect of the financial year ending 31 March 2018; “Financial Statements 2019” the audited financial statements of the Issuer in respect of the financial year ending 31 March 2019; “Financial Statements 2020” the audited financial statements of the Issuer in respect of the financial year ending 31 March 2020; “Financial Statements 2021” the audited financial statements of the Issuer in respect of the financial year ending 31 March 2021; “Financial Year 2018” financial year of the issuer ending 31 March 2018; “Financial Year 2019” financial year of the issuer ending 31 March 2019; “Financial Year 2020” financial year of the issuer ending 31 March 2020; “Financial Year 2021” financial year of the issuer ending 31 March 2021; “Interim Financial Statements the unaudited interim financial statements for the six months period 2020/2021” ended 30 September 2020. “IPO Prospectus” means the prospectus issued in connection with the IPO; “January Placing” means the placing of 9,000,000 Common Shares, as announced on 24 January 2018; “Listing Rules” means the listing rules of the FCA made pursuant to section 73A of FSMA as amended from time to time; “London Stock Exchange” means London Stock Exchange plc; “Market Abuse Regulation” The Market Abuse Regulation (S94/2014); “Net Proceeds” means the funds received on closing of the Subscription less any expenses paid or payable in connection with Admission and the Subscription;

“NOK” Norwegian krone, the currency of the Kingdom of Norway;

“Official List” means the official list maintained by the FCA;

“Oil Share Agreement” means the obligation connected with a business combination completed in July 2010, pursuant to which, for a period of three years commencing 30 November 2010, the Group would provide the vendor with 50% of the annual gross revenue derived from the sale of barrels of oil from the properties and 25% of the annual gross revenue derived from the sale of barrels of oil;

means the stock options over Common Shares granted pursuant to the Stock Option Plan;

“Options”

“Pounds Sterling” or “£” means British pounds sterling, the lawful currency of the UK; “Premium Listing” means a listing on the Premium Listing Segment of the Official List under Chapter 6 of the Listing Rules; “Prospectus Regulation” means the UK version of Regulation (EU) No 2017/1129 of the European Parliament and of the Council of 14 June 2017 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market, and repealing Directive 2003/71/EC, which is part of UK law by virtue of the European Union (Withdrawal) Act 2018;

“Prospectus Regulation”

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“Prospectus Regulation Rules” means the rules set out by the FCA concerning and implementing the Prospectus Regulation; “REDPSA” means the Rehabilitation, Exploration, Development and Production Sharing Agreement entered into on 16 March 2016 between SOCAR, Zenith Aran and SOA, as described in section 25 of Part 14: “ Additional Information ”; “Registrar” means Computershare Trust Company of Canada or any other registrar appointed by the Company from time to time; “Registrar Agreement” means the transfer agency and registrarship agreement dated 5 March 2008 between the Company and Olympia Trust Company, and in which Olympia Trust Company’s right, title and interest were assigned and transferred to the Registrar in 2014, further details of which are set out in Part 18: “ Additional Information ”; “Regulatory Information Service” means a regulatory information service authorised by the UK Listing Authority to receive, process and disseminate regulatory information in respect of listed companies; “SEC” means the US securities and Exchange Commission; “Securities Act” means the US Securities Act of 1933, as amended; “Senior Manager” means the senior manager of the Company whose name is set out in Part 11: “ Directors, Senior Management and Corporate Governance ” under the heading “ Senior Management ”; “Settlement Shares” means the 1,598,579 Common Shares issued in settlement of debt in Canada, as announced on 24 January 2018; “Share Settlement” Means the business process whereby securities or interests in securities are delivered, in simultaneous exchange for payment of money, to fulfil contractual obligations, such as those arising under securities trades; “Shareholders” means the holders of the Common Shares and/or Subscription Shares, as the context requires; “SLK” Sidi El Kilani oilfield; “SMP” Société de Maintenance Pétrolière; “SNPC” Société Nationale des Pétroles du Congo (national oil company of the Republic of the Congo); “SOA” SOCAR Oil Affiliate, a company incorporated under the laws of Azerbaijan; “SOCAR” the State Oil Company of Azerbaijan Republic; “SOCARMO” The Marketing and Operations Department of SOCAR; “Standard Listing” means a listing on the Standard Listing Segment of the Official List under Chapter 14 of the Listing Rules; “Stock Option Plan” the Company’s shareholder approved stock option plan, further details of which are set out in paragraph 6 of Part 18: “ Additional Information ” of this Document; “Subsidiary” as defined in section 2(2) of the Business Corporations Act (British Columbia);

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“Subscription”

“Subscription Price”

“Subscription Shares”
“Takeover Panel”
“Torrente Cigno Concession”
“Trading Day”

“TSXV”

“Tunisian Acquisition”

The subscription for the Subscription Shares at the Subscription Price that is detailed in Part 10 of this document;

1.1 pence per Subscription Share;

the 272,727,273 new Common Shares subscribed for under the Subscription;

means the UK Panel on Takeovers and Mergers;

The gad production concession at Torrente Cigno, Italy;

means a day on which the main market of the London Stock Exchange (or such other applicable securities exchange or quotation system on which the Shares are listed) is open for business (other than a day on which the main market of the London Stock Exchange (or such other applicable securities exchange or quotation system) is scheduled to or does close prior to its regular weekday closing time);

means the TSX Venture Exchange;

Tunisian Acquisition Part I together with Tunisian Acquisition Part II; therefore, the acquisition of a total working interest of 45 per cent in, inter alia , the North Kairouan permit and the Sidi El Kilani concession;
“Tunisian Acquisition Part I” acquisition of a working interest of 22.5 per cent in, inter alia , the North Kairouan permit and the Sidi El Kilani concession from KUFPEC (Tunisia);

“Tunisian Acquisition Part II”

“uncertificated” or
“uncertificated form”
acquisition of its working interest of 22.5 per cent in, inter alia , the North Kairouan permit and the Sidi El Kilani concession from CNPC;
means, in relation to a share or other security, a share or other security, title to which is recorded in the relevant register of the share or other security concerned as being held in uncertificated form (that is, in CREST) and title to which may be transferred by using CREST;
“United Kingdom” or “UK” means the United Kingdom of Great Britain and Northern Ireland;
“United States” or “US” has the meaning given to the term “United States” in Regulation S;

“VAT”

means (i) within the EU, any tax imposed by any Member State in conformity with the Directive of the Council of the European Union on the common system of value added tax (2006/112/EC), and (ii) outside the EU, any tax corresponding to, or substantially similar to, the common system of value added tax referred to in paragraph (i) of this definition;
“Warrants” means the warrants to subscribe for Common Shares, as more particularly described in paragraph 4 of Part 14: “ Additional Information ” of this Document;
“Zenith Aran” Zenith Aran Oil Company Limited (the Company’s wholly�owned subsidiary), a company incorporated under the laws of the British Virgin Islands;

“Zenith Congo”

Zenith Energy Congo SA, a company established under the laws of the Republic of the Congo; and

109

“Zenith Netherlands”

Zenith Energy Netherlands B.V., a company established under the laws of the Netherlands.

References to a “company” in this Document shall be construed so as to include any company, corporation or other body corporate, wherever and however incorporated or established.

110

PART 18 GLOSSARY OF TECHNICAL TERMS

The following technical definitions apply throughout this Document unless the context requires otherwise:

Reserves

Reserves are estimated remaining quantities of oil and natural gas and related substances anticipated to be recoverable from known accumulations, as of a given date, based on:

(a) Analysis of drilling, geological, geophysical and engineering data;
(b) The use of established technology;
(c) Specified economic conditions, which are generally accepted as being reasonable, and shall be disclosed.

Reserves are classified according to the degree of certainty associated with the estimates.

Proved reserves are those reserves that can be estimated with a high degree of certainty to be recoverable It is likely that the actual remaining quantities recovered will exceed the estimated proved reserves.

Probable reserves are those additional reserves that are less certain to be recovered than proved reserves. It is equally likely that the actual remaining quantities recovered will be greater or less than the sum of the estimated proved plus probable reserves.

Possible reserves are those additional reserves that are less certain to be recovered than probable reserves. It is unlikely that the actual remaining quantities recovered will exceed the sum of the estimated proved plus probable plus possible reserves.

Each of the reserves categories (proved, probable and possible) may be divided into developed and undeveloped categories:

(a) Developed reserves are those reserves that are expected to be recovered from existing wells and installed facilities or, if facilities have not been installed, that would involve a low expenditure (e.g., when compared to the cost of drilling a well) to put the reserves on production. The developed category may be subdivided into producing and non�producing.

Developed producing reserves are those reserves that are expected to be recovered from completion intervals open at the time of the estimate. These reserves may be currently producing or, if shut�in, they must have previously been on production, and the date of resumption of production must be known with reasonable certainty.

Developed non�producing reserves are those reserves that either have not been on production or have previously been on production but are shut�in and the date of resumption of production is unknown.

(b) Undeveloped reserves are those reserves expected to be recovered from known accumulations where a significant expenditure (e.g., when compared to the cost of drilling a well) is required to render them capable of production. They must fully meet the requirements of the reserves category (proved, probable, possible) to which they are assigned.

In multi�well pools it may be appropriate to allocate total pool reserves between the developed and undeveloped categories or to subdivide the developed reserves for the pool between developed producing and developed non�producing. This allocation should be based on the estimator’s assessment as to the reserves that will be recovered from specific wells, facilities, and completion intervals in the pool and their respective development and production status.

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Levels of Certainty for Reported Reserves

The qualitative certainty levels referred to in the definitions above are applicable to “individual reserves entities”, which refers to the lowest level at which reserves calculations are performed, and to “reported reserves”, which refers to the highest�level sum of individual entity estimates for which reserves estimates are presented. Reported reserves should target the following levels of certainty under a specific set of economic conditions:

(a) at least a 90% probability that the quantities actually recovered will equal or exceed the estimated proved reserves;
(b) at least a 50% probability that the quantities actually recovered will equal or exceed the sum of the estimated proved plus probable reserves; and
(c) at least a 10% probability that the quantities actually recovered will equal or exceed the sum of the estimated proved plus probable plus possible reserves.

A quantitative measure of the certainty levels pertaining to estimates prepared for the various reserves categories is desirable to provide a clearer understanding of the associated risks and uncertainties. However, the majority of reserves estimates are prepared using deterministic methods that do not provide a mathematically derived quantitative measure of probability. In principle, there should be no difference between estimates prepared using probabilistic or deterministic methods.

General

General
“BIT”	Before Income Tax;
“AIT”	After Income Tax;
“M$”	Thousands of Dollars;
“Effective Date”	The date for which the Present Value of the future cash flows and
	reserve categories are established;
“$US”	United States Dollars;
“BRENT”	North Sea Oil – the common reference for crude oil used for oil price
	comparisons outside North America:
“WTI”	West Texas Intermediate – the common reference for crude oil used
	for oil price comparisons in North America:
Technical Data
“psia”	Pounds per square inch absolute;
“MSTB”	Thousands of Stock Tank barrels of oil (oil volume at 60 F and
	14.65 psia);
“MMscf”	Millions of standard cubic feet of gas (gas volume at 60 f and
	14.65 psia);
“Bbls”	Barrels;
“Mbbls”	Thousands of barrels;
“MMBTU”	Millions of British Thermal Units – heating value of natural gas;
“STB/d”	Stock Tank Barrels of oil per day – oil production rate;
“Mscf/d”	Thousands of standard cubic feet of gas per day – gas production
	rate;
“GOR (scf/STB)”	Gas�Oil ratio (standard cubic feet of solution gas per stick tank barrel
	of oil);

112

“mKB” Metres Kelly Bushing — depth of well in relation to the Kelly Bushing which is located on the floor of the drilling rig. The Kelly Bushing is the usual reference for all depth measurements during drilling operations;

“EOR” Enhanced Oil Recovery; “GJ” Gigajoules; “Marketable or Sales Natural Gas” Natural gas that meets specifications for its sale, whether it occurs naturally or results from the processing of raw natural gas. Field and plant fuel and losses to the point of the sale must be excluded from the marketable quantity. The heating value of marketable natural gas may vary considerably, depending on its composition; therefore, quantities are usually expressed not only in volumes but also in terms of energy content. Reserves are always reported as marketable quantities; “NGLs” Natural Gas Liquids – Those hydrocarbon components that can be recovered from natural gas as liquids, including but not limited to ethane, propane, butanes, pentanes plus, condensate, and small quantities of non�hydrocarbons; “Raw Gas” Natural gas as it is produced from the reservoir prior to processing. It is gaseous at the conditions under which its Volume is measured or estimated and may include varying amounts of heavier hydrocarbons (that may liquefy at atmospheric conditions) and water vapour; may also contain sulphur and other non�hydrocarbon compounds. Raw natural gas is generally not suitable for end use; and “EUR” Estimated Ultimate Recovery.

113

PART 19 COMPETENT PERSON’S REPORT

(A) Chapman Report 2021 – Italy
(B) Chapman Report 2021 – Tunisia (Sidi El Kilani Concession)
(C) Chapman Report 2021 – Tunisia (El Bibane, Robbana and Ezzaouia Concessions)
(D) Chapman Report 2021 – Congo

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(A) Chapman Report 2021 – Italy

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Austria
Switzerland Hungary
Slovenia
Croatia
France
ITALY
Gulf of Venice Bosnia
& Herz.
Misano Adriatico
Adriatic Sea
Rome San Mauro
Torrente Cigno
Lucera
Tyrrhenian Sea
Mediterranean Sea
Tunisia
Algeria
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ZENITH ENERGY LTD.
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COMPANY’S CONCESSIONS ITALY ORIENTATION MAP OCT. 2021 JOB No. 6770 FIGURE No. 1a

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ISOLE TREMITI
LAVIZZA
GIO
COLLE GINESTRE
MAFALDA
COLLE DI LAURO
TORRENTE
CIGNO
VALLE DEL ROVELLO
MASSERIA VERTICCHIO
MASSERIA GROTTAVECCHIA
MELANICO
M A R E
ASSO
MASSERIA PETRILLI A D R I A T I C O
CROCE
MASSERIA
TERTIVERI ACQUASALSA Foggia
TORRENTE �
LUCERA CELONE
TORRENTE
VULGANO
POSTA NUOVA
MACCHIA DI PIERN O
MONTE VRECCIARO
PECORARO SEDIA D'ORLANDO
Barletta, �
Andria, Trani
CANDELA
�
Benevento
NUSCO
40 km
Austria
Switzerland. Hungary
Slovenia
San Andrea
Croatia
France
ITALY
Gulf of Venice Bosnia
& Herz.
Misano Adriatico ZENITH ENERGY LTD.
Adriatic Sea
Rome San Mauro LUCERA CONCESSION
Masseria
Torrente Cigno Acquasals
Lucera PUGLIA REGION, ITALY
Tyrrhenian Sea
LAND MAP
Mediterranean Sea
OCT. 2021 JOB No. 6770 FIGURE No. 1
Tunisia
Algeria
35
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Source: Doglioni and Flores, An Introduction to the Italian Geology, 1997 ZENITH ENERGY LTD. ITALY REGIONAL GEOLOGY OCT. 2021 JOB No. 6770 FIGURE No. 2a 37

152

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ZONES OF INTEREST
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ZENITH ENERGY LTD. ITALY STRATIGRAPHIC CHART OCT. 2021 JOB No. 6770 FIGURE No. 2b

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GIORE 40 km
LONGASTRINO
DOSSO DEGLI ANGELI
ALFONSINE
TOCCAGGIO
PORTO CORSINI TERRA
RAVENNA
CASALE TERRA
COCCHI
Ravenna
�
TITO
SAN MARCO M A R E
AN POTITO E
COTIGNOLA
TOCCAGGIO
DEI GRILLI A D R I A T I C O
�
Forlì -
Cesena
�
Rimini
MISANO
ADRIATICO
Pesaro Urbino
�
MONTELURO
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Austria
Switzerland. Hungary
Slovenia
San Andrea
Croatia
France
ITALY
Gulf of Venice Bosnia
& Herz.
Misano
Adriatico
Adriatic Sea
Rome San Mauro
Masseria
Torrente Cigno Acquasals
Lucera
Tyrrhenian Sea
Mediterranean Sea
Tunisia
Algeria
51
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ZENITH ENERGY LTD.
MISANO ADRIATICO
CONCESSION
EMILIA ROMAGNA REGION, ITALY
LAND MAP
OCT. 2021 JOB No. 6770 FIGURE No. 1
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Source: Doglioni and Flores, An Introduction to the Italian Geology, 1997 ZENITH ENERGY LTD. ITALY REGIONAL GEOLOGY OCT. 2021 JOB No. 6770 FIGURE No. 2a 53

168

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ZONES OF INTEREST
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ZENITH ENERGY LTD. ITALY STRATIGRAPHIC CHART OCT. 2021 JOB No. 6770 FIGURE No. 2b

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RTONA
S. MARIA
IMBARO
CIVITA
ISOLE TREMITI
AGLAVIZZA
O FIUME TRESTE STOCCAGGIO
FIUME TRESTE COLLE GINESTRE
MAFALDA
COLLE
DI LAURO
TORRENTE
CIGNO
Masseria Vincelli 1
4 VALLE DEL ROVELLO
MASSERIA VERTICCHIO
MASSERIA GROTTAVECCHIA
40 km MELANICO
CAMPOBASSO MASSERIA PETRILLI
�
MASSERIA
SANTA CROCE
LUCERA ACQUASALSA
TERTIVERI F
Austria
Switzerland. Hungary
Slovenia
San Andrea
Croatia
France
ITALY
Gulf of Venice Bosnia
& Herz.
Misano Adriatico ZENITH ENERGY LTD.
Adriatic Sea
Rome San Mauro TORRENTE CIGNO
TorrenteCigno MasseriaAcquasals CONCESSION
Lucera MOLISE REGION, ITALY
Tyrrhenian Sea
LAND AND WELL MAP
Mediterranean Sea
OCT. 2021 JOB No. 6770 FIGURE No. 1
Tunisia
Algeria
68
M A R E A D R I A T I C O
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Source: Doglioni and Flores, An Introduction to the Italian Geology, 1997 ZENITH ENERGY LTD. ITALY REGIONAL GEOLOGY OCT. 2021 JOB No. 6770 FIGURE No. 2a 70

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ZONE OF INTEREST
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ZENITH ENERGY LTD. ITALY STRATIGRAPHIC CHART OCT. 2021 JOB No. 6770 FIGURE No. 2b

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4
MASSERIA
VINCELLI 1
UP DIP GAS
AQUIFER
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ZENITH ENERGY LTD. TORRENTE CIGNO CONCESSION MOLISE REGION, ITALY MASSERIA VINCELLI STRUCTURE OCT. 2021 JOB No. 6770 FIGURE No. 2c

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(B) Chapman Report 2021 – Tunisia (Sidi El Kilani Concession)

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ZENITH ENERGY LTD.

SIDI EL KILANI CONCESSION PELAGIAN PROVINCE, TUNISIA ORIENTATION MAP OCT. 2021 JOB No. 6772 FIGURE No. 1

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3 SLK-5
SLK-8 ST
SLK-8 SLK-2
SLK-2 ST
SLK-14
SLK-1
SLK-12 SLK-3 NORTH BLOCK
SLK-4
SLK-6
SLK-7
SOUTH BLOCK
SLK-9
SLK-10
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Well of Interest ZENITH ENERGY LTD.
Company Lands
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SIDI EL KILANI CONCESSION
PELAGIAN PROVINCE, TUNISIA
LAND AND WELL MAP
OCT. 2021 JOB No. 6772 FIGURE No. 1
33
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Source: KUFPEC, Sidi El Kilani (SLK) Concession, Tunisia - July 2019 Asset Presentation, Page 17

ZENITH ENERGY LTD.

TUNISIA PELAGIAN STRUCTURAL FRAMEWORK OCT. 2021 JOB No. 6772 FIGURE No. 2a

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35
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ZENITH ENERGY LTD.
TUNISIA
STRATIGRAPHIC COLUMN
OCT. 2021 JOB No. 6772 FIGURE No. 2b
36
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WEST EAST
Depth,
in feet
M.S .L. M.S .L.
2,000 Post Miocene 2,000
Miocene (nonmar ine) sand and m udstone
O
4,000 E 4,000
P
6,000 Miocene (mar ine) sand and m udstone E 6,000
P
Oligocene E
8,000 Eocene shelf limestone limestone/mar l E O 8,000
E
Paleocene basinal
10,000 mudstone and mar l 10,000
Cretaceous limestone and mar l
Fault
Unconformity
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Source: T.R. Klett, Total Petroleum Systems of the Pelagian Province, Tunisia, Libya, Italy, and Malta—The Bou Dabbous– Tertiary and Jurassic-Cretaceous Composite, U.S. Geological Survey Bulletin 2202-D, 2001, Page 10

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ZENITH ENERGY LTD.
GULF OF HAMMAMET
PELAGIAN PROVINCE, TUNISIA
EAST-WEST REGIONAL
CROSS SECTION
OCT. 2021 JOB No. 6772 FIGURE No. 2c
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0 Plio
Neogene
Mio
24
Olig
Paleogene Eoc
50
Pa l EH
65 AB
L DOU
BIR
BAH
ZEB
100 Cretaceous LF
SRJ
E MCH/SA
MEL
150 144 L MR
NA
M
Jurassic
NA
E
200
L
Triassic
M
E
250 L
Pe rmian
E
PETROLEUM SYSTEM EVENTS
GEOLOGIC TIME SCALE ROCK UNIT SOURCE ROCK RESERVOIR ROCK SEAL ROCK OVERBURDEN ROCK TRAP FORMATION CRITICAL MOMENT
? ?
N
O
IT
A
V
R
E
S
E
R
P
ACCUMULATION
MIGRATION-
GENERATION-
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ZENITH ENERGY LTD.
PELAGIAN PROVINCE
TUNISIA
PETROLEUM SYSTEM-1
OCT. 2021 JOB No. 6772 FIGURE No. 2d
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0 Plio
Neogene BRS
Mio AG
24
Olig KET
Paleogene Eoc REI
50 JDE
BOU
Pa l
65
L
100 Cretaceous
E
144
150 L
M
Jurassic
E
200
L
Triassic
M
E
250 L
Pe rmian
E
PETROLEUM SYSTEM EVENTS
GEOLOGIC TIME SCALE ROCK UNIT SOURCE ROCK RESERVOIR ROCK SEAL ROCK OVERBURDEN ROCK TRAP FORMATION CRITICAL MOMENT
N
O
IT
A
V
R
E
S
E
R
P
ACCUMULATION
MIGRATION�
GENERATION-
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Source: T.R. Klett, Total Petroleum Systems of the Pelagian Province, Tunisia, Libya, Italy, and Malta—The Bou Dabbous– ZENITH ENERGY LTD. Tertiary and Jurassic-Cretaceous Composite, U.S. Geological Survey Bulletin 2202-D, 2001, Page 14 PELAGIAN PROVINCE TUNISIA PETROLEUM SYSTEM-2 OCT. 2021 JOB No. 6772 FIGURE No. 2e

244

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Source: KUFPEC, Sidi El Kilani (SLK) Concession, Tunisia - July 2019 Asset Presentation, Page 23

ZENITH ENERGY LTD.

SIDI EL KILANI CONCESSION

PELAGIAN PROVINCE, TUNISIA TOP ABIOD FORMATION DEPTH STRUCTURE MAP

OCT. 2021 JOB No. 6772 FIGURE No. 2f

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ZENITH ENERGY LTD.

SIDI EL KILANI CONCESSION PELAGIAN PROVINCE, TUNISIA PRODUCTION HISTORY PROFILE OCT. 2021 JOB No. 6772 FIGURE No. 3 42

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3
LOCATION 3
LOCATION 2
LOCATION 1
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Company Producers Development Location

ZENITH ENERGY LTD.

SIDI EL KILANI CONCESSION

PELAGIAN PROVINCE, TUNISIA DEVELOPMENT LOCATIONS MAP OCT. 2021 JOB No. 6772 FIGURE No. 4

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(C) Chapman Report 2021 – Tunisia (El Bibane, Robbana and Ezzaouia Concessions)

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DJERBA ISLAND
ROBBANA
EZZAOUIA
EL BIBANE
Source: Google Earth
TUNISIA
TUNISIA
ZENITH ENERGY LTD.
COMPANY CONCESSIONS
TUNISIA
ORIENTATION MAP
OCT. 2021 JOB No. 6773 FIGURE No. 1
22
M
e
d
i
t
e
r
r
a
n
e
a
n
S
e
a
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COMPANY CONCESSIONS TUNISIA ORIENTATION MAP OCT. 2021 JOB No. 6773 FIGURE No. 1

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N
EBB-2
EBB-1
EBB-4 EBB-5
EBB-3
EBB-W1
2 km
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Producers

ZENITH ENERGY LTD. EL BIBANE CONCESSION TUNISIA LAND AND WELL MAP OCT. 2021 JOB No. 6773 FIGURE No. 1

298

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ZONE OF INTEREST
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Source: Candax Presentation, June 2019, p. 2
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ZENITH ENERGY LTD. EL BIBANE CONCESSION TUNISIA STRATIGRAPHIC CHART OCT. 2021 JOB No. 6773 FIGURE No. 2a 33

300

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EBB-5
EBB-4
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+ Producers

ZENITH ENERGY LTD.

EL BIBANE CONCESSION TUNISIA STRUCTURAL CONTOUR DEPTH MAP ON ZEBBAG FM C.I. = 20 m OCT. 2021 JOB No. 6773 FIGURE No. 2b

301

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4
10
18 11
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Producers
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Source: Ryder Scott Company Petroleum Consultants, Candax Report 2013, p. 38, modified

ZENITH ENERGY LTD. EZZAOUIA CONCESSION TUNISIA LAND AND WELL MAP OCT. 2021 JOB No. 6773 FIGURE No. 1 60

327

328

ZONE OF INTEREST ZONE OF INTEREST Source: Candax Presentation, June 2019, p. 2

ZENITH ENERGY LTD. EZZAOUIA CONCESSION TUNISIA STRATIGRAPHIC CHART OCT. 2021 JOB No. 6773 FIGURE No. 2a 62

329

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Source: MCH-Petroleum Training & Consulting, Candax Report 2020, p. 11, modified

Zebbag Producer M’Rabtine Producer New Location

ZENITH ENERGY LTD. EZZAOUIA CONCESSION TUNICIA STRUCTURAL CONTOUR DEPTH MAP C.I. = 15 m OCT. 2021 JOB No. 6773 FIGURE No. 2b

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D J E R B A I S L A N D
GU-1
MZR-1
ROB-1
ROB-2
N
Producers
----- End of picture text -----

ZENITH ENERGY LTD. ROBBANA CONCESSION TUNISIA LAND AND WELL MAP OCT. 2021 JOB No. 6773 FIGURE No. 1

361

362

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----- Start of picture text -----

ZONE OF INTEREST
----- End of picture text -----

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----- Start of picture text -----

Source: Candax Presentation, June 2019, p. 2
----- End of picture text -----

ZENITH ENERGY LTD. ROBBANA CONCESSION TUNISIA STRATIGRAPHIC CHART OCT. 2021 JOB No. 6773 FIGURE No. 2a 96

363

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Concession boundary

ZENITH ENERGY LTD. ROBBANA CONCESSION TUNISIA STRUCTURAL CONTOUR DEPTH MAP ON MELOUSSI FM C.I. = 25 m OCT. 2021 JOB No. 6773 FIGURE No. 2b

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365

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----- Start of picture text -----

3P
2P
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ZENITH ENERGY LTD.

ROBBANA CONCESSION TUNISIA ANALOG PRODUCTION PLOT FOR NEW DRILLS OCT. 2021 JOB No. 6773 FIGURE No. 3

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Source: Candax Presentation, May 2020, p. 39

ZENITH ENERGY LTD. EL BIBANE CONCESSION TUNISIA TRIASSIC PROSPECT MAP OCT. 2021 JOB No. 6773 FIGURE No. 1 122

389

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----- Start of picture text -----

ZONE OF INTEREST
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ZENITH ENERGY LTD. EL BIBANE CONCESSION TUNISIA STRATIGRAPHIC CHART OCT. 2021 JOB No. 6773 FIGURE No. 2a 124

391

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Source: Ryder Scott Company Petroleum Consultants, Candax Report 2007

==> picture [290 x 256] intentionally omitted <==

----- Start of picture text -----

INDEX MAP
125
T R I A S S I C O U T C R O P S
----- End of picture text -----

ZENITH ENERGY LTD.

EL BIBANE CONCESSION TUNISIA STRATIGRAPHIC CORRELATION Schematic OCT. 2021 JOB No. 6773 FIGURE No. 2b

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@RISK Output Report for RRGIP / MMCF

Performed By: Chapman Petroleum Engineering Ltd. Date: Monday, April 26, 2021 5:02:52 PM

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Simula�on Summary Informa�on	Simula�on Summary Informa�on	Simula�on Summary Informa�on	Simula�on Summary Informa�on
Workbook Name Number of Simula�ons Number of Itera�ons Number of Inputs Number of Outputs Sampling Type Simula�on Start Time Simula�on Dura�on Random # Generator Random Seed		Monte Carlo Parameter El Biban.xlsx 1 1E+05 4 1 La�n Hypercube 4/26/21 16:59:34 00:01:48 Mersenne Twister 1008811076

Summary Sta�s�cs for RRGIP/ MMCF
Sta�s�cs		Percen�le
Minimum Maximum Mean Std Dev Variance Skewness Kurtosis Median Mode Le� X Le� P Right X Right P Di� X Di� P #Errors Filter Min Filter Max #Filtered	65,424 2,705,702 740,769 334,506 1.11894E+11 0.834742064 3.784042047 688,846 597,679 355,075 10% 1,197,155 90% 842,080 80% 0 O� O� 0	5%	289,364
		10%	355,075
		15% 20% 25% 30% 35% 40% 45%	405,453 449,558 491,717 531,493 569,795 609,321 648,711
		50%	688,846
		55% 60% 65% 70% 75% 80% 85%	732,194 778,049 825,794 878,699 937,018 1,005,715 1,088,167
		90%	1,197,155
		95%	1,363,568

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Regression and Rank Informa�on for RRGIP / MMC
Rank Name Regr Corr
1 BVO / MMCF 0.596 0.604
2 2000 / MMCF 0.552 0.547
3 Net Pay Ft. / MMC0.434 0.423
4 Recovery Factor /-0.297 -0.282
ZENITH ENERGY LTD.
EL BIBANE CONCESSION
TUNISIA
OUTPUT RESULTS
OCT. 2021 JOB No. 6773 FIGURE No. A-1
----- End of picture text -----

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409

@RISK Input Results Performed By: Chapman Petroleum Engineering Ltd. Date: Monday, April 26, 2021 5:02:57 PM

	Name	Cell	Min	Mean	Max	5%	95%	Errors
Category: 2000
	2000 / MMCF	E10	1409.627	3566.667	5745.453	2083.769	5058.199	0
Category: BVO
	BVO / MMCF	E8	0.01389181	0.04691667	0.07489542	0.02457296	0.06660676	0
Category: Net PayFt.
	Net Pay Ft. / MMCF	E9	260.1366	510	749.6445	339.8051	674.9308	0
Category: RecoveryFactor
	Recovery Factor / MMCF	E12	50.00964	61.66667	74.96065	53.5352	70.66954	0

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ZENITH ENERGY LTD.
EL BIBANE CONCESSION
TUNISIA
INPUT RESULTS
OCT. 2021 JOB No. 6773 FIGURE No. A-2
143
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Source: Ryder Scott Company Petroleum Consultants, Candax Report 2007

ZENITH ENERGY LTD. EZZAOUIA CONCESSION TUNISIA TRIASSIC PROSPECT MAP OCT. 2021 JOB No. 6773 FIGURE No. 1 150

417

151

418

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ZONE OF INTEREST
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ZENITH ENERGY LTD. EZZAOUIA CONCESSION TUNISIA STRATIGRAPHIC CHART OCT. 2021 JOB No. 6773 FIGURE No. 2a 152

419

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Source: Ryder Scott Company Petroleum Consultants, Candax Report 2007

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----- Start of picture text -----

INDEX MAP
153
T R I A S S I C O U T C R O P S
----- End of picture text -----

ZENITH ENERGY LTD.

EZZAOUIA CONCESSION TUNISIA STRATIGRAPHIC CORRELATION Schematic OCT. 2021 JOB No. 6773 FIGURE No. 2b

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@RISK Output Report for RRGIP / MMCF

Performed By: Chapman Petroleum Engineering Ltd. Date: Monday, April 26, 2021 4:48:32 PM

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Simula�on Summary Informa�on Workbook Name ~~Monte Carlo Parameter~~ Ezzaouia.xlsx Number of Simula�ons 1 Number of Itera�ons 1E+05 Number of Inputs 4 Number of Outputs 1 Sampling Type La�n Hypercube Simula�on Start Time 4/26/21 16:46:20 Simula�on Dura�on 00:01:50 Random # Generator Mersenne Twister Random Seed 332059864

Summary Sta�s�cs for RRGIP/ MMCF	Summary Sta�s�cs for RRGIP/ MMCF	Summary Sta�s�cs for RRGIP/ MMCF	Summary Sta�s�cs for RRGIP/ MMCF
Sta�s�cs		Percen�le
Minimum Maximum Mean Std Dev Variance Skewness Kurtosis Median Mode Le� X Le� P Right X Right P Di� X Di� P #Errors Filter Min Filter Max #Filtered	74,817 1,740,358 554,323 218,229 47623721289 0.64157973 3.354357352 528,515 451,073 292,042 10% 850,353 90% 558,311 80% 0 O� O� 0	5%	242,555
		10%	292,042
		15% 20% 25% 30% 35% 40% 45%	330,596 363,668 393,471 421,495 448,623 474,356 501,469
		50%	528,515
		55% 60% 65% 70% 75% 80% 85%	556,469 586,288 616,999 651,121 689,014 732,214 782,516
		90%	850,353
		95%	954,383

Regression and Rank Informa�on for RRGIP/ MMC	Regression and Rank Informa�on for RRGIP/ MMC	Regression and Rank Informa�on for RRGIP/ MMC
Rank Name Regr	Corr
1 BVO / MMCF 0.684	0.692
2 2000 / MMCF 0.560	0.548
3 Recovery Factor /-0.341	-0.322
4 Net PayFt. / MMC0.238	0.224

*ZENITH ENERGY LTD.*
EZZAOUIA CONCESSION OUTPUT RESULTS TUNISIA
OCT. 2021 JOB No. 6773	FIGURE No. A-1

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@RISK Input Results Performed By: Chapman Petroleum Engineering Ltd. Date: Monday, April 26, 2021 4:48:36 PM

	Name	Cell	Min	Mean	Max	5%	95%	Errors
Category: 2000
	2000 / MMCF	E10	2004.187	4166.667	6493.084	2670.765	5749.957	0
Category: BVO
	BVO / MMCF	E8	0.01385074	0.04691667	0.07493075	0.02457279	0.06660722	0
Category: Net PayFt.
	Net Pay Ft. / MMCF	E9	250.3427	326.6667	399.8448	274.4942	377.0871	0
Category: RecoveryFactor
	Recovery Factor / MMCF	E12	50.02273	61.66667	74.96716	53.53527	70.66975	0

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ZENITH ENERGY LTD.
EZZAOUIA CONCESSION
TUNISIA
INPUT RESULTS
OCT. 2021 JOB No. 6773 FIGURE No. A-2
174
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(D) Chapman Report 2021 – Congo

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10
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----- Start of picture text -----

GABON
REPUBLIC OF
THE CONGO
TILAPIA LICENCE
AT L A N T I C
O C E A N Pointe-Noire
ANGOLA
DR OF THE
CONGO
Source: Google Maps
International Boundary
Regional Boundaries
Major Roads
REPUBLIC OF ZENITH ENERGY LTD.
THE CONGO
TILAPIA LICENCE
REPUBLIC OF THE CONGO
ORIENTATION MAP
OCT. 2021 JOB No. 6771 FIGURE No. #
20
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----- Start of picture text -----

Source: Anglo African Oil & Gas PLC, 2020, Slide 17
32S
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----- Start of picture text -----

ZENITH ENERGY LTD.
TILAPIA LICENCE
REPUBLIC OF THE CONGO
LAND AND WELL MAP
OCT. 2021 JOB No. 6771 FIGURE No. 1
31
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5°W 0° 5°E 10°E 15°E 20°E
CENTRAL AFRICAN REPUBLIC
CAMEROON
5°N
BANGUI
Douala
Gulf of Guinea YAOUNDE
MALABO
EQUATORIAL
Douala, Kribi-Lampo Basin
GUINEA
Rio Muni Basin
LIBREVILLE
0° SAO TOME AND PRINCIPE
GABON
DEMOCRATIC
Gabon Basin
REPUBLIC OF THE
CONGO
BRAZZAVILLE
5°S
ANGOLA (Cabinda)
KINSHASA
Congo Basin
Luanda
Kwanza Basin
10°S
ATLANTIC
OCEAN
ANGOLA
BENGUELA
Benguela Basin ZAMBIA
15°S
Namibe Basin
NAMIBIA
BOTSWANA
20°S
Base from U.S. Geological Survey digital data, 2002
World Geodetic System 1984 (WGS 84)Prime Meridian, Greenwich, 0° Melania-Gamba Total Petroleum System (720301) Central Congo Delta and Carbonate Platform Assessment Unit (72030301) boundary
Congo Delta Composite Total Petroleum Center point of oil field
0 100 200 300 400 KILOMETERS System (720303) Center point of gas field
West-Central Coastal Province boundary
0 100 200 300 400 MILES Gabon Subsalt Assessment Unit (72030101)
boundary
ZENITH ENERGY LTD.
AFRICA
WEST AFRICA
West-Central
Coastal SEDIMENTARY BASINS AND
7203 HYDROCARBON OCCURRENCES
MAP
INDEX MAP
Source: Brownfield, M.E., Assessment of Undiscovered OCT. 2021 JOB No. 6771 FIGURE No. 2a
Oil and Gas Resources of the West-Central Coastal Province,
REPUBLIC OF THE CONGO
----- End of picture text -----

Source: Brownfield, M.E., Assessment of Undiscovered Oil and Gas Resources of the West-Central Coastal Province, West Africa, 2016, p.4

480

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----- Start of picture text -----

Vandji Marine
Nene Marine
M’Boundi
Minsala Marine TILAPIA
Kouakouala
Pointe Indienne Mengo Loufika
Litchendjili
Viodo
Lidongo X Marine Bindi
Loussima
Kundji
Tchiniambi
Pre-salt clastic fields
discovered before 2006
Manzi
Pre-salt clastic fields
discovered after 2006
Move
----- End of picture text -----

Source: Gaffney, Cline & Associates, 2015, Slide 11

ZENITH ENERGY LTD. CONGO BASIN REPUBLIC OF THE CONGO PRE-SALT CLASTIC PLAYS OCT. 2021 JOB No. 6771 FIGURE No. 2b 34

481

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Tectonic
Age Lithology Formation
phase
Paloukou
M iocene
Eo c e n e and
Pa le ocene
S e no nian Emeraud e
T u ronian Loa n g o Dolom i te
Tchala
Ce n om a nian
Sandstone
S endji
Carbonate
A lb ian
Dolomitic
sandstone
Loeme Salt
Aptian
Chela Sandstone
Pointe Indienne Shale
Toca
Mengo
Barremian
Po inte Noire Marl
Djeno Sandstone
Neocomian
Sialivakou Shale
Vandji Sandstone
Pre - C r eta c e o us Basement Pre-rift
So u rce : Bro w nfie l d, M . E., A s ses s m ent of Undiscovered Oil and Gas Resources
of the West-Central Coa st a l P r o vi n ce, West Africa, 2016, p.16
Sandstone Marine siltstone
Littoral siltstone L acustrine marlstone ZENITH ENERGY LTD.
and shale
Dolomi ti c s andstone L imestone
Sa ndstone with shale CONGO BASIN
Dolomitic
partings
REPUBLIC OF THE CONGO
Shale Salt
Basement STRATIGRAPHIC COLUMN
Contact ZONE OF IN TEREST
Unconformity OCT. 2021 JOB No. 6771 FIGURE No. 2c
Source rock
Tertiary
Marl
Madingo
Post-rift
Likouala
Cretaceous
Syn-rift
----- End of picture text -----

482

Source: Brownfield, M.E., Assessment of Undiscovered Oil and Gas Resources of the West-Central Coastal Province, West Africa, 2016, p.17

==> picture [504 x 412] intentionally omitted <==

----- Start of picture text -----

Basin Slope Pla t f or m
SOUTHWEST Sendji Fiel d Shore NOR T HEAST
METERS
Sea Leve l
Atlantic Ocean Em e r aude
Loango Madingo Ma rl
1,000 Sea b ottom T e r t i a ry dolomite
r ock Likouala Siltstone
u n d ivided
Sendji Carbonate
2,000
Pointe Noire Marl
3,000 Sialivakou Shale
4,0 0 0
Denta le Chela sandstone Djeno sandstone Vandji sandstone
5,0 0 0
6,00 0 ? Kayes-
Loeme
Liko u ala H i gh Emeraude Troug h Subbasin
Dentale Grabe n Flat
7,00 0
0 10 20 K I L OMETERS
0 10 20 MILES
Sandstone Sandy dolomite Sandston e and * Approximate Location of
shale the Tilapia Licence
Conglomerate Shale Contact
Fault
Siltstone Marls tone Unconformit y
? Unknown
Limestone Salt
Limey
Dolomite Base ment
Tchala Sandstone
Loeme Salt
Mayyombe
----- End of picture text -----*

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----- Start of picture text -----

0˚
NIGERIA
EQUATORIAL
GUINEA
0˚
ATLANTIC OCEAN
GABON
Line of section
REPUBLIC OF
THE CONGO ANGOLA
INDEX MAP
CAMEROON
----- End of picture text -----

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----- Start of picture text -----

ZENITH ENERGY LTD.
CONGO BASIN
WEST AFRICA
SW-NE REGIONAL
CROSS SECTION
OCT. 2021 JOB No. 6771 FIGURE No. 2d
----- End of picture text -----

483

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----- Start of picture text -----

PETROLEUM SYSTEM EVENTS
GEOLOGY
Age Lithology Formation
Quaternary
Pleistocene
Pliocene
Miocene Malembo
Oligocene
Eocene
Landana
Paleocene
Maastrichtia n
Campania n
Santonian
Coniacian
Turonian
Mesa
Marine
Vermelha Location of
Cenomanian critical moment
X (major uncomformity)
Albian Pinda
Contin ental
Vemel ha
Mavuma/Inhuca
Lo e m e
Aptian
C he l a
T o ca A Toca B
Upper Bucomazi
Barremian
Toc a
C
Toca D
Neocomian
Lucula
Jurassic ?
Mayombe igneous
Precambrian and metamorphic
complex
Sandst one Dolom ite Contact
ZENITH ENERGY LTD.
Unconformity
Conglomerate Salt
Source rock
Ssh anad le stone and Anhydrite Secondary source rock REPUBLIC OF THE CONGOWEST AFRICA
Reservoir rock
Shale Basement Regional evaporate unit ELEMENTS OF CONGO
Limest on e DELTA COMPOSITE
TOTAL PETROLEUM SYSTEM
OCT. 2021 JOB No. 6771 FIGURE No. 2e
Source: Brownfield, M.E., Assessment of Undiscovered
Oil and Gas Resources of the West-Central Coastal Province,
37
Lucula
Quat.
MiddleBucomazi
LowerBucomazi
Lago
Continental Vermelha
SOURCE ROCK RESERVOIR ROCK SEAL ROCK OVERBURDEN ROCK TRAP FORMATION PRESERVATION CRITICAL MOMENT
Tertiary
Senonian
Iabe
Cretaceous
Tocafacies
ACCUMULATION
MIGRATION-
GENERATION-
----- End of picture text -----

==> picture [216 x 27] intentionally omitted <==

----- Start of picture text -----

Source: Brownfield, M.E., Assessment of Undiscovered
Oil and Gas Resources of the West-Central Coastal Province,
West Africa, 2016, p.35
----- End of picture text -----

484

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----- Start of picture text -----

BGM-1 BGM-2 BGMS-1 TLP-103C DIY-1
1670
1912
1968 1962
2019
2115
2183 2193 ?
2218
* ? ?
2356 ?
?
2505
2542
3051
3217
3267
26
API
Source: Anglo African Oil & Gas PLC, 2020, Slide 26
Pointe Indienne Shale * ��
Pointe Noire Marl ? ��
Djeno
Unit 1
Unit 2
Unit 3
Sialivakou
Vandji
292 m
147 m 147 m 281 m 281 m
164 m
138 m 138 m
312 m 312 m 580 m
936 m
936 m
1034 m
911 m 911 m
----- End of picture text -----*

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----- Start of picture text -----

TLP-103C
----- End of picture text -----

ZENITH ENERGY LTD.

TILAPIA LICENCE REPUBLIC OF THE CONGO STRATIGRAPHIC CROSS SECTION OF THE DJENO SANDSTONE OCT. 2021 JOB No. 6771 FIGURE No. 2f

485

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----- Start of picture text -----

TLP-103C
----- End of picture text -----

Source: Anglo African Oil & Gas PLC, 2020, Slide 12

Company’s Djeno Sandstone Well

ZENITH ENERGY LTD. TILAPIA LICENCE REPUBLIC OF THE CONGO DJENO SANDSTONE TIME STRUCTURE MAP C.I. = 10 ms OCT. 2021 JOB No. 6771 FIGURE No. 2g

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Printed by Rubicon Corporate Print 18331-01

AI assistant

Zenith Energy — Capital/Financing Update 2021

8200_rns_2021-11-16_ddb4c565-53ea-4c79-a09d-49a081165a8a.pdf

Zenith Energy Ltd.

Allenby Capital Limited

Financial Adviser & Broker

Notice to Distributors

CONTENTS

PART 1

SUMMARY

Introduction and Warnings

Key Information on the Issuer

Who is the issuer of the securities?

What is the key financial information regarding the issuer?

What are the key risks that are specific to the issuer?

The impact of global oil prices on the Company

Zenith’s oil and natural gas reserves data presented in this prospectus are only estimates which may vary significantly from the actual quantities of oil and gas reserves that may be recovered

Activities in the oil and gas sectors can be dangerous, posing health, safety and environmental risks

Government intervention and regulation may have a material adverse effect on Zenith’s business. Zenith might not be able to comply with its obligations under licences.

Zenith is subject to general operational risks

Zenith is subject to going concern risks

Key Information on the Securities

What are the main features of the securities?

Where will the securities be traded?

What are the key risks that are specific to the securities?

Further issues of securities will dilute existing holders

No history of paying dividends

Key information on the admission to trading on a regulated market

Under which conditions and timetable can I invest in this security?

Why is a prospectus being produced?

PART 2

RISK FACTORS

Risks related to Zenith’s business Activities

The impact of global oil prices on the Company

Zenith’s oil and natural gas reserves data presented in this prospectus are only estimates which may vary significantly from the actual quantities of oil and gas reserves that may be recovered

Zenith faces competition from other oil and gas companies in all areas of its operations

The economic, legal and political position in its countries of operation may negatively impact on Zenith’s business

Country Specific Risks

Italy

The non�renewal of Italian gas production concessions could impact the Issuer’s business activities negatively

Tunisia

Approval for the acquisition of a 45% working interest in the North Kairouan permit and the Sidi El Kilani concession might not be granted

Insufficient data is an obstacle to support reserves for future locations

Economic and political developments in Tunisia may negatively affect the development of Zenith’s business

Republic of the Congo

The Ministry of Hydrocarbons of the Republic of the Congo might not award a new 25�year license for the Tilapia oilfield to the group

The Issuer has no proven reserves in the Republic of the Congo

Insufficient data is an obstacle to support reserves for future locations

Deteriorating economic conditions in emerging markets such as the Republic of the Congo may adversely affect Zenith’s business

Economic and political developments in the Republic of the Congo may negatively affect the development of Zenith’s business

Risks associated with COVID�19

Risks related to the environment

Activities in the oil and gas sectors can be dangerous, posing health, safety and environmental risks

Future climate change and carbon pricing may result in increased expenditure and reduced profitability

Zenith is subject to stringent environmental and health and safety regulations which result in costs relating to compliance and remediation that may adversely affect its results of operations and financial condition

Compliance and control risks

Government intervention and regulation may have a material adverse effect on Zenith’s business. Zenith might not be able to comply with its obligations under licences.

Incidents of non�compliance with applicable laws and regulations could be damaging to Zenith’s reputation and shareholder value.

Operational risks

Zenith is subject to general operational risks

Zenith is subject to operational risks relating to the production, transportation and storage of oil and gas, crude refining and processing and, in the future, power generation. Some of these risks may be uninsured or uninsurable

Zenith may experience operational and/or technological problems which may delay or hinder the progress of ongoing and planned projects

Zenith may be required to curtail, delay or cancel drilling operations

Shortcomings or failures in Zenith’s systems, risk management, internal controls processes or personnel could lead to disruption of its business

Major disruption of Zenith’s information technology systems may have a material adverse effect on Zenith’s business

Zenith is dependent on its key personnel

Litigation and disputes may have a material adverse effect on Zenith’s business

Expiration of permits, licenses and leases

Financial risks

The Company will likely need to raise further capital for expansion

Economic and political dislocations could have a rare but material adverse effect on Zenith’s business, results of operations and financial condition

Movements in foreign currency exchange rates and interest rates can have a material effect on Zenith’s results of operations and financial condition

Adverse financial market conditions may affect Zenith’s ability to refinance

Delay of cash receipts could have a material adverse effect on Zenith’s business, results of operation and financial condition

Borrowing levels, leverage and restrictive covenants could have a material adverse effect on Zenith´s ability to finance expansion of its business

Limited insurance cover can lead to financial problems for Zenith

Zenith is subject to going concern risks

Risks Relating to the Securities

Further issues of securities will dilute existing holders

No history of paying dividends

Zenith Energy Capital/Financing Update 2021