Zephyr Energy

Zephyr has provided an update on first quarter 2022 hydrocarbon sales from its non-operated asset portfolio in the Williston Basin, North Dakota, U.S.

Williston Basin Sales Update

Q1 sales from the Company’s Williston Basin portfolio averaged circa 1,600 barrels of oil equivalent per day net to Zephyr, up from 548 boepd in Q4 2021.

During the quarter, Zephyr sold 144,540 barrels of oil equivalent, and net sales to Zephyr were as follows:

• Oil: 109,940 barrels at an average sales price of US$90.11 /bbl
• Natural Gas: 114,096 million cubic feet at an average sales price of US$5.40 /mcf
• Natural Gas Liquids: 15,584 bbls at an average sales price of US$64.19 per bbl

(Note: First quarter production volumes and average sales prices figures include field estimates in respect of March 2022 gas and NGL sales volumes.)

At the end of Q1 Zephyr had 185 wells available for production, including seven wells that came online during the quarter.

First quarter revenues totalled US$11.5 million net to Zephyr, and  Q1 average operating expenditure was US$11.87 /boe demonstrating the high profit margin realised from the hydrocarbons sold during the period.

Williston Basin production outlook
16 new producing wells from Zephyr’s existing portfolio are expected to be brought online during the next six months.

The Company has currently hedged just under half of its forecast non-operated production over the next two years.  Using an average hedged production price of US$98 for the remainder of the year and using US$90 flat for the remainder of its anticipated production, the Company forecasts a range of US$35-40 million in revenue from production for FY 2022 from its non-operated portfolio based on forecast production range of 500,000 – 550,000 boe during the year.

As expected Zephyr has already kicked on with production from the Williston Basin and also hedged just under half two years worth of estimated flow. The shares have significant upside from here especially with drilling to come from the Paradox Basin later in the year.

i3 Energy

i3 Energy has announced the following update.

Dividend Increase
i3 is pleased to announce that due to the ongoing exceptional performance of its production assets, positive results from the initial phase of its 2022 development drilling programme, and continuing commodity price strength and the resultant positive impact on our cash flow projections, the Company has decided to increase the minimum dividend to be paid in 2022 by 25% from £11.827mm to £14.784mm. The increase will be implemented by increasing the monthly dividend.

Monthly Dividend

i3 announces its June 2022 dividend totalling £1.6052 million and confirms the following:

• Dividend: 0.1425 pence/share
• Ex-Dividend Date: 19 May 2022
• Record Date: 20 May 2022
• Payment date: 10 Jun 2022

Payment to shareholders holding their shares on the TSX will be made in Canadian dollars using the exchange rate from the Bank of England at close on the Dividend announcement date, 11 May 2022.

This is further good news for i3 shareholders and pretty much to be expected after recent performance. I spoke to the management a while ago and the project looks to be delivering at or greater than expectations. 

Whilst the shares have already done very well since the turn of the year they can still be considered attractive especially when a 25% dividend increase is taken into account. With the Bucket List interim update only six weeks ago i3 must be a serious consideration. 

Harbour Energy

Harbour has provided the following unaudited Trading Update. This is issued ahead of the Company’s Annual General Meeting which is being held today at 10.00 BST.

Highlights

• Q1 production averaged 215 kboepd, up c.35 per cent on Q1 2021; on track to meet full year guidance of 195-210 kboepd
• Q1 operating costs of $14.1/boe; full year guidance unchanged at $15-16/boe
• New wells on-stream at J-Area, AELE and Tolmount (UK); active 2022 rig programme including drilling underway at the Catcher- and J-Areas (UK) and the Andaman II licence (Indonesia)
• Total capex (including decommissioning spend) of c.$160 million for Q1; full year guidance of $1.3 billion unchanged, an increase of c.40 per cent versus 2021 levels reflecting the increase in drilling activity
• Continued progress on Harbour’s UK CCS projects in line with the Group’s goal of Net Zero by 2035
• Net debt reduced to $1.7 billion at 31 March from $2.3 billion at 31 December 2021
• Proposed final dividend of $100 million (8.4505 pence per share) for full year 2021 to be paid on 18 May, subject to shareholder approval

Linda Z Cook, Chief Executive Officer, commented:
“We have had a strong start to the year. Our increased production reflects the addition of the Premier portfolio, improved operating reliability and increased UK drilling activity. The Tolmount field in the UK began production in April and, once plateau levels are reached, the project is expected to increase UK domestic gas production by more than 5 per cent.

We continue to invest in high return, infrastructure-led opportunities within our asset base to sustain production while at the same time generating material free cash flow. This together with our robust balance sheet provides us with significant optionality over future capital allocation.

We are committed to producing oil and gas responsibly. As well as taking action to reduce emissions from our operations, we are very focused on progressing our CCS activities in the UK which include the V Net Zero project in the Humber region and an interest in the Acorn project in Scotland. These projects have the potential to capture and store multiple times Harbour’s annual emissions.”

Most parts of Harbour are ticking over nicely and we are beginning to get an idea of the company’s approach to risk which was a consideration when they started having ditched some exciting projects. Also operationally it looks to be picking up well and the questions about management changes whilst not having totally gone are probably forgotten. More on Harbour when I get a chance to meet them….

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