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.
29 February 2024
Zephyr Energy
plc
("Zephyr" or the
"Company")
Fourth Quarter 2023
production results from the Williston Basin
portfolio
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 initial fourth quarter 2023 ("Q4") results
related to hydrocarbon production from its non-operated asset
portfolio in the Williston Basin, North Dakota, U.S (the "Williston
project").
·
Q4 production averaged 1,053 barrels of oil
equivalent per day ("boepd") compared to production in the third
quarter of 2023 ("Q3") of 983 boepd, representing an increase of 7%
quarter on the quarter.
o Peak daily
production rates of 1,440 boepd were achieved in late November 2023
with the commencement of the initial production from the six wells
operated by Slawson Exploration Company (the "Slawson
wells").
o Production
from the Slawson wells was temporarily curtailed in mid-December
2023 due to adverse weather conditions and infrastructure
constraints. Zephyr has been informed by the operator that
production from the Slawson wells resumed in late January
2024.
o Q4
production rates from the remainder of the portfolio were as
expected.
·
2023 full-year production was only marginally
under forecast (1,040 boepd actual vs 1,150 boepd forecast) despite
the above-mentioned factors impacting the Slawson wells. All other
wells performed in line with management expectations during the
year.
·
2023 full-year revenues from the portfolio are
estimated to be, subject to audit, circa US$26.3m of which it is
expected more than 90% is made up of oil sales.
o Q4
revenues are estimated to be, subject to audit, circa US$6.9m
compared to Q3 revenues of US$6.0m.
· At 31 December 2023, 225 wells in Zephyr's portfolio were
available for production (versus 220 wells at the end of
Q3).
· Net
working interests across the Zephyr portfolio now average 8% per
well (equivalent to 15.1 net wells).
·
During February 2024, ten wells in which Zephyr
holds working interests and which are operated by Continental
Resources (Harms Federal and Quale Federal) were placed in
production. Early production data shows these wells performing
ahead of management expectation, adding initial production rates,
net to Zephyr, of circa 75 boepd.
·
The Company has hedged 27,000 barrels of oil over
the first quarter of 2024 at a weighted-average price
of US$82.20
per barrel. The Company will continue to
evaluate its commodity price risk management strategy on a regular
basis.
Colin Harrington, Chief Executive of Zephyr,
said: "Our non-operated assets
continue to deliver strong and robust cash flows, allowing us to
proceed with the next phase of our Paradox project in the
near-term."
"The initial indications of the
performance of the Slawson wells continue to exceed our estimates
and the wells have the potential to materially increase our 2024
cash flows. Very strong initial performance from the Harms Federal
and Quale Federal wells is also highly encouraging."
"We continue to make good progress
ahead of the commencement of drilling on the Paradox project and
will be providing a further update on this in the coming
days."
Note
Q4 production volumes are based on a
combination of state reported production volumes and field estimate
production reports supplied by certain operators. Both production
data sets are two phase reports (oil and well head gas) as opposed
to sales volume reporting which is three phase and consists of oil,
processed sales gas and NGL volumes. While Zephyr previously
reported three phase sales volumes, going forward the Company will
report two phase production volumes on a quarterly basis and three
phase sales volumes on an annual basis. This change has been
necessitated by the timing of the receipt of sales volume data from
certain operators.
Contacts
Zephyr Energy plc
Colin Harrington (CEO)
Chris Eadie (CFO)
|
Tel:
+44 (0)20 7225 4590
|
Allenby Capital Limited -
AIM Nominated Adviser
Jeremy Porter / Vivek
Bhardwaj
|
Tel:
+44 (0)20 3328 5656
|
Turner Pope Investments -
Joint-Broker
James Pope / Andy
Thacker
Panmure Gordon (UK) Limited - Joint-Broker
Hugh Rich / James
Sinclair-Ford
Celicourt Communications - PR
Mark Antelme / Felicity Winkles /
Ali AlQahtani
|
Tel:
+44 (0)20 3657 0050
Tel: +44
(0) 20 7886 2500
Tel: +44 (0) 20 8434 2643
|
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.