Zephyr Energy PLC (AIM:ZPHR, OTCQB:ZPHRF) is looking forward to an exciting period as the company continues to make progress in the unlocking of the next prolific onshore US oil and gas play - that’s according to chair Rick Grant.
Grant, in THursday's full-year results for the twelve months ended December 31, highlighted that Zephyr continued to deliver as a cash-generating oil and gas exploration and production group.
Whilst its production comes from non-operated interests in the Williston Basin, in North Dakota, the company’s operational focus is on the Paradox Basin, Utah, where it is presently gearing up to start production testing.
It is here, in Utah, where the company sees level-changing growth opportunities.
"Despite facing a significant operational challenge during the year, we continued to make steady progress in our pursuit of unlocking the next prolific onshore US oil and gas play,” Grant said.
"With a balanced portfolio of non-operated assets and an operated asset with asymmetric growth potential, our strategy is clear.
“Cashflows generated from our non-operated asset portfolio in the Williston Basin, North Dakota, will be recycled and reinvested to develop our flagship operated asset in the Paradox Basin, Utah, to acquire and to develop further non-operated assets, and to cover our corporate costs.
"I was delighted by the recent safe and successful drilling operation on the State 36-2R LNW-CC well and we are looking forward to the results from the forthcoming production test.
Grant added: "We have an exciting period ahead of us and I believe, more than ever, that we have the pieces in place to enable us to deliver on our strategic objectives successfully."
In terms of its financials, driven by the non-operated portfolio, Zephyr reported revenues of $25.2 million, a decrease from $41.1 million in the previous year.
Gross profit for the year stood at $7.2 million, down from $22.4 million in 2022, and it reported a net loss after tax of $3.5 million, compared to a net profit of $19.3 million in the prior year.
Zephyr said the results were ‘largely in line’ with its expectations, reflecting a lower oil price environment during the period, and, a delayed delivery of six wells operated by Slawson Exploration Company (which have since come online but are yet to hit full capacity).
The Williston assets comprised 230 wells, at the end of March, and the company’s working interest in those wells averaged 7.1% per well. The wells currently have a production run-rate of more than 1,200 barrels of oil equivalent per day.
Zephyr is to hold its annual general meeting (AGM) on 31 July in London.