Zephyr Energy Regulatory News (ZPHR)

Prior to publication, the information contained within this announcement was deemed by the Company to constitute inside information as stipulated under the UK Market Abuse Regulation. With the publication of this announcement, this information is now considered to be in the public domain.

7 February 2022

Zephyr Energy plc

("Zephyr" or the "Company")

Fourth Quarter 2021 production update from non-operated Williston Basin portfolio

Zephyr Energy plc (AIM: ZPHR) (OTCQB: ZPHRF), the Rocky Mountain oil and gas company focused on responsible resource development from carbon-neutral operations, is pleased to provide an update on fourth quarter 2021 ("Q4") hydrocarbon production from its non-operated asset portfolio in the Williston Basin, North Dakota, U.S.

Williston Basin Production update

Q4 operational production rates from the Company's Williston Basin portfolio averaged 548 barrels of oil equivalent per day ("boepd") net to Zephyr. In addition, three wells on the Sundance Kid pad were brought online in late December, which added an additional net 106 boepd on an operated basis. As a result, Zephyr's existing non-operated portfolio produced at a total run rate of 654 boepd by the end of Q4.

Zephyr sold 43,185 barrels of oil equivalent ("boe") during Q4, and net sales to Zephyr for the quarter were broken out as follows:

 Oil: 35,895 barrels ("bbls") at an average sales price of $72.34 /bbl

 Natural Gas: 19,081 million cubic feet ("mcf") at an average sales price of $5.35 /mcf

Natural Gas Liquids: 5,132 bbls at an average sales price of $56.56 per bbl

(Note: Fourth quarter production volumes and average sales prices figures include field estimates in respect of December 2021 production and sales)

Zephyr began Q4 with interests in 7 non-operated producing wells, with 8 additional wells brought onto initial production by the end of the quarter. Newly producing wells include the Company's interests in the Sundance Kid wells, which are currently producing on flowback only - production from the pad is expected to further increase when artificial lift is installed in mid-February. An additional 7 wells in the existing portfolio are expected to come on line during the first half of 2022.

Williston Basin Production Outlook

Production from the Company's non-operated portfolio is expected to further increase over the coming months as additional wells from the existing portfolio are brought online and when the Company's proposed $36 million acquisition of further non-operated assets in the Williston Basin is completed (the "proposed Acquisition") as expected in mid-February.

On completion of the proposed Acquisition, working interests in 163 additional producing wells will be integrated into Zephyr's portfolio. The proposed Acquisition has an effective date of 1 December 2021, and cash flows associated with the proposed Acquisition's December and January production will accrue to Zephyr's benefit post-closing. In December 2021, production from the proposed Acquisition averaged 1,105 boepd, giving Zephyr's non-operated business a net pro forma combined run rate of 1,759 boepd at the end of December.

Zephyr has not hedged any production to date. The Company plans to hedge a substantial portion of the combined non-operated production after completion of the proposed Acquisition.

Contacts:

Dr Gregor Maxwell, BSc Hons. Geology and Petroleum Geology, PhD, Technical Adviser to the Board of Zephyr Energy plc, who meets the criteria of a qualified person under the AIM Note for Mining and Oil & Gas Companies - June 2009, has reviewed and approved the technical information contained within this announcement.