REG - Zephyr Energy PLC - Williston Basin Update

Zephyr EnergyAnnouncement

01/11/2023 07:15

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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/ (https://www.turnerpope.com/register/)

 

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

 Celicourt Communications - Public Relations       Tel: +44 (0) 20 7770 6424

 Mark Antelme / Felicity Winkles / Ali 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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