Zephyr Energy Plc (AIM: ZPHR): High initial production from Slawson
• The six Slawson wells in the Williston Basin have delivered an aggregate IP20-30 of 897 boe/d net to Zephyr. The wells commenced production over the course of November.• The overall rate is above the company’s expectations.
• The YE23 run rate from the Williston is expected to be between 1,450 and 1,700 boe/d. The range results from decline rates and the exact number of wells in production at the time.
• The new production is expected to contribute to cash flow from 1Q24.
• The redrill of the high impact State 36-2 well continues to be expected to commence in March. The company will then drill the first helium well in Salt Wash that could be spudded just after the 36 2 well is completed.
• This upcoming programme is expected to start derisking the large upside in the Paradox and allow the company to book additional reserves.
• Pending further details on the programme, we currently forecast overall production (net to Zephyr) of 4.6 mboe/d in 4Q24.
• We re-iterate our target price of £0.16 per share.
Forecasts and Valuation
Our ReNAV for Zephyr is unchanged at £0.16/sh. Our unrisked NAV for the 39 mmboe 2C contingent resources in the Cane Creek reservoir targeted by the State 36-2 well is £0.11/sh while our unrisked NAV for the helium contingent plus prospective resources (average of 0.5 bcf) is £0.10 per share.
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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