November 4, 2025
ZENITH ENERGY LTD.
("Zenith" or the "Company")
Decision & Appeal of SMP Court Case
Zenith Energy Ltd. ("Zenith" or the "Company") (LSE: ZEN; OSE: ZENA; XSAT:ZENASDR), the listed international energy production and development company,announces that the Paris Commercial Court (the "Court") has delivered adecisionin respect of the legal claim (the "Claim") brought before the ParisCommercialCourt (the "Court") by its fully owned subsidiary, Anglo African Oil & GasCongoS.A.U ("AAOGC") against SMP Energies (hereafter "SMP", formerly Société deMaintenance Pétrolière - SMP) the rig contractor that performed drillingservices in wells TLP-103 and TLP-103C of the Tilapia oilfield during2018-2019.
Background On July 15, 2019, formerly AIM quoted Anglo African Oil & Gas plc ("AAOG"),theprevious owner of AAOGC prior to its acquisition by Zenith in May 2020, madeanannouncement confirming that AAOGC had initiated a claim against SMP followingpoor performance in drilling wells TLP-103 and TLP-103C, and the refusal bySMPto engage in negotiations to cover the significant cost overruns that had beenincurred by AAOGC as a direct consequence. The Claim was initially launched in Court against SMP to recover costs ofUS$3.1million relating to SMP's unsatisfactory performance. In taking the decision to launch the Claim for costs against SMP the followingreasons were considered significant at the time: · AAOGC had maintained extensive, contemporaneous technical records ofthefailures of the Rig and the losses and delays that were caused as a result; · SMP had not put forward evidence, of any kind, to suggest that Rigperformance was not the cause for cost overruns; and · Advice from International counsel in London, Paris and the Republic ofthe Congo was that the Claim had merit. Under the rules and conventions of the Court, mediation between the partiesengaged in a dispute is a recommended course of action. As a result, asupervised mediation meeting took place during the Autumn of 2019. On December 11, 2019, AAOG announced that mediation efforts had provenunsuccessful and that, as a result, AAOGC would continue to pursue the Claim. On November 11, 2020, Zenith provided an update on the Claim announcing thatSMPhad retaliated to the Claim by obtaining a number of unjustified seizureordersover the fixed assets of AAOGC in the Republic of the Congo, as well as overitslocal bank accounts, and that whilst the initial granting of these orders hadnobearing on the Claim launched in the Paris Commercial Court, it had beensuccessful in fully revoking all of the wrongful seizure orders initiallyobtained in the Republic of the Congo.
On February 17, 2023, Zenith announced that it AAOGC had increased the amountofthe Claim for SMP's failures during drilling activities to US$9 million, inconsideration of the significant commercial damages suffered by AAOGC,specifically the impossibility, as a direct result, to begin productionactivities from the Tilapia oilfield. Further, Zenith announced that AAOGC had intensified its legal activities insupport of the Claim by commissioning third-party reports from leadingexperts.
On July 3, 2023, the Company announced that the Court had rejected SMP'srequestfor a stay of proceedings in France due to new proceedings having beeninitiatedin the Republic of Congo, stating that SMP's request contained "all thecharacteristics of a dilatory request", and ordered SMP to pay an amount ofEUR30,000 to AAOGC as initial procedural costs (the "Initial Procedural Costs"). SMP unsuccessfully appealed this intermediate decision of the Court, resultingin the Paris Court of Appeal upholding the decision of the Paris CommercialCourt and AAOGC receiving Procedural Costs in the amount of approximately EUR30,000. On October 4, 2024, the Company announced that it had appointed CharlesRussellSpeechlys Paris as new legal counsel before the Court in connection with thelegal claim against SMP.
Decision
The Court has partially accepted a significant proportion of the legalargumentsadvanced by AAOGC as part of the Claim, whilst solely recognising 160,000 EURincompensation payable to AAOGC as a result of the responsibilities ascribabletoSMP.
However, the Court ruled that SMP's invoice, amounting to approximatelyEUR630,000- although fully contested by AAOGC - remains payable on the basis that it wasnot disputed within six (6) calendar days, as stipulated in the contract. Thisinterpretation is firmly contested by AAOGC.The Court has not provided for provisional enforcement of the decision.
Appeal AAOGC has instructed Charles Russell Speechlys (Paris) to appeal the decision,given its clearly contradictory nature and the limited level of compensationawarded despite the Court's acknowledgment of many of AAOGC's arguments.The Company will provide a further update in due course as the appealprogresses.
Andrea Cattaneo, Chief Executive Officer, commented: "In light of the fact that AAOGC has been pursuing this claim forapproximatelyfive years, the decision is disappointing.
It is important to underline that this case was initiated prior to ouracquisition of AAOGC, and that the underlying events occurred before thecurrentmanagement assumed responsibility for this entity. Nevertheless, uponacquiringAAOGC, we formed the view - which we continue to hold - that AAOGC's claim hadstrong legal and factual merits.The procedural conduct of SMP, as evidenced by the intermediate decision inJuly2023, has had the purpose of making every possible attempt to impede theprogress of the Claim. With receivables exceeding US$5.3 million due from SNPC, the national oilcompany of the Republic of the Congo, and given the absence of any provisionalenforcement in this decision, we shall proceed to appeal before the ParisCourtof Appeal.
We remain unwavering in our confidence in the Company's potential and lookforward to making further near-term progress on the key strategic fronts thatunderpin the Company's value."
Further Information:Zenith Energy Ltd
Andrea Cattaneo, Chief Executive Officer Tel: +1 (587) 315 1279E: info@zenithenergy.ca
Notes to Editors:
Zenith Energy Ltd. is a revenue generating, independent energy company with energy production, exploration and development assets in North Africa, the US and Europe. The Company is listed on the London Stock Exchange Main Market LSE:ZEN, the Euronext Growth of the Oslo Stock Exchange (OSE: ZENA) and on the Spotlight Stock Market in Sweden (XSAT: ZENA SDR).
Zenith's strategic focus is on pursuing development opportunities through thedevelopment of proven revenue generating energy production assets, as well aslow-risk exploration activities in assets with existing production.
For more information, please visit: www.zenithenergy.caTwitter: @zenithenergyltdLinkedIn: https://www.linkedin.com/uas/login?session_redirect=https%3A%2F%2Fwww.linkedin.com%2Fcompany%2F10818980%2Fadmin%2F
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