TIDMZPHR
RNS Number : 4639T
Zephyr Energy PLC
15 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.
15 November 2023
Zephyr Energy plc
("Zephyr" or the "Company")
Third Quarter 2023 results from 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 third
quarter 2023 ("Q3") results related to hydrocarbon production and
cashflows from its non-operated asset portfolio in the Williston
Basin, North Dakota, U.S (the "Williston project").
Highlights
-- Q3 revenue was US$6.0 million compared to second quarter 2023
("Q2") revenues of US$7.1 million (subject to audit). Q3 revenues
reflect the standard decline rates expected from the portfolio.
-- Q3 sales volumes averaged 1,043 barrels of oil equivalent per
day ("boepd") compared to Q2 sales volumes average of 1,385 boepd,
in line with management expectations. The average sale price per
barrel of oil equivalent ("boe") was US$64.35 per boe in Q3
compared to US$56.64 per boe in Q2 (not including realised hedging
impacts).
-- Q3 operating income was US$4.3 million (after taxes, lease
operating expenses, realised hedging impacts, and gathering and
marketing fees), compared to Q2 operating income of US$4.2 million
(subject to audit).
-- At 30 September 2023, 220 wells in Zephyr's portfolio were
available for production (versus 223 wells at 30 June 2023).
o Net working-interests across the Zephyr portfolio now average
7% per well, equivalent to 14.7 gross wells in total.
-- As announced on 1 November 2023, production has commenced
from the pad site for six wells in which Zephyr acquired a
working-interest, and which are operated by Slawson Exploration
Company ("Slawson"). These wells are expected to lead to a material
increase in production rates during the fourth quarter of 2023
("Q4") and beyond, and Zephyr intends to update the market on flow
rates after the first thirty days of stabilised production.
Colin Harrington, Chief Executive of Zephyr, said : "Our
non-operated assets continue to deliver strong and robust cash
flows, allowing Zephyr to continue to fund investment and growth
across both our operated and non-operated portfolios.
"Furthermore, I'm pleased that this year's investment in the
Slawson wells is expected to materially boost production rates in
the current quarter, and the resulting cashflows will be utilised
to deliver additional growth as we intensify our operational
activity."
Q3 Sales Detail
Zephyr's net sales for Q3 were approximately 93,186 boe.
Q3 sales product mix was 91% crude oil, 3% natural gas, and 6%
natural gas liquids. The table below provides sales volumes,
product mix, and average sales prices for the quarter:
Oil: 66,889 bbls at an average sales price of US$84.69/bbl*
Natural Gas: 91,778 thousand cubic feet ("mcf") at an average sales price
of US$2.08 /mcf
Natural Gas Liquids: 13,682 bbls at an average sales price of US$26.93 per bbl
*not including hedges
(Note: Q3 volumes and average sales prices figures include field
estimates in respect of September 2023 natural gas and natural gas
liquids sales volumes and are subject to future revision.)
In the Williston Basin, cashflow from non-operated interests in
newly drilled wells may lag actual production by up to five months.
Such payments from the operator accrue on a monthly basis and are
paid in full prior to the sixth month of production, which may
result in impacts to quarterly sales volumes and revenues during
times of significant completion activity. Zephyr expects additional
accrued payments from operators during the remainder of 2023 and
into 2024 given the Company's interests in the six Slawson operated
wells (which came online in November of 2023), and the ten Harms
East Federal / Quale Federal wells which are expected to come
online in December 2023 or January 2024.
The Company has hedged 67,000 barrels of oil over the next six
months at a weighted-average price of US$82.93 per barrel. The
Company will continue to evaluate its commodity price risk
management strategy on a regular basis.
Contacts
Zephyr Energy plc Tel: +44 (0)20 7225 4590
Colin Harrington (CEO)
Chris Eadie (CFO)
Allenby Capital Limited - AIM Nominated Tel: +44 (0)20 3328 5656
Adviser
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 - PR
Mark Antelme / Felicity Winkles / Ali Tel: +44 (0) 20 8434 2643
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
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.
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END
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