Zenith Energy Ltd. (“Zenith” or the “Company”) announced on Tuesday, November 4, 2025, that the Paris Commercial Court has delivered its decision in the longstanding legal claim brought by Zenith’s wholly owned subsidiary, Anglo African Oil & Gas Congo S.A.U. (“AAOGC”), against the French rig contractor SMP Energies (“SMP”) regarding drilling activities in the Tilapia oilfield during 2018–2019.
The Court acknowledged several legal arguments presented by AAOGC but awarded only EUR 160,000 in compensation. At the same time, the Court ruled that a previously contested SMP invoice amounting to approximately EUR 630,000 remains payable due to procedural timing clauses in the contract. The decision is not subject to provisional enforcement, and Zenith has confirmed that an appeal has been initiated through its legal counsel, Charles Russell Speechlys Paris.
Analyst Group’s View on the Paris Court Decision
The original claim was increased to USD 9 million in 2023, reflecting extended operational and commercial damages resulting from SMP’s drilling activities in the Tilapia oilfield. In this context, the Paris Commercial Court’s decision to award only EUR 160,000 (approximately SEK 1.76M) constitutes a limited recovery and should be viewed as a disappointment in relation to the size of the original claim. While the Court acknowledged several of AAOGC’s legal arguments, the compensation awarded does not reflect the magnitude of the alleged damages. Importantly, the case relates to legacy events that predate Zenith’s acquisition of AAOGC in 2020 and is unrelated to the Company’s current operations or management. Since acquiring AAOGC, Zenith has acted to advance the claim, strengthen its legal position through the engagement of Charles Russell Speechlys Paris, and support its arguments with third-party technical expert reports. It is also worth noting that the legal cost of procedures appears to be largely offset by the EUR 30,000 in procedural costs (approximately SEK 330,500) awarded in favor of AAOGC and paid by SMP, following an earlier ruling by the Paris Court of Appeal in 2023. Taken together, the Paris Court’s decision currently has no financial or operational impact on the Company.
While the ruling acknowledged several of AAOGC’s legal arguments, the low compensation and the validation of SMP’s disputed invoice, based on a procedural clause rather than substantive merits, underline the mixed nature of the outcome. However, the Court’s decision is not subject to provisional enforcement, meaning there is no immediate cash outflow for Zenith, and the contested invoice is not payable while the appeal is ongoing.
Analyst Group has not included any financial upside from the SMP litigation in our valuation model. As such, any future positive outcome from the appeal process should be viewed as a legal option, rather than a valuation driver. Given the limited financial scale of the SMP case, especially in comparison to Zenith’s ongoing ICSID arbitration, where the Company is pursuing USD 572.65 million in damages under the UK–Tunisia Bilateral Investment Treaty, we do not consider the outcome of this ruling to materially affect Zenith’s investment case. It is also important to clarify that this case is fully independent of Zenith’s separate arbitration processes under the ICSID and ICC frameworks. These proceedings differ both in jurisdiction and legal substance, and the SMP ruling has no bearing on their trajectory or potential outcomes.
Background
The claim was originally filed in 2019 by AAOG, the previous owner of AAOGC, and relates to operational failures and cost overruns during drilling at Tilapia. Zenith has maintained that AAOGC preserved extensive technical documentation showing that delays and losses were directly linked to rig performance. SMP has been found to have adopted obstructive procedural tactics, including an attempt to delay French proceedings through Congolese litigation — a motion rejected by the Court in 2023, resulting in procedural cost awards in favor of AAOGC.
The Company raised the claim amount to USD 9 million in 2023, citing broader commercial damages due to the loss of production potential from Tilapia. Legal strategy was further strengthened through third-party technical reports and the appointment of new legal counsel.
Analyst Group’s View on Zenith as an Investment
Zenith has a long history of well-timed acquisitions at attractive valuations, as demonstrated by the acquisition of oil assets in Tunisia during the COVID-19 period. Zenith’s core operations remain resilient, supported by profitable gas-to-electricity and solar production in Italy, where Zenith has been active since the year 2010. Following the two most recent acquisitions in Piedmont and Puglia, Zenith’s solar pipeline now totals 98.5 MWp. The Company has communicated its strategy to monetize selected development-stage assets while progressing others to construction. Zenith’s solar projects are strategically located in regions with high solar irradiation and favorable pricing dynamics, supporting attractive revenue-per-MWh and short payback profiles.
Beyond core operations, the Company remains engaged in legal processes that could materially impact long-term valuation. The ICC-1 arbitration concluded successfully in December 2024 with a USD 9.7M award. While ICC-2 resulted in a full dismissal of USD 130M in claims, Zenith has now submitted an annulment application, citing serious procedural irregularities and newly discovered connections between tribunal members and the Tunisian state. The broader and most strategically significant legal process remains the ICSID arbitration, where Zenith is pursuing USD 572.65M in damages under the UK–Tunisia Bilateral Investment Treaty. The case is now entering its final phase, with hearings scheduled for April 2026. This case represents a key binary value driver, and Analyst Group estimates a 68% probability of a favorable outcome based on precedent and legal circumstances.
With a resilient operational base in Italy, a solar pipeline nearing the 100 MWp threshold, and multiple legal processes with embedded optionality, Zenith presents a risk–reward profile where ongoing arbitration and portfolio execution act as significant future value catalysts.
Read the full analysis on Zenith Energy here. The current values of the valuation scenarios are:
Bear 1.1 NOK, Base 3.2 NOK, and Bull 5.7 NOK.
