Zenith Energy Regulatory News (ZEN)

ZENITH ENERGY LTD.

("Zenith" or the "Company")

Operational Update

Team B commences sidetrack operations at well M-195 in Azerbaijan

Calgary, Alberta, April 18, 2017, Zenith Energy Ltd. ("Zenith" or the "Company") (LSE: ZEN; TSX.V: ZEE), the dual listed international oil & gas production company, is pleased to announce that the local drilling contactor operating as 'Team B' has initiated a sidetrack operation at the Muradkhanli field well M-195. This sidetrack has required the arrival of a more sophisticated workover rig operated by the local drilling contractor. The Company confirms that this new workover rig has arrived to the well site location and that sidetrack activities have begun today, 18 April, 2017.

Team B was successful in removing several obstructions and fixing a previously observed casing displacement at the 2780-meter level in this older well which was first drilled in 1980. Milling and reaming operations were then continued to a depth of 3026 meters and in the open-hole section below. Unexpected difficulties were encountered in the open-hole section due to various amounts of metal debris which prevented the completion of workover operations aimed at installing a new casing screen. After extensive consultations with the local management team and industry experts, Zenith's engineering and geological team has decided to proceed with a sidetrack operation in order to reach an undisturbed section of the oil-bearing reservoir with greater oil producing potential. A window will be cut in the 168 mm casing at approximately 2955-2960m depth and a 139.7mm bit will be used to drill a sidetrack hole to a depth of approximately 3020 meters while taking gyro-directional surveys to monitor the direction and inclination of the sidetrack hole. A 114.3mm casing will then be cemented in the new hole and a slimmer hole will be subsequently drilled to a total depth of approximately 3065 meters. This section of wellbore, from 3020 meters to total depth, will be left as open-hole.

The Company will provide a final update when operations at well M-195 have been completed.

Dr. Dario Sodero, Senior Geologist and Director, commented:

"When re-entering older wells, it is often impossible to predict the exact conditions of the casing and what kinds of metal debris may be found at the bottom of the well, especially when dealing with 'Soviet era' drilling and completion techniques. It is unfortunate that the M-195 well could not be completed as per the initial work programme; operations conducted by Team B have however proved to be a good learning experience for Zenith in Azerbaijan. I expect that Team B will be very proficient in drilling the sidetracked hole with the valuable consultancy of international directional drilling experts. I am confident that the new uncontaminated section of reservoir rock will yield good results when placed on production. This would reward the Company's decision to begin the workover programme specifically at well M-195 which, whilst relatively more challenging than other wells, has excellent production upside potential."

For further information, please contact:

José Ramón López-Portillo

Chairman

Andrea Cattaneo

CEO & President

Email: info@zenithenergy.ca

Telephone: +1 (587) 315 9031

Telefax: +1 (403) 775-4474