REG - Zephyr Energy PLC - Q4 24 Williston Basin results & Paradox update

Zephyr EnergyAnnouncement

11/03/2025 07:15

For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20250311:nRSK0940Aa&default-theme=true

RNS Number : 0940A  Zephyr Energy PLC  11 March 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.

11 March 2025

Zephyr Energy plc

("Zephyr" or the "Company")

 

Fourth Quarter 2024 and FY 2024 results from the Williston project; and

Paradox project update

 

Zephyr Energy plc (AIM: ZPHR) (OTCQB: ZPHRF) is pleased to provide initial
fourth quarter 2024 ("Q4") and full-year 2024 ("FY 2024") results related to
hydrocarbon production from its non-operated asset portfolio in the Williston
Basin, North Dakota and Montana, U.S. (the "Williston project"), and an update
on the Company's flagship project in the Paradox Basin, Utah, U.S. (the
"Paradox project").

 

Williston project results

·    FY 2024 sales volumes averaged 1,149 barrels of oil equivalent per
day ("boepd"), an increase over full-year 2023 ("FY 2023") sales volumes of
1,116 boepd.

o  Total FY 2024 sales were 420,724 barrels of oil equivalent ("boe") of
which 90% comprised crude oil sales, 4% natural gas sales, and 6% from natural
gas liquids sales.

·   FY 2024 revenues from the portfolio are estimated to be, subject to
audit, circa US$24.3 million, versus FY 2023 revenues of US$25.2 million. The
3.6% year-on-year decline in revenues, despite increased sales and production
in FY 2024, was the result of lower commodity prices in FY 2024 compared to
the prior year.

 

·   FY 2024 operating income is estimated to be, subject to audit, US$16.7
million (after production taxes, lease operating expenses, realised hedging
impacts, and gathering and marketing fees), demonstrating the strong
profitability of the portfolio.

 

·    FY 2024 production was 1,052 boepd versus FY 2023 production of 1,040
boepd. The increase in production year-on-year was the result of the Company's
wells operated by Slawson Exploration Company being online for much of FY
2024, offset by the natural decline of the portfolio. FY 2024 production was
4.3% lower than the Company's base forecast range due to the downtime
experienced in the Williston Basin in Q4 (which experienced extreme weather
during the quarter).

o  Q4 production averaged 829 boepd net to Zephyr. Production impacts caused
by the Q4 downtime are expected to be temporary.

 

·    At 31 December 2024, 229 wells in Zephyr's portfolio were available
for production (versus 228 wells at the end of third quarter of 2024).

 

·    Net working interests across the Zephyr portfolio now average 7% per
well (equivalent to 16.0 net wells).

 

·   The Company hedged a total of 27,500 barrels of oil ("bbls") in Q4.
10,500 of these were hedged at a price of US$80.91 per barrel of oil ("bbl")
and the other 17,000 bbls were hedged by way of financial collars with a
weighted average floor price of US$71.35 per bbl and a weighted average
ceiling price of US$84.38 per bbl.

 

Paradox project update

Following the completion of safe and successful drilling operations of the
extended lateral section (the "lateral") at the State 36-2 LNW-CC-R well ("the
well"), the Nabors rig was fully demobilised from site and the drill-pad has
been prepared for the upcoming completion and production testing operations.
Equipment for the completion operation has begun mobilising to site.

The Company is encouraged that 97% of the lateral was drilled in the Cane
Creek reservoir and that elevated mud gas levels with notable peaks were
evident across the length of the lateral.  In addition, data gathered during
the drilling operations has been incorporated into an updated completion plan
in order to determine the optimal number and location of stages to be
perforated along the length of the lateral.

At present, Zephyr plans to perforate 16 stages, using a wellbore perforating
technology developed by Halliburton to generate improved connectivity between
the reservoir and wellbore, prior to treating the well with acid to enhance
near-wellbore formation permeability. As part of the operation, the Company
also plans to deploy a fibre optic cable in the well to gather pressure and
temperature data to assess the production rate of each individual stage during
production testing. This will allow the team to further understand the
production capacity of the reservoir and optimise stimulation techniques for
future operations.  Due to a slightly longer lead time on the fibre optic
cable than originally expected, the Company anticipates completion operations
to commence next week and expects initial production test results to be
available in mid to late April 2025, subject to weather and current vendor
schedules.

Colin Harrington, Chief Executive of Zephyr, said: "2024 was another strong
year for our non-operated Williston portfolio. The historical investment in
the portfolio continues to compound cashflow which enables us to pursue the
significant upside potential of the Paradox project.

 

"I am also very happy with the progress our team has made, in conjunction with
our service partner Halliburton, in designing the upcoming completion for the
State 36-2 LNW-CC-R well.  Activity at site has started, and we look forward
to commencing completion operations shortly, with production testing to follow
immediately thereafter.

 

"We will provide further updates as operations progress."

 

FY 2024 Non-Operated Portfolio Sales Detail

 

Zephyr's net sales for FY 2024 were approximately 420,724 boe.

 

FY 2024 product mix was circa 90% crude oil, 4% natural gas, and 6% natural
gas liquids. The table below provides sales volumes, product mix, and average
sales prices for   FY 2024:

 

Oil:                                   300,006 barrels
("bbls") at an average sales price of US$73.86/bbl*

Natural Gas:                   417,417 thousand cubic feet
("mcf") at an average sales price of US$2.16 /mcf

Natural Gas Liquids:     2,148,239 gallons at an average sales price
of US$0.74 per gallon

 

*Includes hedges realised in the year

 

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

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 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.

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  UPDSFLEESEISEFD