Zenith Energy Ltd. confirmed that preparation activities for well deepening operations in well C-37 of the Jafarli field have been completed successfully. The estimated saving achieved by utilising Zenith's A-80 workover rig to complete these activities has been assessed as approximately USD 250,000. As announced on November 23, 2018, these operations have involved running in hole with a scraper to perform a cleanout of the casing to a depth of 3,904 metres. During these operations an obstruction was encountered at a depth of 1,830 metres requiring the scraper to be pulled out of hole and further well cleanout operations to be undertaken. Once further cleanout activities were completed, Zenith's field team ran in hole with a tri-cone drill bit successfully clearing the previously detected obstruction at a depth of 1,830 metres and reaching the target depth of 3,904 metres (production casing shoe). The tri-cone drill bit was subsequently pulled out of hole and a scraper was again run in hole and successfully cleaned out the wellbore to a depth of 3,904 metres as planned. Tender Process for Well C-37 Deepening Operation: The Company confirms that a total of 12 companies have participated in the tender by submitting commercial and technical bids for well C-37 deepening operations. Zenith is currently evaluating the aforementioned bids in consultation with its partner, SOCAR, and expects to award contracts, in accordance with its tender procedure and with the approval of its partner, during the next 14 business days. Jafarli Field Well Deepening Programme: The Company's geological investigations have determined that a number of wells adjacent to well C-37 in the Jafarli field share a strong production potential from the Middle Eocene and Upper Cretaceous formations of the same unexploited structure identified as the target zone for well deepening operations in well C-37. The Company's field team is currently determining which well represents the best candidate for well deepening operations through a series of well tests and workover activities utilizing its A-80 workover rig. Zenith can confirm that its A-80 workover rig is currently performing a full cleanout of the well C-26 wellbore to the depth of 3,920 metres (production casing shoe) in order to confirm the integrity of the production casing and thereby determine whether the well might be suitable for well deepening activities. In the event of a successful result being achieved in well C-37 deepening operations, the Company will mobilise a drilling rig to a second well location in the Jafarli field to perform well deepening operations targeting the same Middle Eocene and Upper Cretaceous formations. BD-260 Drilling Rig: The Company has received confirmation from B Robotics W S.r.l., ("Robotics") that the BD-260 drilling rig, purchased by its oilfield service company subsidiary, Zena Drilling Limited, ("Zena"), has been fully rigged up and that all components have been fully tested. Robotics is now rigging down the BD-260 drilling rig in preparation for transportation. Zenith is currently defining an agreement with an international logistics company in order to transport the BD-260 drilling rig from Italy to Azerbaijan. The Company will make an announcement once transportation of the BD-260 drilling rig begins. 2019 Production Target: As announced on August 13, 2018, the company has completed two comprehensive geological studies to optimise the selection of potential drilling locations and workover opportunities across the Muradkhanli, Jafarli and Zardab fields. The study focussed on the Muradkhanli and Jafarli fields enabled the identification of a new, previously unexplored, Mesozoic carbonate prospect running across the two fields beginning from the south-western flank of the Muradkhanli field. The Zardab field geological study enabled an identification of the main producing target reservoirs, seal and source rocks, a comprehensive analysis of all well test results, digitalisation of all well logs, the creation of stratigraphic logs and structural logs, as well as several structural maps. The Company is finalising a drilling programme that is planned to initially include the spudding of an appraisal well during the first six months of 2019, to be named ZEN-01, to target the aforementioned unexploited Mesozoic carbonate prospect in the Muradkhanli and Jafarli oilfields.

Zenith's oil production target for the 2019 calendar year remains unchanged at 1,000 barrels per day. The arrival of new equipment including a 260-ton drilling rig, a 100-ton truck-mounted workover rig, and the planned leasing of a 180-ton truck-mounted drilling rig from a local drilling contractor; and the resultant employment of this equipment on the basis of detailed geological and reservoir investigations is expected to enable the Company to achieve this target. The Company's current average production is approximately 270 barrels per day generating gross monthly revenue of approximately USD 450,000. The decline in oil production has resulted from the temporary shutting-in of certain wells in the Jafarli and Muradkhanli fields due to uneconomical performance caused by high watercut, and the necessary suspension of production from wells undergoing well preparation for deepening activities in the Jafarli field.