Prior to publication, the information contained within this announcement was deemed by the Company to constitute inside information as stipulated under the UK Market Abuse Regulation. With the publication of this announcement, this information is now considered to be in the public domain.

14 February 2024

Zephyr Energy plc

("Zephyr" or the "Company")

Approval of State 36-2R Well Drilling Permit Sundry Notice

Zephyr Energy plc (AIM: ZPHR) (OTCQB: ZPHRF), the Rocky Mountain oil and gas company focused on responsible resource development from carbon-neutral operations, is pleased to announce that it has received state and federal Sundry Notice approvals for the amendment of the drilling permit related to the forthcoming "twinned" redrill of the State 36-2 well (the "State 36-2R well"). These are the final regulatory approvals required for the Company to spud the State 36-2R well on its project in the Paradox Basin, Utah, U.S.

Zephyr will now move to execute a rig contract and will update the market on the expected timeline for the spud of the State 36-2R well upon award of the contract.  Bid processes for other major services are also underway.

The State 36-2R well's main objective is to target the same Cane Creek reservoir natural fracture network which was successfully intersected by the State 36-2 well last year. The Company expects to recover substantially all State 36-2R well drilling costs under the well control insurance policy that it has in place for the State 36-2 well.

Colin Harrington, Zephyr's Chief Executive, said: 

"We are pleased to have cleared the final regulatory hurdles for the spud of the State 36-2R well and look forward to next steps, including the execution of a rig contract and mobilisation of operations to the site. 

"This is a time of significant activity for the Company with the potential to generate substantial new value for Shareholders, and we plan to provide regular updates over the coming weeks and months as operations progress."

Contacts:

Notes to Editors

Zephyr Energy plc (AIM: ZPHR) (OTCQB: ZPHRF) is a technology-led oil and gas company focused on responsible resource development from carbon-neutral operations in the Rocky Mountain region of the United States. The Company's mission is rooted in two core values: to be responsible stewards of its investors' capital, and to be responsible stewards of the environment in which it works.

Zephyr's flagship asset is an operated lease holding of over 46,000 gross acres located in the Paradox Basin, Utah, 25,000 acres of which has been assessed to hold, net to Zephyr, 2P reserves of 2.6 million barrels of oil equivalent ("mmboe"), 2C resources of 34 mmboe and 2U resources 270 mmboe.

In addition to its operated assets, the Company owns working interests in a broad portfolio of non-operated producing wells across the Williston Basin in North Dakota and Montana. Cash flow from the Williston production will be used to fund the planned Paradox Basin development. In addition, the Board will consider further opportunistic value-accretive acquisitions.