TIDMZPHR
RNS Number : 9505R
Zephyr Energy PLC
01 November 2023
Prior to publication, the information contained within this
announcement was deemed by the Company to constitute inside
information as stipulated under the UK Market Abuse Regulation.
With the publication of this announcement, this information is now
considered to be in the public domain.
1 November 2023
Zephyr Energy plc
("Zephyr" or the "Company")
Williston Basin Update
Slawson wells commence production; and
semi-annual debt redetermination process reaffirms Company's
borrowing base
Zephyr Energy plc (AIM: ZPHR) (OTCQB: ZPHRF), the Rocky Mountain
oil and gas company focused on responsible resource development
from carbon-neutral operations, is pleased to provide updates on
its non-operated asset portfolio in the Williston Basin, North
Dakota, U.S. and on its associated borrowings.
Slawson wells commence production
In December 2022, the Company announced that it had acquired a
working-interest in six recently spudded wells (the "Wells")
operated by Slawson Exploration Company ("Slawson"). The working
interests acquired range from 11% to 32% and Zephyr's management
estimated the Wells to contain 2P reserves, net to Zephyr, of circa
550,000 barrels of oil equivalent.
Following the recent completion of the associated production
facilities, the Company is pleased to announce that is has been
notified by Slawson that the Wells are scheduled to be brought
online today, 1 November 2023.
The Wells will provide a significant near-term production boost
and are expected to generate substantial cashflows for the Company
which can be reinvested into the development of its project in the
Paradox Basin, Utah, U.S. (the "Paradox project") or into
additional non-operated investment opportunities.
Updates on the Wells will be provided in the Company's third
quarter 2023 Williston Basin update, which is expected to be
announced in mid-November 2023, by which time the Company is
expected to have around two weeks of production data.
Semi-annual debt redetermination
Zephyr is pleased to announce a successful outcome to the
semi-annual redetermination of the Company's revolving credit
facility ("RCF"), carried out by the Company's senior lender,
North-Dakota based First International Bank and Trust ("FIBT").
The redetermination process confirmed the existing amounts
available under the RCF, with the borrowing base remaining at US$13
million, the level at which it is currently drawn. In addition to
the RCF, at 31 October 2023, Zephyr had an additional US$11.7
million of outstanding borrowings on its amortising senior bank
term loan with FIBT (versus US$15.8 million at 31 October
2022).
No value was ascribed to the new Slawson production during the
redetermination process (due to production not commencing during
the FIBT evaluation period), but Zephyr does expect that the newly
commenced Slawson production will allow for a significantly
enhanced borrowing base once production is established.
Investor Webinar
The Company will be presenting an investor webinar today at
5.30pm (U.K. local time) to provide an update on Zephyr's
activities. You can register for the event by using the following
link:
https://www.turnerpope.com/register/
Contacts:
Zephyr Energy plc Tel: +44 (0)20 7225
Colin Harrington (CEO) 4590
Chris Eadie (CFO)
Allenby Capital Limited - AIM Nominated Tel: +44 (0)20 3328
Adviser 5656
Jeremy Porter / Vivek Bhardwaj
Turner Pope Investments - Joint Broker Tel: +44 (0)20 3657
James Pope / Andy Thacker 0050
Panmure Gordon (UK) Limited - Joint Tel: +44 (0) 20 7886
Broker 2500
John Prior / Hugh Rich / James Sinclair-Ford
Celicourt Communications - Public Relations Tel: +44 (0) 20 7770
Mark Antelme / Felicity Winkles / Ali 6424
AlQahtani
Qualified Person
Dr Gregor Maxwell, BSc Hons. Geology and Petroleum Geology, PhD,
Technical Adviser to the Board of Zephyr Energy plc, who meets the
criteria of a qualified person under the AIM Note for Mining and
Oil & Gas Companies -June 2009, has reviewed and approved the
technical information contained within this announcement.
*Estimates of resources and reserves contained within this
announcement have been prepared according to the standards of the
Society of Petroleum Engineers. All estimates are internally
generated and subject to third party review and verification.
Notes to Editors
Zephyr Energy plc (AIM: ZPHR) (OTCQB: ZPHRF) is a technology-led
oil and gas company focused on responsible resource development
from carbon-neutral operations in the Rocky Mountain region of the
United States. The Company's mission is rooted in two core values:
to be responsible stewards of its investors' capital, and to be
responsible stewards of the environment in which it works.
Zephyr's flagship asset is an operated lease holding of over
46,000 gross acres located in the Paradox Basin, Utah, 25,000 acres
of which has been assessed to hold, net to Zephyr, 2P reserves of
2.6 million barrels of oil equivalent ("mmboe"), 2C resources of 34
mmboe and 2U resources 270 mmboe.
In addition to its operated assets, the Company owns working
interests in a broad portfolio of non-operated producing wells
across the Williston Basin in North Dakota and Montana. Cash flow
from the Williston production will be used to fund the planned
Paradox Basin development. In addition, the Board will consider
further opportunistic value-accretive acquisitions.
Glossary of Terms
Reserves : Reserves are defined as those quantities of petroleum
which are anticipated to be commercially recovered from known
accumulations from a given date forward.
1P: proven reserves (both proved developed reserves + proved
undeveloped reserves)
2P: 1P (proven reserves) + probable reserves, hence "proved and
probable"
3P: the sum of 2P (proven reserves + probable reserves) +
possible reserves, all 3Ps "proven and probable and possible"
Contingent Resources : Those quantities of petroleum estimated,
as of a given date, to be potentially recoverable from known
accumulations by application of development projects, but which are
not currently considered to be commercially recoverable due to one
or more contingencies.
Contingent Resources may include, for example, projects for
which there are currently no viable markets, or where commercial
recovery is dependent on technology under development, or where
evaluation of the accumulation is insufficient to clearly assess
commerciality. Contingent Resources are further categorised in
accordance with the level of certainty associated with the
estimates and may be sub-classified based on project maturity
and/or characterised by their economic status.
1C: Low estimate of Contingent Resources
2C: Best estimate of Contingent Resources
3C: High estimate of Contingent Resources
Prospective Resources : Those quantities of petroleum which are
estimated, on a given date, to be potentially recoverable from
undiscovered accumulations.
1U: Low estimate of Prospective Resources
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