Zephyr Energy PLC (AIM:ZPHR, OTCQB:ZPHRF, FRA:VD5N) told investors it has lined up non-dilutive financing for up to US$15 million to help fund its Paradox Basin oil and gas project in Utah,
The AIM-listed company signed a non-binding letter of intent with Atlas Oil Company covering a prepaid commodity purchase agreement. It won't involve issuing shares or selling project-level working interest, the company noted.
The funding would be used for infrastructure construction, workovers at the State 36-2R wells and other existing wells, and potentially larger gas-processing facilities.
Atlas would receive exclusive rights to market, purchase and sell hydrocarbons produced from an agreed area for a specified period. It would be repaid solely from future production proceeds, with the financing not contingent on the timing of first gas.
Chief executive Colin Harrington said the proposal demonstrated “strong confidence” in Paradox from a longstanding industry partner.
Zephyr said the arrangement could support its continuing farm-out process or allow it to develop the project independently at a larger initial scale.
