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Highlights:
Successful Redetermination Process: Zephyr Energy PLC has completed its semi-annual redetermination with First International Bank & Trust, reaffirming its $15.15 million revolving credit facility while lowering the interest rate from 11% to 10% per annum.
Reduction in Overall Borrowings: The company has successfully decreased its total borrowings to $27.4 million, down from $30.1 million at the start of 2024.
Positive Production Performance: Zephyr reported net revenue of $13.6 million in the first half of 2024, with a production rate of approximately 1,239 barrels of oil equivalent per day from its non-operated assets.
Zephyr Energy PLC (LSE:ZPHR) has announced the successful completion of its semi-annual redetermination process with its lender, First International Bank & Trust (FIBT), based in North Dakota. This process has reaffirmed the company’s existing revolving credit facility (RCF) of $15.15 million while reducing the facility's interest rate from 11% to 10% per annum.
The company, which generates revenue from around 1,200 barrels per day of non-operated production assets, reported a decrease in its overall borrowings to $27.4 million, down from $30.1 million at the beginning of 2024. In addition to the RCF, Zephyr holds amortizing term loans amounting to $7.2 million and $5.2 million, with interest rates of 6.74% and 10%, respectively. Following these adjustments, the company’s blended interest rate has been reduced to 9.1%, down from 9.5%, leading to anticipated savings of approximately $150,000 in annualized interest costs.
Chief Executive Colin Harrington expressed satisfaction with the results of the redetermination, highlighting the substantial value of Zephyr's non-operated portfolio and the subsequent reduction in its cost of capital. The company’s non-operated assets, characterized as long-lived and high-margin, continue to provide a stable foundation for growth.
In the first half of 2024, Zephyr generated net revenue of $13.6 million, supported by net sales of approximately 1,239 barrels of oil equivalent per day. Notably, recent well test data from the Paradox basin project in Utah indicated flows exceeding 2,100 barrels of oil equivalent per day from one well, prompting plans for a longer lateral section to enhance the well's productivity. Drilling for the extended lateral is scheduled to commence either late in 2024 or early in 2025, subject to rig availability and weather conditions.
