June 3, 2026
 
ZENITH ENERGY LTD.

("Zenith" or the "Company")

Exclusivity Agreements to acquire controlling interest in Daybreak Oil and Gas,
Inc.

Zenith (LSE: ZEN; OSE: ZENA; XSAT: ZENA SDR), the listed international energy
production and development company, is pleased to announce that it has signed
exclusivity agreements in connection with the potential acquisition of a
combined shareholding of approximately 82% in Daybreak Oil and Gas, Inc.
("Daybreak").

The proposed acquisition reflects Zenith's strategy of maximising the value of
Leopard Energy Inc. (OTC: LEEN), its publicly traded US subsidiary in which
Zenith currently holds approximately 99.87% of the total voting rights. Any
shareholdings successfully acquired may ultimately be held through Leopard
Energy or another designated subsidiary within the Zenith group, reflecting the
Company's focus on building a larger portfolio of revenue-generating US energy
assets in a favourable oil price environment.

Exclusivity Agreements with Reabold Resources Plc and Portillion Capital Limited


Zenith has entered into confidentiality and exclusivity agreements with Reabold
Resources Plc ("Reabold") and Portillion Capital Limited ("Portillion") in
relation to the potential acquisition of their respective shareholdings in
Daybreak, representing a combined interest of approximately 82% of Daybreak's
issued share capital, comprising approximately 42% and 40%, respectively.

Under the terms of these agreements, Zenith has been granted a 90-day
exclusivity period to conduct customary due diligence and negotiate the proposed
transactions. During this period, both Portillion and Reabold have undertaken
not to solicit, initiate, continue, or enter into any competing discussions or
transactions in respect of their interests in Daybreak.

The exclusivity agreements are non-binding in respect of the proposed
acquisitions and there can be no certainty that any transaction will ultimately
be completed. Completion of any acquisition remains subject to the satisfactory
completion of due diligence, the negotiation and execution of definitive
transaction documentation, and the satisfaction of any other conditions that may
be agreed between the parties.
The agreements permit the Company to engage in discussions with other Daybreak
shareholders regarding the potential acquisition of additional shares. Should
both proposed acquisitions be successfully completed, Zenith (through its
designated subsidiaries) would acquire a controlling interest of approximately
82% in Daybreak.


About Daybreak Oil and Gas, Inc.

Daybreak is an independent, OTC-traded crude oil and natural gas company engaged
in the exploration, development and production of onshore crude oil and natural
gas assets, primarily in California, United States. Daybreak holds working
interests in producing crude oil wells and development acreage in Kern County,
California. In May 2022, Daybreak acquired Reabold California, LLC, an
independent crude oil and natural gas company with operations in Central
California, including producing and development assets located in Contra Costa
and Monterey Counties.

Based on management representations and information obtained during the
Company's preliminary due diligence review, current production is estimated to
be approximately 130 barrels of oil per day, reflecting a prolonged period of
limited drilling and development activity. The existing asset base offers
significant potential for production growth through a targeted redevelopment and
drilling programme.

The Board notes that recent legislative changes in California, including the
implementation of Senate Bill 237, may create a more supportive permitting
framework for oil and gas development activities in Kern County, where
Daybreak's principal producing assets are located. The Company believes these
developments could enhance the potential for future drilling and redevelopment
programmes across Daybreak's asset base.

The approximately 42% shareholding currently held by Reabold originated from
Daybreak's acquisition of Reabold California in 2022 in a transaction valued at
approximately US$5.3 million. The approximately 40% interest held by Portillion
and associated parties originated from a financing completed in connection with
that acquisition, pursuant to which Daybreak raised approximately US$2.5 million
of new equity capital. Accordingly, the interests subject to the exclusivity
agreements originated from transactions representing an aggregate value of
approximately US$7.8 million.

The Company believes that the non-core nature of these shareholdings for both
Reabold and Portillion may support a transaction on attractive commercial terms.
The historical acquisition values are provided solely for contextual purposes
and do not reflect, nor will they be used as a reference point in, the current
negotiations.

Strategy 

The proposed acquisitions are consistent with Zenith's strategy of growing
through proven, revenue-generating energy production assets, complemented by
low-risk exploration activities in assets with existing production. 

A controlling interest in Daybreak would provide Zenith with a low-cost,
high-optionality entry into the California onshore oil and gas sector,
comprising established infrastructure, existing cash flow and a substantial
inventory of undrilled development locations. Daybreak's current production
profile does not fully reflect the underlying potential of its asset base,
having experienced a prolonged period of limited drilling and development
activity due to capital constraints. Zenith's operational, financial and capital
markets expertise can be applied to support the redevelopment and growth of
these assets, with the objective of increasing production, growing cash flow and
supporting future value creation.

The transaction represents an attractive opportunity to acquire a controlling
interest in a publicly traded company with established producing assets through
the acquisition of significant shareholdings held by long-standing investors for
whom the investment is considered non-core.


Andrea Cattaneo, Chief Executive Officer, commented:

"We are pleased to have secured exclusivity over both Reabold's and Portillion's
shareholdings, which together represent an approximately 82% controlling
interest in Daybreak.

Daybreak represents an operated, revenue-generating onshore production base with
established infrastructure, existing production and substantial development
potential. We believe the asset base offers significant opportunities for
production growth through targeted redevelopment and drilling activities,
particularly against the backdrop of an improving regulatory and permitting
environment for oil and gas operations in California.

The proposed acquisition is consistent with our strategy of supporting the
growth and value creation objectives of Leopard Energy, our publicly traded US
subsidiary. We believe Daybreak represents an attractive opportunity to expand
Leopard's portfolio of producing energy assets through the acquisition of an
established production base with existing cash flow, infrastructure and
development potential. Following a prolonged period of limited drilling and
development activity, we believe there is scope to increase production, enhance
cash flow and create value through active strategic management and targeted
capital investment. The acquisition would represent a further step in our
strategy of building Leopard into a diversified, revenue-generating platform
focused on onshore energy assets in the United States.

We look forward to progressing our due diligence and providing further updates
to the market in due course."

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

Market Abuse Regulation (MAR) Disclosure

The information included in this announcement is defined as 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.
nouncement is defined as 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.\