We interviewed Zephyr Energy (LSE:ZPHR) CEO Colin Harrington on news of the £10M share raise from new and existing institutions, the board and other investors.
$3.5M dollars goes to drill and fund the lateral appraisal well at the Paradox Basin, the next step in the work programme there, and Colin emphasised that the Cane Creek well has been as derisked as much as it is possible to be.
A further 8 million dollars goes to purchase five soon to be oil producing wells in the 'Bakken Formation', North Dakota. Most of the money goes on paying back CAPEX on the project, which the previous owner had not been able to pay. In May the first well will begin to produce oil and by the year end the wells will be producing 720 bpd, with a net cost of less than a dollar per barrel of oil.
"We are buying five well bore interests alongside a very good operator in the Bakken Formation, one of the most active operators there," added Colin. "All five wells have been drilled, one is already online and producing, the other four are drilled but not yet completed, they are about to be completed in May."
The Bakken wells were purchased from a distressed seller, are non operational, the operator is good quality and the purchase breaks even after a year. "Its been a transformational time for the company", said Colin. "With the drilling of the lateral and the acquisition, we have got a platform which we can grow significantly on its own resources without having to raise more capital, and we are just anxious to get moving on it."