TIDMZPHR
RNS Number : 6349V
Zephyr Energy PLC
11 August 2022
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.
11 August 2022
Zephyr Energy plc
("Zephyr" or the "Company")
Second Quarter 2022 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 second
quarter 2022 ("Q2") results related to hydrocarbon production and
cashflows from its non-operated asset portfolio in the Williston
Basin, North Dakota, U.S.
Q2 2022 Williston Basin Highlights
-- Quarterly revenues totalled US$14.3 million net to Zephyr, up
from US$11.5 million in the first quarter of 2022 ("Q1") and a
16-fold increase from US$0.9 million reported in Q2 2021.
-- Quarterly operating income was US$10.1 million (after taxes,
lease operating expenses, hedging impacts, and gathering and
marketing fees).
-- Q2 sales volumes averaged circa 1,856 barrels of oil
equivalent per day ("boepd") , an increase from circa 1,600 boepd
in Q1 2022 and from 148 boepd in Q2 2021.
o Q2 revenue was positively impacted by deferred payments for
production on newly completed wells generated in earlier months but
received in Q2.
o Q2 wellhead production averaged circa 1,400 boepd, net to
Zephyr, in line with management expectations and marginally
impacted by temporary shut-ins due to planned "frac-protect"
procedures on existing wells while new nearby wells were
completed.
-- At the end of Q2, 195 wells in the portfolio were available
for production, including 10 wells which came online during the
quarter.
o An estimated 30 additional wells in which Zephyr will have
working interests are forecast to be brought on production by the
end of 2022, which will help to decrease standard portfolio decline
rates.
-- Net working interests across the Williston Basin non-operated
portfolio now average 7.1%, equivalent to 15 gross wells, all of
which utilised horizontal drilling and modern, hydraulically
stimulated completions.
-- Zephyr reiterates its previously released 2022 production and
revenue guidance of an expected US$35-40 million in non-operated
revenue, net to Zephyr, for FY 2022 based on a forecast production
range of 500,000 to 550,000 barrels of oil equivalent ("boe") for
the year.
Q2 Sales Detail
During the second quarter of 2022, the Company reported net
sales of approximately 168,880 boe. Product mix for Q2 was 73%
crude oil, 15% natural gas, and 12% natural gas liquids. The table
below provides sales volumes, product mix, and average sales prices
for the quarter:
Oil: 123,233 barrels ("bbls") at an average sales price of
US$99.84/bbl
Natural Gas: 149,860 thousand cubic feet ("mcf") at an average
sales price of US$6.69 /mcf
Natural Gas Liquids: 20,671 bbls at an average sales price of US$50.40 per bbl
( Note: Second quarter production volumes and average sales
prices figures include field estimates in respect of June 2022
natural gas and natural gas liquids sales volumes and are subject
to future revision.)
During Q2, a number of Zephyr's existing production wells were
temporarily shut-in due to "frac-protect" procedures while new
nearby wells were stimulated and completed. As new infill wells are
drilled, existing offset wells may be temporarily shut in to
optimise the nearby completion and mitigate offset well production
losses. Offset wells are then re-instated for production when the
new infill wells are started up for production.
Q2 sales volumes of 168,880 boe include approximately 41,480 boe
produced prior to Q2 but for which payments were received during
the quarter. 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 in Q3 2022 given the
Company's interests in 10 newly drilled wells which came online
during Q2.
Williston Basin production outlook
30 additional producing wells from Zephyr's existing portfolio
are expected to be brought online during the next six months, which
will partially mitigate decline rates typical of Williston Basin
production.
The Company has hedged just under half of its forecast
non-operated production over the next 21 months. Using an average
hedged production price of US$96.28 for the remainder of the 2022
calendar year and using US$90 flat for the remainder of its
anticipated production, the Company reiterates its forecast of an
expected US$35-40 million in non-operated revenue, net to Zephyr,
for FY 2022 based on forecast production range of 500,000 to
550,000 boe for the year.
Colin Harrington, Chief Executive of Zephyr, said : "In the 15
months since we announced Zephyr's first non-operated acquisition
in the Williston Basin, I've been delighted with the growth and
strong cash flows generated from that part of our portfolio. Having
completed six discrete acquisitions, our non-operated asset base is
a now diverse mix of 195 low-risk, high margin producing wells
operated by some of the strongest companies in the Williston Basin.
With a further 30 wells expected to come online over the next six
months, the platform is demonstrating its capacity for future
organic growth.
"This highly attractive portfolio is delivering substantial
cashflows which will fuel the ongoing development of our flagship
Paradox project, and potentially facilitate further opportunistic
portfolio acquisitions.
"It's an exciting time for Zephyr and we look forward to keeping
Shareholders regularly updated on progress in the coming weeks. In
particular, we look forward to commencing the upcoming drilling
programme on the Paradox project. With internal development
potential fully funded from our existing asset portfolio, we plan
on significant further growth over the next twelve months."
Contacts:
Zephyr Energy plc Tel: +44 (0)20 7225
Colin Harrington (CEO) 4590
Chris Eadie (CFO)
Allenby Capital Limited - AIM Nominated Tel: +44 (0)20 3328
Adviser 5656
Jeremy Porter / Liz Kirchner / Vivek
Bhardwaj
Turner Pope Investments - Broker Tel: +44 (0)20 3657
James Pope / Andy Thacker 0050
Celicourt Communications
Mark Antelme / Felicity Winkles Tel: +44 (0) 20 8434
2643
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.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
IR SFAESSEESEIA
(END) Dow Jones Newswires
August 11, 2022 02:00 ET (06:00 GMT)
Zephyr Energy (AQSE:ZPHR.GB)
Historical Stock Chart
From Jun 2024 to Jul 2024
Zephyr Energy (AQSE:ZPHR.GB)
Historical Stock Chart
From Jul 2023 to Jul 2024