Zephyr Energy, the Rocky Mountain oil and gas company focused on responsible resource development from carbon-neutral operations, today provides updates on its non-operated asset portfolio in the Williston Basin, North Dakota, U.S. and on its associated borrowings.

Slawson wells commence production

In December 2022, the Company announced that it had acquired a working-interest in six recently spudded wells (the "Wells") operated by Slawson Exploration Company. The working interests acquired range from 11% to 32% and Zephyr's management estimated the Wells to contain 2P reserves, net to Zephyr, of circa 550,000 barrels of oil equivalent.

Following the recent completion of the associated production facilities, the Company is pleased to announce that is has been notified by Slawson that the Wells are scheduled to be brought online today, 1 November 2023.

The Wells will provide a significant near-term production boost and are expected to generate substantial cashflows for the Company which can be reinvested into the development of its project in the Paradox Basin, Utah, U.S. (the "Paradox project") or into additional non-operated investment opportunities.

Updates on the Wells will be provided in the Company's third quarter 2023 Williston Basin update, which is expected to be announced in mid-November 2023, by which time the Company is expected to have around two weeks of production data.

Semi-annual debt redetermination

Zephyr further announces a successful outcome to the semi-annual redetermination of the Company's revolving credit facility ("RCF"), carried out by the Company's senior lender, North-Dakota based First International Bank and Trust ("FIBT").

The redetermination process confirmed the existing amounts available under the RCF, with the borrowing base remaining at US$13 million, the level at which it is currently drawn. In addition to the RCF, at 31 October 2023, Zephyr had an additional US$11.7 million of outstanding borrowings on its amortising senior bank term loan with FIBT (versus US$15.8 million at 31 October 2022).

No value was ascribed to the new Slawson production during the redetermination process (due to production not commencing during the FIBT evaluation period), but Zephyr does expect that the newly commenced Slawson production will allow for a significantly enhanced borrowing base once production is established.

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