This announcement is an advertisement for the purposes of the Prospectus Rules of the UK Financial Conduct Authority ("FCA") and not a prospectus and not an offer to sell, or a solicitation of an offer to subscribe for or to acquire, securities in the United States or in any other jurisdiction, including in or into the United States, Australia or Japan. Neither this announcement nor anything contained herein shall form the basis of, or be relied upon in connection with, any offer or commitment whatsoever in any jurisdiction. Investors should not purchase or subscribe for any transferable securities referred to in this announcement except on the basis of information contained in the prospectus (the "UK Prospectus") in its final form expected to be published by Zenith Energy Ltd. in due course in connection with the proposed admission of its common shares ("Common Shares") to the standard listing segment of the Official List maintained by the FCA (the "Official List") and to trading on the London Stock Exchange plc’s (the "London Stock Exchange") main market for listed securities (the "Main Market"). Copies of the UK Prospectus will, following publication, be available for inspection from www.zenithenergy.ca, www.SEDAR.com and the offices of Dechert LLP at 160 Queen Victoria Street, London EC4V 4QQ, United Kingdom.

  

Zenith Announces Intention to Apply for

Dual Listing on the Main Market of the London Stock Exchange and

UK Placing to Raise up to CAD $5.9 Million

  

Calgary, Alberta / TheNewswire / December 6, 2016 – Zenith Energy Ltd. (TSX-V – ZEE) ("Zenith" or the "Company"), an international oil and gas company with properties in Argentina, Italy and Azerbaijan, is pleased to announce its intention to apply to the FCA for all of its Common Shares (issued and to be issued in connection with the UK Placing (as defined below)) to be admitted to the standard listing segment of the Official List maintained by the FCA and to the London Stock Exchange for such Common Shares to be admitted to trading on the Main Market (collectively, "Admission").  Zenith intends to maintain the listing of its Common Shares (issued and to be issued) on the TSX Venture Exchange (the "TSX-V").

 

Zenith also intends to carry out  a private placement of new Common Shares ("New Common Shares") to institutional and other investors in the United Kingdom, certain member states of the European Economic Area ("EEA States"), Switzerland and other countries (the "UK Placing"). The Company intends to raise aggregate gross proceeds of a minimum of CAD $1.7 million (£1.0 million) and up to CAD $5.9 million (£3.5 million) pursuant to the UK Placing and intends to allocate such proceeds to provide additional funding for debt repayment, to provide additional funding for the Company’s development and appraisal activities in Azerbaijan, Italy and Argentina and to provide additional working capital. The UK Placing will be priced in the context of the market with the final terms of the UK Placing to be determined at the time of pricing.

Reasons for listing in London

 

The directors of Zenith (the "Directors") believe that the Company has reached a stage in its development where it is appropriate to seek admission to another major international stock exchange.

 

The Directors believe that listing in London is desirable for the following reasons:

 

• -To enable the Company to raise funds to be applied as described above.

 

• -To improve liquidity in the market for Common Shares.

 

• -To enhance the Company’s profile and enable it to access equity finance required to continue its expansion.

• -In addition, the Directors believe a presence in London, with its geographical and time zone locations in the middle of the Group’s main centres of operation, will assist the Directors in the effective running of the business.

  

Summary of the UK Placing

 

The Company intends to raise total gross proceeds of a minimum of CAD $1.7 million (£1.0 million) and up to CAD $5.9 million (£3.5 million) via the UK Placing led by Optiva Securities Limited ("Optiva") by way of private placement to institutional and other investors in the United Kingdom, certain EEA States, Switzerland and other countries. The New Common Shares being issued by the Company pursuant to the UK Placing will, on Admission, rank pari passu in all respects with the existing Common Shares including for all dividends and other distributions thereafter declared, made or paid on the Common Shares. The New Common Shares will be freely transferable outside of Canada; however, any New Common Shares issued pursuant to the UK Placing will be subject to a four month restricted holding period in Canada (beginning on the date such New Common Shares are issued by the Company pursuant to the UK Placing) which will prevent such New Common Shares from being resold in Canada, through a Canadian exchange or otherwise, during the restricted period without an exemption from the Canadian prospectus requirement. The closing of the UK Placing will be conditional only on Admission. The UK Placing is not being underwritten.

  

Application will be made to the FCA and London Stock Exchange for Admission. It is expected that Admission will become effective on or around 8:00 a.m. (London time) on December 16, 2016 and that dealings in the Common Shares will commence at that time. No application has been or is currently intended to be made for the Common Shares to be admitted to listing or dealings on any other stock exchange.  

 

Optiva is acting as corporate broker in relation to the UK Placing.

 

The Company intends to use the net proceeds of the UK Placing to provide additional funding for debt repayment, to provide additional funding for the Company’s development and appraisal activities in Azerbaijan, Italy and Argentina and to provide additional working capital.  

 

About Zenith Energy Ltd. – Azerbaijan Activity

 

Zenith Aran Oil Company Ltd, a fully owned affiliate of Zenith Energy Ltd., recently assumed operations of the largest onshore oil concession in Azerbaijan through its subsidiary, Aran Oil Operating Company Limited. The assets under management produce today approximately 295 barrels of oil per day from the 3 fields.

Zenith’s extensive 642 square kilometer onshore concession encompasses the three fields of Muradkhanli, Jafarli and Zardab in the Republic of Azerbaijan. The duration of the REDPSA (Rehabilitation Exploration Development Production Sharing Agreement) is 25 years. Zenith remains focused on building daily production and expanding the proven reserves for the concession.

 

Zenith’s expertise in operating in Argentina and Italy has been crucial in enabling the Company to establish the REDPSA, which now outlines the binding work commitment necessary to be achieved during the tenure of the contract. Zenith’s REDPSA holds the strength of statutory law in the Republic of Azerbaijan as ratified legislation.

 

Management anticipates that Zenith Aran will be able to grow from the current base of production through investments in technology, enhanced production techniques, significant infill development opportunities.

  

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that 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:

 

Jose Ramon Lopez-Portillo                                         Andrea Cattaneo

Chairman of the Board                                                 CEO & President

 

Email:                 info@zenithenergy.ca

Telephone:         (587) 315 9031

Telefax:             (403) 775-4474

Forward-looking information

 

This news release contains certain forward‐looking information and statements relating, but not limited, to the growth of Zenith Aran, the proposed use of proceeds for the UK Placing and anticipated timing for completing the UK Placing.  Forward-looking information typically contains statements with words such as "anticipate", "plan", "estimate", "expect", "potential", "could", "will", or similar words suggesting future outcomes.  The Company cautions readers not to place undue reliance on forward‐looking information as by its nature, it is based on current expectations regarding future events that involve a number of assumptions, inherent risks and uncertainties, which could cause actual results to differ materially from those anticipated by Zenith. In addition, the forward‐looking information is made as of the date hereof, and the Company and Optiva and their respective affiliates expressly disclaim any obligation or undertaking to update, review or revise any forward-looking statements contained in this document to reflect any change in its expectations or any change in events, conditions or circumstances on which such statements are based unless required to do so by applicable law, the Prospectus Rules, the Listing Rules or the Disclosure Guidance and Transparency Rules of the Financial Services Authority.

 

Forward‐looking information is not based on historical facts but rather on management's current expectations and assumptions regarding, among other things, plans for and results of drilling activity and testing programs, future capital and other expenditures (including the amount, nature and sources of funding thereof), continued political stability, and timely receipt of any necessary government or regulatory approvals. Although the Company believes the expectations and assumptions reflected in such forward‐looking information are reasonable, they may prove to be incorrect. Forward‐looking information involves significant known and unknown risks and uncertainties. A number of factors could cause actual results to differ materially from those anticipated by Zenith including, but not limited to, risks associated with the oil and gas industry (e.g. operational risks in exploration; inherent uncertainties in interpreting geological data; changes in plans with respect to exploration or capital expenditures; interruptions in operations together with any associated insurance proceedings; the uncertainty of estimates and projections in relation to costs and expenses and health, safety and environmental risks), the risk of commodity price and foreign exchange rate fluctuations, the uncertainty associated with negotiating with foreign governments and risk associated with international activity, including the risk of political instability.  For further information on Zenith and the risks associated with its business, please see the Company's annual management’s discussion and analysis which is available on SEDAR at www.sedar.com.

  

Disclaimer

 

This announcement does not constitute an offer for sale of, or a solicitation to purchase or subscribe for, any securities in the United States of America (including its territories or possessions, any state of the United States of America and the District of Columbia) (the ''United States'') nor will it form the basis of any contract for the purchase of or subscription for any securities nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. The New Common Shares which are the subject of the UK Placing have not been and will not be registered under the U.S. Securities Act of 1933 , as amended (the "U.S. Securities Act"), or the securities laws of any state or other jurisdiction of the United States and may not be, offered, sold, resold, transferred, delivered 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) except pursuant to an exemption from, or in a transaction that is not subject to, the registration requirements of the U.S. Securities Act and in compliance with the securities laws of any state or other jurisdiction of the United States.  Terms used in this paragraph have the meanings given to them by Regulation S, promulgated under the U.S. Securities Act.

 

This announcement does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for any shares or any other securities nor shall it (or any part of it) or the fact of its distribution, form the basis of, or be relied on in connection with, any contract therefore. The UK Placing and the distribution of this announcement and other information in connection with Admission and the UK Placing in certain jurisdictions may be restricted by law and persons into whose possession any document or other information referred to herein 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.

 

The contents of this announcement, which has been prepared and issued by, and is the sole responsibility of Zenith Energy Ltd., have been approved by Optiva solely for the purposes of section 21(2)(b) of the Financial Services and Markets Act 2000 (as amended).

 

This announcement does not constitute a recommendation concerning the UK Placing. The price and value of securities can go down as well as up.  Past performance is not a guide to future performance.  Information in this announcement or any of the documents relating to the UK Placing cannot be relied upon as a guide to future performance.  Potential investors should consult a professional advisor as to the suitability of the UK Placing for the person concerned.

 

Any purchase or subscription of Common Shares in the proposed UK Placing should be made solely on the basis of the information contained in the UK Prospectus to be issued by Zenith in connection with the UK Placing. The information contained in this announcement is for background purposes only and does not purport to be full or complete. No reliance may or should be placed by any person for any purpose whatsoever on the information contained in this announcement or on its completeness, accuracy or fairness. The information in this announcement is subject to change.

 

Optiva, which is authorised and regulated in the UK by the Financial Services Authority, is acting exclusively for Zenith and no one else in connection with the UK Placing and will not regard any other person as its client in relation to the UK Placing and will not be responsible to anyone other than Zenith for providing the protections afforded to its clients or for giving advice in relation to the UK Placing or the contents of this announcement or any transaction, arrangement or other matter referred to herein.

 

In connection with the UK Placing, Optiva or any of its respective affiliates, acting as investors for their own accounts, may subscribe for or purchase New Common Shares and in that capacity may retain, purchase, sell, offer to sell or otherwise deal for their own accounts in such securities of Zenith or related investments in connection with the UK Placing or otherwise. Accordingly, references in the UK Prospectus, once published, to the New Common Shares being issued, offered, subscribed, acquired, placed or otherwise dealt in should be read as including any issue or offer to, or subscription, acquisition, placing or dealing by, Optiva or any of its respective affiliates acting as investors for their own accounts.  Optiva or any of its respective affiliates do not intend to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligations to do so.

 

Optiva or any of its respective subsidiary undertakings, affiliates or any of their respective directors, officers, employees, advisers, agents or any other person accepts any responsibility or liability whatsoever for, or makes any representation or warranty, express or implied, as to the truth, accuracy, completeness or fairness of the information or opinions in this announcement (or whether any information has been omitted from the announcement) or any other information relating to Zenith or its subsidiaries, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of this announcement or its contents or otherwise arising in connection therewith.

 

Certain figures contained in this document, including financial information, have been subject to rounding adjustments. Accordingly, in certain instances, the sum or percentage change of the numbers contained in this document may not conform exactly with the total figure given.

NOT FOR PUBLICATION OR RELEASE IN OR INTO AUSTRALIA, JAPAN OR THE UNITED STATES OR TO U.S. PERSONS.