Zephyr Energy plc (LON:ZPHR), the Rocky Mountain oil and gas company focused on responsible resource development from carbon-neutral operations, will hold its Annual General Meeting at 10am BST today, at the offices of Zephyr Energy plc, First Floor, Newmarket House, Market Street, Newbury, Berkshire, RG14 5DP.
Ahead of the AGM today, Rick Grant, Zephyr’s Non-Executive Chairman, has made the following statement:
“The past year has been a period of substantial growth for Zephyr which has seen the Company transform into a carbon neutral, cash generative, self-sustaining oil production company with a balanced portfolio of both operated and non-operated assets located in two established oil producing basins in the U.S.
We continue to make sustained progress on our stated mission – to open up the next prolific onshore U.S. oil and gas play. To this end, we have added value through initial drilling success at our flagship operated Paradox project in Utah, U.S., culminating in defining the first project reserves and significantly increasing both the contingent and prospective resources, while simultaneously highlighting the scale and future production potential of the project. We aim to materially increase the project reserves when we target undertaking extended production testing from our State 16-2LN-CC well by the end of September 2022 and through our three well drilling programme which is expected to commence in the second half of 2022 and for which detailed planning has long been underway.
In addition to our operated Paradox project, we are producing significant levels of cash flow from our non-operated Williston Basin assets in North Dakota, U.S. (“Williston project”). First quarter 2022 (“Q1”) revenues from the portfolio totalled US$11.5m, generated from an average of 1,600 barrels of oil equivalent per day, net to Zephyr, at an average sales price for the oil of US$90.11 per barrel. Q1 operating cash flow (net of royalty, tax and operating expenditure) was US$9.8 million, which demonstrates the high profit margin realised from the hydrocarbons sold during the period. Today, we reiterate our previous full-year 2022 revenue forecast of US$35-40 million, which is based on a forecast production range of 500,000 – 550,000 barrels of oil equivalent for the year. We also continue to evaluate opportunistic acquisitions to further grow our production portfolio during 2022 and beyond.
Importantly, even through this period of significant production and cashflow growth, the Company will always strive to operate within our core values of being responsible stewards of both our investors’ capital and of the environment in which we operate. We believe that we are ideally positioned to deliver on our stated strategy and we look forward to keeping the market updated as the Paradox drilling programme commences, alongside other milestones.
On behalf of the Board, I would like to thank everyone within Zephyr for their unswerving hard work and commitment during this transformational period. I would also like to extend my heartfelt gratitude to our Shareholders and advisers for their continued support.
Due to the achievements of 2021, we look to the future with a high degree of confidence and excitement as we continue our pursuit of building a group of which all our stakeholders can be proud.”
Williston production and sales update
Zephyr Energy expects to update the market on second quarter 2022 production and sales volumes from its Williston non-operated portfolio in early August 2022. Going forward, and given the timing of the provision of production and sales data to Zephyr from the well operators, the Company intends to provide quarterly updates on its non-operated portfolio performance with updates published within 45 days of the relevant quarter end.
