REG - Zephyr Energy PLC - Half-year Report
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RNS Number : 3768B Zephyr Energy PLC 30 September 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.
30 September 2025
Zephyr Energy plc
("Zephyr", the "Company", or the "Group")
Interim results for the six months ended 30 June 2025
Zephyr Energy plc (AIM: ZPHR) (OTCQB: ZPHRF) reports its unaudited interim
results for the six months ended 30 June 2025 ("H1 2025").
Colin Harrington, Chief Executive of Zephyr, said:
"During H1 2025, and in the period since, we have continued to invest
significant resources into the development of our flagship operated project in
the Paradox Basin, Utah, U.S. (the "Paradox project") primarily through
drilling operations on the State 36-2 LNW-CC-R well (the "State 36-2R well")
which were successfully delivered and without any health, safety or
environmental issues. The production test demonstrated the considerable scale
and potential of the Paradox project and reaffirmed that the Cane Creek
reservoir can be developed in a highly productive manner, on par with some of
the leading oil and gas plays in the U.S.
"Since the completion of drilling operations, as we move closer towards first
commercial production from the Paradox project, our focus has shifted to
advancing the design, engineering and contractual agreements required to
enable access to gas export markets through the nearby third-party pipeline.
In parallel, we are advancing structured discussions with potential industry
and financial partners to accelerate further drilling activity at the Paradox
project. We expect substantial progress in these two key areas in the coming
months, allowing the Company to unlock the considerable potential value of the
Paradox project.
"Our investment in the Paradox project is supported by our strategy of
generating cashflow from our non-operated portfolio in the Williston Basin,
North Dakota and Montana, U.S. (the "Williston project"), which is intended to
fully fund all general and administrative ("G&A") costs, and which allows
for continued investment in our asset portfolio.
"We also remain focused on opportunistically growing our non-operated
portfolio, and I was delighted that we recently completed the acquisition of
working interests in accretive, mature proved developed producing ("PDP")
assets in core Rocky Mountain basins, U.S. (the "Acquisition"). In addition to
the PDP assets, the Acquisition included attractive near-term proven
undeveloped ("PUD") upside and additional acreage with longer-term potential
for future development, providing us with the opportunity to execute the first
transactions through Zephyr Hawk LLC, our US$100 million strategic partnership
with a U.S based capital provider.
"Our progress would not be possible without the support of our stakeholders. I
would like to thank our shareholders for their continued trust in the Company
and their support in the equity raise that was announced in June 2025. I would
also like to extend my sincere thanks to our debt provider, First
International Bank and Trust ("FIBT"), with which we continue to have an
excellent working relationship, and which has just completed its valuation of
the Company's non-operated portfolio reaffirming our current borrowing base.
"We look forward to the coming months with confidence as we continue to
open-up the next prolific oil and gas basin in the U.S., and we look forward
to providing regular updates as we advance through the next phase of our
development including the imminent publication of an updated third-party
Competent Persons Report ("CPR") on the Paradox project."
Contacts
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 - Public Relations Tel: +44 (0) 20 7770 6424
Mark Antelme / 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.
Notes to Editors
Zephyr Energy plc (AIM: ZPHR) (OTCQB: ZPHRF) is a technology-led oil and
gas company focused on responsible resource development in the Rocky
Mountain region of the U.S. 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. 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. Cashflow 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.
ZEPHYR ENERGY PLC
INTERIM REPORT FOR THE SIX MONTHS TO 30 JUNE 2025
The Board is pleased to present Zephyr's unaudited interim report for the
six-month period to 30 June 2025.
REVIEW OF ACTIVITIES
OVERVIEW
H1 2025 was dominated by ongoing operational activity at the Paradox project
and, in particular, operations on the State 36-2R well. The drilling
operations carried out during H1 2025 were delivered without any health and
safety or environmental issues.
The period began with the successful drilling of the lateral extension on the
State 36-2R well, and culminated in the production test on the well, which
included a peak flow rate of 2,848 barrels of oil equivalent per day
("boepd"), which was achieved with no material drop in bottom hole pressure,
suggesting that the well ranks in the top 6% of all gas drilled wells across
the Lower 48 in the U.S. since 2000 (and achieved without the use of any
fracture stimulation).
The test results suggest that 10,000-foot lateral wells drilled at the Paradox
project could potentially achieve a P50 individual well performance of 3.6
million barrels of oil equivalent ("boe"). The Company's P50 estimate of gross
ultimate recoverable resources in the Cane Creek reservoir is 72.5 million
boe, with eight additional overlying reservoirs offering meaningful
exploration upside and further resource expansion potential.
In summary, work performed during H1 2025 reconfirmed the substantial scale
and potential value of the Paradox project and our key operational focus for
the next period is to continue the work to unlock this value for our
shareholders.
The income generating non-operated Williston project assets continue to
deliver monthly cashflow, enabling us to progress ongoing development at the
Paradox project and to cover the Company's G&A costs in both the U.K. and
the U.S.
Over the last four years, Zephyr has built a highly experienced management
team which is well positioned to appraise, acquire and manage high-return,
non-operated assets in core Rocky Mountain basins, resulting in a growing and
diverse base of assets with low maintenance capital expenditure ("CAPEX"),
significant free cashflow, and considerable potential future drilling upside.
In addition to the existing production, two key recent developments are
expected to have a meaningful impact on the future growth of the Williston
project.
Firstly, the Company, through Zephyr Hawk LLC, entered a US$100 million
strategic partnership with a major U.S. based capital provider focused on the
energy sector to help us drive forward the Williston project (the
"partnership"). The combination of Zephyr's regional expertise and the
investor's financial strength will allow us to accelerate the Group's
non-operated growth, enhance consolidated cashflow, and drive attractive
project returns. Under the terms of the partnership, the investor will provide
up to US$100 million to be used to fund 100% of the CAPEX related to the
drilling, completing and equipping of newly acquired assets.
Secondly, the Company recently completed its US$7.3 million acquisition of
working interests in producing assets located across core Rocky Mountain
basins. In addition to acquiring an initial circa 400 boepd of existing PDP
production, circa 600,000 boe of PDP reserves, the Acquisition also includes
further potential PUD upside, the CAPEX for which will potentially be funded
through the partnership. The Acquisition is expected to be accretive to both
earnings and reserves, strengthen the balance sheet, provide strategic entry
into key areas, and enhance our competitive position in core Rocky Mountain
oil and gas producing basins. The Acquisition is anticipated to add operating
income of US$4 million in the first 12 months (based on strip prices on 29 May
2025).
Management will continue to be opportunistic and strategic in both sourcing
and funding further accretive non-operated opportunities that will enable the
Company to continue to grow its non-operated asset portfolio.
PARADOX PROJECT
Zephyr holds operated leases over more than 46,000 gross acres in the Paradox
Basin. Of this acreage, 25,000 acres are contiguous and largely covered by
modern 3D seismic data. These acres have been previously assessed by
third-party consultant Sproule-ERCE International ("Sproule"), in its 2022
CPR, to contain, net to Zephyr, 2P reserves of 2.6 million barrels of oil
equivalent ("mmboe"), 2C contingent resources of 34 mmboe, and net unrisked 2U
prospective resources of 270 mmboe.
Following the successful production test on the State 36-2R well the Company
commissioned Sproule to produce a revised CPR on the Paradox project, the
results of which are expected imminently.
The Group's proactive land management strategy has resulted in a robust and
expanding acreage position - one which the Board believes is increasingly
difficult to replicate given today's evolving regulatory and political
landscape.
State 36-2R well
Following the completion of the drilling and initial production tests on the
State 36-2R well, the decision was made in 2024 to proceed with the drilling
of an extended lateral on the well (the "extended lateral").
Drilling operations for the extended lateral commenced in January 2025,
targeting an additional 5,500 feet of the Cane Creek reservoir. Exactly 30
days later, on 20 February 2025, drilling operations were concluded safely and
successfully. The well trajectory of the extended lateral section was drilled
as planned and correlated with the Company's existing 3D seismic data. Circa
97% of the lateral was drilled within the Cane Creek reservoir section
demonstrating the ability to accurately steer within the reservoir across a
structurally complex play. Encouragingly, elevated mud gas levels with notable
peaks were evident throughout the drilling of the Cane Creek reservoir.
Production testing on State 36-2R well following the completion of the
extended lateral
During the subsequent production test on the State 36-2R well, which commenced
in April 2025, the well was tested at multiple flow rates to gather data to
determine the flow rate capacity, to provide an early estimate of potential
resource volumes, and to obtain fluid samples. The production test
successfully delivered on all its objectives and delivered results that were
at the top end of management expectations.
In summary, the test included a peak flow rate of 2,848 boepd, achieved with
no material drop in bottom hole pressure and suggested that the well ranks in
the top 6% of all horizontal resource play gas wells drilled across the Lower
48 since 2000 (despite not using any fracture stimulation). Well test data
and interpretation suggest that there is more than sufficient well
deliverability for a commercial well.
The well test results suggest that the chosen completion strategy (hydra-jet
abrasive perforation and matrix acidisation) was highly successful, and that
fracture stimulation could offer further upside potential for both the well
and the broader Paradox project development.
As a result of the successful production test from the State 36-2R well, work
commenced to finalise gas processing and related infrastructure requirements
for the project, and to tie in both the Federal 28-11 well and the State 16-2
LN-CC well as soon as practicable.
Potential Paradox development plan
Following the analysis of the data from the State 36-2R well production test,
management applied the results to a conceptual full field development plan to
better understand the potential resource range of the Cane Creek reservoir
(under the current 3D seismic coverage).
This conceptual development plan suggests the potential for a further 20 Cane
Creek reservoir horizontal wells (plus the previously drilled State 16-2 LN-CC
and State 36-2 wells), with preliminary management estimates of gross ultimate
recoverable gas in a low-mid-high scenario range of recoverable condensate as
set out in the table below.
Estimated Ultimate Recovery LOW MID HIGH
Gross Recoverable Gas (BCF) 174.0 341.0 501.0
Gross Recoverable Condensate (MMBC) 3.5 15.7 29.0
Total Gross equivalent (MMBOE) 32.5 72.5 112.5
Initial management estimates of ultimate recoverable resources, net to Zephyr,
are set out in the table below.
Estimated Ultimate Recovery LOW MID HIGH
Net Recoverable Gas (BCF) 137.0 271.0 399.0
Net Recoverable Condensate (MMBC) 2.7 12.5 23.1
Total Net equivalent (MMBOE) 25.6 57.7 89.5
The test results imply that each 10,000-foot lateral well drilled on the
Paradox project could achieve a P50 individual well performance of circa 3.6
million boe and a NPV-10 of US$25.2 million.
In summary, the evaluation of the production test confirmed that the Cane
Creek reservoir is highly productive and potentially ranks alongside some of
the most productive oil and gas plays in the U.S. The results also suggest
that there may be a considerable increase in the project's recoverable
resources.
Next steps
The Board believes that the fundamental pieces of a significant oil and gas
play are present within the Paradox project and over the coming months there
are a number of key deliverables that will enable the Group to move towards
the commencement of commercial production from the Paradox project.
The ongoing work includes:
· A new CPR to be delivered by Sproule imminently;
· Structured engagement with potential farm-in, strategic and
investment partners to help fund and accelerate a larger scale Paradox project
drilling programme;
· Completion of gas marketing agreements and improvements to the gas
processing plant infrastructure;
· Completion of contracts with the owner of the operational 16-inch
pipeline which runs adjacent to our gas plant, regarding the terms and
timetable for the transportation of gas produced from the Paradox project;
· Continued leasing of additional nearby acreage;
· Acceleration of legacy workovers on existing 28-11 and 16-2 wells to
bring online additional production at reduced cost; and
· Testing of overlying reservoirs (potentially using an existing
vertical wellbore).
WILLISTON PROJECT
Overview
Zephyr's non-operated Williston project was established in 2021 and today,
following multiple discrete acquisitions, Zephyr continues to deliver on its
strategy to acquire low-risk working interest positions in value accretive,
high-quality, high-margin production assets with significant near-term growth
potential.
The Group's non-operated portfolio continues to deliver strong returns, and
cashflows generated from the portfolio continue to be recycled into the
Paradox project development programme and into additional Williston Basin
drilling opportunities, in addition to covering Zephyr's G&A costs.
At 30 June 2025, Zephyr had working interests in 228 wells that were available
for production. Net working interests across the Company's portfolio now
average 7% per well, equivalent to 16 gross wells in total, all of which
utilise horizontal drilling and modern, hydraulically stimulated completions.
The majority of the wells are operated by leading Williston Basin producers.
The Company will continue to develop and grow its non-operated portfolio
through accretive and opportunistic acquisitions and where the potential to
add additional commercial value arises.
H1 2025 performance
· H1 2025 revenue, net to Zephyr, totalled US$6.3 million (H1 2024:
US$13.6 million). The decline in revenue compared to H1 2024 was primarily due
to the following factors;
o Lower commodity prices in H1 2025 compared to H1 2024.
o Impact of the temporary shut-in of the six wells operated by Slawson
Exploration (the "Slawson wells") during the period. In H1 2025 sales volumes
from the Slawson wells averaged 142 boepd compared to 299 boepd in H1 2024.
Management believes that the production impacts on the Slawson wells will be
temporary and that the overall performance from the wells will meet
expectations over the long-term (see further information below).
o Standard / expected decline in the non-operated portfolio.
o H1 2025 revenue does not include June revenue from the Acquisition, which
had an effective date of 1 June 2025, and which will be included in the 2025
full year results.
· H1 2025 sales volumes averaged 684 boepd (H1 2024: 1,240 boepd) for a
total of 123,798 boe, net to Zephyr, during the period (H1 2024: 225,622 boe);
o Production in the second quarter of 2025 ("Q2") averaged 632 boepd, net to
Zephyr, versus an average production in the first quarter of 2025 ("Q1") of
755 boepd, net to Zephyr.
o H1 2025 production does not include June production from the Acquisition,
which had an effective date of 1 June 2025, and which will be included in the
2025 full year results.
· H1 2025 gross profit (including operating and transportation
expenses, production taxes and realised gains from hedging contracts, and
excluding DD&A) was US$3.1 million.
· Revenue and production are expected to increase in the second half of
2025 ("H2 2025") due to the impact of the Acquisition and due to the Slawson
wells potentially coming back online.
Slawson wells
In December 2022, Zephyr announced the acquisition of working interests in six
Slawson wells (equivalent to 1.1 total wells). Zephyr's working interest in
the six Slawson wells ranges from 11% to 32% and management estimates 2P
Reserves acquired were circa 550,000 boe, net to Zephyr.
The wells initially came online in November 2023, although production from the
Slawson wells has been sporadically curtailed at various times due to adverse
weather conditions, infrastructure constraints and / or low commodity prices.
During Q2 2025, production from the Slawson wells continued to be constrained,
at the discretion of Slawson, due to low commodity prices. Overall production
from the Slawson wells in H1 2025 was 141 boepd versus management's forecast
of 214 boepd.
While the limited production from the Slawson wells did impact sales volumes
in H1 2025, management believes that the production impacts will be temporary
and that the overall performance from the wells will meet expectations over
the long-term.
Strategic partnership
In May 2025, Zephyr announced a new US$100 million strategic partnership with
a major U.S. based capital provider focused on the energy sector. The
partnership, which will utilise a combination of Zephyr's regional expertise
and the investor's financial strength, is designed to accelerate Zephyr's
non-operated growth, enhance consolidated cashflow, and drive attractive
returns. The Board views this partnership as an excellent way to utilise
experienced industry capital to further grow the Group's cash generating
foundation.
Under the terms of the partnership, the investor will provide up to US$100
million to be used to fund 100% of the CAPEX related to the drilling,
completing and equipping of newly acquired assets, which will be contained
within a defined geographical area (the "Programme Area").
The Programme Area consists of counties located in the Williston Basin,
although the parties may consider opportunities in other Rocky
Mountain basins upon mutual consent. The Investor may elect to participate in
opportunities at its discretion, on a case-by-case basis, after conducting its
own financial and technical verification. Zephyr retains the right (but not
the obligation) to fund up to 33% of pro rata CAPEX. The Investor will earn a
majority of the cashflows generated by its pro rata working interest in each
well until an agreed upon initial hurdle rate is met.
Completed acquisition
In August 2025, the Company completed the US$7.3 million acquisition of
working interests in accretive production assets located across core Rocky
Mountain basins. Under the terms of the Acquisition, Zephyr acquired circa 400
boepd of existing production, 600,000 boe of PDP reserves, and the Acquisition
also offers significant further drilling opportunities to be potentially
funded through our joint venture.
The Acquisition had an effective completion date of 1 June 2025 and is
forecast to add operating income of US$4 million over the first 12 months of
Zephyr's ownership (based on strip prices at 29 May 2025). As part of the
Acquisition, and as announced on 17 July 2025, Zephyr applied for regulatory
approval to become an operator of record in the states of Colorado and North
Dakota.
Overall, the Acquisition is accretive on both an earnings and reserve basis,
strengthens the Group's balance sheet, offers the Group strategic entry into
key areas of interest and enhances our competitive position within core Rocky
Mountain basins.
Hedging
In H1 2025 the Company hedged 40,000 barrels of oil.
· 34,000 barrels of oil were hedged at a weighted-average price
of US$69.06 per barrel of oil.
· 6,000 barrels of oil were hedged by way of financial collar options
which enabled the Company to lock-in a minimum price for these barrels of oil.
These collar options gave the Company a weighted average floor price of US$63
per barrel of oil and a weighted average ceiling price of US$69.92 per barrel
of oil.
The Company will continue to evaluate its commodity price risk management
strategy on a regular basis.
FINANCIAL REVIEW
The unaudited financial information is reported in United States Dollars
("US$").
Income Statement
· The Company reports revenue for H1 2025 of US$6.3 million, net to
Zephyr, (H1 2024: US$13.6 million). Revenue relates to the Company's
hydrocarbon production from the non-operated Williston project. The decrease
in revenue from H1 2024 was primarily due to the following factors;
o Lower commodity prices in H1 2025 compared to H1 2024.
o Impact of the temporary shut-in of the six wells operated by Slawson
Exploration (the "Slawson wells") during the period. In H1 2025 sales volumes
from the Slawson wells averaged 142 boepd compared to 299 boepd in H1 2024.
o Standard / expected decline in the non-operated portfolio.
· Revenue in H2 2025 is expected to increase due to the impact of the
acquisition which is expected to add circa US$4 million of operating income in
the first 12 months (following its 1 June 2025 effective date), and with the
Slawson wells potentially coming back online.
· H1 2025 gross profit (including operating and transportation
expenses, production taxes and realised gains from hedging contracts, and
excluding DD&A) was US$3.1 million (H1 2024: US$10 million).
· H1 2025 net loss after tax was US$13 million or a loss of 0.74 cents
per Ordinary Share (H1 2024: net loss after tax of US$3 million or a loss of
0.18 cents per Ordinary Share). Included in the H1 2025 net loss after tax of
US$13 million are the following US$11.8 million non-cash accounting
adjustments;
o a foreign exchange charge of US$5.8 million relating to the retranslation
of the Company's intercompany loans. The charge arises due to the
strengthening of sterling against the US dollar during the period.
o a DD&A charge of US$6 million (H1 2024: US$5.4 million) related to the
asset depletion of the Williston project.
· Administrative expenses in H1 2025 were US$2.9 million (H1 2024:
US$2.9 million). Administrative expenses are in line with those in H1 2024.
Costs continue to be closely controlled and monitored regularly by executive
management and cash management is a continuing priority of the Board.
Balance Sheet
· Exploration and evaluation assets at 30 June 2025 were US$56.5
million (30 June 2024: US$52.2 million) reflecting the Company's ongoing
investment into the Paradox project.
· Property and equipment assets at 30 June 2025 were US$21.3 million
(30 June 2024: US$45.8 million) which reflects the Company's ongoing
investment in its non-operated portfolio of oil and gas properties offset by
non-cash impairment and depletion charges. The Company recognised a non-cash
IAS 36 accounting impairment of US$14.5 million on the non-operated portfolio
at 31 December 2024.
· Cash and cash equivalents at 30 June 2025 were US$5.8 million (30
June 2024: US$1.1 million). In addition, the Company received further gross
cash proceeds of US$7 million (£5.2 million) in July 2025 following the
completion of its fundraise (as outlined below).
· The Company's gross borrowings on 30 June 2025 were US$23.4 million
(30 June 2024: US$29.2 million). During H1 2025 the Company met all its
funding obligations in respect of the outstanding borrowings.
· On 23 September 2025, the Group's debt provider, First International
Bank and Trust ("FIBT") completed its valuation of the Company's non-operated
portfolio which reaffirmed the Group's borrowing base of US$22.1 million.
CORPORATE
· On 25 June 2025, the Company announced that it has raised
approximately US$13.5 million (£9.8 million) (before expenses) through the
placing of 326,666,667 new ordinary shares of 0.1 pence each in the Company
("Ordinary Shares") to new and existing institutional and professional
investors at an issue price of 3 pence per new Ordinary Share (the "issue
price"). In addition, certain Directors, management and their affiliates
subscribed for 23,333,333 new Ordinary Shares at the issue price raising a
further approximately US$0.9 million (£0.7 million) for the Company.
o On 27 June 2025, the Company issued 175,071,902 new Ordinary Shares at a
price of 3 pence per new Ordinary Share, raising gross proceeds of
approximately US$7.2 million (£5.3 million).
o The remaining 174,928,098 new Ordinary Shares (including those subscribed
for by Directors, management and their affiliates) were issued by the Company
on 15 July 2025 at a price of 3 pence per new Ordinary Share, raising gross
proceeds of approximately US$7 million (£5.2 million).
OUTLOOK
The Board looks forward the to the coming months with confidence and
excitement as the Company continues in its quest to open-up the next prolific
oil and gas basin in the U.S. It is anticipated that there will be
considerable news flow as Zephyr progresses to the next phase in its
development.
I would like to extend my appreciation to the Zephyr team and our contractors
for their ongoing work, and I would also like to extend my gratitude to my
fellow Board members, leadership team, advisors and most importantly, our
shareholders for their continued support.
We have an exciting period ahead of us, and I believe, more than ever, that we
have the pieces in place to enable us to successfully achieve our strategic
objectives.
Colin
Harrington
Chief Executive
Officer
30 September 2025
ZEPHYR ENERGY PLC
CONDENSED CONSOLIDATED INCOME STATEMENT
For the six months ended 30 June 2025
Unaudited Unaudited Audited
six months six months year ended
ended 30 June ended 30 June 31 December
2025 2024 2024
Notes US$'000 US$'000 US$'000
Revenue 6,255 13,591 24,279
Operating and transportation expenses (2,685) (2,622) (5,809)
Production taxes (477) (1,110) (2,046)
Depreciation, depletion and amortisation (6,016) (5,364) (9,241)
Gain/(loss) on derivative contracts 3 215 (101) 14
Gross (loss)/profit (2,708) 4,394 7,197
Administrative expenses (2,919) (2,897) (5,976)
Allowance for expected credit losses - - (1,226)
Impairment of property and equipment - - (14,541)
Share-based payments (243) (3,157) (3,129)
Foreign exchange (losses)/gains (5,803) 360 1,007
Finance income 3 1 2
Finance costs (1,338) (1,764) (3,303)
Loss on ordinary activities before taxation (13,008) (3,063) (19,969)
Taxation credit - 51 395
Loss for the period attributable to owners of the parent company
(13,008) (3,012) (19,574)
Loss per Ordinary Share
Basic and diluted, cents per share 4 (0.74) (0.18) (1.13)
ZEPHYR ENERGY PLC
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six months ended 30 June 2025
Unaudited Unaudited Audited
six months six months year ended
ended 30 June ended 30 June 31 December
2025 2024 2024
US$'000 US$'000 US$'000
Loss for the period attributable to owners of the parent company
(13,008) (3,012) (19,574)
Other comprehensive income/(loss)
Items that may be subsequently reclassified to profit or loss
Foreign currency translation differences on foreign operations 5,739 (358) (1,007)
Total comprehensive loss for the period attributable to owners of the parent
company
(7,269) (3,370) (20,581)
ZEPHYR ENERGY PLC
CONDENSED CONSOLIDATED BALANCE SHEET
As at 30 June 2025
Unaudited Unaudited Audited
as at as at as at
30 June 30 June 31 December
2025 2024 2024
Notes US$'000 US$'000 US$'000
Non-current assets
Exploration and evaluation assets 5 56,538 52,189 53,236
Property and equipment 6 21,306 45,790 27,292
77,844 97,979 80,528
Current assets
Trade and other receivables 1,860 11,507 2,676
Cash and cash equivalents 5,814 1,093 10,267
Derivative contracts 97 83 3
7,771 12,683 12,946
Total assets 85,615 110,662 93,474
Current liabilities
Trade and other payables (7,236) (7,576) (4,383)
Advance from joint operator - - (7,394)
Borrowings 7 (20,357) (20,709) (20,933)
Lease liabilities (24) (39) (31)
Derivative contracts - (54) (86)
Provisions (562) - (549)
(28,179) (28,378) (33,376)
Non-current liabilities
Borrowings 7 (3,054) (8,460) (5,384)
Lease liabilities (4) (11) (17)
Deferred tax - (344) (395)
Provisions (3,511) (5,084) (3,560)
(6,569) (13,899) (8,961)
Total liabilities (34,748) (42,277) (42,337)
Net assets 50,867 68,385 51,137
Equity
Share capital 8 42,889 42,648 42,649
Share premium account 81,308 75,292 74,792
Warrant reserve 1,887 1,557 1,887
Share-based payment reserve 5,710 6,489 5,665
Cumulative translation reserves (8,480) (13,570) (14,219)
Accumulated deficit (72,447) (44,031) (59,637)
Equity attributable to owners of the parent company
50,867 68,385 51,137
ZEPHYR ENERGY PLC
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six months ended 30 June 2025 (Unaudited)
Share premium account Share-based payment reserve Cumulative translation reserve
Share capital Warrant reserve Accumulated deficit
Total
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
As at 1 January 2025 42,649 74,792 1,887 5,665 (14,219) (59,637) 51,137
Transactions with owners in their capacity as owners:
Issue of equity shares 240 6,959 - - - - 7,199
Expenses of issue of equity shares - (443) - - - - (443)
Share-based payments - - - 243 - - 243
Transfer to accumulated deficit in respect of expired options (198) 198
- - - - -
Total transactions with owners in their capacity as owners 240 6,516 45 - 198 6,999
-
Loss for the period - - - - - (13,008) (13,008)
Other comprehensive income:
Currency translation differences 5,739 5,739
- - - - -
Total other comprehensive income for the period 5,739 5,739
- - - - -
Total comprehensive loss for the period 5,739 (13,008) (7,269)
- - - -
As at 30 June 2025 42,889 81,308 1,887 5,710 (8,480) (72,447) 50,867
ZEPHYR ENERGY PLC
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2024 (Audited)
Share premium account Share-based payment reserve Cumulative translation reserve
Share capital Warrant reserve Accumulated deficit
Total
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
As at 1 January 2024 42,568 71,735 1,557 3,270 (13,212) (41,217) 64,701
Transactions with owners in their capacity as owners:
Issue of equity shares 81 3,816 - - - - 3,897
Grant of warrants - (49) - 49 - - -
Exercise of warrants - - - (3) - 3 -
Expenses of issue of equity shares
- (380) - 371 - - (9)
Warrant exercise extension
- (330) 330 - - - -
Share-based payments - - - 3,129 - - 3,129
Transfer to accumulated deficit in respect of expired options
- - - (1,151) - 1,151 -
Total transactions with owners in their capacity as owners 81 330 2,395 1,154 7,017
3,057 -
Loss for the year - - - - - (19,574) (19,574)
Other comprehensive loss:
Currency translation differences (1,007) (1,007)
- - - - -
Total other comprehensive loss for the year (1,007) (1,007)
- - - - -
Total comprehensive loss for the year (1,007) (20,581)
- - - - (19,574)
As at 31 December 2024 42,649 74,792 1,887 5,665 (14,219) (59,637) 51,137
ZEPHYR ENERGY PLC
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six months ended 30 June 2024 (Unaudited)
Share premium account Share-based payment reserve Cumulative translation reserve
Share capital Warrant reserve Accumulated deficit
Total
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
As at 1 January 2024 42,568 71,735 3,270 (13,212) (13,212) (41,217) 64,701
Transactions with owners in their capacity as owners:
Issue of equity shares 80 3,817 - - - - 3,897
Expenses of issue of equity shares
- (49) - 49 - - -
Warrant exercise extension
- (211) - 211 - - -
Share-based payments - - - 3,157 - - 3,157
Transfer to accumulated deficit in respect of lapsed options
- - - (88) - 88 -
Transfer to accumulated deficit in respect of expired options
- - - (107) - 107 -
Transfer to accumulated deficit in respect of exercised warrants
- - - (3) - 3 -
Total transactions with owners in their capacity as owners
80 3,557 - 3,219 - 198 7,054
Loss for the period - - - - - (3,012) (3,012)
Other comprehensive loss:
Currency translation differences (358) (358)
- - - - -
Total other comprehensive loss for the period (358) (358)
- - - - -
Total comprehensive loss for the period
- - - - (358) (3,012) (3,370)
As at 30 June 2024 42,648 75,292 1,557 6,489 (13,570) (44,031) 68,385
ZEPHYR ENERGY PLC
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
For the six months ended 30 June 2025
Unaudited Unaudited Audited
six months six months year ended
ended 30 June ended 30 June 31 December
2025 2024 2024
US$'000 US$'000 US$'000
Operating activities
Loss on ordinary activities before taxation (13,008) (3,063) (19,969)
Adjustments for:
Allowance for expected credit losses - - 1,226
Impairment of property and equipment - - 14,541
Finance income (3) (1) (2)
Finance costs 1,338 1,764 3,303
Depreciation and depletion of property and equipment 6,045 5,384 9,292
Share-based payments 243 3,157 3,129
Unrealised foreign exchange losses/(gains) 5,744 (358) (1,006)
Operating cash inflow before movements in working capital 359 6,883 10,514
Decrease/(increase) in trade and other receivables 633 (633) 1,315
Unrealised (gain)/loss on derivative contracts (180) 249 362
Increase/(decrease) in trade and other payables 1,361 (356) 788
Cash generated from operations 2,173 6,143 12,979
Income tax paid - - -
Net cash generated from operating activities 2,173 6,143 12,979
Investing activities
Additions to exploration and evaluation assets (440) (9,525) (12,768)
Additions to oil and gas properties (1,552) (389) (962)
Increase/(decrease) in capital expenditure related payables 2 966 (3,367)
Insurance proceeds received in respect of exploration and evaluation assets
182 4,256 11,420
Grant funds received in respect of exploration and evaluation assets
- - 250
Interest received 3 1 2
Net cash used in investing activities (1,805) (4,691) (5,425)
Financing activities
Net proceeds from issue of shares 6,756 10 1
Net (use of advance)/advance from joint operator (7,394) - 7,394
Proceeds from borrowings - 5,600 5,600
Repayment of borrowings (2,970) (7,915) (9,958)
Repayment of lease liabilities (19) (17) (65)
Interest and fees paid on borrowings (1,185) (1,646) (3,868)
Interest paid on leases (3) (2) (2)
Net cash used in financing activities (4,815) (3,970) (898)
Net (decrease)/increase in cash and cash equivalents (4,447) (2,518) 6,656
Cash and cash equivalents at beginning of period 10,267 3,611 3,611
Effect of foreign exchange rate changes (6) - -
Cash and cash equivalents at end of period 5,814 1,093 10,267
ZEPHYR ENERGY PLC
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
For the six months ended 30 June 2025
1. ACCOUNTING POLICIES
Basis of preparation
This report was approved by the Directors on 29 September 2025.
The financial statements have been prepared in accordance with UK-adopted
International Accounting Standard 34 Interim financial reporting and the
Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's
Financial Conduct Authority.
The condensed consolidated interim financial statements are presented in
United States Dollar ("US$"). All amounts have been rounded to the nearest
thousand unless otherwise indicated.
The Company is domiciled and incorporated in England and Wales under the
Companies Act 2006. 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 2024, and with those
expected to be adopted in the Group's financial statements for the year ending
31 December 2025.
Comparative figures for the year ended 31 December 2024 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 is unaudited and 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 2024. 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, 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. DIVIDENDS
The Directors do not recommend the payment of a dividend for the period.
3. GAIN/(LOSS) ON DERIVATIVE CONTRACTS
During the period, the Group entered into hedging transactions to mitigate its
exposure to fluctuations in commodity prices. The net change in these
contracts resulted in a realised net gain of US$0.03 million (30 June 2024:
net gain of US$0.1 million, 31 December 2024: net gain of US$0.4 million) and
an unrealised net gain of US$0.2 million (30 June 2024: net loss of US$0.2
million, 31 December 2024: net loss of US$0.4 million) for the period to 30
June 2025.
4. LOSS PER ORDINARY SHARE
Basic loss per Ordinary Share is calculated by dividing the net loss for the
period by the weighted average number of Ordinary Shares in issue during the
period. Diluted loss per Ordinary Share is calculated by dividing the net loss
for the period by the weighted average number of Ordinary Shares in issue
during the period, adjusted for the dilutive effect of potential Ordinary
Shares arising from the Company's share options and warrants.
The calculation of the basic and diluted loss per Ordinary Share is based on
the following data:
Unaudited Unaudited Audited
six months six months year ended
ended 30 June ended 30 June 31 December
2025 2024 2024
US$'000 US$'000 US$'000
Losses
Losses for the purpose of basic and diluted loss per Ordinary Share being net
loss for the period
(13,008) (3,012) (19,574)
Number Number Number
'000 '000 '000
Number of shares
Weighted average number of shares for the purpose of basic and diluted loss
per Ordinary Share
1,754,588 1,705,299 1,728,196
Loss per Ordinary Share
Basic and diluted, cents per share (0.74) (0.18) (1.13)
Due to the losses incurred in the periods reported there is no dilutive effect
from the existing share options or warrants.
5. EXPLORATION AND EVALUATION ASSETS
US$'000
Cost
At 1 January 2024 49,941
Additions 12,768
Decommissioning - change in estimates (472)
Insurance proceeds (8,751)
Grant funds (250)
At 31 December 2024 53,236
Additions 3,385
Decommissioning - change in estimates (83)
At 30 June 2025 56,538
Carrying amount
At 30 June 2025 56,538
At 31 December 2024 53,236
STATE 36-2R WELL JOINT OPERATION
On 17 December 2024, the Group entered into an agreement with a U.S. based
industry investor to fund all expected drilling, completion and operating
costs of the State 36-2R well.
Under the terms of the agreement, the advance from the investor of US$7.5
million was fully utilised for the lateral extension of the well during the
period to 30 June 2025.
6. PROPERTY AND EQUIPMENT
Oil and gas properties Office equipment Right-of-use assets
US$'000 US$'000 US$'000 Total
US$'000
Cost
At 1 January 2024 74,359 25 77 74,461
Additions 1,336 - 43 1,379
Disposals (612) - - (612)
Decommissioning - change in estimates (715) - - (715)
Exchange differences - - (1) (1)
At 31 December 2024 74,368 25 119 74,512
Additions 111 - - 111
Decommissioning - change in estimates (53) - - (53)
Exchange differences - 2 7 9
At 30 June 2025 74,426 27 126 74,579
Accumulated depreciation, depletion and amortisation
At 1 January 2024 23,579 21 21 23,621
Charge for the period 9,241 2 49 9,292
Disposals (233) - - (233)
Exchange differences - - (1) (1)
At 31 December 2024 32,587 23 69 32,679
Charge for the period 6,016 1 28 6,045
Exchange differences - 2 6 8
At 30 June 2025 38,603 26 103 38,732
Impairment
At 1 January 2024 - - - -
Charge for the period 14,541 - - 14,541
At 31 December 2024 14,541 - - 14,541
Charge for the period - - - -
At 30 June 2025 14,541 - - 14,541
Carrying amount
At 30 June 2025 21,282 1 23 21,306
At 31 December 2024 27,240 2 50 27,292
7. BORROWINGS
Unaudited Unaudited Audited
six months six months year ended
ended 30 June ended 30 June 31 December
2025 2024 2024
US$'000 US$'000 US$'000
Term loans 8,411 14,187 11,317
Revolving credit 15,000 14,981 15,000
23,411 29,168 26,317
Maturity analysis
Less than 6 months 19,160 18,954 4,151
6 months to 1 year 2,550 3,397 19,148
1 year to 2 years 1,709 5,953 3,403
2 years to 5 years 1,709 3,418 2,563
25,128 31,722 29,265
FIRST INTERNATIONAL BANK AND TRUST ("FIBT")
On 16 February 2022, the Group entered into credit facility agreements with
FIBT through its U.S. subsidiaries. Under the terms of the agreements the
Group received a term loan ("first term loan") of US$18 million, and a
12-month revolving credit facility of US$10 million.
FIBT has a lien on the assets of the Group's U.S. subsidiaries, Zephyr Bakken
LLC and Rose Petroleum (Utah) LLC.
Term loans
The first term loan is repayable by 48 monthly instalments and incurs interest
at a rate of 6.74% per annum
On 19 June 2024, the Group entered into a new facility agreement with FIBT.
Under the terms of the agreement, the Group received a new term loan ("second
term loan"), of US$5.6 million. The second term loan is repayable by 48
monthly instalments and carries interest at a fixed rate of 10% per annum.
Revolving credit facility
The revolving credit facility has a standard redetermination every six months.
In October 2023, the repayment term of the revolving credit facility was
extended to 16 October 2024, and the interest charge was adjusted to a
variable rate equal to the Wall Street Prime Rate plus 2.5% subject to a
minimum rate of 6.74% per annum.
In October 2024, the repayment term of the revolving credit facility was
further extended to 16 December 2025, and the interest charge was adjusted to
a fixed rate of 10% per annum.
At 30 June 2025, the Group had drawn US$15 million in respect of the facility.
Under the terms of the FIBT agreements, the credit facilities are subject to a
financial covenant which is a debt service coverage ("DSC") ratio, measured
annually as of 31 December. The Group has always been compliant with the DSC
covenant.
In September 2025, FIBT completed its valuation of the Group's non-operated
portfolio which reaffirmed the Group's current borrowing base.
8. SHARE CAPITAL
Unaudited Unaudited Audited
as at as at as at
30 June 30 June 31 December
2025 2024 2024
Number Number Number
'000 '000 '000
Authorised
Ordinary Shares of 0.1p each 7,779,297 7,779,297 7,779,297
Deferred Shares of 9.9p each 227,753 227,753 227,753
8,007,050 8,007,050 8,007,050
Unaudited Unaudited Audited
as at as at as at
30 June 30 June 31 December
2025 2024 2024
US$'000 US$'000 US$'000
Allotted, issued and fully paid
1,925,790,921 Ordinary Shares of 0.1p each (30 June 2024: 1,750,719,019: 31 2,584 2,343 2,344
December 2024: 1,750,719,019)
227,752,817 Deferred Shares of 9.9p each 40,305 40,305 40,305
42,889 42,648 42,649
The Deferred Shares are not listed on the AIM Market, 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 £0.01 from all
shareholders upon giving not less than 28 days' notice in writing.
ISSUED ORDINARY SHARE CAPITAL
On 9 May 2024, the Company issued 64,045,768 Ordinary Shares of 0.1 pence each
at a price of 4.85 pence per Ordinary Share, in settlement of US$3.88 million
of its outstanding loan facility with SGRI. See note 7.
On 16 May 2024, the Company issued 171,429 Ordinary Shares of 0.1 pence each
in respect of the exercise of warrants, at a price of 4.375 pence per Ordinary
Share, raising gross proceeds of US$9,506 (£7,500).
On 27 June 2025, the Company issued 175,071,902 Ordinary Shares of 0.1 pence
each at a price of 3 pence per Ordinary Share, raising gross proceeds of
US$7.2 million (£5.3 million).
Ordinary Deferred Shares
Shares Number
Number '000
'000
At 1 January 2024 1,686,502 227,753
Allotment of shares 64,217 -
At 31 December 2024 1,750,719 227,753
Allotment of shares 175,072 -
At 30 June 2025 1,925,791 227,753
9. POST BALANCE SHEET EVENTS
All matters relating to events occurring since the period end are reported in
the review of activities.
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