Equity Capital Markets and Advisory Business, Auctus Advisors

Auctus Advisors

Equity Capital Markets and Advisory Business

Auctus Advisors is a specialist Equity Capital Markets and Advisory business with a focus in the Energy Sector. The partners have complementary skill sets, with decades of experience across Equity Capital Markets, Investment Banking and the Energy industry. We have worked at Société Générale, Canaccord Capital, BMO Capital Markets and Schlumberger. Most recently we have worked together for many years at GMP FirstEnergy. Auctus has been set up at the beginning of a new decade in which we see significant opportunities in the Energy space. Globally, demand for energy is at record levels and continues to grow. Conversely, investment in traditional energy sources has been severely constrained. We believe this imbalance creates opportunities for both companies and investors. Auctus provides Corporate Broking, Equity Research and Investment Banking services.

Equity Bottom-Up

<ul>
<li>The FY23 operating cashflow after interests of ~US$9 mm was above our forecasts (US$7 mm) due to change of working capital.</li>
<li>We expected a negative change of working capital given (1) Zephyr had to make advance payments for the remedial of the State 36-2R well ahead of being reimbursed by the insurance and (2) the fact that the proceeds of the production for the Slawson wells were not received until part way through 1H24.</li>
<li>Zephyr’s revolving credit facility (RCF) has been redetermined with an unchanged borrowing base (compared to December 2023) of US$15.15 mm.</li>
</ul>


The FY23 operating cashflow after interests of ~US$9 mm was above our forecasts (US$7 mm) due to change of working capital.
We expected a negative change of working capital given (1) Zephyr had to make advance payments for the remedial of the State 36-2R well ahead of being reimbursed by the insurance and (2) the fact that the proceeds of the production for the Slawson wells were not received until part way through 1H24.
Zephyr’s revolving credit facility (RCF) has been redetermined with an unchanged borrowing base (compared to December 2023) of US$15.15 mm.


Zephyr Energy Plc (AIM: ZPHR): Reducing the cost of debt. Testing at State 36-2R to start imminently

<ul>
<li>The State 36-2R well has reached TD.</li>
<li>The well penetrated a folded and naturally fractured section of the Cane Creek reservoir, encountering drilling mud gas shows of a similar magnitude to the original well.</li>
<li>Pore pressure analysis suggests formation pressures estimated at approximately 9,300 psi (which is broadly consistent with previously drilled offset wells).</li>
</ul>


The State 36-2R well has reached TD.
The well penetrated a folded and naturally fractured section of the Cane Creek reservoir, encountering drilling mud gas shows of a similar magnitude to the original well.
Pore pressure analysis suggests formation pressures estimated at approximately 9,300 psi (which is broadly consistent with previously drilled offset wells).


Zephyr Energy Plc (AIM: ZPHR): Spotless Execution at Twinning of High Impact Well.

<ul>
<li>1Q24 production (excluding NGL) in the Williston was 1,151 boe/d.</li>
<li>This is 140 boe/d above our expectations and ~100 boe/d above 4Q23 production.</li>
<li>Production in March (excluding NGL) had increased to 1,212 boe/d.</li>
</ul>


1Q24 production (excluding NGL) in the Williston was 1,151 boe/d.
This is 140 boe/d above our expectations and ~100 boe/d above 4Q23 production.
Production in March (excluding NGL) had increased to 1,212 boe/d.


Zephyr Energy Plc (AIM: ZPHR): Higher 1Q24 Production than We Anticipated. All Eyes on High Impact Drilling in the Paradox

<ul>
<li>4Q23 production in the Williston was 1,053 boe/d.</li>
<li>This only reflects oil and natural gas production.</li>
<li>Adding our estimates of NGL production (reported in previous periods but not in 4Q23) would lead to ~1,200 boe/d (we forecasted ~1,400 boe/d).</li>
</ul>


4Q23 production in the Williston was 1,053 boe/d.
This only reflects oil and natural gas production.
Adding our estimates of NGL production (reported in previous periods but not in 4Q23) would lead to ~1,200 boe/d (we forecasted ~1,400 boe/d).


Zephyr Energy Plc (AIM: ZPHR): Gearing-up for the return to drilling in the Paradox

<ul><li>• The six Slawson wells in the Williston Basin have delivered an aggregate IP20-30 of 897 boe/d net to Zephyr. • The YE23 run rate from the Williston is expected to be between 1,450 and 1,700 boe/d. • Pending further details on the programme, we currently forecast overall production (net to Zephyr) of 4.6 mboe/d in 4Q24.</li></ul>

• The six Slawson wells in the Williston Basin have delivered an aggregate IP20-30 of 897 boe/d net to Zephyr. • The YE23 run rate from the Williston is expected to be between 1,450 and 1,700 boe/d. • Pending further details on the programme, we currently forecast overall production (net to Zephyr) of 4.6 mboe/d in 4Q24.

Zephyr Energy Plc (AIM: ZPHR): High initial production from Slawson

United Kingdom

Zephyr Energy plc operates as a technology-led exploration and production company. The Company focuses on the delivery of economic returns from developed oil and gas projects in the Rocky Mountain region of the United States.

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Zephyr Energy (ZPHR LN)

Zephyr Energy Plc (AIM: ZPHR): Reducing the cost of debt. Testing at State 36-2R to start imminently

The FY23 operating cashflow after interests of ~US$9 mm was above our forecasts (US$7 mm) due to change of working capital.

Auctus Advisors

Zephyr Energy Plc (AIM: ZPHR): Spotless Execution at Twinning of High Impact Well.

Pore pressure analysis suggests formation pressures estimated at approximately 9,300 psi (which is broadly consistent with previously drilled...

Auctus Advisors

Zephyr Energy Plc (AIM: ZPHR): Higher 1Q24 Production than We Anticipated. All Eyes on High Impact Drilling in the Paradox

1Q24 production (excluding NGL) in the Williston was 1,151 boe/d. This is 140 boe/d above our expectations and ~100 boe/d above 4Q23 production.

Auctus Advisors

Zephyr Energy Plc (AIM: ZPHR): Gearing-up for the return to drilling in the Paradox

Adding our estimates of NGL production (reported in previous periods but not in 4Q23) would lead to ~1,200 boe/d (we forecasted ~1,400 boe/d).

Auctus Advisors

Zephyr Energy Plc (AIM: ZPHR): High initial production from Slawson

• The six Slawson wells in the Williston Basin have delivered an aggregate IP20-30 of 897 boe/d net to Zephyr. • The YE23 run rate from the...

Auctus Advisors

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