Q2 2024 results from the Williston Basin portfolio

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.

14 August 2024

Zephyr Energy plc

("Zephyr" or the "Company")

 Second Quarter 2024 Williston Basin production results:

Fourth consecutive quarter of non-operated production growth

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 results for the quarter ended 30 June 2024 ("Q2") related to hydrocarbon production from its non-operated asset portfolio in the Williston Basin, North Dakota, U.S (the "Williston project").

·    Q2 production averaged 1,226 barrels of oil equivalent per day ("boepd") compared to production in the first quarter of 2024 ("Q1") of 1,151 boepd, an increase of seven per cent quarter on quarter.

o  During Q2, production from the six wells operated by Slawson Exploration Company (the "Slawson wells") continued to be partially impacted by gas export infrastructure constraints.

§ The Slawson wells averaged stable production of approximately 525 boepd during the quarter, with minimal signs of decline due to the constrained status of the wells.

o  Q2 production rates from the remainder of the portfolio were in line with management expectations.

·      At the end of Q2, 231 wells in Zephyr's portfolio were available for production (versus 230 wells at the end of Q1).

·    Net working interests across the Zephyr portfolio currently average 7.1 per cent per well (equivalent to 16.3 net wells).

·    The Company hedged a total of 76,000 barrels of oil over Q2 and for the remainder of the year. 40,500 of these barrels are hedged at a price of US$80.91 per barrel of oil and the remainder have been hedged by way of financial collars which enable the Company to lock-in a minimum price for these barrels. Of the 35,500 financial collars, 26,600 will give the Company a minimum price of US$74 per barrel of oil with the remaining 9,000 guaranteeing a floor price of US$69 per barrel of oil.

·    Now that sufficient production data has been generated by the Slawson wells, Zephyr projects a range of 1,100-1,300 boepd for its 2024 full year non-operated production forecast, an increase from 1,040 boepd in the previous year.

·     The Company's unaudited interim financial statements, which are due to published by the end of September 2024, will contain an update on sales and revenues from the Williston project for the six months ended 30 June 2024 ("H1 2024").

Colin Harrington, Chief Executive of Zephyr, said: "I am delighted to report a fourth consecutive quarter of production growth from the Williston project.  Our non-operated assets continue to deliver strong and robust cash flows, enabling us to cover all corporate costs and advance our operations at the Paradox Basin, Utah, U.S. 

"We look forward to reporting H1 2024 sales, revenues and income figures when our interim statements are published, at which point full non-operated sales information will have been received from our operating partners.

"In the meantime, the second phase of our production test at the State 36-2R well is underway and we look forward to updating the market in due course."

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.