Zenith Energy interim profit falls on jump in arbitration costs

Zenith Energy Ltd on Monday reported a drop in profit, despite a rise in revenue, due to an increase in costs incurred from its arbitration against the Republic of Tunisia.

The Calgary, Canada-based oil company, which has interests in Italy, Tunisia and the US, said pretax profit fell 34% for the six months ended September 30 to C$3.8 million - approximately £2.1 million - from C$5.7 million last year.

This was driven by administrative costs swelling to C$7.6 million from C$277,000 as a result of costs incurred from the company’s arbitration against the Republic of Tunisia. Arbitration costs quadrupled to C$3.6 million from C$778,000 a year ago.

Zenith is currently engaged in two separate arbitration proceedings against the Republic of Tunisia. The company had alleged in 2023 that authorities had obstructed oil liftings, costing the company revenue at its Sidi El Kilani concession.

Both proceedings ‘progressed materially’ during the period and are expected to conclude in 2026, the company said.

Revenue rose 20% to C$1.1 million from C$911,000. The company had no production in Tunisia in the period, but produced and sold electricity and gas from its Italian assets.

Chief Executive Andrea Cattaneo said: ‘The period under review has been marked by substantial operational, corporate, and legal developments across all principal areas of the company‘s business.

‘Zenith has continued to advance its renewable energy initiatives in Italy, progress the permitting of two nationally significant uranium projects through its long-established Italian subsidiary, and continue pursuing major international arbitration proceedings against the Republic of Tunisia.’

Looking ahead, Cattaneo added the company is ‘positioned for a period of potentially material corporate development and value realisation’ in 2026.

Shares in Zenith fell 4.6% to 3.63 pence on Monday afternoon in London.

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