Zenith Energy Regulatory News (ZEN)

ZENITH ENERGY LTD.

("Zenith" or the "Company")

ZENITH ANNOUNCES 2017 ANNUAL CONSOLIDATED RESULTS

Calgary, Alberta, June 28, 2017, Zenith Energy Ltd. ("Zenith" or the "Company") (LSE: ZEN; TSX.V: ZEE) the dual listed international energy production company with production interests in Italy and the operator of the largest onshore oilfield in Azerbaijan, is pleased to announce its annual consolidated audited financial results for the year ending March 31, 2017. These results can be viewed online at: www.sedar.com and will also shortly be available for review at www.zenithenergy.ca

These results were filed on SEDAR on June 27, 2017 in accordance with TSX rules. This is the first annual consolidated audited financial report to be published since the Company was admitted to trading on the London Stock Exchange on January 11, 2017.

During the year Zenith achieved the following important milestones:

- On August 11, 2016 the handover of the Azerbaijan assets was formally completed and Zenith commenced crude oil production of approximately 275 BOPD in Azerbaijan. The acquisition of the assets in Azerbaijan was reflected in an immediate accretion of the oil gross revenues of CAD$2,560,000 (GBP 1,542,310) for the period from August 11 to March 31, 2017.

- On January 11, 2017 Zenith's entire Common Share capital was admitted to the standard listing segment of the London Stock Exchange Main Market.

- On February 20, 2017 the Company announced the divestment of its operations in Argentina. This was a strategic decision which has strengthened the Company's balance sheet and enabled Zenith's management to focus on the consolidation of its energy production portfolio in Italy and the Company's transformational oil production opportunity in Azerbaijan.

Consolidated Annual Financial Results

- During the year, Zenith reported revenues of CAD$ 4,424,000 (GBP 2,655,310) (2016 - CAD$ 791,000), an increase of 459.3% year-on-year.

- During the year, Zenith reported a gain of CAD$ 567,378,000 (GBP 341,826,000) (2016 - loss of CAD$ 7,675,000- GBP 4,623,930) which primarily reflects the value of the Azerbaijan asset acquisition under IFRS standards.

- Net profit for fiscal year ending March 31, 2017 equates to CAD$ 4.54 (GBP 2.74) per share, on a fully diluted basis.

- As of March 31, 2017 Zenith held CAD$ 3,924,000 (GBP 2,364,080) in cash (March 31, 2016 CAD$ 138,000 - GBP 83,140).

- Cash used in investing activities totalled CAD$ 402,000 (GBP 242,191) (March 31, 2016 CAD$ 576,000 - GBP 347,020). The cash from financing activities in 2017 totalled CAD$ 5,710,000 (GBP 3,440,080), these were mostly the proceeds of the Company's admission to the London Stock Exchange, less net repayment of loans.

Highlights for the year ended March 31, 2017 include the following:

- During the year ended March 31, 2017 Zenith sold 65,432 Bbls of oil from its producing assets in Azerbaijan. This data is not comparable to that of the previous year. It is important to note that the data regarding the 2017 year includes the oil production from August 11, 2016 to March 31, 2017.

- During the year ended March 31, 2017, Zenith sold 25,124 Mcf of natural gas from its Italian assets versus 92,345 Mcf of natural gas in the 2016 comparative period. The reason for this decrease in the sales of natural gas from Torrente Cigno is the fact that natural gas production at this concession is now wholly used to produce electricity. This re-configuration reflects the greater profitability of electricity production.

- During the year ended March 31, 2017, Zenith sold 807 Bbls of condensate from its Italian assets compared to 906 Bbls of condensate in the 2016 comparative period, a decrease of 11%.

- During the year ended March 31, 2017, Zenith sold 9,636 MWh of electricity from its Italian assets.

- The EPS basic for 2017 stands at CAD$ 8.15 (GBP 4.91), and diluted is CAD$ 4.54 (GBP 2.74) - loss of (CAD$0.23) (GBP 0.14) in 2016. Details of the potentially dilutive effects of options and warrants outstanding are set out in Note 13 of the Financial Statements.

Corporate Activities

- Gross fundraising of CAD$ 5,288,240 (GBP 3,187,000) completed in January 2017.

- Comprehensive Azerbaijan workover programme started in February 2017.

- Loan re-payment of US$ 700,000 (CAD$ 932,684 - GBP 562,001) made on January 20, 2017 to significantly reduce corporate debt.

- CAD$ 407,000 (GBP 245,204) of convertible loan debt was converted on January 30, 2017 resulting in the issuance of 3,700,000 new shares.

Andrea Cattaneo, Zenith CEO, commented:

"I am pleased to present our annual audited consolidated financial results; the first set of financial results since the Company's listing on the London Stock Exchange in January 2017. Our annual results for the year ended March 31, 2017 clearly demonstrate the transformational impact of Zenith's recent acquisition in Azerbaijan. Some of these numbers have already been provided to the market in the form of our Q2 and Q3 2017 reports and are now presented in full in our annual results.

The Company has a very prosperous journey ahead with an opportunity to significantly increase our oil production revenues and thereby enhance our market capitalisation as we progress with the field rehabilitation, development and exploration of the largest onshore oilfield in Azerbaijan.

This is in addition to our diversified energy production portfolio in Italy which also presents opportunities to substantially increase revenues through our production of electricity, natural gas and condensate.

The Company's primary objective is to achieve incremental oil production increases in Azerbaijan. Our oil production target of 1000 BOPD by March 31, 2018 should project Zenith towards a mid-tier market capitalisation. I have full confidence that our systematic programme of field rehabilitation, begun in February 2017, will achieve this target and I am very excited about our journey ahead."

For further information, please contact:

Zenith Energy Ltd.

José Ramón López-Portillo

Chairman

Andrea Cattaneo

CEO & President

Email: info@zenithenergy.ca

Telephone: +1 (587) 315 9031

Telefax: +1 (403) 775-4474

Allenby Capital Limited - (Joint Broker)

Nick Harriss

Nick Athanas

Richard Short

Telephone:   + 44 (0) 203 328 5656

Optiva Securities - (Joint Broker)

Christian Dennis

Telephone: + 44 (0) 203 137 1903