Zephyr Energy Plc (AIM: ZPHR): Equity raise for Rocky Mountain acquisition and working capital to Paradox first production
• Zephyr has raised £10.5 mm of new equity at £0.03 per share. The proceeds of the raise will fund (1) a £5.4 mm acquisition of 0.6 mmboe 2P and ~400 boe/d net production in the Rocky Mountains and (2) working capital and capex through to first production at its flagship Paradox Basin development.• The acquisition includes working interests in a portfolio of over 400 wells, with 21 to be operated by Zephyr. It also brings near-term PUD upside across 20,000+ acres, including 17 drilled but uncompleted wells nearing completion and 13 new wells scheduled for near-term drilling. The transaction enables access to a recently announced US$100 mm funding agreement with a US private equity group, which may fund the drilling programme.
• With a strengthened balance sheet, Zephyr will be better positioned to monetize initial Paradox gas output via local pipeline infrastructure or direct CNG offtake to nearby data centre and crypto-mining operators.
• We have changed our target price to £0.15 per share in line with our new ReNAV to reflect (1) the equity issue (2) the acquisition and (3) the appreciation of £ vs. US$ since 1Q25. This valuation excludes the potential upside from new Rocky Mountains drilling and potential Paradox resources beyond the current 3D seismic coverage (~50% of the acreage) and the Cane Creek reservoir, above which lie eight analogous horizons.
Upcoming newsflow in the Paradox
An updated CPR report is expected in early 4Q25, with a material resource upgrade anticipated. Zephyr estimates 0.8–1.0 tcf of gas in place in the Cane Creek within the area covered by existing 3D seismic. First gas (~5 mmcf/d gross) is targeted for 1H26—marking a key milestone that will elevate the asset's profile and support ongoing negotiations with multiple prospective farm-in partners to unlock full development potential.
Valuation
Our Core NAV is £0.04 per share with a ReNAV of £0.15 per share. Our total unrisked NAV, including the shallower reservoir overlying the Cane Creek in the Paradox, is ~£0.81/sh.
Rose Petroleum is an oil and gas (O&G) and mining company with exploration assets and an operational crushing and flotation mill. Co.'s principal activities are the exploration and development of O&G resources together with the evaluation and acquisition of other mineral exploration targets, principally gold, silver, uranium and copper, and the development and operation of mines in Mexico. In Co.'s O&G division, the area of focus is on two unconventional oil and gas basins in the U.S.: the Uinta Basin and the Paradox Basin. In its mining division, Co. continues its milling operations through its subsidiary, Minerales VANE S.A. de C.V., which owns the SDA Mill in Mexico.
Auctus Advisors is a specialist Equity Capital Markets and Advisory business with a focus in the Energy Sector.
The partners have complementary skill sets, with decades of experience across Equity Capital Markets, Investment Banking and the Energy industry. We have worked at Société Générale, Canaccord Capital, BMO Capital Markets and Schlumberger. Most recently we have worked together for many years at GMP FirstEnergy.
Auctus has been set up at the beginning of a new decade in which we see significant opportunities in the Energy space. Globally, demand for energy is at record levels and continues to grow. Conversely, investment in traditional energy sources has been severely constrained. We believe this imbalance creates opportunities for both companies and investors.
Auctus provides Corporate Broking, Equity Research and Investment Banking services.
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