TIDMZPHR
RNS Number : 4563N
Zephyr Energy PLC
30 September 2021
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.
30 September 2021
Zephyr Energy plc
("Zephyr", the "Company" or the "Group")
Interim Results for the six months ended 30 June 2021
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 announce its
unaudited interim results for the six months ended 30 June
2021.
Overview
The first six months of the 2021 financial year, and the period
since, were a time of tremendous progress and intense activity
during which Zephyr transformed from a single project exploration
company into a self-sustaining, cash-generating, carbon-neutral oil
and natural gas producer. During this period, significant
additional operational and technical milestones were met on our
Paradox Project. In addition, the Company completed five separate
acquisitions which resulted in a growing portfolio of operated and
non-operated assets located in two established U.S. oil producing
basins. The Company also delivered on its ambitious goal to
commence 100% carbon-neutral Scope 1 operations by 30 September
2021.
Highlights
Paradox Project, Utah, U.S. (operated asset)
-- The State 16-2LN-CC horizontal well was safely drilled to a
total depth of 14,370 feet ("ft") with 4,555 ft of horizontal
landed successfully in the Cane Creek reservoir target.
o Significant data from an extensive suite of wireline logs,
cores and pressure data was acquired from drilling operations and
from the subsequent diagnostic fracture injection test
("DFIT").
o Premier Oilfield Group, a leading consulting specialist with
expertise in well completions, was engaged to assist the Company's
multi-month evaluation of optimal completion designs.
o Multiple positive factors from the data analysed led Zephyr's
Board of Directors (the "Board") to approve the running of
production casing and to elect to complete the State 16-2LN-CC by
way of hydraulic stimulation.
o Completion operations will take place in the coming weeks,
followed shortly thereafter by a production test of the well.
-- If development of the overall project through the utilisation
of hydraulic stimulation proves successful, the Company estimates
the potential for a wider development with up to 200 potential well
locations across the project, with a range of risked net
recoverable contingent resources of up to 143 million barrels of
oil equivalent ("mmboe") from both the Cane Creek reservoir and
eight overlying reservoirs.
-- An additional 12,260 acres of Paradox Basin acreage was
acquired during the period (with potential resources not yet
included in Zephyr's internal estimates).
Williston Basin, U.S. (non-operated assets)
-- Zephyr completed four acquisitions which provide the Company
with working interests in 22 wells across multiple pads and
operators:
o 7 wells are currently producing, and 15 wells are drilled and
currently awaiting completion.
o Q2 2021 production averaged 148 barrels of oil equivalent per
day ("boe/d") net to Zephyr, with an average realised sales price
of US$52.90 per barrels of oil equivalent ("boe").
o August 2021 production averaged 506 boe/d net to Zephyr.
o Monthly production is expected to climb further as existing
wells hit peak production and additional wells are brought
online.
-- Cashflow from the non-operated portfolio will be reinvested
into the development of the Paradox project or used to acquire
further non-operated assets that meet the Company's strict
criteria.
-- In August 2021, the Company executed a Joint Venture
agreement with Purified Resource Partners, LLC, a highly
experienced Williston Basin team, focused on the generation of
additional non-operated deal flow.
Corporate
-- Achieved its ambitious Environmental, Social and Governance
target to commence 100% carbon neutral operations by 30 September
2021.
-- Completed a GBP10 million fundraise in April 2021 which
funded drilling operations on the Paradox project and the
acquisition of non-operated assets.
-- Commenced cross trading on the OTCQB Venture Market which is
expected to facilitate future investor outreach in the U.S.
Colin Harrington, Zephyr's Chief Executive said: " I am
delighted by the tremendous growth and progress delivered during
the period under review. Zephyr is now ideally positioned as a cash
generating platform from which to deliver significant future growth
for our Shareholders.
"We've worked tirelessly to meet or exceed the goals and
timelines we publicly set for ourselves, while doing so on budget
and in a low-cost manner - and I'm particularly proud that we
successfully executed our strategy in line with our twin core
values of being responsible stewards of investors' capital and
responsible stewards of the environment in which we work.
"The next few months will continue to see a flurry of corporate
and operational activity as we target production from the Paradox
project, increase non-operated production and accumulate cash flows
from our assets in the Williston Basin.
"These are exciting times, and we look forward to keeping all
our stakeholders updated on our progress."
A copy of the interim results report will be available on the
Company's website later today at http://www.zephyrplc.com .
Contacts:
Zephyr Energy plc Tel: +44 (0)20 7225 4590
Colin Harrington (CEO)
Chris Eadie (CFO)
Allenby Capital Limited - AIM Nominated Tel: +44 (0)20 3328 5656
Adviser
Jeremy Porter / Liz Kirchner
Turner Pope Investments - Broker Tel: +44 (0)20 3657 0050
James Pope / Andy Thacker
Flagstaff Strategic and Investor Communications
- PR Tel: +44 (0) 20 7129
Tim Thompson / Mark Edwards / Fergus 1474
Mellon
ZEPHYR ENERGY PLC
INTERIM REPORT FOR THE SIX MONTHS TO 30 JUNE 2021
The Board is pleased to present Zephyr's unaudited interim
report for the six-month period to 30 June 2021.
CHIEF EXECUTIVE'S STATEMENT
OVERVIEW AND OUTLOOK
During the first six months of the 2021 financial year and in
the period since, Zephyr transformed from a single project
exploration company into a self-sustaining, cash generating, oil
producing company. The Company now has a growing and balanced
portfolio of both operated and non-operated assets located in two
established oil producing basins in the U.S.
During the period under review, we made substantial progress on
our operated flagship project in the Paradox Basin, Utah (the
"Paradox project") where we are targeting first production in the
coming weeks. We also established a thriving non-operated business
through the acquisition of four producing, near-term production and
future drilling packages in the Williston Basin one of the most
prolific oil producing basins in the U.S. Over the last several
months, the Company received its first monthly production revenues
from the non-operated portfolio, and we expect to generate further
substantial cash flows from these assets over the next twelve
months and beyond. These revenues will be reinvested into the wider
development of the Paradox project or will be used to secure and /
or fund the acquisition of additional non-operated assets that meet
our stringent criteria.
In late 2020, we completed the rebranding of the Group, which
included the Board approving the two core values under which Zephyr
will operate. These values are simple yet fundamental to our
mission: Zephyr's team will always strive 1) to be responsible
stewards of investors' capital and 2) to be responsible stewards of
the environment in which we work. We believe that good
environmental practices, together with good governance and
oversight, will translate into good business performance. We are
one hundred per cent focused on delivering strong economic returns
in the most environmentally responsible manner possible.
On this front, I was delighted when, in June 2021 we announced
our intention to achieve Scope 1 carbon-neutrality across our
operational footprint by the end of September 2021, and I'm equally
delighted to report that we have now delivered on that pledge
within our ambitious timeline. This industry-leading initiative,
unanimously supported by our Board, marks a major step in the
Company's commitment to social and environmental best
practices.
In all, I am proud of the growth and progress delivered during
the period under review. We've worked hard to meet or exceed the
goals and timelines we publicly set ourselves, while doing so on
budget, in a low-cost manner and in line with our twin core values.
The next few months will continue to see a flurry of corporate and
operational activity as we target production from the Paradox
project, increase non-operated production and accumulate cash flows
from our assets in the Williston Basin. These are exciting times,
and we look forward to keeping all our stakeholders updated on our
progress.
BACKGROUND
Twelve months ago, following the comprehensive restructuring of
the Company, Zephyr was positioned as a clean and unlevered vehicle
with a single asset and a clearly defined strategy designed to
deliver responsible growth, both through acquisitions and through
the measured development of our existing asset.
During the period under review, we made substantial progress
delivering on that stated strategy. Zephyr is now a
cash-generating, oil producing Group with significant organic
growth prospects on the brink of delivering first potential
production from the Paradox project. As importantly, we made
tremendous progress regarding our understanding of the geology and
optimal development path of our Paradox asset, with a series of
incremental steps and positive indications related to the upside
potential of that project.
We believe the successful execution of our strategy occurred not
simply by sheer hard work, but by being bold and opportunistic
while the larger marketplace experienced turmoil and disruption due
to the impacts of the global pandemic.
PARADOX PROJECT
Overview and next steps
During the period under review and in the subsequent months, the
Company made significant headway on its operated Paradox project in
which Zephyr currently has operatorship and a minimum 75 per cent
working interest across 37,613 gross leased acres. The Company will
be targeting initial production from the Paradox project over the
coming weeks.
Recent work on the project, in particular the safe and
successful completion of the State 16-2LN-CC drilling operations in
August 2021, provided Zephyr with a far greater understanding of
not only the Company's prime target, the Cane Creek reservoir, but
also of the potential of the reservoirs that overlie the Cane Creek
(the "overlying reservoirs").
The evaluation of the significant data acquired from two
discrete drilling operations, and the results from the subsequent
DFIT, enabled the Company's technical team and consultants to
complete a thorough analysis of the optimal way in which to develop
the project.
Highlights from the DFIT included the following:
-- High formation pressure: After perforation of the State
16-2LN-CC wellbore and stimulation of the reservoir, pressure
measurements from the wellbore suggested high formation pressure -
a strong positive indicator of reservoir drive.
-- Permeability: DFIT results also suggested evidence of matrix
permeability consistent with other prolific U.S. resource
plays.
-- Hydrocarbon flow: During the DFIT operation, there was
demonstrable evidence of hydrocarbons flowing into the well after
stimulation.
-- Geomechanical interpretations: Further rock mechanical data
(including lithostatic gradient, effective stress and fracture
propagation data) has been interpreted and has provided valuable
insight to assist with completion design.
Based on the positive results from the DFIT, and in conjunction
with the log and core data acquired, Zephyr has elected to complete
the State 16-2LN-CC using hydraulic stimulation. The well will
serve as the initial "proof of concept" for wider potential
development of the Paradox asset base as a hydraulically stimulated
resource play (an "HSRP"), although natural fracture completions
may also be utilised in the future where optimal.
The Board continues to believe that that the Paradox project has
the potential to be a project of significant scale as evidenced by
the Zephyr's internal resource estimates for the project based on
HSRP development. In summary:
-- In the Cane Creek reservoir alone, up to 30 potential well
locations with a range of risked net recoverable contingent
resources of up to 18 mmboe.
-- In the overlying reservoirs high-graded by Zephyr as
potential exploration zones, an estimated P50 total of 1 billion
barrels of oil equivalent hydrocarbons in place across the
Company's acreage.
-- In total, up to 200 potential well locations with a range of
risked net recoverable contingent resources of up to 143 mmboe.
Following the decision to proceed down the HSRP completion route
for the State 16-2LN-CC well, final completion design work is
underway with plans for a completion crew to be on-site during the
second week of October. Completion operations are expected to take
less than a week and production testing is envisioned to commence
shortly thereafter, with initial flow tests and results expected
two to four weeks later.
Background
Having completed a restructuring of the Paradox project in 2020,
which primarily involved overhauling the joint venture partnership
and securing additional tenure for the most attractive project
acreage, our next task was to commence operations on the ground and
begin the process of unlocking the considerable potential value of
the project.
In September 2020, Zephyr secured US$2 million of U.S.
Government grant funding which enabled us to proceed with the
drilling of the State 16-2 well and which was the catalyst for the
considerable progress on the project in the period under
review.
After a period of intense activity to complete all drill
planning activities (including site preparation, road work, permit
approvals and vendor selection) the State 16-2 wells was spud in
December 2020 and was completed in January 2021 having been
successfully drilled to a measured depth of 9,745 ft total depth
("TD"). Drilling operations were safe and effective, conducted in
accordance with Covid-19 related guidance and restrictions, and
were completed well within the Group's forecast timeframe. This was
a fantastic achievement by everybody involved.
The primary objective was to drill and set casing at 6,450 ft
measured depth ("MD") in order to provide a host wellbore for a
future horizontal side track. This goal was achieved within
thirteen days from spud. As mentioned above, we subsequently
reached TD within nineteen days of spud, a marked improvement over
historical drilling efforts in this part of the Paradox Basin. The
reduction in drilling time represented a major operational success
and demonstrated that the cost of future development wells could be
significantly reduced from our earlier estimates, thereby improving
the overall potential value of the Paradox project for
Shareholders.
Our secondary objective was to acquire a significant amount of
new data to improve our understanding of our Paradox acreage. We
were pleased to report that Zephyr's data acquisition programme
secured the following:
-- approximately 113 ft of continuous whole core across the
historically productive Cane Creek reservoir interval - the first
whole Cane Creek core ever to be retrieved in the northern part of
the Paradox Basin;
-- rotary side wall cores in eleven shallower exploration targets; and
-- gamma ray, neutron density, resistivity, formation litho
scanner and sonic wireline log data across the bulk of the Paradox
Formation, which secured significant additional petrophysical
data.
Following the completion of drilling and data acquisition
operations, the State 16-2 well was temporarily plugged at 6,450 ft
TD, stable and for future re-use as a lateral wellbore host.
Decision to proceed with State 16-2LN-CC lateral well
The core and log data acquired from the State 16-2 Cane Creek
reservoir both corroborated and supported the Board's long-held
view that the Paradox has the potential to be a project of
considerable scale.
On 15 March 2021, we announced a detailed update on the Paradox
project, which included confirmation of evidence of hydrocarbon
saturation across the entirety of the continuous core acquired from
the Cane Creek reservoir. When integrated with the recently
acquired log data, existing 3D seismic data, geologic and regional
analogue analysis, the resulting analysis gave the Board strong
justification for advancement to the next phase of the project. The
Board therefore elected to proceed with detailed planning for the
near-term drilling of the lateral, and following the successful
completion of the fundraise in April 2021, the Company was fully
funded to commence the drilling of the lateral portion of the
well.
Drilling of the State 16-2LN-CC lateral well
Drilling operations commenced in July 2021, ahead of its
forecast timeline, and the Company was delighted to announce in
August that the well was successfully drilled to a TD of 14,370 ft,
at which point a full suite of wireline logs was run and production
casing was set.
Drilling operations achieved their main objective of hitting the
Cane Creek reservoir target and staying within that reservoir
across the entire lateral portion of the well. In addition, there
was evidence of hydrocarbon charge across the entirety of the Cane
Creek lateral, as well as in multiple overlying reservoirs.
With the setting of production casing, we now have an excellent
well bore from which to complete the well and test production from
the Cane Creek reservoir.
Results from the State 16-2LN-CC data evaluation and DFIT
Following the completion of the lateral well, the Company was
pleased to report the initial results from the interpretation of
the data acquired during drilling operations.
We were particularly pleased that wireline data suggested that
85 per cent of the lateral has the potential to be completed for
well testing and production, with additional positive data
suggesting porosity and permeability estimates equivalent to other
producing basins with prolific HSRP development, as well as mud gas
mass spectrometry evidence suggesting the presence of oil, gas and
condensate with corresponding apparent low water saturations.
Based on the preponderance of positive data received, we
therefore elected to initiate a DFIT to provide additional insight
into the potential for successful hydraulic stimulation on our
acreage position. As the State 16-2LN-CC is the first horizontal
well in this part of the Paradox Basin, the ability to develop a
strong understanding of reservoir mechanical properties was
crucially important to help assess the series of options for wider
potential development.
In early September the Company announced the results from the
DFIT, during which a 3 ft interval at the toe of the lateral was
perforated and hydraulically stimulated.
The results from the DFIT were highly encouraging and suggested
high formation pressure (a strong positive indicator of reservoir
drive), permeability consistent with other prolific resource plays,
and demonstrable evidence of hydrocarbons flowing into the well
after stimulation. In addition, the DFIT provided rock mechanical
data (including lithostatic gradient, effective stress and fracture
propagation data) which was subsequently interpreted and provided
valuable insight to assist with completion design.
In all, the results of the DFIT, combined with the significant
amount of data previously gathered from the well, all indicate that
the State 16-2LN-CC has the potential to be an excellent "proof of
concept" location for an HSRP test.
On that basis, the Board unanimously approved proceeding with a
HSRP completion at the State 16-2LN-CC.
The completion is scheduled for October 2021 and, if successful,
would result in a substantial reduction in development risk across
our acreage, as well as allow for a wider systematic development
with predictable well distribution.
Production results from the well are expected to be available in
November and will be the first test of the viability of this
strategy, but given what we have learned to date, the Board feels
confident that we will continue to hone drilling and completion
techniques on this acreage well into the future.
We believe that our Paradox acreage holds multiple opportunities
within both the Cane Creek and the shallower clastic reservoirs to
support the drilling of additional wells to delineate the acreage.
This first completion will add further data to help us understand
the reservoirs and our ability to optimise well length, well
spacing and completion design.
I would like to conclude by noting that in pursuing the HSRP
development route, Zephyr's goal is to maximise resource efficiency
and project economics while minimising environmental and surface
disruption. Zephyr's core mission is to be responsible stewards of
investors' capital while also being responsible stewards of the
environment. With any future development, we will continue to
strive to mitigate the environmental impact by reducing surface
footprint, minimising disturbance and offsetting our emissions.
NON-OPERATED PORTFOLIO
Overview
As we outlined to Shareholders in January 2021, Zephyr's key
goal for 2021 was to establish production and positive cash flow
either through our existing portfolio, via acquisition, or through
a combination of both. In the period under review and since, we
have significantly exceeded my expectations.
We have now closed four separate non-operated asset acquisitions
to date this year, deals which created a balanced asset base of
working interests in 22 producing or near-term production wells and
which also provide exposure to additional non-operated drilling
expected in 2022. I am particularly pleased that the current blend
of strong commodity prices and highly economic production has the
potential to generate enough cash flow to fund additional Paradox
Basin development.
The acquisitions completed to date are in prime locations, and
the majority of the wells are operated by Whiting Petroleum
Corporation ("Whiting"), a leading Williston Basin producer.
Sourcing and structuring compelling acquisitions requires
detailed basin knowledge and deep local experience, which is why
I'm delighted to have entered into a joint-venture ("JV") with
Purified Resource Partners LLC ("Purified") related to ongoing
non-operated business development efforts . I have known the
Purified principals for over two decades, and have watched as they
successfully assembled a top-notch portfolio of Williston Basin
non-operated interests for their former sponsor.
Over the last few months, we've worked very closely with
Purified to close our initial Williston Basin acquisitions, the
details of which are outlined below, and I look forward to
continued collaboration and co-investment from their team.
Whiting wells
In March 2021, following a successful fundraise to fund the
acquisition, the Group completed the purchase of the initial
Whiting wells, which were expected to provide the Group with
low-risk oil production from five already drilled wells and to
generate substantial cash flows that could be utilised across the
Group.
The initial cost of the acquisition was US$350,000. In addition,
the Company made a payment of approximately US $3.7 million to the
project operator for historical capital expenditure ("CAPEX")
obligations on the project.
The key details of the project were as follows:
-- acquisition of non-operated working interests in five wells
(one producing well and four drilled but uncompleted wells (a "DUC"
or "DUCs") in Mountrail County, North Dakota, U.S.;
-- the working interests on the five wells ranged from 16.8% to 37.2%;
-- the wells are operated by Whiting, an active and highly
experienced operator in the Williston Basin;
-- the Group agreed headline terms with the vendor when the oil
price was at US$45 per barrel of oil ("bo");
-- the producing well had been on production since March 2020
and first revenue payments were received by Zephyr in April
2021;
-- the completions on the four DUCs commenced in April and
production revenues will be received on all four wells by the end
of October 2021;
-- 2P Reserves acquired were estimated at 449,434 boe to the Group; and
-- the five wells are spread across three separate drilling pads, creating attractive production diversification.
The key benefits of the Whiting well acquisition are as
follows:
-- a low-risk acquisition with substantial near-term cash flow expected;
-- no remaining drilling risk - all five wells were already
drilled successfully to target depth;
-- excellent complement to (and funding source for future
development on) the Paradox project; and
-- no federal tax payments payable in the short-term as profits
can be offset against the Group's historic tax losses.
The Group forecasts that the acquisition will provide:
-- up to US$8 million of undiscounted cash flow over the next 12
months, and a total of US$15 million of undiscounted cash flow over
the lifetime of the project, for Zephyr to deploy into the Paradox
development or into additional projects (assuming an oil price of
US$60/bo);
-- 2P net present value at NPV-10 of US$4.3 million;
-- a cash flow breakeven oil price of US$36.69/bo (inclusive of all CAPEX expended);
-- a one-year cash payback; and
-- the opportunity to shelter U.S. federal tax payments by
utilising the Group's historical tax losses of more than US$16
million.
Continental acreage
In May 2021, Zephyr announced the acquisition of the Continental
acreage, which gave the Group a working interest in a drilling
spacing unit ("DSU") operated by Continental Resources Inc ("
Continental "), the largest operator in the Williston Basin. The
Continental acreage is located approximately ten miles from the
Company's Whiting wells, in a highly attractive part of the Basin.
The cost of the acreage acquired by Zephyr was approximately
US$170,000 and was paid for from the Company's existing cash
resources.
Continental has drilled two initial wells on the DSU ("Initial
wells"), with up to an additional 22 future wells ("Future wells")
forecast to be drilled by 2023.
-- Zephyr's forecast net CAPEX for the initial wells was
approximately US$135,000 which was funded from existing cash
resources.
-- Zephyr's net CAPEX for the proposed 22 Future wells is
forecast to be approximately US$710,000, which could also be funded
from the Group's existing cash resources.
-- CAPEX on the Future wells is discretionary, and Zephyr's
Board of Directors will elect whether to participate in those wells
on a case-by-case basis.
The Continental acreage has, net to Zephyr, Company estimated 2P
reserves (from all 24 wells) of circa 60,000 boe which were
acquired at a price of approximately US$2.83/boe. The 1P reserves
on the Continental acreage are, net to Zephyr, estimated at circa
41,000 boe and the 3P reserves at circa 72,000 boe.
This opportunistic acquisition has strong forecasted economics
and has provided the Company with additional exposure to low risk,
near-term production. Initial revenues from the acquisition are
expected to be received in the second half of this year.
The acquisition of the Continental acreage, in a DSU operated by
a first-class Williston Basin participant, is a strong example of
what can be achieved in the current market. The acreage is in an
excellent location and provides both near-term drilling exposure
and future drilling optionality. While the initial scale of the
acquisition is small, for a minimal upfront cost Zephyr now has
potential to participate in up to twenty-four highly economic wells
over the next two years. Given the continued improvement in
drilling costs and robust oil price environment, we believe this
acreage will provide attractive near-term cash flow returns and is
an excellent addition to our asset portfolio.
Production
During Q2 2021, the Company's net production from the Whiting
and Continental wells averaged 148 boe/d with an average realised
sales price of US$52.90 per boe.
In September 2021, the Company provided a further update to the
market on the progress on the Whiting and Continental wells. In
summary:
-- The Company reported that production from the wells was, net
to Zephyr, 506 boe/d during August 2021.
-- Four of the wells continue to be brought into full
production, with oil production still rising, water cuts reducing
and stable gas oil ratios.
-- Four of the wells were initially brought on at reduced
production rates in order to minimise any gas flaring and CO2
emission impact while gas export infrastructure constraints were
addressed, a CO2 mitigation effort very much welcomed by the Board.
Now that those infrastructure constraints have been resolved, the
Company expects overall production to continue to rise during the
next quarter and further updates will be announced as production
data matures.
Further non-operated acquisitions
In September 2021, Zephyr announced the completion of two
additional non-operated portfolio acquisitions in the Williston
Basin.
Details of the acquisitions were as follows:
-- The first acquisition purchased 72.5 net acres, resulting in
an average 5.6% working interest in four drilled but uncompleted
("DUC") wells operated by Prima Exploration Inc. ("Prima") which
target production from the Middle Bakken reservoir in Richland
County, Montana, U.S.
-- The second acquisition purchased an average 3.1% WI in 11
wells (one currently being drilled and 10 DUC wells) operated by
Whiting, all of which target the Middle Bakken reservoir in
Mountrail County, North Dakota, U.S.
-- All newly acquired wells are estimated by Zephyr to have
rapid paybacks, high internal rates of return and a combined total
2P estimated ultimate recoveries (EURs), net to Zephyr, of 194,000
boe.
-- Once initial payback has been achieved, Zephyr can utilise
its historical tax losses of more than US$16 million to reduce the
federal tax payable on the revenues received from these new
acquisitions.
-- Total consideration for the new acquisitions was US$968,000,
which has been paid for from the Company's existing cash
resources.
-- In addition to the acquisition price paid, Zephyr plans to
fund the discretionary CAPEX related to the drilling and completion
of the 15 wells acquired. This CAPEX total is forecast to be circa
US$3.9 million. CAPEX will be due in late 2021 and early 2022, and
the Board expects to be able to fund this CAPEX out of its current
cash resources and with additional revenues from its current
production.
-- The Company expects all 15 newly acquired wells to be in
production by 31 March 2022, resulting in a forecasted additional
200-300 net boe/d. Additional updates will be provided as wells
come online and adequate production history is gathered.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE ("ESG")
As previously mentioned, the Board is unanimously committed to
ensuring that every action and investment decision the Company
makes is in line with our core values. This includes the following
points of focus:
-- we will continue to protect the Group, safeguard its existing
asset base and position it for attractive growth opportunities;
-- we will continue to seek creative and beneficial funding
opportunities in an effort to unlock value from our existing asset
portfolio, as evidenced by the U.S. Government funding we received
for our recent drilling programme on the Paradox project;
-- we will continue to adopt a disciplined focus on growth via
the acquisition of producing or near-term development opportunities
in the Rocky Mountain region. Even in this unusual economic
environment, we believe that attractive, value-additive
acquisitions are available and may be acquired using
non-traditional funding structures;
-- we will continue with our programme of tight financial
controls and cash preservation which will enable the Group to
continue trading effectively; and
-- we will continue to ensure management and the Board are
aligned with our Shareholders through significant ownership of
shares.
I am proud of how we have conducted our operations in the period
under review and we will continue to adhere to our core values of
being responsible stewards of investors' capital and being
responsible stewards of the environment in which we work.
Furthermore, I was delighted that Zephyr was able to recently
announce that it has achieved carbon-neutrality across its
operational footprint prior to its published goal of 30 September
2021.
As an integral part of this undertaking, Zephyr is collaborating
with the Prax Group, a British multinational independent oil
refining, trading, storage, distribution and retail conglomerate
dealing in crude oil, petroleum products and bio-fuels,
headquartered in London, United Kingdom. The Prax Group, which has
trading offices in London, Singapore and the U.S., worked with
Zephyr to measure, reduce and mitigate greenhouse gas ("GHG")
emissions across Zephyr's businesses, with mitigation efforts
primarily focused on the purchase of sustainability/decarbonisation
offsets (called Verified Emission Reductions or "VER") from
reputable pre-vetted developers of sustainable projects. This
exercise includes Zephyr's current corporate activity, its
non-operated production assets in the Williston Basin, North
Dakota, U.S., and its upcoming appraisal drilling project in the
Paradox Basin, Utah, U.S.
In addition to the environmental benefits that will result from
Zephyr's efforts to reach carbon-neutrality, the Company
anticipates that this approach will also yield economic benefits
including expanded access to a wider group of potential
institutional investors, as total ESG-focused assets under
management are currently estimated to be over US$30 trillion
globally. Moreover, the average cost of capital for companies with
committed ESG and decarbonisation initiatives has been shown to be
demonstrably less than that of traditional resource companies. The
Board believes that incremental regulatory benefits may also
materialise from Zephyr's actions.
JV with Purified
In September I was excited to announce the formation of a JV
with Purified for the identification and execution of additional
non-operated acquisitions. Purified's principals have substantial
experience in the Williston Basin, a basin in which they previously
helped assemble and close over US$70 million of non-operated asset
acquisitions and associated CAPEX for a private equity-backed
vehicle.
Purified has assisted and/or co-invested with Zephyr in all four
Williston acquisitions that it has closed this year, and their team
will have the right to continue to co-invest up to 20 per cent in
future transactions. The newly formed JV provides Zephyr with
significant land and business development expertise directly in
Zephyr's geographic region of focus.
Commencement of trading on OTCQB Venture Market
In July 2021, Zephyr announced that its Ordinary Shares had been
approved to trade on the OTCQB Venture Market ("OTCQB") in the
U.S.
We believe that c ross-trading on the OTCQB will increase
liquidity and significantly enhance the ability of U.S. based
investors to access and trade Zephyr shares during a period in
which we are actively expanding our U.S. asset base. Over the
coming months, Zephyr's management team will place specific
additional emphasis on increasing our outreach efforts to U.S.
based institutions and investors.
FINANCIAL REVIEW
The financial information is reported in United States Dollars
("US$").
Income Statement
The Group reports revenues from its newly acquired Whiting wells
for the six months ended 30 June 2021 of US$0.9 million (30 June
2020: nil). Revenues relate to the Company's share of production
from the corresponding wells from 1 March 2021. Revenues for the
second half of the financial year will be considerably higher as it
will not only include revenues for a full six-month period but will
also include revenue from all five of the Whiting wells, some of
which came online until after 30 June.
Administrative expenses for the six months ended 30 June 2021
were US$1.2 million (30 June 2020: US$0.6 million). The increase in
administrative expenses mirrors the Company's growth over the last
twelve months as it emerged from a significant corporate
retrenchment in response to the global pandemic, in addition to the
increase in its asset portfolio and significantly enhanced
corporate and operational footprint. Costs continue to be closely
controlled and monitored regularly by executive management and also
at Board level, with this being a continuing priority of the Board.
It is recognised by the Board, however, that additional technical,
legal and other costs were justified to help deliver the various
acquisitions which the Company has secured over the past nine
months.
Net loss after tax from continuing operations was US$1.0 million
or a loss of 0.1 US cents per share for the six months ended 30
June 2021 (30 June 2020: net profit after tax from continuing
operations of US$0.9 million or a profit of 0.32 US cents per
share).
The profit for the comparative six-month period to 30 June 2020
was primarily the result of unrealised foreign exchange differences
that arose on the restatement of the Company's loans to its
subsidiaries. These foreign exchange differences resulted in an
unrealised loss of US$0.4 million for the six months ended 30 June
2021 (30 June 2020: unrealised gain of US$1.6 million). The
unrealised loss in this period is the result of the strengthening
of sterling against the US dollar.
Balance Sheet
Intangible assets at 30 June 2021 were US$16.0 million (30 June
2020: US$13.6 million) which reflects the Company's ongoing
investment into the Paradox project.
Tangible assets at 30 June 2021 were US$6.4 million (30 June
2020: US$44,000) which reflects the Company's ongoing investment in
the Whiting wells and the Continental acreage.
Cash and cash equivalents at 30 June 2021 were US$9.2 million
(30 June 2020: US$0.4 million), primarily due to the Company's
US$13.9 million (GBP10 million) fundraise that completed in April
2021. Cash conservation and tight cash management remain key
priorities of the Board. Cash and cash equivalents at 1 September
2021 were US$4 million.
CONCLUSION
The period under review was one of substantial progress for the
Group, and I am confident that over the next few months we will
continue to see a flurry of corporate and operational activity as
we target production from the Paradox project and accumulate
significant cash flows from our non-operated assets in the
Williston Basin. Over the next period there is also the possibility
of the expansion of the Group's asset portfolio through additional
acquisitions or partnerships.
These are exciting times, and we look forward to keeping all our
stakeholders updated on our progress.
Finally, I would like to extend my heartfelt gratitude to the
Company's Shareholders and advisers for their ongoing support. We
are delighted to be invested alongside you, and we look forward to
keeping you updated as we progress through these exciting
times.
Colin Harrington
Chief Executive Officer
30 September 2021
ZEPHYR ENERGY PLC
CONDENSED CONSOLIDATED INCOME STATEMENT
For the six months ended 30 June 21
Unaudited Unaudited Audited
six months six months year ended
ended 30 June ended 30 31 December
June
2021 2020 2020
Notes US$'000 US$'000 US$'000
Continuing operations
Revenue 917 - -
Cost of Sales (270) - -
Gross profit 647 - -
Administrative expenses (1,194) (613) (1,517)
Development expenses (43) (104) (135)
Foreign exchange (losses)/gains (377) 1,623 (705)
Operating (loss)/profit (967) 906 (2,357)
Other income - - 13
Finance costs (1) - -
(Loss)/profit before taxation (968) 906 (2,344)
Taxation charge (7) - -
(Loss)/profit for the period attributable
to owners of the parent company (975) 906 (2,344)
(Loss)/profit per Ordinary Share
Basic and diluted, cents per share 3 (0.10) 0.32 (0.66)
ZEPHYR ENERGY PLC
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six months ended 30 June 2021
Unaudited Unaudited Audited
six months six months year ended
ended 30 ended 30 31 December
June June
2021 2020 2020
US$'000 US$'000 US$'000
(Loss)/profit for the period attributable
to owners of the parent company (975) 906 (2,344)
Other comprehensive income
Items that may be subsequently reclassified
to profit or loss, net of tax
Foreign currency translation differences
on foreign operations (619) 3,223 (1,277)
Total comprehensive (loss)/profit
for the period attributable to owners
of the parent company (1,594) 4,129 (3,621)
ZEPHYR ENERGY PLC
CONDENSED CONSOLIDATED BALANCE SHEET
As at 30 June 2021
Unaudited Unaudited Audited
as at as at as at
30 June 30 June 31 December
2021 2020 2020
Notes US$'000 US$'000 US$'000
Non-current assets
Intangible assets 4 15,962 13,586 13,914
Property, plant and equipment 5 6,462 44 28
22,424 13,630 13,942
Current assets
Trade and other receivables 861 88 135
Cash and cash equivalents 9,216 350 3,940
10,077 438 4,075
Total assets 32,501 14,068 18,017
Current liabilities
Trade and other payables (3,163) (411) (2,464)
Lease liabilities - (23) (8)
(3,163) ( (434) (2,472)
Non-current liabilities
Provisions (67) (57) (7)
Total liabilities (3,230) (491) (2,479)
Net assets 29,271 13,577 15,538
Equity
Share capital 6 42,045 40,688 41,221
Share premium account 51,787 37,975 39,638
Warrant reserve 136 227 227
Share-based payment reserve 4,581 3,341 3,762
Cumulative translation reserves (8,892) (11,612) (9,225)
Retained deficit (60,386) (57,042) (60,085)
Equity attributable to owners
of the parent company 29,271 13,577 15,538
ZEPHYR ENERGY PLC
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six months ended 30 June 2021 (Unaudited)
Share-based
Share payment Cumulative
Share premium Warrant reserve translation Retained
capital account reserve reserve deficit Total
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
As at 1 January
2021 41,221 39,638 227 3,762 (9,225) (60,085) 15,538
Transactions with
owners in their
capacity as owners:
Issue of equity
shares 824 14,332 - - - - 15,156
Expenses of issue
of equity shares - (2,183) - 1,357 - - (826)
Transfer to retained
deficit in respect
of exercised warrants - - (91) (583) - 674 -
Share-based payments - - - 45 - - 45
Total transactions
with owners in
their capacity
as owners 824 12,149 (91) 819 - 674 14,375
Loss for the period - - - - - (975) (975)
Other comprehensive
income:
Currency translation
differences - - - - (619) - (619)
Total other
comprehensive
income for the
period - - - - (619) - (619)
Total comprehensive
income for the
period - - - - (619) (975) (1,594)
Currency translation
differences on
equity at historical
rates - - - - 952 - 952
As at 30 June 2021 42,045 51,787 136 4,581 (8,892) (60,386) 29,271
ZEPHYR ENERGY PLC
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2020 (Audited)
Share-based
Share payment Cumulative
Share premium Warrant reserve translation Retained
capital account reserve reserve deficit Total
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
As at 1 January
2020 40,688 37,975 568 3,748 (9,972) (58,737) 14,270
Transactions with
owners in their
capacity as owners:
Issue of equity
shares 533 2,401 - - - - 2,934
Expenses of issue
of equity shares - (738) - 594 - - (144)
Transfer in respect
of lapsed warrants - - (341) (251) - 592 -
Share-based payments - - - 79 - - 79
Transfer in respect
of lapsed options - - - (404) - 404 -
Effect of foreign
exchange rates - - - (4) - - (4)
Total transactions
with owners in
their capacity
as owners 533 1,663 (341) 14 - 996 2,865
Loss for the year - - - - - (2,344) (2,344)
Other comprehensive
income:
Currency translation
differences - - - - (1,277) - (1,277)
Total other
comprehensive
income for the
period - - - - (1,277) - (1,277)
Total comprehensive
income for the
year - - - - (1,277) (2,344) (3,621)
Currency translation
differences on
equity at historical
rates - - - - 2,024 - 2,024
As at 31 December
2020 41,221 39,638 227 3,762 (9,225) (60,085) 15,538
ZEPHYR ENERGY PLC
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six months ended 30 June 2020 (Unaudited)
Share-based
Share payment Cumulative
Share premium Warrant reserve translation Retained
capital account reserve reserve deficit Total
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
As at 1 January
2020 40,688 37,975 568 3,748 (9,972) (58,737) 14,270
Transactions with
owners in their
capacity as owners:
Transfer to retained
deficit in respect
of lapsed
warrants/options - - (341) (448) - 789 -
Share-based payments - - - 42 - - 42
Effect of foreign
exchange rates - - - (1) - - (1)
Total transactions
with owners in
their capacity
as owners - - (341) (407) - 789 41
Profit for the
period - - - - - 906 906
Other comprehensive
income:
Currency translation
differences - - - - 3,223 - 3,223
Total other
comprehensive
income for the
period - - - - 3,223 - 3,223
Total comprehensive
income for the
period - - - - 3,223 906 4,129
Currency translation
differences on
equity at historical
rates - - - - (4,863) - (4,863)
As at 30 June 2020 40,688 37,975 227 3,341 (11,612) (57,042) 13,577
ZEPHYR ENERGY PLC
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
For the six months ended 30 June 2021
Unaudited Unaudited Audited
six months six months year ended
ended 30 ended 30 31 December
June June
2021 2020 2020
Appendices US$'000 US$'000 US$'000
Net cash from/(used) in operating
activities a 777 (661) (1,350)
Net cash (used in)/from investing
activities b (9,843) (38) 1,445
Net cash from/(used in) financing
activities c 14,322 (26) 2,745
Net increase/(decrease) in cash
and cash equivalents 5,256 (725) 2,840
Cash and cash equivalents at
beginning of period 3,940 1,084 1,084
Effect of foreign exchange rate
changes 20 (9) 16
Cash and cash equivalents at
end of period 9,216 350 3,940
ZEPHYR ENERGY PLC
APPICES TO THE CONDENSED CONSOLIDATED CASH FLOW STATEMENT
For the six months ended 30 June 2021
Unaudited Unaudited Audited
six months six months year ended
ended 30 ended 30 31 December
June June
2021 2020 2020
US$'000 US$'000 US$'000
a Operating activities
(Loss)/profit before taxation from
continuing operations (968) 906 (2,344)
Finance costs 1 - -
Adjustments for:
Depreciation of property, plant
and equipment 96 29 49
Share-based payments 45 5 79
Unrealised foreign exchange gain 308 (1,631) 739
Operating outflow before movements
in working capital (518) (691) (1,477)
(Increase)/decrease in trade and
other receivables (616) 24 (20)
Increase in trade and other payables 1,913 6 147
779 (661) (1,350)
Income tax paid (2) - -
Net cash from/(used) in operating
activities 777 (661) (1,350)
b Investing activities
Purchase of intangible exploration
and evaluation
assets (4,116) (38) (355)
Grant funds received 200 - 1,800
Purchase of development and production (5,927) - -
assets
Net cash (used in)/from investing
activities (9,843) (38) 1,445
c Financing activities
Proceeds from issue of shares 15,156 - 2,934
Expenses of issue of shares (826) - (144)
Repayment of lease liabilities (8) (26) (45)
Net cash from/(used in) financing
activities 14,322 (26) 2,745
ZEPHYR ENERGY PLC
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL
STATEMENTS
For the six months ended 30 June 2021
1. ACCOUNTING POLICIES
Basis of preparation
This report was approved by the Directors on 30 September
2021.
The condensed consolidated interim financial statements have
been prepared in accordance with the recognition and measurement
principles of International Financial Reporting Standards as
adopted by the EU ('Adopted IFRSs')
The condensed consolidated interim financial statements are
presented in United States Dollar ('US$') as the Group's trading
operations, and the majority of its assets are primarily
represented in US$.
The Company is domiciled in the United Kingdom. The Company's
shares are admitted to trading on the AIM market in the UK and the
OTCQB Venture Market ("OTCQB") in the U.S.
The current and comparative periods to June have been prepared
using the accounting policies and practices consistent with those
adopted in the annual financial statements for the year ended 31
December 2020, and with those expected to be adopted in the Group's
financial statements for the year ending 31 December 2021.
Comparative figures for the year ended 31 December 2020 have
been extracted from the statutory financial statements for that
period which carried an unqualified audit report, did not contain a
statement under section 498(2) or (3) of the Companies Act 2006 and
have been delivered to the Registrar of Companies.
The financial information contained in this report does not
constitute statutory financial statements as defined by section 434
of the Companies Act 2006, and should be read in conjunction with
the Group's financial statements for the year ended 31 December
2020. This report has not been audited or reviewed by the Group's
auditors.
During the first six months of the current financial year there
have been no related party transactions that materially affect the
financial position or performance of the Group and there have been
no changes in the related party transactions described in the last
annual financial report.
Having considered the Group's current cash forecast and
projections, and following detailed conversations with the
Company's brokers and major shareholders, the Directors have a
reasonable expectation that the Company and the Group have, or have
access to, sufficient resources to continue operating for at least
the next 12 months. Accordingly, the Directors continue to adopt
the going concern basis in preparing the financial statements.
The principal risks and uncertainties of the Group have not
changed since the publication of the last annual financial report
where a detailed explanation of such risks and uncertainties can be
found.
2. DIVIDS
The Directors do not recommend the payment of a dividend for the
period.
3. (LOSS)/PROFIT PER ORDINARY SHARE
Basic (loss)/profit per Ordinary Share is calculated by dividing
the net (loss)/profit for the period attributable to owners of the
parent company by the weighted average number of Ordinary Shares
outstanding during the period. The calculation of the basic and
diluted (loss)/profit per Ordinary Share is based on the following
data:
Continuing Continuing Continuing
operations operations operations
unaudited unaudited audited
six months six months year ended
ended 30 ended 30 31 December
June June 2020
2021 2020 US$'000
US$'000 US$'000
(Losses)/profits
(Losses)/profits)
for the purpose of
basic (loss)/profit
per Ordinary Share
being net (loss)/profit
attributable to owners
of the parent company (975) 906 (2,344)
Number Number Number
'000 '000 '000
Number of shares
Weighted average
number of shares
for the purpose of
basic (loss)/profit
per Ordinary Share 939,631 287,111 357,951
(Loss)/profit per
Ordinary Share
Basic and diluted,
cents per share (0.10) 0.32 (0.66)
Due to the losses incurred, there is no dilutive effect from the
existing share options, share based compensation plan or
warrants.
4. INTANGIBLE ASSETS
Exploration
and evaluation
assets US$'000
Cost
At 1 January 2020 13,549
Additions 37
At 30 June 2020 13,586
Additions 2,128
Grant funds (1,800)
At 31 December 2020 13,914
Additions 2,338
Grant funds (290)
At 30 June 2021 15,962
Carrying amount
At 30 June 2021 15,962
At 30 June 2020 13,586
At 31 December 2020 13,914
5. PROPERTY, PLANT AND EQUIPMENT
Development
Plant and Right-of-use and production
machinery assets assets Total
'000 '000 '000 '000
Cost
At 1 January 2020 159 90 - 249
Exchange differences (1) (4) - (5)
At 30 June 2020 158 86 - 244
Disposal (39) (34) - (73)
Exchange differences 10 5 - 15
At 31 December 2020 129 57 - 186
Additions - - 6,530 6,530
Exchange differences 2 1 - 3
At 30 June 2021 131 58 6,530 6,719
Accumulated depreciation,
depletion and amortisation
At 1 January 2020 142 30 - 172
Charge for the period 3 26 - 29
Exchange differences - (1) - (1)
At 30 June 2020 145 55 - 200
Charge for the period 2 18 - 20
Disposal (39) (34) - (73)
Exchange differences 9 2 - 11
At 31 December 2020 117 41 - 158
Charge for the period 3 16 77 96
Exchange differences 2 1 - 3
At 30 June 2021 122 58 77 257
Carrying amount
At 30 June 2021 6,462
At 30 June 2020 44
At 31 December 2020 28
6. SHARE CAPITAL
Unaudited Unaudited Audited
as at as at as at
30 June 30 June 31 December
2021 2020 2020
Number Number Number
'000 '000 '000
Authorised
Ordinary Shares of 0.1p each 7,779,297 7,779,297 7,779,297
Deferred Shares of 9.9p each 227,753 227,753 227,753
8,007,050 8,007,050 8,007,050
Unaudited Unaudited Audited
as at as at as at
30 June 30 June 31 December
2021 2020 2020
US$'000 US$'000 US$'000
Allotted, issued and fully paid
1,290,314,182 Ordinary Shares of 0.1p
each (30 June 2020: 287,111,606: 31
December 2020 696,202,515) 1,740 383 916
227,752,817 Deferred Shares of 9.9p
each 40,305 40,305 40,305
42,045 40,688 41,221
The Deferred Shares are not listed on AIM, do not give the
holders any right to receive notice of, or to attend or vote at,
any general meetings, have no entitlement to receive a dividend or
other distribution or any entitlement to receive a repayment of
nominal amount paid up on a return of assets on winding up nor to
receive or participate in any property or assets of the Company.
The Company may, at its option, at any time redeem all of the
Deferred Shares then in issue at a price not exceeding GBP0.01 from
all shareholders upon giving not less than 28 days' notice in
writing.
As outlined in the Company's 2020 Annual Report it is the
Company's intention to issue nil-cost options to certain Directors
and employees to compensate them for salaries sacrificed during
2020. This will be done when the Board is permitted to do so and in
line with its regulatory responsibilities.
ISSUED ORDINARY SHARE CAPITAL
In January 2021, the Company issued 1,308,227 Ordinary Shares of
0.1p each at a price of 0.55p per share, raising gross proceeds of
US$0.012 million (GBP0.01 million).
In February 2021, the Company issued 5,124,000 Ordinary Shares
of 0.1p each at a price of 0.55p per share, raising gross proceeds
of US$0.048 million (GBP0.035 million).
In February 2021, the Company issued 8,236,363 Ordinary Shares
of 0.1p each at a price of 2p per share, raising gross proceeds of
US$0.22 million (GBP0.16 million).
In March 2021, the Company issued 200,000,000 Ordinary Shares of
0.1p each at a price of 2p per share, raising gross proceeds of
US$5.5 million (GBP4.0 million).
In March 2021, the Company issued 8,468,182 Ordinary Shares of
0.1p each at a price of 2p per share, raising gross proceeds of
US$0.23 million (GBP0.17 million).
In April 2021, the Company issued 300,000,000 Ordinary Shares of
0.1p each at a price of 2p per share, raising gross proceeds of
US$8.4 million (GBP6.0 million).
In April 2021, the Company issued 2,428,885 Ordinary Shares of
0.1p each at a price of 0.08p per share, raising gross proceeds of
US$0.03 million (GBP0.02 million).
In May 2021, the Company issued 2,727,273 Ordinary Shares of
0.1p each at a price of 2p per share, raising gross proceeds of
US$0.08million (GBP0.05 million).
In June 2021, the Company issued 62,409,646 Ordinary Shares of
0.1p each at a price of 0.55p per share, raising gross proceeds of
US$0.55 million (GBP0.4 million).
In June 2021, the Company issued 3,409,091 Ordinary Shares of
0.1p each at a price of 2p per share, raising gross proceeds of
US$0.09 million (GBP0.07 million).
Ordinary Deferred
Shares Shares
Number Number
'000 '000
At 1 January 2020 and 30 June 2020 287,112 227,753
Allotment of shares 409,090 -
At 31 December 2020 696,202 227,753
Allotment of shares 594,112 -
At 30 June 2021 1,290,314 227,753
7. POST BALANCE SHEET EVENTS
All matters relating to events occurring since the period end
are reported in the Chief Executive's Statement.
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.
Glossary of Terms
Reserves are those quantities of petroleum anticipated to be
commercially recoverable by application of development projects to
known accumulations from a given date forward under defined
conditions. Reserves must satisfy four criteria: discovered,
recoverable, commercial, and remaining (as of the evaluation's
effective date) based on the development project(s) applied. When
the range of uncertainty is represented by a probability
distribution, a low, best, and high estimate shall be provided such
that:
Proved Reserves are those quantities of Petroleum that, by
analysis of geoscience and engineering data, can be estimated with
reasonable certainty to be commercially recoverable from known
reservoirs and under defined technical and commercial conditions.
If deterministic methods are used, the term "reasonable certainty"
is intended to express a high degree of confidence that the
quantities will be recovered. If probabilistic methods are used,
there should be at least a 90% probability that the quantities
actually recovered will equal or exceed the estimate.
Probable Reserves are those additional Reserves which analysis
of geoscience and engineering data indicate are less likely to be
recovered than Proved Reserves but more certain to be recovered
than Possible Reserves. It is equally likely that actual remaining
quantities recovered will be greater than or less than the sum of
the estimated Proved plus Probable Reserves (2P). In this context,
when probabilistic methods are used, there should be at least a 50%
probability that the actual quantities recovered will equal or
exceed the 2P estimate.
Possible Reserves are those additional Reserves that analysis of
geoscience and engineering data suggest are less likely to be
recoverable than Probable Reserves. The total quantities ultimately
recovered from the project have a low probability to exceed the sum
of Proved plus Probable plus Possible (3P) Reserves, which is
equivalent to the high-estimate scenario. When probabilistic
methods are used, there should be at least a 10% probability that
the actual quantities recovered will equal or exceed the 3P
estimate.
*Production summaries and estimates are given as two phase well
head fluids (oil and unprocessed gas) summaries or estimates. A 6
mcf (thousand cubic feet) of gas to one BOE is used in the
conversion of gas to barrel of oil equivalents.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
IR SEDFAUEFSESU
(END) Dow Jones Newswires
September 30, 2021 02:00 ET (06:00 GMT)
Zephyr Energy (LSE:ZPHR)
Gráfica de Acción Histórica
De Abr 2024 a May 2024
Zephyr Energy (LSE:ZPHR)
Gráfica de Acción Histórica
De May 2023 a May 2024
