WTI (Aug) $64.37 -$4.14, Brent (Aug) $67.14 -$4.34, Diff -2.77 -20c
USNG (July) $3.54-16c, UKNG (July) 82.0p -3.5p, TTF (July) €35.625 -€0.085

Oil price

Peace dawned after a jittery start in which both Iran and Israel had a Presidential wrap over the knuckles for not finishing on time. Oil fell again making over 10 bucks over the two days. 

But NBC put a fly in the ointment by revealing a secret document which said that the raid hadn’t been a success, a dangerous tactic and one which Trump has spent most of the day at the NATO con-flab. 

The key to all this is the IAEA who are apparently scheduled to do some checking, in the meantime provided the battlefield remains quiet, so will the oil market…

And the API stats last night showed a decent crude draw of 4.277m barrels, tonight will be interesting and if so it may be that day to day stuff like inventory stats will be back in the limelight again. 

Zephyr Energy

On 24 June 2025 the Company announced a proposed equity fundraising by way of an accelerated bookbuild. The Board of Zephyr is pleased to announce that the Bookbuild has concluded and that it has conditionally raised gross proceeds of approximately £9.8 million at the Issue Price of 3.0 pence through the Placing of 326,666,667 Placing Shares to new and existing investors.

In addition, certain Directors, management and their affiliates intend to subscribe for 23,333,333 new Ordinary Shares at the Issue Price to raise a further £0.7 million for the Company after publication of the Company’s audited results for the year ended 31 December 2024 by 30 June 2025, subject to the passing of the Resolutions.

The Placing was undertaken on the back of three key recent catalysts for the Company: 

1.     The Company delivered a highly successful production test on the State 36-2R well.  The test achieved a notable, choked-back peak flow rate of 2,848 boe per day with no material drop in bottom hole pressure, and without the use of any fracture stimulation. Detailed test results indicate that the one-mile well’s productivity will rank in the top 6% of all gas wells across the United States’ ‘Lower 48’.  The well also demonstrated elevated liquid yields, and economic estimates appear to be competitive with longer lateral wells in core U.S. basins.  Additional management analysis suggests that future, two-mile laterals on the Paradox project will have an estimated P50 individual well performance of 3.6 million boe per well and internal rates of return in excess of 280% (based on 29 May 2025 prices), significantly higher figures than exist today in core U.S. basins;

2.     A US$100 million commitment from a major U.S.-based oil sector investor (the ‘Investor’) to accelerate growth through the drilling activity in Zephyr’s Williston Basin non-operated asset portfolio.  Pairing Zephyr’s proven track record and deep regional expertise with the Investor’s financial strength, the partnership is designed to increase consolidated cash flow rapidly and deliver attractive returns for all stakeholders; and

3.     A proposed accretive, off-market acquisition that will add an initial 400 boepd net to Zephyr and 600,000 boe of proved developed producing (PDP) reserves to the portfolio. In addition, the Proposed Acquisition offers attractive near-term drilling upside potential suitable for the Investor and accretive to Zephyr.

Colin Harrington, Chief Executive of Zephyr, said: 
“I am delighted to announce the results of the oversubscribed Placing and believe that the Company has now passed an exciting inflection point in its growth and development trajectory.

“Net proceeds from the fundraise will generate immediate accretive production while also providing a path to first cash flow at the Paradox project.  The result, following the highly successful State 36-2R well drilling and production testing operations, puts Zephyr in a position of real strength as we move to formalise dialogue with potential Paradox project infrastructure and industry partners.  Further, it comes at a time when we believe we have “cracked the code” for a highly commercial future development of the Paradox project.

“It is anticipated that there will be considerable news flow as we progress through this exciting period.  Updates are expected to include an updated independent Competent Person’s Report (“CPR”) on the Paradox project, deployment of initial funds from our strategic partnership, updates regarding discussions with industry and financial partners related to the acceleration of future development of the Paradox project, and the finalisation of infrastructure to enable us to secure sustainable production from our Paradox project wells.

“It should be noted that the Company’s primary goal is to deliver production and returns from the Paradox project as quickly as possible. In addition to ongoing discussions with local pipeline and gas processing infrastructure partners, the Company has been approached by multiple parties, including compressed natural gas service companies and data centre / cryptocurrency mining operators, expressing an interest in securing direct, near-term offtake agreements for gas produced by the project.  The Company first considered these early production concepts in 2022 and, cognisant of today’s backdrop, has seen significant renewed interest from third parties related to this approach.  These gas sales alternatives would not require any CAPEX contribution from Zephyr, but could provide for rapid deployment of a near-term gas sales solution – albeit for a portion of gas produced with the remainder ultimately sold via pipeline. Should a data centre / cryptocurrency mining venture come to fruition, the Board would consider the merits of the Company being paid in, and keeping in treasury, Bitcoin and, potentially, other mainstream cryptocurrencies.

“In summary, we are ready to capitalise on the recent progress made across our asset portfolio, and, as always, our Company’s management and Board remains fully aligned with our shareholders. To date, management and affiliates have purchased circa 10% of the Company’s issued share capital, and it is our intention to have meaningful participation in the fundraising.  In light of recent catalysts and particularly given the excellent progress made delivering top-tier well results, management believes that Zephyr offers substantial future upside.  We look forward to participating in this growth alongside all other shareholders.

“I would like to thank our adviser team for the successful execution of the Placing in challenging market conditions, and I speak for the entire Zephyr team in welcoming our new shareholders on board.”

 Zephyr has hit the ground running following the success in the Paradox project and has raised some £9.8m at 3p plus director subscriptions of £0.7m to new and existing investors. 

Following the successful well at the Paradox  which has led to the company to predict production from long lateral wells Zephyr has bought an accretive 400 b/d with 600/- of PDP reserves in the portfolio with near term drilling upside also accretive.

Next stop will be to update the market with regard to discussions with industry and financial partners which it is hoped will accelerate the future development of the Paradox project infrastructure and, as they say themselves ‘enable us to secure sustainable production from our Paradox project wells’.

With a highly effective new means of completing wells through acidisation, Zephyr believes that it has ‘cracked the code’ for the highly commercial future development of the Paradox project, next stop an independent CPR all of which works with the game plan. 

With the production base growing which has been struck on very attractive terms and which will, with the facility, accelerate growth both in the Williston Basin and ultimately in the Paradox Basin. 

Put all this together and Zephyr is in an exceptionally strong position across its increasingly powerful portfolio, one of the best managements in the business is building a legacy which has huge upside. In the Bucket List for a good reason, I’m totally confident of a massive future for Zephyr.

Prospex Energy

Prospex has announced a retail offer via the Winterflood Retail Access Platform (“WRAP”) to raise up to £500,000 (the “WRAP Retail Offer”) through the issue of new ordinary shares of 0.1p each in the capital of the Company (“Ordinary Shares”).  Under the WRAP Retail Offer up to 11,111,111 new Ordinary Shares (the “WRAP Retail Offer Shares”) will be made available at a price of 4.5 pence per share, although this may be increased depending on demand.

In addition to the WRAP Retail Offer and as announced today, 25 June 2025, the Company has also raised £1,031,650 (before expenses) by way of a placing and subscription of 22.925.555 new Ordinary Shares (the “Placing Shares” and “Subscription Shares”). The Placing, which was conducted through a bookbuild process (the “Placing”) and the Subscription (“Subscription”) were at an issue price of 4.5 pence per share (the “Issue Price”). The Issue Price represents a discount of approximately 4.4 per cent. to the mid-market closing price of an Ordinary Share on 24 June 2025 (being the latest practicable date prior to this announcement). The issue price of the WRAP Retail Offer Shares is equal to the Issue Price.

A separate announcement has been made regarding the Placing and Subscription and its terms and sets out the reasons for the Placing and Subscription and use of proceeds.  The proceeds of the WRAP Retail Offer will be utilised in the same way as the proceeds of the Placing and Subscription.

For the avoidance of doubt, the WRAP Retail Offer is not part of the Placing and Subscription. Completion of the WRAP Retail Offer is conditional, inter alia, upon the completion of the Placing and Subscription but completion of the Placing and Subscription is not conditional on the completion of the WRAP Retail Offer.

The WRAP Retail Offer is conditional on the Placing Shares and the Subscription Shares being admitted to trading on the AIM Market of the London Stock Exchange plc (“Admission”). It is anticipated that Admission will become effective and that dealings in the Placing Shares, the Subscription Shares and the WRAP Retail Offer Shares will commence on AIM, at 8 a.m. on 3 July 2025.

WRAP Retail Offer

The Company values its retail shareholder base and believes that it is appropriate to provide its existing retail shareholders in the United Kingdom the opportunity to participate in the WRAP Retail Offer.

Therefore, the Company is making the WRAP Retail Offer open to eligible investors in the United Kingdom, being existing shareholders of Prospex, following release of this announcement and through certain financial intermediaries.

Existing shareholders can contact their broker or wealth manager to participate in the WRAP Retail Offer.

The WRAP Retail Offer is expected to close at 4:30pm on Friday 27 June 2025. Eligible shareholders should note that financial intermediaries may have earlier closing times.

Retail brokers wishing to participate in the WRAP Retail Offer on behalf of existing retail shareholders, should contact wrap@winterflood.com.

To be eligible to participate in the WRAP Retail Offer, applicants must be a customer of a participating intermediary and, prior to the release of this announcement, shareholders in the Company which may include individuals aged 18 years or over, companies and other bodies corporate, partnerships, trusts, associations and other unincorporated organisations. Participating intermediaries may also have further requirements for participation in the retail offer.

There is a minimum subscription of £100 per investor under the WRAP Retail Offer. The terms and conditions on which investors subscribe will be provided by the relevant financial intermediaries including relevant commission or fee charges.

The Company reserves the right to amend the size of the retail offer at its discretion. The Company reserves the right to scale back any order and to reject any application for subscription under the WRAP Retail Offer without giving any reason for such rejection.

It is vital to note that once an application for WRAP Retail Offer Shares has been made and accepted via an intermediary, it cannot be withdrawn.

The New Ordinary Shares will, when issued, be credited as fully paid and will rank pari passu in all respects with existing Ordinary Shares including the right to receive all dividends and other distributions declared, made or paid after their date of issue.

It is a term of the WRAP Retail Offer that the total value of the WRAP Retail Offer Shares available for subscription at the Issue Price does not exceed £500,000, or such size as agreed by the Company.

The WRAP Retail Offer is offered in the United Kingdom under the exemption from the requirement to publish a prospectus in section 86(1)(e) of FSMA. As such, there is no need for publication of a prospectus pursuant to the Prospectus Regulation Rules of the Financial Conduct Authority, or for approval of the same by the Financial Conduct Authority. The WRAP Retail Offer is not being made into any jurisdiction other than the United Kingdom.

No offering document, prospectus or admission document has been or will be prepared or submitted to be approved by the Financial Conduct Authority (or any other authority) in relation to the WRAP Retail Offer, and investors’ commitments will be made solely on the basis of the information contained in this announcement and information that has been published by or on behalf of the Company prior to the date of this announcement by notification to a Regulatory Information Service in accordance with the Financial Conduct Authority’s Disclosure Guidance and Transparency Rules, the Market Abuse Regulation (EU Regulation No. 596/2014) (“MAR”) and MAR as it forms part of United Kingdom law by virtue of the European Union (Withdrawal) Act 2018 (as amended).

Investors should make their own investigations into the merits of an investment in the Company. Nothing in this announcement amounts to a recommendation to invest in the Company or amounts to investment, taxation or legal advice.

It should be noted that a subscription for WRAP Retail Offer Shares and investment in the Company carries a number of risks. Investors should take independent advice from a person experienced in advising on investment in securities such as the WRAP Retail Offer Shares if they are in any doubt.

An investment in the Company will place capital at risk. The value of investments, and any income, can go down as well as up, so investors could get back less than the amount invested.

 Neither past performance nor any forecasts should be considered a reliable indicator of future results.

Diversified Energy Company

Diversified Energy Company PLC (LSE: DEC; NYSE: DEC) (“Diversified,” or “DEC”), a leading publicly traded natural gas and liquids production company, and global investment firm Carlyle (NASDAQ: CG) have today announced a strategic partnership to invest in up to $2 billion in existing proved developed producing (PDP) natural gas and oil assets across the United States.

This exclusive partnership will combine Carlyle’s deep credit and structuring expertise, led by Carlyle’s asset-backed finance (ABF) team, with Diversified’s market-leading operating capabilities and differentiated business model of acquiring and optimizing portfolios of existing long-life oil and gas assets to generate reliable production and consistent cash flow.

The partnership enhances Diversified’s access to capital in an attractive acquisition market. Under the terms of the agreement, Diversified will serve as the operator and servicer of the newly acquired assets. As investments occur, Carlyle intends to pursue opportunities to securitize these assets, seeking to unlock long-term, resilient financing for this critical segment of the nation’s energy infrastructure.

“We are excited to partner with Carlyle, a leader in the asset-backed finance space. This arrangement significantly enhances our ability to pursue and scale strategic acquisitions in what we believe is a highly compelling environment for PDP asset consolidation,” said Rusty Hutson, Jr., CEO of Diversified Energy. “We continue to see a robust pipeline of opportunities and the growing need for operational scale and efficiency. With Carlyle’s support, we are well-positioned to capitalize on these trends while aiming to generate sustainable cash flow and value for our shareholders.”

“Diversified is a leading operator of long-life energy assets and a pioneer in bringing PDP securitizations to institutional markets,” said Akhil Bansal, Head of Asset-Backed Finance at Carlyle. “We are excited to bring institutional capital to high-quality, cash-yielding energy assets that are core to US domestic energy production and energy security. This partnership underscores Carlyle’s ability to originate differentiated investment opportunities through proprietary sourcing channels and seek access to stable, yield-oriented energy exposure.”

As promised yesterday I have had a chance to look at the DEC announcement and contacted the company in order to learn a bit more about this deal and I think I can add a couple of points. Firstly it does appear  that there are plenty of assets around in this market and thus a deal with Carlyle, a leader in the asset backed finance sector will gear up DEC’s operations given that the two are leaders in their own fields. Giving DEC the operational responsibilities and the fact that they will service the assets should lead to a blue chip operation across the board.

And secondly, I feel that it compares favourably with the Oaktree deal where the JV assets provided a future pipeline of known assets which DEC bought out having taken performance fees along the way. The two participants will be able to use their own industry skills to, in a world of the need for operational scale and efficiency which both partners will use and thus ‘generate sustainable cash flow and value for our shareholders’. I continue to believe that this is a cracking deal that DEC shares will continue to outperform and are worthy of a place in the bucket list.

Carlyle Asset-Backed Finance (“Carlyle ABF”) is a group within Carlyle’s Global Credit platform focused on private fixed income and asset-backed investments. The highly experienced team leverages the knowledge, sourcing, structuring, and breadth of the entire Carlyle investment platform to help deliver tailored asset-focused financing solutions to businesses, specialty finance companies, banks, asset managers, and other originators and owners of diversified pools of assets. Carlyle ABF has deployed approximately $8 billion since 2021 and has approximately $9 billion in assets under management as of March 31, 2025.

Original article   l   KeyFacts Energy Industry Directory: Malcy's Blog