Zephyr Energy PLC (AIM:ZPHR, OTCQB:ZPHRF) said it is looking to the future with a high degree of confidence and excitement following the achievements of 2021, which saw it transformed “into a carbon neutral, cash generative, self-sustaining oil production company”.
The AIM-quoted firm, in a statement ahead of today’s AGM, told investors it now has a balanced portfolio of both operated and non-operated assets in two established oil producing basins in the United States.
“We continue to make sustained progress on our stated mission - to open up the next prolific onshore US oil and gas play,” non-executive chair Rick Grant said in the statement.
“To this end, we have added value through initial drilling success at our flagship operated Paradox project in Utah culminating in defining the first project reserves and significantly increasing both the contingent and prospective resources, while simultaneously highlighting the scale and future production potential of the project.”
Zephyr intends to materially increase reserves at Paradox, through a planned extended well test at the State 16-2LN-CC well (slated by September) and a subsequent three-well drill programme (due in the second half of the year).
"We are producing significant levels of cash flow from our non-operated Williston Basin assets in North Dakota," Grant added.
“First quarter 2022 revenues from the portfolio totalled US$11.5mln, generated from an average of 1,600 barrels of oil equivalent per day, net to Zephyr, at an average sales price for the oil of US$90.11 per barrel.
“Q1 operating cash flow (net of royalty, tax and operating expenditure) was US$9.8mln, which demonstrates the high profit margin realised from the hydrocarbons sold during the period.”
Zephyr repeated guidance for the non-operated portfolio which is expected to deliver between US$35mln to US$40mln of revenue for the full 2022 financial year, based on an aggregate production of 500,000 to 550,000 barrels.
At the same time, Grant said the company would continue to evaluate opportunistic acquisitions to further grow the portfolio.
The company noted that going forward it intends to update the market on its non-operated portfolio on a quarterly basis.
Zephyr’s AGM takes place at its offices – in Newbury, Berkshire, - at 10am today.