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Filing of 2018 CPR and Release of New Investor Presentation



Zenith Energy Ltd., ("Zenith" or the "Company"), (LSE: ZEN; TSX.V: ZEE), the international oil & gas production company operating the largest onshore oilfield in Azerbaijan, is pleased to announce that it has filed its year-end independent evaluation of reserves for the year ending March 31, 2018 (the "2018 CPR"), prepared in accordance with National Instrument 51-101: Standards of Disclosure for Oil and Gas Activities ("NI 51-101"), on SEDAR. Additional information regarding the Company will be included in Zenith's Annual Information Form and annual financial statements which will be filed on SEDAR on or before June 30, 2018. The 2018 CPR documents were filed on SEDAR on May 18, 2018 in accordance with TSX Venture rules and applicable Canadian securities laws.

The 2018 CPR has assessed Zenith's proved plus probable ("2P") reserves in Azerbaijan, for the duration of the 25-year Rehabilitation, Exploration, Development and Production Sharing Agreement ("REDPSA") effective from August 11, 2016, as approximately 31.7 million barrels of oil, decreasing from approximately 32.1 million as at March 31, 2017.

Italian natural gas 2P reserves have been reassessed in the 2018 CPR, increasing to 16.4 BCF from approximately 15.36 BCF as at March 31, 2017.

All assumptions and qualifications relating to costs and other matters are included in the Chapman Report (as defined below). The recovery and reserves estimates on the Company's assets described herein are estimates only. The actual reserves in the Company's assets may be greater or smaller than those calculated.

The following is a summary of the oil and natural gas reserves and the value of future net revenue of the Company, as evaluated by Chapman Petroleum Engineering Ltd., Calgary, Alberta, as at March 31, 2018, and dated April 1, 2018 (the "Chapman Report"). Chapman Petroleum Engineering Ltd. is an independent qualified reserves evaluator and auditor. The Chapman Report has been prepared in accordance with the standards contained in the Canadian Oil and Gas Evaluation Handbook ("COGEH") reserves definitions that are consistent with NI 51-101.

SUMMARY OF OIL AND GAS RESERVES
BASED ON FORECAST PRICES AND COSTS

AS AT MARCH 31, 2018

Company Reserves(1)

AZERBAIJAN

Light and Medium Oil

Heavy Oil

Natural Gas(9)

Natural Gas Liquids

Gross

Net

Gross

Net

Gross

Net

Gross

Net

Reserves Category

MSTB

MSTB

MSTB

MSTB

MMscf

MMscf

Mbbl

Mbbl

PROVED

Developed Producing(2)(6)

377

377

0 0 0 0 0 0

Developed Non-Producing(2)(7)

0 0 0 0 0 0 0 0

Undeveloped(2)(8)

3,511

3,511

0 0 0 0 0 0

TOTAL PROVED(2)

3,887

3,887

0 0 0 0 0 0

TOTAL PROBABLE(3)

27,847

27,847

0 0 0 0 0 0

TOTAL PROVED + PROBABLE(2)(3)

31,735

31,735

0 0 0 0 0 0

Company Reserves(1)

ITALY

Light and Medium Oil

Heavy Oil

Natural Gas(9)

Natural Gas Liquids

Gross

Net

Gross

Net

Gross

Net

Gross

Net

Reserves Category

MSTB

MSTB

MSTB

MSTB

MMscf

MMscf

Mbbl

Mbbl

PROVED

Developed Producing(2)(6)

0 0 0 0

1,196

1,196

15

15

Developed Non-Producing(2)(7)

0 0 0 0

220

220

0 0

Undeveloped(2)(8)

0 0 0 0 0 0 0 0

TOTAL PROVED(2)

0 0 0 0

1,416

1,416

15

15

TOTAL PROBABLE(3)

0 0 0 0

14,984

14,984

242

242

TOTAL PROVED + PROBABLE(2)(3)

0 0 0 0

16,400

16,400

257

257

The tables above are summaries of the reserves of Zenith as evaluated in the Chapman Report. As the tables summarise the data contained in the Chapman Report, they may contain slightly different numbers due to rounding. As such, the numbers in each column may not exactly add up. Please also review all of the advisories and definitions below in tandem with the above tables.

Oil and Natural Gas Reserves

The disclosure in this news release summarises certain information contained in the Chapman Report but represents only a portion of the disclosure required under NI 51-101. Full disclosure with respect to the Company's reserves as at March 31, 2018 have been filed on SEDAR (www.sedar.com) on May 18, 2018. The reserves definitions used in this evaluation are the standards defined by COGEH reserve definitions and consistent with NI 51-101 and used by Chapman Petroleum Engineering Ltd. The oil reserves are presented in thousands of barrels, at stock tank conditions.

Reserves Categories

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 (i) analysis of drilling, geological, geophysical and engineering data; (ii) the use of established technology; and (iii) 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.

Notes:

1. "Gross Reserves" are the Company's working interest (operating or non-operating) share before deducting of royalties and without including any royalty interests of the Company. "Net Reserves" are the Company's working interest (operating or non-operating) share after deduction of royalty obligations, plus the Company's royalty interests in reserves.

2. "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. Proved reserves should have at least a 90 percent probability that the quantities actually recovered will equal or exceed the estimated proved reserves

3. "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. Probable reserves should have at least 50 per cent probability that the quantities actually recovered will equal or exceed the sum of the estimated proved plus probable reserves.

4. "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. Possible reserves should have at least a 10 percent probability that the quantities actually recovered will equal or exceed the sum of the estimated proved plus probable plus possible reserves.

5. "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.

6. "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.

7. "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.

8. "Undeveloped reserves" are those reserves expected to be recovered from known accumulations where a significant expenditure (for example, 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 classification (proved, probable, possible) to which they are assigned.

9. Includes associated, non-associated and solution gas where applicable.

The 2018 CPR documents can be viewed online at www.sedar.com and will shortly also be available on the Company website: www.zenithenergy.ca.

New 2018 Investor Presentation

The Company confirms that during the course of today a new 2018 Investor Presentation will be made available on Zenith's website. This will highlight the Company's development plans for its operations in Azerbaijan and Italy during the course of 2018. The presentation also includes the Board's expectation that approximate all-in average oil production costs will fall from the current US$19 per barrel to a cost of US$13 per barrel when the Company achieves a production rate of 1,000 barrels per day in Azerbaijan.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as such term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.


For further information please contact:

Zenith Energy Ltd.

Andrea Cattaneo

Chief Executive Officer

E-mail: info@zenithenergy.ca

Tel: +1 (587) 315 9031

Vigo Communications - PR Adviser

Patrick d'Ancona

Chris McMahon

Kate Rogucheva

Tel: +44 (0) 20 7830 9700

Daniel Stewart & Company Plc - (Joint Broker)

Robert Emmet- Corporate Broking

Nikhil Varghese- Corporate Finance

Tel: + 44 (0) 207 776 6550

Optiva Securities - (Joint Broker)

Christian Dennis

Tel: + 44 (0) 203 137 1903

Allenby Capital Limited - (Financial Adviser)

Nick Harriss

Nick Athanas

Tel: + 44 (0) 203 328 5656

Forward-looking statements

This news release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "objective", "ongoing", "may", "will", "project", "should", "believe", "plans", "intends" and similar expressions are intended to identify forward-looking information or statements. More particularly and without limitation, this press release contains forward-looking statements and information concerning the oil and gas reserves estimates of the Company and the filing of certain continuous disclosure documents on or before June 30, 2018. The forward-looking statements and information are based on certain key expectations and assumptions made by Zenith, including the ability to execute its strategy and realise its growth opportunities including its ability to finance and execute its plans. Although Zenith believes that the expectations and assumptions on which such forward-looking statements and information are based are reasonable, undue reliance should not be placed on the forward-looking statements and information because the Company can give no assurance that they will prove to be correct. All timing given in this announcement, unless stated otherwise is indicative and while the Company endeavours to provide accurate timing to the market, it cautions that due to the nature of its operations and reliance on third parties this is subject to change often at little or no notice. By its nature, such forward-looking information is subject to certain risks and uncertainties (both general and specific) that could cause actual events or outcomes to differ materially from those anticipated or implied by such forward-looking statements. These risks and uncertainties, include, but are not limited to, Zenith being unable to finance or realise growth opportunities. Readers are cautioned not to place undue reliance on this forward-looking information, which is given as of the date hereof, and to not use such forward-looking information for anything other than its intended purpose. Zenith undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law. The forward-looking information contained herein is expressly qualified by this cautionary statement.

Notes to Editors:

Zenith Energy Ltd. is an international oil and gas production company, dual listed on the TSX Venture Exchange and London Stock Exchange.

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

The Company's primary focus is the development of its Azerbaijan operations by leveraging its technical expertise and financial resources to maximise low-cost oil production via a systematic field rehabilitation programme intended to achieve significantly increased revenue. Zenith also operates, or has working interests in, a number of natural gas production concessions in Italy. The Company's Italian operations produce natural gas, natural gas condensate and electricity.

Zenith's development strategy is to identify and rapidly seize value-accretive hydrocarbon production opportunities in the onshore oil & gas sector. The Company's Board of Directors and senior management team have the experience and technical expertise to develop the Company successfully.

To find out more, visit www.zenithenergy.ca or follow Zenith on Twitter @zenithenergyltd