2019 INVESTOR PRESENTATION - Zenith Energy

 
2019 INVESTOR PRESENTATION - Zenith Energy
2019 INVESTOR PRESENTATION
2019 INVESTOR PRESENTATION - Zenith Energy
DISCLAIMER
               This document (the “Presentation”) has been prepared by and is the sole responsibility of Zenith energy Ltd. (“Zenith”). All information used in the Presentation has been compiled from
2019           publicly available sources that are believed to be reliable. However, because of possible human or mechanical error by Zenith, its affiliates or its sources, Zenith cannot guarantee the
INVESTOR       accuracy, validity, timeliness or completeness of any information provided for in this Presentation.
PRESENTATION   No guarantee, warranty or representation, express or implied, can be given by Zenith as to the accuracy, adequacy or completeness of the information contained in this Presentation and
               they are not responsible for any errors or omissions or results obtained from use of such information. Neither Zenith, nor any affiliates, officers, directors or employees accept any liability or
               responsibility in respect of the information which is subject to change without notice and may only be correct at the stated date of their issue, unless in case of gross negligence, fraud or
               wilful misconduct Zenith expressly disclaims any warranties of merchantability or fitness for a particular purpose. In no event will Zenith, its affiliates or any such parties be liable to you for
               any direct, special, indirect, consequential, incidental damages or any other damages of any kind even if Zenith have been advised of the possibility thereof.
               The Presentation has been prepared purely for information purposes, and nothing in this report should be construed as an offer, or the solicitation of an offer, to buy or sell any security,
               product, service or investment. The Presentation reflects the objective views of Zenith and does not constitute investment advice.
               The information provided in this document is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to
               law or regulation or which would subject Zenith or its affiliates to any registration requirement within such jurisdiction or country.
               The fact that Zenith has made available through this Presentation various information this constitutes neither a recommendation to enter into a particular transaction nor a representation that
               any financial instrument is suitable or appropriate for you. Each investor must make their own independent decisions and obtain their own independent advice regarding any information,
               projects, securities, or financial instruments mentioned herein.
               The Presentation includes statements that are, or may be deemed to be, “forward-looking statements”. These forward looking statements can be identified by the use of forward-looking
               terminology, including the terms “believes”, “envisages”, “estimates”, “anticipates”, “projects”, “expects”, “intends”, “may”, “will”, “could”, “seeks” or “should” or, in each case, their negative
               or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. These forward-looking statements include matters that are
               not historical facts and speak only as of the date of the Presentation. They appear in a number of places throughout the Presentation and include statements regarding Zenith and the directors
               of Zenith’s current intentions, beliefs or expectations concerning, amongst other things, investment strategy, financing strategy, performance, results of operations, financial condition,
               liquidity, prospects, growth, strategies and the industry in which Zenith operates.
               The receipt of this document by any person is not to be taken as constituting the giving of investment advice by Zenith to any to any such person.
               No part of this document may be reproduced, stored in a retrieval system or transmitted in any form or by any means, mechanical, photocopying, recording or otherwise, without prior
               permission from Zenith
               By accepting this document, the recipient agrees to be bound by the limitations set out in this notice.
               This notice shall be governed and construed in accordance with English law.
2019 INVESTOR PRESENTATION - Zenith Energy
A DUAL-LISTED INTERNATIONAL OIL & GAS
               PRODUCTION MID-CAP IN THE MAKING
2019
INVESTOR           Operating the largest onshore oilfield in Azerbaijan by cumulative acreage.
PRESENTATION
                   Producing natural gas, electricity and condensate in Italy

               Development                                 Recent Highlights                                       METRICS
               strategy defined by:                        Assigned a medium to long-term issuer                   KEY SHAREHOLDERS:
                                                           credit rating of “B+” with Positive Outlook             Board of Directors,
                                                                                                                   Mirabaud & Cie (Europe) SA,
               •   Acquiring and developing assets
                                                           on October 8, 2018 by Arc Ratings S.A.                  Miton UK Microcap Trust PLC,
                   with untapped reserves and existing                                                             Mr. Dean Clark
                                                           Admitted to trading on the Merkur Market
                   production                              of the Oslo Børs on November 8, 2018                    STOCK TICKER
                                                                                                                   (LSE: ZEN / TSX.V:ZEE /
               •   Strong positioning in stable, secular   Issue and listing of EURO 3,120,000 unsecured           OSE: ZENA-ME)
                   and democratic countries against a      corporate notes on the Third Market (MTF) of
                   favourable backdrop of resurgent oil    the Vienna Stock Exchange.                              MARKET CAP CIRCA

                                                                                                                   £9M
                   prices

               •   Maximising revenue by implementing
                   low-cost oil production models          Significant development                                 SHARES IN ISSUE

               •   Decreasing reliance on external
                   oilfield service companies by
                                                           potential
                                                           •   Independently assessed 2P reserves of 31.7
                                                                                                                   239.96M
                                                                                                                   (the above figure represents the common shares In issue and admitted
                   acquiring and operating key                 million barrels of oil in Azerbaijan and 16.4 BCF   to trading on the Merkur Market of the Oslo Børs and the TSX Venture
                                                                                                                   Exchange. The number of common shares admitted to trading on the
                   equipment required for long-term            of natural gas in Italy                             London Stock Exchange Main Market remains 216.3 million)

                   asset development
                                                           •   Plans to perform highly prospective drilling        NET PRESENT VALUE (NPV)
                                                               activities during 2019 to ‘prove’ potentially       DISCOUNTED AT 10%: US$483M
SLIDE                                                          transformational Azerbaijan asset using
01                                                             recently acquired 1,200hp drilling rig              — AZERBAIJAN: US$469M
                                                               operated by Italian personnel                       — ITALY: US$14M
2019 INVESTOR PRESENTATION - Zenith Energy
PORTFOLIO OVERVIEW
2019                                                                                                               11
INVESTOR
PRESENTATION
                                                                                                                    11

                AZERBAIJAN                                                                               11

                                                                                                                             1
                Largest onshore                                                                           11
                                                                                                                                 5

                oilf ield in Azerbaijan                                                                        1
                                                                                                                                     1

                by cumulative acreage                                                                              5

                                                                                                                         1

                Average daily production of                                      ITALY
                oil in Azerbaijan:                                               6 operated and
                                                                                 3 non-operated natural gas concessions
                270 BARRELS                                                      — Gross Italy energy production revenue
                — 2P reserves: 31.7 million barrels of oil                         for December 2018: €65,000
                — NPV discounted at 10%: US$469M                                 — 2P reserves: 16.4 BCF of natural gas
                — Historical peak daily production: 15,000 Barrels               — NPV discounted at 10%: US$14M

                Average all-in     Oil production         Gross Azerbaijan oil   Daily Italian     Monthly
                production         target by Dec 31,      production revenue     energy            production
                cost per barrel:   2019:                  for December 2018:     production:       of electricity:

                US$19              1,000                  US$450,000             55 BOE            900 MWH
                                   BARRELS
SLIDE
02                                 PER DAY
2019 INVESTOR PRESENTATION - Zenith Energy
AZERBAIJAN DAILY
               AZERBAIJAN –                                                                                                                OIL PRODUCTION

               ‘LAND OF FIRE’, BIRTHPLACE OF OIL                                                                                           797,000
2019
                                                                                                                                           BARRELS
INVESTOR
PRESENTATION                 KULEVI

                                                                         GEORGIA                          RUSSIA
                Azerbaijan is the world’s oldest
                oil producing country                                  TBILISI

               •                                                                                                                                      CASPIAN
                   Low-risk developing country with highly
                                                                                                                                                        SEA
                   favourable oil production environment                                                              Guba-Khachmaz
                                                                                                     Shaki-Zaqatala

               •   Democratic, stable and secular government
                                                                                                                                      Absheron
                                                                                                                          Daghlig
               •   Azerbaijan’s economy is underpinned by its                                                             Shirvan                              DUBENDI
                                                                                  Ganja-Gazakh
                   oil and gas industry, producing on average
                   0.79 million barrels of oil per day
                                                                                                                                                    BAKU
                                                                   ARMENIA
               •   Population: 9.7 Million                                             Kalbajar-                                                 BP operated
                                                                                        Lachin                                                   Sangachal
                                                                                                                                ARAN
               •   Transformational oil and and gas                                                 Yukhari
                                                                                                                              ECONOMIC
                                                                                                                                                 Terminal

                                                                                                   Garabagh
                   production operations in the Caspian Sea                                                                    REGION

                   by oil majors including BP, Statoil and Total
                                                                                                                                                 Shah Deniz Field
                                                                          Nakhchivan
               •   Southern Gas Corridor, one of the largest                                                  IRAN
                   gas developments in the world, expected to
                   provide highly significant long-term support         SCP
                                                                                                                          Lankaran
                                                                                                                                                           Absheron Field
                   to Azerbaijan economy                                BTC
                                                                        BAKU–NOVOROSSIYSK OIL PIPELINE
               •   Government focus on large-scale                      BAKU-SUPSA WESTERN EXPORT PIPELINE
                   modernisation policies. Azerbaijan’s
                   capital, Baku, is an increasingly
                   modern city                                     GDP (2017)            PROVEN OIL RESERVES:                       Q4 2018 OIL PRODUCTION:
SLIDE
03
                                                                   US$40.7 7 BILLION                                                68.5 MILLION
                                                                   BILLION BARRELS                                                  BARRELS
2019 INVESTOR PRESENTATION - Zenith Energy
ZENITH DAILY                                      ACTIVE
               ZENITH IN AZERBAIJAN                                                                                                                                       OIL PRODUCTION                                    PRODUCTION
                                                                                                                                                                                                                            WELLS
                                                                                                                                                                          270
2019
INVESTOR
                 High-margin low-cost oil production from the largest
                 onshore oilfield by cumulative acreage in the country                                                                                                    BARRELS                                           34
PRESENTATION

               Zenith is the only junior independent                     KULEVI   Supsa

               operator in Azerbaijan.                                                                                                                          GEORGIA                                 RUSSIA

                                                                                                                                                             TBILISI
               • 25-year REDPSA, (Rehabilitation, Exploration and
                 Production Sharing Agreement), with SOCAR, (State                                                                                                                                                                                                     C
                 Oil Company of the Azerbaijan Republic), signed in                                                                                                                                Shaki-Zaqatala
                                                                                                                                                                                                                    Guba-Khachmaz

                 2016
                                                                                                                                                                                                                                    Absheron
                                                                                                                                                                                                                        Daghlig
               • 80% participating interest in the three contingent                                                                                                              Ganja-Gazakh
                                                                                                                                                                                                                        Shirvan                              DUBENDI

                 oilfields comprising the REDPSA area -
                 Muradkhanli, Jafarli and Zardab. SOCAR retains the                                                                                                                                                                               BAKU
                                                                                                                                              ARMENIA
                 remaining 20% interest                                                                                                       Tanker                                 Kalbajar-                                                 BP operated
                                                                                                                                              access road                             Lachin                                                   Sangachal
                                                                                                                                              to Shirvan                                                                      ARAN             Terminal
                                                                                                                                              oil terminal                                        Yukhari
               • The REDPSA signed between Zenith and
                                                                                                                                                                                                                            ECONOMIC
                                                                                                                                                                                                 Garabagh
                                                                                                                                                                                                                             REGION
                                                                                                                     Zardab          Muradkhanli

                 SOCAR has been enacted by Azerbaijan’s

                                                                                                               EX
                                                                                                               IS
                                                                                                                TI
                                                                                                                    N
                 legislature into national law, having received

                                                                                                                    G
                                                                                                                     3D
                                                                                       Kura River
                                                                                                                                                                 Nakhchivan

                                                                                                                        SE
                                                                                                                          IS
                                                                                                                                                                                                            IRAN

                                                                                                                          M
                 all the necessary approvals
                                                                                   Exploration

                                                                                                                             IC
                                                                                   area of REDPSA

                                                                                                                                                                 Oil Storage                                            Lankaran
                                                                                                                                                                 & Processing

               • All-in average production cost per barrel: US$19                  Area of interest
                                                                                   for Development
                                                                                   Drilling Programme

               • Oil production transported by tanker to local                                      10 KM
                                                                                                                                                                       Jafarli

                 oil terminal, named Shirvan, located approximately                                                     EXISTING 3D SEISMIC                       Well C-37
                                                                                                                                                                  Deepening
                                                                                                                                                                  Operation
                 125 kilometres from field                                                                                                                   Imishli

               • Plan to perform two well deepening operations in
                 the Jafarli Field to be followed by the spudding of a
                 new well in the Muradkhanli Field (ZEN-01).
                                                                          REDPSA                            AVERAGE                                              2P OIL                                                  WELLS CAPABLE
               • Production target: 3,000 barrels per day by              AREA                              WELL DEPTH                                           RESERVES                                                OF PRODUCTION

SLIDE
                 the close of 2020 to be achieved via systematic
                 drilling programme. Projected all-in production cost     642.4                             3,812  31.7 MILLION 75
04               of approximately US$9 per barrel once this rate of
                 production is achieved
                                                                          KM2                               METRES BARRELS
Shaki-Zaqatala

                                                                                                                                                                                      Absheron
                                                                                                                                                                           Daghlig
                                                                                                                                                                           Shirvan                              DUBENDI
                                                                                                                                 Ganja-Gazakh

               LARGEST ONSHORE OILFIELD IN AZERBAIJAN
                                                                                                                                                                                                     BAKU
                                                                                                               ARMENIA
                                                                                                                                      Kalbajar-                                                   BP operated
                                                                                                                                       Lachin                                                     Sangachal
                                                                                                                                                                                 ARAN             Terminal

               BY CUMULATIVE ACREAGE
                                                                                                                                                    Yukhari
                                                                                                                                                                               ECONOMIC
                                                                                                                                                   Garabagh
                                                                                                                                                                                REGION

                                                                                                                       Nakhchivan

                Field Geography
                                                                                                                                                              IRAN
2019                                                                                                                                                                      Lankaran
INVESTOR
PRESENTATION
                                                                                    KULEVI   Supsa

                                                                                                                       GEORGIA                                RUSSIA
                                                                            Tanker                                   TBILISI
                                                                            access road
                                                                            to Shirvan                                                                                 Guba-Khachmaz

                                                                            oil terminal
                                                                                                                                                      Shaki-Zaqatala

                                                                                                                                                                                       Absheron
                                                                                                                                                                            Daghlig
                                                                                                                                                                            Shirvan                             DUBENDI
                                                                                                                                 Ganja-Gazakh

                                                   Zardab          Muradkhanli
                                                                                                                                                                                                      BAKU
                                                                                                               ARMENIA
                                                                                                                                                                                                  BP operated

                                             EX
                                                                                                                                       Kalbajar-
                                                                                                                                        Lachin                                                    Sangachal

                                             IS
                                                                                                                                                                                  ARAN            Terminal
                                                                                                                                                    Yukhari

                                              TI
                                                                                                                                                                                ECONOMIC
                                                                                                                                                   Garabagh

                                                  N
                                                                                                                                                                                 REGION

                                                  G
                                                   3D
                        Kura River

                                                      SE
                                                                                                                         Nakhchivan

                                                                                                                                                               IRAN

                                                        IS
                                                        M
                    Exploration

                                                           IC
                                                                                                                                                                           Lankaran

                    area of REDPSA

                                                                                                     Oil Storage
                                                                                                     & Processing

                    Area of interest
                    for Development
                    Drilling Programme

                                                                                                           Jafarli
                                     10 KM
                                                      EXISTING 3D SEISMIC                             Well C-37
                                                                                                      Deepening
                                                                                                      Operation

SLIDE                                                                                            Imishli
05
AZERBAIJAN FIELD DEVELOPMENT
                Journey So Far
2019
INVESTOR
PRESENTATION

                 Decision to shut-in        Installation of 11   Approximately       Deployment      Order of ancillary
                 31 production              modern electrical    £1.3 million of     of A-100        drilling equipment
                 wells in the               submersible          Chinese oil         workover        for a total of
                 Muradhkhanli and           pumps in the         production          rig to field    EURO 722,000.
                 Jafarli oilfields that     Muradkhanli &        materials           operations      Shipment currently
                 were performing            Jafarli oilfields    delivered to        expected in     in progress to
                 uneconomically with                             field operations    March 2019.     Azerbaijan with
                 a watercut of 99                                in Azerbaijan                       BD-260 drilling rig
                 per cent

                          Completion of two         Line pipe                Oil storage tank       Completion of work
                          comprehensive             replacement              reconstruction in      on BD-260 1,200hp
                          geological studies        programme                progress with first    drilling rig in Italy.
                          to optimise               ongoing to               2,000 m3 tank now      Currently en route
                          selection of drilling     modernise field          undergoing safety      to Azerbaijan.
                          locations across the      infrastructure           testing. Work on       Deployment to field
SLIDE                     Muradkhanli, Jafarli                               second tank to start   operations expected
06                        and Zardab oilfields                               in March 2019          in early March 2019
2018 AZERBAIJAN OPERATIONAL OBJECTIVES
                Strategy Overview
2019
INVESTOR
PRESENTATION

                              Identify          Identify and isolate    Spud a new well
                              bypassed pay      water source in a       (ZEN-01) using
                              zones in          number of shut-in       Zenith’s BD-260
                              shut-in wells     wells to achieve        1,200hp drilling rig to
                                                economically viable     appraise large Upper
                                                production with         Cretaceous formation
                                                significantly reduced   structure identified in
                                                water cut               the Muradkhanli Field

                  Maximise production         Complete                   Perform two              Utilise the Company’s
                  from 34 active              comprehensive              well deepening           two workover rigs to
                  production wells            reservoir                  operations to test       increase production
                  across Zenith’s             engineering                Upper Cretaceous         from existing
                  REDPSA area by              and                        formation in             wells and perform
                  performing systematic       petrophysical              the Jafarli Field        high-intensity well
                  workover activities         study                      during the first six     preparation for
SLIDE                                                                    months of 2019           deepening activities
07
DEEPENING OF WELL C-37,                                                           An adjacent well to C-37, C-22,
               JAFARLI FIELD                                                                     achieved a production of

2019
INVESTOR
PRESENTATION
                                                                                                 700 BOPD

                  BACKGROUND                                                                     PLAN OF ACTION

                  Drilled in 2008 by SOCAR to a      Zenith’s geological and                     1. The Company’s A-80 workover rig has
                                                     reservoir investigations have               completed all preparatory work for well C-37
                  total depth of 3,987 metres                                                    deepening operations. These activities have
                                                     resulted in the identification
                                                                                                 included pulling the electrical submersible
                                                     a new structure in the
                  Produced at a rate of 5            Middle Eocene and Upper
                                                                                                 pump out of hole and subsequently running
                                                                                                 in hole with a scraper to the production
                  barrels per day following the      Cretaceous formations of                    casing shoe at a depth of 3,904 metres,
                  installation of an electrical      the Jafarli Field                Complete
                                                                                                 as well as performing a series of well
                  submersible pump                                                               investigations by wireline. The estimated
                                                     The identified structure                    saving achieved by utilising Zenith’s A-80
                                                     measures approximately 3                    workover rig to complete these activities has
                  Historical well data indicates     square kilometres with a                    been assessed as approximately US$250,000.
                  that an adjacent well, C-22,       significant degree of closure
                                                                                                 2. Deepen well C-37’s total depth, 3,987
                  achieved an initial production     indicated by a thickness of
                                                                                                 metres, by 15-20 metres into the Middle
                  rate of 700 barrels per day from   approximately 100 metres
                                                                                                 Eocene formation and subsequently perform
                  the Middle Eocene formation                                                    a production test. The Company believes
                                                     Zenith has formulated                       there may be significant reserves in place to
                  when drilled in 1986               a highly prospective two-                   be produced from this formation on account
                                                     stage drilling programme to                 of historical production data from well C-22
                                                     bring potentially significant
                                                     reserves from the Middle                    3. Following the completion of drilling
                                                     Eocene and Upper                            activities in the Middle Eocene formation
                                                     Cretaceous formations                       target zone, Zenith will proceed with
                                                     into production                             deepening well C-37 by approximately
SLIDE                                                                                            200-250 metres to penetrate the Upper
08                                                                                               Cretaceous formation and test the fluid
                                                                                                 content of this new, unexploited structure
PLIOCENE

                WELL 1500M
                      DEEPENING ACTIVITIES IN WELL C-37, JAFARLI FIELD
                                                                      C30 C22 C37 C26
2019                   w     2000M
                                                                                                                            E
INVESTOR         0M
PRESENTATION                                                              (Karagan – Pontian)
                                                                0.37km South
                                                                                                        = PRODUCTION WELL
                500M                                      MIOCENE
                             2500M
                                                                               (Chokrak)               = TARGET ZONE
               1000M              QUATERNARY TO
                                    PLIOCENE
                                                                                                       = NEW, UNEXPLOITED
                             3000M                                                                       TARGET ZONE
               1500M                                   OLIGOCENE
                                                     LOWER MIOCENE                                     = FIRST STAGE OF
                                                                                                         DRILLING OPERATIONS

               2000M
                                                                               (Maykop)                = SECOND STAGE OF
                                                                                                         DRILLING OPERATIONS
                             3500M              (Karagan – Pontian)
                                                                                                AREA OF INTEREST
                                      MIOCENE         UPPER EOCENE
               2500M
                                                    (Chokrak)
                            4000M
               3000M                                 MIDDLE EOCENE
                                   OLIGOCENE
                                 LOWERLOWER  EOCENE
                                        MIOCENE
                                                     (Maykop)
               3500M         4500M
                                  UPPER EOCENE                                                  UPPER CRETACEOUS
               4000M
                                 MIDDLE EOCENE                                                                     LOWER EOCENE
                             5000M
                       LOWER EOCENE
                                                                                                PALAEOCENE
               4500M
                                                                         UPPER CRETACEOUS
SLIDE
09             5000M
DRILLING OF NEW WELL IN THE MURADKHANLI FIELD
                        M-38                   M-40   M-12 ZEN-01                     M-205             M-23                M-24

2019
INVESTOR
                                CHOKRAK                                                                         CHOKRAK
PRESENTATION

                3000M                                                NEW
                                                                     APPRAISAL
                                                                     WELL

                                 MAYKOP                                                       MAYKOP

                3500M

                                                                                                                 UPPER
                                                                                                                EOCENE

                4000M
                                                                                                                MIDDLE-
                                                                           UPPER                                LOWER
                                                                          EOCENE                                EOCENE

                                                                                                                PALEOCENE
                                                                                                                  MARLS

                                                                                                                 UPPER
                                  UPPER                                                                        CRETACEOUS
                                 EOCENE                                                                         VOLCANICS
                4500M
                                                                       MIDDLE LOWER
                                                                          EOCENE

                                                                         PALEOCENE

                                MIDDLE LOWER
                                   EOCENE
                                                                           MARLS
                                                                                                       Identification of a previously
                                                                           UPPER
                                                                         CRETACEOUS                    unexplored Mesozoic carbonate
                5000M                                   TA R G E T       CARBONATES
                                                                                                       prospect in the Muradkhanli
                        Oil
SLIDE
                        Water
                                                                                                       and Jafarli oilfields
10
Z–21
                                                                       Z–4   Z–14    Z–3                  Z–28           NEW WELL
               DEVELOPMENT
               OF ZARDAB FIELD
2019           •   Zardab is the least developed field in
INVESTOR           Zenith’s REDPSA area
PRESENTATION
               •   Zenith’s 2018 CPR does not include any       Time
                                                                mSec
                   assessment of the reserves in this field
                                                                                            PLIOCENE
               •   A number of wells drilled in Zardab
                   achieved high production rates for a short   2000

                   time before clogging-up with sand and
                   becoming shut-in

               •   Zenith believes large quantities of
                   recoverable oil remain in place and                                      MIOCENE
                   ageological study to optimise the
                                                                2500
                   selection of new drilling and workover
                   opportunities has been completed

                                                                                            CHOKRAK
                   Z-3 was spud in 1979 and drilled to a
                   total depth of 4,300 metres into the
NEW WELL           Eocene and Cretaceous formations.            3000
                                                                                            MAYKOP
                   It tested approximately 2,900 barrels
                   of mixed hydrocarbons per day from
                   the Eocene formation before the
                   wellbore collapsed                                                       EOCENE

                                                                3500

                       = TESTED & PRODUCED
                         HYDROCARBONS
                       = HYDROCARBON                                                       CRETACEOUS
                         SHOWS
SLIDE
11                     = POTENTIAL
                                                                4000
                         HYDROCARBONS
                                                                                           SEISMIC LINE INTERPRETATION
WORKING INTERESTS IN
               ITALY - CASH GENERATING                                                                         368.96 KM2
               ENERGY PRODUCTION                                                                               OF ITALIAN NATURAL
                                                                                                               GAS PRODUCTION
2019             A low-risk jurisdiction with a strong EU regulatory framework                                 CONCESSIONS
INVESTOR
PRESENTATION     and favourable petroleum industry tax and royalty regime

                Italy has a long and successful                                                                         SOUTHERN GAS
                                                                                                                        CORRIDOR - TAP
                history of natural gas production
                                                                                                                        PRODUCTION
                and exploration across its territory                                                                    CONCESSIONS
                                                                                                                        ITALIAN NATIONAL
               • Balanced energy production portfolio                     Genoa                                         PIPELINE
                                                                                                                        INFRASTRUCTURE
                 providing cashflow with stable low-cost
                 natural gas production
               • Moderate investment expected to achieve
                                                                                                  ADRIATIC
                 significant increase in natural gas production                                     SEA

               • Highly profitable electricity is produced at                         ROME
                 the Torrente Cigno concession using low-
                 grade sour gas production
               • Gross Italy energy production revenues for
                 December 2018: €65,000
               • Italy’s economy is heavily dependent on oil
                 and gas

                                                                                                       MEDITERRANEAN
                                                                                                             SEA

                NATURAL GAS
                2P RESERVES
                                     CONDENSATE
                                     2P RESERVES           6    OPERATED
                                                                CONCESSIONS
                                                                                  2 EXPLORATION
                                                                                  PERMITS
                                                                                                     MONTHLY
                                                                                                     ELECTRICITY
                                                                                                                       NPV
                                                                                                                       DISCOUNTED
                16.4                 257                                                             PRODUCTION:       AT 10%
SLIDE
12              BCF                  MBBLS                 3    NON-OPERATED
                                                                CONCESSIONS
                                                                                  2 EXPLORATION
                                                                                  PERMITS AWAITING
                                                                                  APPROVAL
                                                                                                     900 MWh           US$14M
OPERATIONAL STRATEGY
                1               2                       3                      4                    5                     6
2019
INVESTOR            Overcome previous operational setbacks by implementing a
PRESENTATION        revised strategy of performing systematic well deepening and
                    sidetrack activities in wells drilled by SOCAR during the last ten
                    years in the Jafarli Field with modern, verified well data

                                          Achieve successful execution of work programme to
                                          obtain ‘proof of concept’ regarding Azerbaijan asset
                                          development strategy

                                                                  Maximise Azerbaijan oil revenue against a backdrop of
                                                        $         strengthened oil prices - currently generating a revenue
                                                                  of approximately US$450,000 with existing production

                                                                                         Utilise recently acquired 1,200hp drilling rig to to drill an appraisal
                                                                                         well targeting a large, unexploited Upper Cretaceous formation
                                                                                         structure identified in the Murdakhanli Field following extensive
                                                                                         geological studies and models completed in the last 12 months

                                                                                                               Continue to perform field rehabilitation and workover
                                                                                                               activities using the Company’s workover rigs in wells
                                                                                                               with verified well data

                                                                                                                                     Further enrich portfolio by acquiring large undeveloped
                                                                                                                                     onshore hydrocarbon production assets
SLIDE
13
CORPORATE STRATEGY
                1                     2                            3                           4                         5
2019
INVESTOR
PRESENTATION        Build upon successful listing of corporate bonds
                    on the Vienna Stock Exchange to reach target of €10
                €
                    million to be invested directly in Zenith’s development
                    and increase non-dilutive financing

                                          B+    Intention to improve the Company’s recently assigned
                                                medium to long-term issuer credit rating of “B+” with
                                                Positive Outlook to “BB” to facilitate debt financing

                                                                              Reduce exposure to convertible loan facilities
                                                                              whenever possible to avoid damaging conversions

                                                                                                         Maximise cost control to fulfil low-cost company
                                                                                               $
                                                                                                         structure and ensure profitability

                                                                                                                                   Pay dividend to shareholders if revenue
                                                                                                                                   position allows this following successful
                                                                                                                                   operational performance during 2019
SLIDE
14
SUMMARY INVESTMENT CASE
2019                                                                  Development of Italian     Highly experienced
INVESTOR
PRESENTATION                                                          assets expected to         operational team in
                                                                      increase natural           Azerbaijan with a proven
                                                                      gas and electricity        track-record of success
                                                                      production revenue         in onshore oil projects

                Strong fundamentals      Large reserve base           Internationally
                with profitable          with independently           connected Board of
                low-cost existing        assessed 2P reserves         Directors fully aligned
                production, generating   of 31.7 million barrels      with shareholder
                significant monthly      of oil in Azerbaijan         interests, holding large
                revenue against a        and 16.4 BCF of              stakes in the capital of
                backdrop of rising       natural gas in Italy         the Company. Chief
                oil prices                                            Executive Officer,
                                                                      Andrea Cattaneo, has
                                                                      elected to be fully
                Ready availability       Intention to develop         remunerated in equity
                of equipment and         the Company using            for two consecutive
                technical personnel      stringent due diligence      years since Zenith’s
                required for field       criteria to exploit value-   listing on the London
                development              accretive development        Stock Exchange
                operations in            opportunities
SLIDE           Azerbaijan and Italy
15
TEAM
                 Executive Directors & Senior Management
2019
INVESTOR
PRESENTATION
                                                        Luca Benedetto              Luca Benedetto trained in Italy as a registered accountant
                                                        Chief Financial Officer     with further education in IFRS accounting and consolidation
                                                                                    at IPSOA Milan. He has more than twenty-five years
                                                        (UK based)
                                                                                    of accounting, auditing and financial administration
                                                                                    experience.

               Andrea Cattaneo                          Luigi Regis Milano          Luigi has more than 40 years of experience in the petroleum
                                                        Executive Director,         industry during which he has been the executive director
               Chief Executive Officer &                                            of a large trading company specialised in oil refining,
               President (Azerbaijan based)             Managing Director
                                                                                    processing and trading. Luigi has held a significant interest
                                                        of Italian Operations       in an Italian oil refinery since 2000. Luigi is one of Zenith’s
                                                        (Italy based)               founders and currently serves as Managing Director of the
               Proven deal maker and government                                     Company’s Italian subsidiary.
               advisor with specifc expertise in
               former Soviet Union countries.
               He has more than 30 years of             Ion Tica                    Mr. Tica is a well operations and engineering executive with
                                                        Workover &                  over 28 years of international experience in drilling and
               experience in sovereign loans, capital
                                                                                    heavy workover operations. He joins the Company from the
               markets and oil trading between          Drilling Manager
               Western and emerging countries.                                      Arawak Energy group where he spent more than 10 years
                                                        (Azerbaijan based)          working in Azerbaijan and Kazakhstan. He previously worked
               At the beginning of his career he
               pioneered financial engagement                                       17 years for OMV Petrom in Romania and Kazakhstan in
               with Vietnam during the post-war                                     various technical and management positions.
               period and organised the first USD
               denominated loan to the country
                                                        Augusto Rossato             Augusto is a senior geologist with a proven track-record
               after the Vietnam War. He currently                                  of operational success in South America, Southern
               serves as a Non- Executive Member        Senior Geologist
                                                                                    Europe and Africa. He has over 30 years of experience
               of the Anglo-Azerbaijan Society and      (Azerbaijan based)
                                                                                    working for oil majors including Elf, Total, OMV and Eni
               Partner of the Buenos Aires Stock
               Exchange. He is one of Zenith’s
               founders and largest shareholders.       Dr. Narmina Garayeva        PhD degree in Reservoir Engineering and 30 years’
                                                        Senior Reservoir Engineer   experience acquired with small independent and
                                                                                    major international oil companies. Broad technical
                                                        (Azerbaijan based)
SLIDE                                                                               understanding of other disciplines including geology,
16                                                                                  drilling, and production operations across Azerbaijan,
                                                                                    West Africa, North Sea, Middle East, Russia, Kazakhstan.
TEAM
                Non-Executive Directors
2019
INVESTOR
PRESENTATION

               Dr. José Ramón               Dr. Dario Sodero              Saadallah Al-Fathi           Erik Sture Larre Jr         Sergey Borovskiy
               López Portillo               Non-executive                 Non-executive                Non-executive               Non-executive
               Chairman and Non-            Director,                     Director                     Director                    Director
               executive Director,          (Canada based)                (Austria based)              (Norway based)              (China based)
               (UK based)

                                            Experienced energy                                         Norwegian national          Sergey has over 25 years
               Former Mexican               industry executive            Former Head of               with strong expertise in    of experience in business
               Ambassador to Food and       with strong geological,       OPEC’s Energy Studies        large-scale real estate     management in China
               Agriculture Organisation     technical and exploration     Department. Award-           development projects,       and Hong Kong, he is
               (United Nations) and         expertise in North            winning oil and gas          banking and the oil &       fluent in Russian, English
               Minister in Mexican          America, North Africa and     industry researcher and      gas industry. Erik served   and Mandarin and holds
               Federal Government.          the Middle East. Holds a      columnist. Has served        as Deputy Chairman of       a degree in economics
               Leading researcher on the    doctorate in Geological       as Government and            SpareBank 1 Nord-Norge      CEO and Chairman
               energy security of Mexico.   Sciences from the             private advisor. Joint       and as Chairman of its      of various oil & gas
               He is also the Former        University of Turin, Italy.   winner of the 2016           Audit Committee.            consulting, engineering,
               Chairman of the FAO                                        scientific research award                                trading, chemical, seismic
               council. Holds a doctorate                                 of the Organization of the                               research and exploration
               f rom the University                                       Arab Petroleum Exporting                                 services companies based
               of Oxford in political                                     Countries.                                               in China and Hong Kong.
               science and international
               relations.

SLIDE
17
CONTACT   Zenith Energy Ltd.
                  Andrea Cattaneo
                  Chief Executive Officer
                  E-mail: info@zenithenergy.ca
                  Tel: +1 (587) 315 9031

                  Optiva Securities - (Broker)
                  Christian Dennis
                  Tel: + 44 (0) 203 137 1903

                  Allenby Capital Limited - (Financial Adviser)
                  Nick Harriss
                  Nick Athanas
                  Tel: + 44 (0) 203 328 5656

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08
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