ZENA: Acquisition of Italian Biogas Plant

July 20, 2026
 
ZENITH ENERGY LTD.

("Zenith" or the "Company")

Acquisition of Italian Biogas Plant

Zenith Energy Ltd (LSE: ZEN; OSE: ZENA; XSAT: ZENA SDR), is pleased to announce
that it has entered into a binding Letter of Intent and Exclusivity (the
"Contract") for the acquisition of 100% of the issued share capital of an
Italian biogas development company (the "Target"), which owns the rights to
develop a fully permitted and engineered biogas production facility in Italy,
subject to completion of the proposed acquisition (the "Project").

The Project is fully permitted, fully engineered and construction-ready, with
all material permits, licences and engineering approvals already obtained. Once
operational, the Project will produce approximately 3 million cubic metres of
methane gas per annum, for injection into the Italian gas network, sold at
Italian gas prices and benefiting from 15-year government incentives.

A long-term feedstock supply contract with a major Italian regional authority,
comprising approximately 50% municipal waste and 50% agro-industrial waste,
significantly mitigates what is widely regarded as the principal operational
risk associated with biogas projects. This provides the Project with a stable
and secure long-term feedstock supply, supporting predictable operations and
facilitating access to project financing.

Project Economics

The Project's projected annual revenues at full operational capacity are
estimated at approximately EUR5 million. The projected annual EBITDA is estimated
at approximately EUR2.5 million; a 50% EBITDA margin that reflects the Project's
strong underlying economics and the benefit of long-term, government-backed
revenue incentives.

Zenith is providing what the Project has always lacked: the operational
expertise required to produce and sell gas into the Italian network, together
with the project finance expertise and financing relationships necessary to
unlock its full potential. As with the Company's previously announced
acquisition and development of its solar portfolio, both the acquisition of the
Target and the development of the Project are expected to be funded through
non-dilutive green project financing.

Details surrounding the final consideration and the identity of the Target,
together with the geographical location of the Project and the identity and
location of the vendor, will be disclosed upon completion, as the Company
believes that premature disclosure could increase the risk of competing offers
for the Project.

Highlights

o	The purchase price of the Target is capped at EUR 1.6 million, with the final
consideration to be determined following completion of confirmatory due
diligence.
o	Biogas enjoys exceptional government support in Italy: a 40% capital cost
subsidy and a 15-year incentive providing a 20% uplift on methane sales. These
mechanisms materially enhance project returns and provide long-term revenue
visibility.
o	Italy's National Energy and Climate Plan (PNIEC) targets 5.7 billion cubic
metres of biomethane production per annum by 2030 - a target that requires
national production to roughly double and represents a significant, sustained
investment opportunity that Zenith intends to capture.
o	Once operational, the Project will produce approximately 3 million cubic
metres of methane gas, which will be injected into the Italian gas network "Snam
Rete" through which Zenith has produced and sold natural gas since 2013 via its
subsidiary Canoel Italia S.p.A. 

o	Green project financing is targeted by the end of Q3 2026. Completion of the
Acquisition is expected during Q4 2026, with construction to commence
immediately thereafter and the plant expected to be operational in Q3 2027.
o	This Acquisition is the first step in building a diversified Italian biogas
and biomethane portfolio alongside Zenith's existing solar development business.

About Biogas in Italy

Italy is one of Europe's largest and most established biogas markets, with
approximately 2,400 plants in operation and a combined installed capacity of
approximately 1.5 GW, concentrated in the north of the country. The sector was
originally built around the production of renewable electricity under long-term
feed-in tariffs; it is now undergoing a structural transition towards biomethane
- a renewable gas equivalent to natural gas that is injected directly into the
national gas network and sold at Italian gas prices.

The policy backdrop is among the most supportive in Europe. Italy's PNIEC
targets 5.7 billion cubic metres of biomethane production per annum by 2030,
supported by substantial capital grants and long-dated revenue incentives for
new biomethane capacity. This combination of a large existing industrial base,
binding national targets and generous long-term incentives has attracted
significant capital from major international infrastructure investors in recent
years - and underpins Zenith's decision to establish biogas and biomethane as
its second Italian renewable energy division.
 
Andrea Cattaneo, Chief Executive Officer, commented:

"The proposed acquisition marks the beginning of Zenith's second Italian
renewable energy division and establishes a strong platform from which to build
a diversified biogas and biomethane business in Italy.

The Project is fully permitted, fully engineered and supported by long-term
waste supply agreements with a group of municipal authorities and leading food
and agro-industrial companies. Having already achieved the key permitting,
engineering and commercial milestones, the Project is well positioned to advance
into construction. Zenith believes it is uniquely positioned to provide the
operational expertise, sector experience and project financing capabilities
required to unlock the Project's full potential.

The proposed acquisition reflects our Italian renewable energy strategy in
action: acquiring high-quality development assets at attractive valuations and
creating value by financing, constructing and operating them. We have
successfully applied this approach in our solar development business and are now
extending it into the rapidly growing Italian biogas sector.

Biogas is a natural extension of our Italian platform. We have operated as a
natural gas and electricity producer in Italy since 2013, giving us extensive
experience of the Italian energy market, its regulatory framework and the
commercialisation of gas production. Combined with a highly supportive policy
environment, including government grants covering up to 40% of eligible capital
expenditure and 15-year biomethane incentives, we believe the sector offers a
highly attractive long-term investment opportunity.

We intend for this proposed acquisition to serve as the foundation for the
development of a significant Italian biogas and biomethane portfolio in Italy,
and we look forward to completing the transaction during Q4 2026."

Further Information:

Zenith Energy Ltd
 
Andrea Cattaneo, Chief Executive Officer
 
 	 
 
Tel: +1 (587) 315 1279
E:  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 the
development of proven revenue generating energy production assets, as well as
low-risk exploration activities in assets with existing production.

For more information, please visit: www.zenithenergy.ca

Twitter: @zenithenergyltd

LinkedIn: https://bit.ly/3A5PRJb

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pursuant to MAR article 7 and is publicly disclosed in accordance with MAR
article 17 and section 5-12 of the Norwegian Securities Trading Act. The
announcement is made by the contact person.
 inside information\
pursuant to MAR article 7 and is publicly disclosed in accordance with MAR\
article 17 and section 5-12 of the Norwegian Securities Trading Act. The\
announcement is made by the contact person.\