REG - Zephyr Energy PLC - Paradox project update & joint broker appointment

Zephyr EnergyAnnouncement

14/11/2024 07:00

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RNS Number : 1644M  Zephyr Energy PLC  14 November 2024

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.

 

14 November 2024

 

Zephyr Energy plc

("Zephyr" or the "Company")

 

Paradox project update; and

Appointment of Joint Broker

 

Zephyr Energy plc (AIM: ZPHR) (OTCQB: ZPHRF), the Rocky Mountain oil and
gas company focused on responsible resource development and carbon-neutral
operations, is pleased to provide an update on operations on the State 36-2R
LNW-CC well (the "well") at the Company's flagship project in the Paradox
Basin, Utah, U.S. (the "Paradox project").

Preparations for the commencement of drilling operations to extend the lateral
on the well (the "extended lateral") are at an advanced state.  All
regulatory approvals are in place for the planned drilling operation, detailed
well planning has been completed and equipment procurement is underway.  A
selection process for service companies (including drilling rig providers) has
also commenced and is at an advanced phase.

Surface operations on the pad will begin as soon as possible, with the Company
expecting full drilling operations to commence early in the first quarter of
2025 (subject to rig availability and weather conditions).

The existing well was drilled to 10,200 feet, including 130 feet of completed
reservoir interval in the short horizontal section of the well.  The extended
lateral will be drilled horizontally from the existing wellbore and is
expected to target an additional 5,500 feet of the Cane Creek reservoir.  The
cost of the operation is expected to be circa US$7 million, a total which
includes surface preparation, the drilling of the extended lateral,
acidisation completion and production testing.

In conjunction with operational planning, and further to Zephyr's announcement
on 10 October 2024 regarding the funding Letter of Intent, the Company is
pleased to confirm that the funding process for the extended lateral (the
"proposed funding") continues to progress in line with expectations.  This
asset level investment, from an experienced U.S. based industry investor (the
"investor"), would fund 100% of the expected costs required to drill, complete
and test the extended lateral, and the Company expects to sign full binding
documentation in the coming weeks.  No Company equity or warrants will be
issued as part of the transaction and the investor will not receive any future
interest or option in the Paradox project other than the working interest in
the well.

 

Appointment of Joint Broker

 

After completing a detailed review of Zephyr's existing advisers and brokers,
the Company is pleased to announce the appointment of Canaccord Genuity
Limited ("Canaccord") as the Company's Joint Broker with immediate effect.
Canaccord will act in conjunction with Turner Pope Investments, who remain as
the Company's other Joint Broker.

 

Colin Harrington, Zephyr's Chief Executive, said: "We are excited to be making
material progress towards recommencing drilling operations on the well, and we
believe that the extended lateral, combined with an effective acidisation
completion, will deliver a large and highly productive well.

"In parallel with our ongoing operational work, the proposed funding is
progressing well and we expect to complete binding documentation in the coming
weeks. The proposed funding will fully fund the next phase of our operational
activity, as outlined above, without any equity dilution at the Company level.

"We are also very pleased to welcome Canaccord to the team at this pivotal
moment for the Company."

 

 

Contacts:

 

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

 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 / Felicity Winkles / 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 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.

 

 

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