REG - Zephyr Energy PLC - Completion of Acquisition & Divestment of Wells

Zephyr EnergyAnnouncement

Tue 07:00

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RNS Number : 5948W  Zephyr Energy PLC  26 August 2025

 

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.

 

 26 August 2025

Zephyr Energy plc

("Zephyr" or the "Company")

 

Completion of Acquisition and

Divestment of Operated Wells

 

Further to its announcements on 24 June and 30 July 2025, Zephyr Energy
plc (AIM: ZPHR) (OTCQB: ZPHRF) is pleased to announce the completion of its
US$7.3 million acquisition of working interests in accretive, mature proved
developed producing ("PDP") assets in core Rocky Mountain basins, U.S. (the
"Acquisition").  The Acquisition has an effective date of 1 June 2025, with
cash flow accruing to Zephyr from that date.

 

In addition to the PDP assets, the Acquisition includes attractive, near-term
proven undeveloped ("PUD") upside and additional acreage with potential for
future development.

 

Upon the completion of the Acquisition, the Company elected to divest a small
package of the newly acquired operated wells in North Dakota and Wyoming (the
"divested assets") to a neighbouring private upstream operator.  In exchange
for the divested assets, Zephyr received total consideration of US$1.5
million, comprised of US$679,000 in cash and the assumption of US$822,000 in
mostly near-term plugging and abandonment liabilities.

 

Based on management forecasts, the Acquisition, adjusted for the sale of the
divested assets, will add production of approximately 388 barrels of oil
equivalent per day ("boepd") net to Zephyr in the first month of production
(versus an initial, pre-divestiture estimate of 400 boepd).  Zephyr will
continue to actively manage its asset portfolio and will consider both
acquisitions and divestitures which are deemed value-accretive and in the best
interests of Shareholders.

 

In addition to the existing production, the Acquisition has already provided
investment opportunities suitable for Zephyr Hawk LLC, the US$100 million
strategic partnership announced by the Company on 13 May 2025 (the "Joint
Venture").  From the 1 June 2025 effective date, the Acquisition has provided
18 new development well participation opportunities suitable for Joint Venture
funding (an increase from the 5 opportunities at the time the transaction was
initially agreed upon).

Colin Harrington, Zephyr's Chief Executive, commented: "We are delighted to
complete the Acquisition, which adds high-margin production and additional
proved reserves to our existing asset base.  We now have cash-flowing
non-operated investments across key Rocky Mountain regions, our longstanding
area of focus.  In particular, this enhanced geographical position will give
us a new foothold into active developments in the Powder River Basin, as well
as increased exposure in the Williston Basin.

"The Acquisition also provides us with the opportunity to execute the first
transactions through our US$100 million Joint Venture, and we look forward to
advancing further opportunities through the Joint Venture.

"I'd like to reiterate that Zephyr has always actively managed its asset
portfolio to create Shareholder value, and the Acquisition has offered
immediate opportunities to do so.  During the period between the signing of
the initial Letter of Intent and the completion of the Acquisition, we
received an offer related to the divested assets.  In addition to providing
immediate cash consideration and the assumption of near-term liabilities, the
sale of the divested assets also saves significant future costs related to
maintaining operatorship in two new jurisdictions.  As such, we elected to
divest these wells immediately after their acquisition, without significant
impact to our previously released Acquisition production forecasts.

"We look forward to providing further updates on the Acquisition and our
Paradox project, where we expect to publish a revised Competent Person's
Report in the near-term."

 

Williston project update

The Company will provide the results of hydrocarbon sales and production from
its non-operated Williston project for the second quarter of 2025 ("Q2") as
part of its half-year financial results which are expected to be published by
the end of September 2025.

The Q2 results will incorporate production from the Acquisition, which became
effective on 1 June 2025.

 

 

 Zephyr Energy plc                                              Tel: +44 (0)20 3475 4389

 Colin Harrington (CEO)

 Chris Eadie (Group Finance Director and Company Secretary)

 Allenby Capital Limited - AIM Nominated Adviser                Tel: +44 (0)20 3328 5656

 Jeremy Porter / Vivek Bhardwaj

 Turner Pope Investments - Joint Broker                         Tel: +44 (0)20 3657 0050

 James Pope / Andy Thacker

 Canaccord Genuity Limited - Joint Broker                      Tel: +44 (0)20 7523 8000

 Henry Fitzgerald-O'Connor / Charlie Hammond

 Celicourt Communications - PR

 Mark Antelme / Ali AlQahtani                                  Tel: +44 (0) 20 7770 6424

 

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 46,000-acre leaseholding 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 in core Rocky mountain
basins. 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.

 

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