Zenith Energy Ltd. (“Zenith” or the “Company”) announced on July 21, 2026, that the Company has completed a private placement of 50,000,000 new common shares of no par value with existing institutional investors in Norway, raising aggregate gross proceeds of approximately GBP 2.12m (equivalent to approximately NOK 27.5m or USD 2.85m). The private placement was completed at a subscription price of NOK 0.55 per share, representing a discount of approximately 0.36 % to the Company’s closing share price on Euronext Growth Oslo on July 20, 2026, and was accompanied by the issuance of 50,000,000 warrants with a two-year duration and an exercise price of NOK 0.675 per share. Following Admission, the Company will have 764,756,457 Common Shares in issue, each carrying one vote. The Company stated that proceeds will be used to fund due diligence and construction related to the Italian biogas project announced on July 20, 2026, to advance legal expenses associated with ongoing international arbitration proceedings, to further develop its Italian solar portfolio, and for general working capital purposes.
Conclusion
In Analyst Group’s view, the Financing is a well-executed, low-discount capital raise that equips Zenith to pursue its stated near-term priorities, chief among them the proposed entry into the Italian biogas sector. The binding Letter of Intent introduces a fully permitted, construction-ready asset with government-backed revenue visibility and, subject to confirmatory due diligence and the arrangement of non-dilutive project financing, an attractive acquisition cost relative to the Project’s projected earnings. The pending Piedmont divestment provides a separate, earlier-stage indication of the value being ascribed to Zenith’s Italian solar portfolio, though it remains non-binding at this stage. Considered alongside the approaching ICSID Tribunal Award and the continued development of Zenith’s uranium exploration interests through its shareholding in Reveille Resources Plc, Analyst Group views the Financing and the biogas entry as consistent with the Company’s strategy of financing, developing and selectively monetizing energy assets across Italy. Taken together, with completion of both the biogas acquisition and the Piedmont sale as the key near-term catalysts, Analyst Group considers that Zenith’s increasingly diversified asset base underpins an attractive long-term risk-reward proposition as these catalysts materialize over the coming quarters.
Analyst Group’s View on the Financing
In Analyst Group’s view, the private placement was efficiently priced. The discount of only approximately 0.36 % to the prevailing closing price is notably narrow for a placement of this size, is broadly consistent with the Board’s stated objective of securing capital at a market-based price with a high degree of execution certainty, and reflects continued institutional support for the Company’s strategy. The issuance of 50,000,000 new shares represents dilution of approximately 7.0 % relative to the previously outstanding 714,756,457 Common Shares, or approximately 6.5 % of the enlarged share capital following Admission, a limited dilutive impact relative to the optionality the proceeds support. The accompanying 50,000,000 warrants, exercisable at NOK 0.675 per share, a premium of approximately 22.7 % to the subscription price, over a two-year period, could provide up to approximately NOK 33.75m of additional funding if exercised in full, albeit through the issuance of up to 50,000,000 further shares.
Beyond the biogas project discussed below, the stated uses of proceeds reinforce each of Zenith’s core value pillars. The continued development of the solar portfolio should be viewed alongside the memorandum of understanding signed on July 15, 2026, for the proposed sale of a 50 MWp Piedmont development portfolio for EUR 12m against an aggregate acquisition and development cost of approximately EUR 5m, implying a gross profit of approximately EUR 7m, or a consideration of approximately 2.4x cost. If completed, this would represent the first monetization of Zenith’s Italian solar development portfolio, currently approximately 193 MWp, and would provide tangible market validation for the Company’s build-and-sell model, although it remains at the non-binding stage and subject to confirmatory due diligence and a definitive agreement. A further portion of proceeds is earmarked for legal costs associated with the ICSID arbitration brought by Zenith’s subsidiaries against the Republic of Tunisia in relation to a USD 572.65m claim, for which post-hearing submissions are due on July 31 and September 30, 2026, ahead of a Tribunal Award expected in the first quarter of 2027; Analyst Group continues to assign a 72 % probability to a favorable outcome based on precedent.
Analyst Group’s View on the Biogas Acquisition
In Analyst Group’s assessment, the more strategically significant development is the Financing’s direct link to Zenith’s entry into the Italian biogas sector, disclosed one day earlier through a binding Letter of Intent and Exclusivity for the acquisition of 100 % of an Italian biogas development company. The transaction establishes what the Company describes as its second Italian renewable energy division and extends Zenith’s operating history in the Italian gas market, in which its subsidiary Canoel Italia S.p.A. has produced and sold natural gas into the Snam Rete network since 2013. The underlying project (the ”Project”) is fully permitted, fully engineered and construction ready, a materially more advanced stage than is typical for an early-stage acquisition, and is expected to produce approximately 3 million m³ of methane per year for injection into the Italian gas network, sold at Italian gas prices and supported by a 15-year government incentive. A long-term feedstock supply contract with a major Italian regional authority, comprising approximately 50 % municipal waste and 50 % agro-industrial waste, materially mitigates feedstock security risk, widely regarded as the principal operational risk in biogas projects, and should support access to project-level financing.
The Company projects annual revenue of approximately EUR 5m and annual EBITDA of approximately EUR 2.5m at full capacity, a 50 % margin supported by Italy’s biogas incentive regime, which comprises a 40 % capital cost subsidy and a 15-year incentive providing a 20 % uplift on methane sales. Against a purchase price capped at EUR 1.6m for the Target’s shares, this implies a multiple of approximately 0.64x projected annual EBITDA, a level that, subject to confirmation through due diligence, Analyst Group views as attractive for a construction-ready asset with government-backed revenue visibility, though it necessarily excludes the separate construction capital expenditure required to bring the Project into operation. On a purely illustrative basis, sustained annual EBITDA of EUR 2.5m across the 15-year incentive period would imply aggregate undiscounted EBITDA of the order of EUR 37.5m, which, while excluding ramp-up, discounting, financing and construction costs, indicates the potential scale of the opportunity relative to the capped acquisition cost.
Analyst Group notes that several elements of the transaction remain to be confirmed. The final consideration is subject to confirmatory due diligence, and the identity of the Target and the vendor, together with the Project’s precise location, have not been disclosed, which limits independent verification of the disclosed economics at this stage. Completion is targeted for the fourth quarter of 2026, with green project financing targeted by the end of the third quarter of 2026 and operations expected in the third quarter of 2027. The Company has stated that proceeds from the Financing will contribute to due diligence and construction costs for the Project, while, consistent with the approach applied across its solar portfolio, the acquisition and development are expected to be funded principally through non-dilutive green project financing. In Analyst Group’s view, the arrangement of this financing on acceptable terms represents the primary execution risk associated with Zenith’s entry into biogas.
