Zephyr Energy PLC - State 16-2well, business development & '21 outlook
Zephyr Energy plc
(the "Company" or "Zephyr")
Update on State 16-2 well, business development and outlook for 2021
Zephyr Energy plc (AIM: ZPHR), the
State 16-2 well,
· Drilling crews at the State 16-2 well site have been operating around the clock since the December spud, and progress to date is fully in line with the Company's expectations.
· Following the spud of the State 16-2 well, the Company received the third
Business Development activity
· While the safe and successful completion of the State 16-2 well drilling operation is the Company's top priority, the Company's key goal for 2021 is to establish production and positive cash flow, either through our existing portfolio, via acquisition, or through a combination of both. We aim to end 2021 with a balanced asset base, one that contains a mix of current production and substantial long-term development upside.
· Management continues to assess acquisition opportunities with the potential to deliver near-term cash flow at attractive valuations. Potential acquisitions under consideration have the following criteria which meet the Company's strategic profile:
o Oil and gas interests located in the greater
o Current or near-term production potential, in order to balance the significant long-term upside potential provided by the Company's Paradox project;
o Low-risk, low-entry cost assets located in core areas of established, historically prolific basins;
o Ability to generate near-term value from the Company's existing
o Proprietary acquisition angles (via land strategy, relationship, or unique view on upside opportunity).
· Related to the above criteria, we continue to monitor progress on our proposed working interest acquisition in the
"2021 promises to be a very exciting year for the Company, both from the continued development of our Paradox project and with an acceleration of our efforts in the broader acquisition market.
"Any acquisitions made will have to conform to our strict search criteria, most notably the ability to accelerate production and cash flows to the Company. We continue to be excited about the potential
"The goal for Zephyr over the next twelve months is straightforward - we want to transform the Company into a well-capitalised producer of oil and natural gas, with strong positive cash flow and significant growth potential in its asset portfolio, and one which has developed its assets in an environmentally responsible way. The first step on that journey begins with the safe and successful completion the State 16-2 well.
"The coming weeks will be filled with activity, and we look forward to updating Shareholders on our progress."
Zephyr Energy plc
Tel: +44 (0)20 7225 4590
Allenby Capital Limited - AIM Nominated Adviser
Tel: +44 (0)20 3328 5656
Turner Pope Investments - Broker
Flagstaff Strategic and Investor Communications
Tel: +44 (0)20 3657 0050
Tel: +44 (0) 20 7129 1474
Background to the McCoy Acquisition
The Company is now pleased to announce that it has now negotiated a further extension to close the Acquisition, and to exercise its Option until
The Board continues to believe that the McCoy Acquisition would fit well with the Company's stated strategy of targeting low-risk, low-entry cost acquisitions which can deliver near-term production to balance the Group's asset portfolio and would complement the Company's Paradox project in
The Acquisition would provide the Group with low-risk horizontal development drilling exposure in the prolific Niobrara shale play, and on acreage contiguous to other major
The Board views the
The Acquisition would also mark the beginning of a partner relationship with CEH and its operating affiliate Captiva Energy Partners ("CEP"). This partnership would provide further deal flow, access to proven competence and a wealth of experience in the
Due to the economic crises related to coronavirus and the associated downturn in the oil price since the Group signed the
Quick facts: Zephyr Energy PLC
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