Zephyr Secures Full Funding for Paradox Project Drilling in Utah

Zephyr Energy, a US-based oil and gas company, has secured full funding for the extended lateral drilling in its flagship Paradox project in Utah. By signing binding agreements, the financing for all drilling, completion, and production testing costs totaling $7.5 million is secured. The amount exceeds the initial estimate of $7 million and comes from an industry investor in the US, in exchange for a 50% non-operated working interest in the drilling. Notably, this financing agreement does not involve the issuance of Zephyr shares or the incurrence of debt. Zephyr retains a right of first refusal to repurchase the 50% non-operated interest at a discounted price should the investor decide to sell. The investor will cover their proportional operating and overhead costs, while Zephyr will continue as the operator. The net proceeds from the drilling will be equally divided between Zephyr and the investor from the start of production. The agreed $7.5 million is to be transferred to Zephyr by December 31, 2024, to complete preparations for the start of drilling. With the secured funding, Zephyr is currently finalizing operational activities such as drilling contracts and service provider agreements. Surface work has already begun, and full drilling operations are expected to commence in early January 2025. Upon completion of the drilling phase, Zephyr plans to proceed directly to production testing, with results expected in the first quarter of 2025. CEO Colin Harrington expressed his satisfaction with the dynamic development of the US investment market in the non-operator segment and views this financing as an attractive growth tool for the Paradox project.