Zephyr Energy : Turner Pope Research Note, 25th August 2022

Turner Pope Research Note, 25th August 2022

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Zephyr has announced an increase in its operated land position through the acquisition of an additional 1,920 acres (the 'new acreage') in the Paradox Basin, Utah (the 'Paradox'), while also providing an update on its State 16-2LN-CC operations and upcoming Paradox drilling programme. This prime new acreage, which is already located under Zephyr's 3D seismic, not only adds valuable locations and resources, but also secures an immediate opportunity to complete a longer and more effective lateral at the upcoming State 36-2 LNW-CC well. The beneficial impact of the latter is expected to be delivered in terms of the well's production potential and its estimated ultimate recovery. In the meantime, management is focused on recommencing production testing at the State 16-2 LN-CC, for which operational preparations are largely complete with long lead time items well in process. With a planned three well drill programme on the Paradox project expected to commence in 2H 2022, (and with all funding being provided from the Group's Williston Basin non-operated assets), Zephyr appears set for a further period of intense activity in its run-up to 2023. This is likely to be key to the Group moving closer toward its ultimate goal of unlocking the next great unconventional onshore resource play in the US. We would draw your attention to the various disclaimers in the document both at the beginning and at the end of the note. Retail clients (as defined by the rules of the FCA) must not rely on the research document. In particular you should note that the research document is a non-independent marketing communication. The analyst who has prepared the research is aware that TPI provides research to Zephyr Energy plc. Accordingly the research has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibitions on dealing ahead of its dissemination. The information in the document is published solely for information purposes and is not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. The material contained in the document is general information intended for recipients who understand the risks associated with equity investment in smaller companies. It does not constitute a personal recommendation as defined by the FCA or take into account the particular investment objectives, financial situation or needs of individual investors nor provide any indication as to whether an investment, a course of action or the associated risks are suitable for the recipient.

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