REG - Zephyr Energy PLC - Debt facility update

Zephyr EnergyAnnouncement

10/11/2022 07:00

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RNS Number : 9103F  Zephyr Energy PLC  10 November 2022

10 November 2022

Zephyr Energy plc

("Zephyr" or the "Company")

 

Semi-annual redetermination results in

30% increase to availability under Revolving Credit Facility

 

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 that the Company's lender, North-Dakota
based First International Bank and Trust ("FIBT"), has completed its regularly
scheduled semi-annual redetermination of the Company's revolving credit
facility ("RCF").

 

The redetermination process resulted in a 30% increase to the RCF, with the
new borrowing base set at US$13 million.  As of today, US$8 million is
currently outstanding on the RCF, providing the Company with an additional
US$5m of liquidity which can be drawn at Zephyr's discretion. In addition to
the RCF, at 1 November 2022, Zephyr had an additional US$15.8 million of
outstanding borrowings, the majority of which is comprised of a senior bank
term loan with FIBT.

 

As of today's date the Company has more than US$18.5m in available liquidity
taking into account its current cash balances and the increased headroom on
the RCF.

 

The next semi-annual redetermination of the RCF is scheduled to take place in
the second quarter of 2023.

 

Colin Harrington, Zephyr's Chief Executive, said:  "The successful
redetermination and resulting 30% increase to the RCF borrowing base is an
excellent testament to the strength of Zephyr's underlying assets - and the
increased debt capacity is particularly notable in light of the Company's
production revenues of over US$25 million during the first half of 2022.

 

"We expect to continue to generate strong free cash flow for the foreseeable
future, which in turn will fund the planned expansion of both our operated and
non-operated asset portfolios.

 

"I would like to thank FIBT, a regional bank with over 110 years of history in
North Dakota, and its team for their continued strong support of Zephyr."

 

 

Contacts:

 

 Zephyr Energy plc                                                   Tel: +44 (0)20 7225 4590

 Colin Harrington (CEO)

 Chris Eadie (CFO)

 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

 Panmure Gordon (UK) Limited - Joint-Broker                         Tel: +44 (0) 20 7886 2500

 John Prior / Hugh Rich / James Sinclair-Ford / Harriette Johnson

 Celicourt Communications - PR

 Mark Antelme / Felicity Winkles                                    Tel: +44 (0) 20 8434 2643

 

 

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 45,000-acre leaseholding located in
the Paradox Basin, Utah, 25,000 acres of which has been assessed by third
party consultants Sproule International to hold, net to Zephyr, 2P reserves
of 2.1 million barrels of oil equivalent ("mmboe"), 2C resources of 27 mmboe
and 2U resources 203 mmboe. Following the successful initial production
testing of the recently drilled and completed State 16-2LN-CC well, Zephyr has
planned a three well drilling program commencing in 2022 to further delineate
the scale and value of the project.

 

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.

 

The Williston portfolio currently consists of working-interests in over 200
modern horizontal wells which are expected to provide US$35-40 million of
revenue, net to Zephyr, in 2022.  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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