Zephyr Energy PLC (AIM:ZPHR, OTCQB:ZPHRF) has brought in a new cornerstone shareholder after SGR Investments executed an equity-for-debt swap, retiring some £3.11 million of loan notes.
It gives SGRI a shareholding of 3.7% - with the investor taking 64 million new shares, priced at 4.85p each, in exchange for the notes.
A residual remainder of loan notes held by SGRI are expected to be refinanced later this month through Zephyr’s existing banking facilities as it concludes a semi-annual redetermination process.
When this banking process is concluded, the company expects its gross debt position will be around $30 million.
“The debt for equity exchange will further strengthen our balance sheet, with no ancillary fees and at no discount to the current market price, while increasing future cash flows for reinvestment into our growing asset portfolio,” chief executive Colin Harrington said in a statement.
“I'm thrilled to welcome SGRI as a cornerstone equity investor as we work to deliver the next phase of Zephyr's growth."
The SGRI loan notes were issued in December 2022 alongside the company’s deal to acquire its producing wells in the Williston Basin – those wells were yielding over 1,000 barrels of oil per day, according to data included in February’s fourth-quarter update.
Drill progress at Paradox project
Zephyr, meanwhile, also highlighted its continuing progress in the field with the drilling of the State 36-2 LNW-CC-R well advancing apace.
The well, spud on 25 April, is now at a depth of around 3,238 feet towards its target depth of 10,362 feet. Once complete, it will include a 270 foot horizontal reservoir section.
Colin Harrington added: “We continue to make good progress on the drilling of the State 36-2R well and remain on track to complete the well within our forecast thirty-day period.”