Zephyr Energy PLC (AIM:ZPHR, OTCQB:ZPHRF) has completed its semi-annual redetermination process with its lender, North Dakota-based First International Bank & Trust (FIBT).
It has reaffirmed Zephyr’s existing $15.15 million revolving credit facility (RCF), while also reducing the interest rate on the facility from 11% to 10% per annum.
The company, which generates revenue from around 1,200 barrels per day of non-operated production assets, noted that its overall borrowings now stand at $27.4 million, down from $30.1 million at the start of 2024.
Besides the RCF, Zephyr has $7.2 million and $5.2 million in amortizing term loans at interest rates of 6.74% and 10% respectively.
Zephyr’s blended interest rate is lowered to 9.1%, from 9.5%, which is expected to save the company approximately $150,000 in annualized interest costs.
"I am delighted at the outcome of this semi-annual redetermination which both affirms the substantial value of our non-operated portfolio and further reduces our cost of capital,” chief executive Colin Harrington said.
"Our non-operated assets are long-lived and high-margin and continue to provide a stable platform for our growth.
“I would once again like to thank our partners at FIBT for their strong support of Zephyr."
Zephyr generated $13.6 million of net revenue in the first half of 2024, as its portfolio of non-operated interests in production wells yielded some 1,239 barrels of oil equivalent per day in net sales.
Meanwhile, in its cornerstone Paradox basin project in Utah, recent well test data from one well saw flows in excess of 2,100 boepd – prompting a decision to extend the well’s potential with a longer lateral section.
The company now expects this will be “a large and highly productive well” to demonstrate “the key for the long-term development of the Paradox project”.
Drilling of the extended lateral is expected to start either before the end of 2024 or in early 2025, depending on rig availability and weather conditions.