Zephyr Energy looks to raise £10.0m from placing and subscription

Oil and gas company Zephyr Energy launched a placing and subscription of 500.0m new ordinary shares on Monday as part of an effort to fund an appraisal well and production wells in the Bakken Formation in North Dakota, US.

Zephyr will offer the new shares at a price of 2.0p each, a 2.5% discount to the company's closing price of 2.05p per share on 26 March, with the group looking to raise £10.0m before expenses.

The placing will fully fund Zephyr's $3.5m State 16-2 CC LN appraisal well drilling programme for first production from its Paradox project and will also allow the company to proceed with its proposed acquisition of "highly economic working interests" in currently producing and near-term production wells in the Bakken Formation.

The AIM-listed group stated the funds would also help transform it into a self-sustaining platform for organic growth with a diverse portfolio of production assets in two established USA oil-producing basins.

Chief executive Colin Harrington said: "Today's developments mark a truly ground-breaking moment for the company.

"Following the completion of this ambitious fundraise, Zephyr is poised to transform itself into a well-capitalised, self-sustaining platform with a financial flexibility that will enable the company to pursue - on an independent basis - the significant upside potential which exists in our Paradox project."

As of 0835 GMT, Zephyr shares were up 10.12% at 2.26p.