Member Info for davwal

The well developments are fully funded by the investor, but the purchase was fully funded by Zephyr as part of the capital raise - as stated in the terms of agreement by ZPHR. Further opportunities are available to the investor from that acquisition in the form of new well drilling, but beyond that Zephyr must first identify and acquire more assets - again as stated in the terms. Given ZPHR has little cash to splash without another fundraiser, the 100m will not be spent in a hurry. That's just the way it is, but I'm not sure some understand that.

Papaduke, the cost of acquiring the 13 new wells was factored into the main acquisition cost, for which a raise by ZPHR was necessary. They weren’t free and the investor paid nothing toward their purchase value (together with any new wells beyond those). Yes they are to cover the cost of bringing them to production- but clearly that’s largely to their benefit. We effectively seem to subsidise the investor for years to come. We should know more than we have been drip-fed in my view.

My concern is that CH is withholding key information from shareholders because of the interests of other parties (investors) who don't want their business deals made public. For example, he's used Zephyr funds to acquire the rights to the 13 wells in question but dodges providing any guidance regarding any financial return. Public and private companies can make uneasy bedfellows.

Not a mention anywhere in the financial assessment of the fact that 50% of production on one of the seven Paradox wells - 36-2 - is owed to a third party. In fact, the well investor’s ongoing interest in 36-2 (including contributing to equipment costs,) seems to have become an unmentionable fact since the well was completed. Strange that.

I wonder if Dominion Enbridge have CH over a barrel regarding access to their 16 inch pipe. It looks like the equivalent of a ransom strip negotiation where Enbridge hold all the cards.

CH loses months like I lose socks.

We know we’ve made a significant outlay in accordance with the agreement, including for the opportunity cost of the as yet undrilled wells. I can’t believe (and hope) CH isn’t still operating on a suck-it-and-see basis regarding the framework for cost and income sharing from any wells the partners opts into. Meanwhile, you seem to be making a few assumptions on some of the terms of the agreement that were not stated. As I said, it will be very interesting to find out, and I hope ZPHR do well and can build on the model.

It will be very interesting to hear the percentage split of income from drilling activities between ZPHR and the 100m funder once the partnership starts producing. We only know Zephyr gets a minority of that income until some as-yet-unannounced threshold is reached - at which point presumably ZPHR gets more. Given the materiality of that financial return structure, and the supposed immediacy of drilling opportunities, it seems surprising the finer details remain elusive to shareholders.

A not insubstantial sum of which there had been no mention. Did he even realise it initially?

Some deal that, coming with instant $822k liabilities.

Nothing significant seems imminent.

Hardly the point!

17th July - “ We look forward to a prolonged period of positive news flow as we complete the Proposed Acquisition and move towards first production on the Paradox project."

So do we Fella, so do we. But that future news flow we are all so much looking forward to seems to have been future tense an awful long time.

A tinge..?

Regarding a possible takeover, I’d be concerned at how that might be structured. The company has been split in two to separate non-op business from the operational side. They could sell off the Paradox but we investors would be left with just the runt, i.e. the non-op asset-based company. Not what we came in for. For the foreseeable future, I’d prefer maintaining the status quo.

Trump is actually pro cheap oil/gas, so not necessarily the industry's friend. He also swings wildly from one position to another, which makes rational business decisions harder to achieve. The current share price should not impact the acquisition price, what is calculated to be in the ground is what counts. A higher CPR will help set the bar. I added recently on what should follow recent developments. With the third-party investor riding shotgun, I'm confident production will commence asap.

The $7.5m well investor certainly won’t settle for unnecessary delays in achieving production. They’ll want their slice of cake asap.

Given the arrangement with the 100M investor initially lasts only six months the current acquisition must be the purpose. Zephyr is paying for production from legacy wells - some to be operated by ZPHR - along with 13 potential new wells, with the partner gaining interest in the 13 future wells. Thing is, they don't seem to have contributed anything to the overall acquisition cost and will apparently take most of the income from those wells apart from an unspecified percentage at an unspecified point. And yet CH says that will be accretive to Zephyr. When this deal required a substantial raise by ZPHR, they clearly cant do another on the same basis when the legacy well income is to be directed at developing Paradox. Clarification is desperately required.

I’ve sat on my wallet for some time, but what the heck. All things considered, I’m minded to add now and - as ever - hope for the best. There really does now seem to be real opportunities for the company to develop at pace.

Trades….

Must admit to being disappointed the cpr is only now about to commence. We’re ZPHR that strapped for cash?!