RE: SGR / 50% State 36-2 wellbore interest8 Jun 2026 12:01
From funding RNS
Further to its announcement on 10 October 2024, in which the Company outlined its intention to drill an extended lateral from the existing wellbore (the "extended lateral"), the Company is pleased to announce that it has now entered into binding documentation to fully-fund all expected drilling, completion and production test costs (the "well costs") (the "funding"). The funding has increased to US$7.5 million, an increase from the initial estimated amount of US$7.0 million, and has been secured from a U.S.-based industry investor (the "wellbore investor") in exchange for a 50% non-operated working-interest in the single well.
There is no issuance of Zephyr's equity or any form of debt as part of the funding, and the wellbore investor will not receive any further interest or option in the Paradox project. In addition, Zephyr has retained a right of first refusal to repurchase the working interest at a discount to fair market value in the event that the wellbore investor chooses to sell its 50% non-operated working-interest in the future.
Going forward, the wellbore investor will cover its pro rata portion of the well's operating and overhead costs, and Zephyr will remain the operator of the well. Net revenues from the well will be split 50:50 between Zephyr and the wellbore investor from the time of first production, with no catch-up period or other preferential rights to the investor.
Under the terms of the funding, the US$7.5 million will be transferred by the wellbore investor to Zephyr in full by 31 December 2024, ahead of the commencement of drilling.