Turner Pope Research Note, 30 December 2025
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| Rounding off a highly active 2025, Zephyr has released a year-end update covering both its operated and non-operated activities, its strategic partnership and revolving credit facility. Q3 2025 production from the Group’s non-operated asset portfolio increased substantially, averaging 925 barrels of oil equivalent per day (‘boepd’), net to Zephyr, versus average net production in Q2 2025 of 632 boepd. This increase demonstrates the positive impact of the US$7.3m acquisition of accretive production assets announced on 26 August 2025 (the ‘Acquisition’), offset by standard decline of the existing non-operated portfolio. The Group has also confirmed an extension to the initial six-month term of the strategic partnership with a US-based capital provider (the ‘Investor’) announced on 13 May 2025, making up to US$100m available to fund 100% of capital expenditures related to the drilling, completing and equipping of new non-operated wells within the Williston Basin. In tandem with this, Zephyrs’ senior lender has renewed the term of the Group’s US$15.15m revolving credit facility through to 16 December 2026. The Paradox Project data room meanwhile continues to generate a high level of interest from large national and regional oil & gas companies. Multiple proposals have already been received with more likely to follow. The Board vigorously pursues all approaches in expectation of securing a potential farm-in/joint-venture partner(s) capable of supporting projected funding needs, including value creation and accelerated drilling programmes to maximise value for shareholders. Based on this, 2026 looks set to deliver Zephyr’s next significant phase of growth. We would draw your attention to the various disclaimers in the document both at the beginning and at the end of the note. Retail clients (as defined by the rules of the FCA) must not rely on the research document. In particular you should note that the research document is a non-independent marketing communication. The analyst who has prepared the research is aware that TPI provides research to Zephyr Energy plc. Accordingly the research has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibitions on dealing ahead of its dissemination. The information in the document is published solely for information purposes and is not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. The material contained in the document is general information intended for recipients who understand the risks associated with equity investment in smaller companies. It does not constitute a personal recommendation as defined by the FCA or take into account the particular investment objectives, financial situation or needs of individual investors nor provide any indication as to whether an investment, a course of action or the associated risks are suitable for the recipient. |