Member Info for Candlestick

Yeah, and with the level of dilution coming there’s going to be a number of TR-1s coming through, all of them looking at first glance like there’s a massive sell-off happening when their % of the total is the only thing that’s changed.

We need to be sure we’re not talking about holders selling out if it’s not actually the case 👍

The RNS states that it is due to “An event changing the breakdown of voting rights”.

They hold the same amount as they did back in 2022.

So they’ve said they’re not able to raise funds (they’ll always be able to, depends on the terms).

They’ve said they’re not able to get a jv (they’ll always be able to depends on the terms)

Which leaves giving back $200m worth of asset.

One of the top two will happen (maybe a combination of the two) because you can bet your life the bottom one won’t! (And if we did give it back, what would happen to the sp?)

Be interesting to see what would happen as Richard Sneller sold all of his shares in SCE the day it was announced 😮

This is what SCE did last week - there’s always ways around it if you look hard enough…

“The Placing will be conducted by way of an accelerated bookbuild ("Bookbuild") which will be launched immediately following this Announcement, in accordance with the terms and conditions set out in the Appendix to this Announcement.

The Firm Placing will be effected by way of a cashbox placing of new Ordinary Shares for non-cash consideration, further details of which are set out below. The cashbox placing structure is being used due to the Issue Price being at a substantial discount, which would otherwise limit the net proceeds receivable by the Company given the existing allotment authorities available to the Board for issuing Ordinary Shares on a non-pre-emptive basis.”

I guess the thing with Options is - if the price tanks, they haven’t lost anything. All that’s happened is they won’t exercise them.

And as the most recent ones are valid for 10 years, they can sit this maelstrom out and wait for the price to rise.

“The total net cash paid to the Pensacola joint venture partner during 2023 for the Pensacola exploration well and post well cost was £12.0 million (2022: £2.1 million).”

They’ve already spent £14.1m on the Pensacola well, there’s no way they’re walking away.

If the Director holdings are indeed so low, there’s nothing to stop them worrying about wiping out SH value.

…and I know what happened to HE1 post-raise, so maybe that is the plan. Lots and lots of short term pain but with a big end result based on 2 big well results?

I’ve read through the RNS a few times now and really don’t get where we are (I mean, I know we’re fooked, but the whole message doesn’t make sense. We’re not able to complete a JV, but we can’t raise funds either. For a project with an NPV of $200m net to Deltic.

I sense we have the mother of all fundraising coming, there’s no way they’ll give back their share. The problem will be the dilution at this level (or lower). If they need to raise the full £15m - and I’d suggest they should or there’ll be another raise on the way - we may be looking at HE1 or SCE levels to get those numbers.

Even if we manage somehow to raise at 18p, that’s 90% dilution.

At 15p it’s 127%

At 12p it’s 184%

At 10p it’s 241%

And a very worst case of 7p it’s almost 400% dilution. I don’t see it that low but SCE SH were diluted by almost 200% - they raised at a discount of 66%, where HE1 raised at a 72% discount. Something close to that would be sub 7p here.

Maybe they are trying to play hardball, but who in their right mind would go down the route of screwing over the shareholder base as they have, just as a tactic 🤷‍♂️

Best of luck.

I’m holding, with the opposite view re Glenn.

It’s worth noting that he has spent over £160k for almost 2.5m shares over the past 3 years, at an average of 15p. He is invested, literally, in getting this turned around.

Despite almost perpetual disappointment for shareholders over the past 2 years, what was in the ground is still in the ground. Chart looking good right now as well.

https://x.com/candlesticks18/status/1778691199794106523?s=46&t=ipW7IMp6GVgCsYSTs_Wd3g

Https://x.com/candlesticks18/status/1777989688323608803?s=46&t=ipW7IMp6GVgCsYSTs_Wd3g

There has to be value here - if they raise at this level, they’re crazy (they own 9% of the company, between Bill, Glenn and Helen Green) 🤷‍♂️

The other option would have seen them exercise them prior to 15/4 which would give us another 32.5m shares possibly being sold now. 🤷‍♂️

Trying to figure out the cash position, this is what I’ve got - be great have some input or discussion on it. Anything missed?

Certainly in a decent position but will need something to happen in order to progress. My hope is that they’ll be able to get a JV in place, or a sale - anything else certainly won’t be to the benefit of shareholders.

https://x.com/candlesticks18/status/1777823122168668574?s=46&t=ipW7IMp6GVgCsYSTs_Wd3g

Petro - assuming this is on the wrong page from you? 😂. Currently flat after a massive 10% increase yesterday, down by 50% on the 3 month chart 😂🤷‍♂️

Looking at your posts, can only suspect you’ve been spiked at some point in the past. Maybe better to learn from it and move on rather than spend your whole days as a white knight for others - we’re all able to make decisions on our own (not necessarily the right ones every time of course).

Solo - this is from the RNS from 18 Oct…

“It is currently forecast that the cost of the Commitment well will be up to circa US$6 million, and the Company has commenced conversations with industry participants (including infrastructure and existing helium-focused companies) to jointly fund the drilling of the Commitment well. Alternative options include funding the Commitment well from Zephyr cash resources or not proceeding with the project. The Company does not intend to raise funds for the Commitment well by way of an issue of equity.

Colin Harrington, Zephyr's CEO commented: "…I should also make clear that funding for the Commitment well will not be provided through a future Zephyr equity raise.””

Massive disconnect between current sp and value:

$25m net Debt (broker estimate YE23)

$48m equity (3p)

Giving $73m enterprise value

~$65m PV Williston asset

That gives enterprise value of Paradox of just $5m million.

We should be sitting at at least 5p now, heading into the 36-2 drill

Some real newsflow coming our way, these are some highlights (there may be more!):

- Commencement of 36–2R drill, “we have a Significant Hydrocarbon discovery”.

- Salt Wash commitment well, this needs to be drilled before the end of Q2, “a development well to be drilled here right after we finish 36–2, using the same rig”.

- Announcement of funding partner for the salt wash project, “we continue to talk to parties who are interested in funding plays with helium exposure to joint fund the well”.

- Production from 16–2 and 28–11, and tying to Dominion infrastructure.

- Strong Q1 production from Williston with at least nine weeks production from Slawson (which was producing around 900 BOEPD, before it was paused due to weather). With the NGL numbers taken out, it’s possible we can get these through earlier than normal?

So, lots to look forward to within days, weeks, and months. Strong buy imo

The company posted this with the previous RNS release, to quote from a great Talking Heads song, it’s the “same as it ever was”…

‘Zephyr is pleased to confirm that there have been no changes to the previous guidance regarding insurance and reiterates that it expects to recover substantially all State 36-2R well re-drill costs under the well control insurance policy.‘

https://x.com/zephyrenergyplc/status/1767183447112527991?s=46&t=ipW7IMp6GVgCsYSTs_Wd3g

(Courtesy of Tim on the TG group)

Gearing-up for the return to drilling in the

Paradox

• 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).

• While production reached 1,440 boe/d in late November (~1,650 boe/d including NGL), 4Q23 production was negatively impacted by the curtailment of production from the new Slawson wells in mid-December due to adverse weather condition and infrastructure constraints.

• Production from the Slawson wells resumed in late January.

• During February, ten additional wells were placed on production adding

~75 boe/d net production. The wells are performing ahead of expectations.

• With regulatory approvals in place, depending on rig availability, drilling of the State 36-2 well could start in April or May.

• We are cautiously reducing our production forecast in 1Q24 to

~1.1mboe/d by deferring 1/3 of 1Q24 production to 2Q24 and 3Q24.

• As we revisit our production forecast and activity assumptions for the Paradox in 2024, we have changed our target price to £0.12/sh in line with our new ReNAV.

• Overall production is expected to increase by 250% by 4Q24 (compared to the FY23 average production) and the drilling programme could unlock the Paradox (£0.13/sh unrisked just for the 2C contingent resources) and the Salt Wash helium (£0.03/sh unrisked for the 0.13 bcf of helium).

Revisiting our FY24 forecasts in the Paradox

We are now assuming that two wells will be drilled in the Paradox in 2024:

(1) the twinning of the State 36-2 well and (2) the Salt Wash helium well (50% WI). Further exploration wells targeting prospective resources in sands overlaying the Cane Creek are likely to be drilled from 2025. We assume that production in the Paradox will start in late 3Q24/early 4Q24 with 10 mmcf/d plus condensate. The growing production and limited capex (since the costs of the State 36-2 well will be covered by insurance, we carry only US$7.5 mm total capex in 2024) suggests an important cash build-up in 2024 with net debt dropping from ~US$25 mm at YE23 to ~US$2 mm at YE24.

Valuation

We have rolled forward our DCF by one year to YE24. We have increased our Core NAV from £0.03/sh to £0.04/sh as our new YE24 net cash is now higher (due to lower capex spend that we previously anticipated). We are excluding the value of an exploration well in one of the reservoirs overlaying the Cane

Creek (£0.04/sh) until we have better visibility on the timing of further exploration wells. Our new ReNAV is £0.12/sh.