Zephyr Energy says it is fully funded to drill State 16-2 well following oversubscribed placing
Zephyr Energy PLC (LON:ZPHR) has unveiled the results of an oversubscribed share placing that it said will fully finance its maximum funding obligations for drilling the State 16-2 dual-use well at its acreage in the Paradox Basin in Utah.
The AIM-listed oil & gas firm said the placing of around 409mln new shares at a price of 0.55p each, a 24% discount to its Thursday closing price, has raised £2.25mln and has been conducted with a range of new, existing and institutional investors.
Of the funds raised in the placing, around £1.15mln is conditional on the approval by shareholders of resolutions to provide authority to the directors to issue and allot further new ordinary shares on a non-pre-emptive basis at a general meeting to be convened by the company.
Aside from funding the spudding of the State 16-2 well, the firm said the proceeds from the placing will also be used for future lateral drilling on the Paradox project, as well as the funding of potential acquisitions as a time where there are “significant opportunities arising in the Rocky Mountain region of the US upstream oil and gas markets”.
“With the funding now secured, the company remains on track to spud the well before the end of the year. We expect the processing and interpretation of the data acquired to take place early in the New Year, following which we hope to be in a position to commence commercial drilling operations utilising the 16-2 wellbore shortly thereafter”, Zephyr chief executive Colin Harrington said in a statement.
“The board believes that the spudding of the 16-2 well will be the catalyst to finally unlock the significant potential of the company’s Paradox asset”, he added.
Zephyr shares were 10.4% lower at 0.65p in early deals on Friday, an 18% premium to the placing price.