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.

8 April 2022

Zephyr Energy plc

("Zephyr" or the "Company")

Production update from non-operated Williston Basin portfolio;

Record quarterly production and monthly revenue, and

recent acquisition fully integrated

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 hydrocarbon production from its non-operated asset portfolio in the Williston Basin, North Dakota, U.S.

Highlights

·    Assets purchased in the recent US$36 million Williston Basin acquisition (the "Acquisition"), which completed on 17 February 2022, are now fully integrated into Zephyr's portfolio and first monthly revenues from the Acquisition have been paid to Zephyr from Whiting Petroleum Corporation, the operator of the assets.

·    At the end of March 2022, Zephyr had 185 wells available for production, including 7 wells which came online during the first quarter of the year.

o  An additional 16 wells are expected to be brought online and be available for production over the next six months.

·    Q1 operational production rates from the Company's Williston Basin portfolio averaged 1,643 barrels of oil equivalent per day ("boepd") net to Zephyr, ahead of previous expectations and representing a record-breaking production quarter for the Company.

o  80% of produced volumes were oil

·    In total, Zephyr received circa US$6 million in cash flow (net to Zephyr) from its non-operated portfolio in March 2022, the first month in which revenues from the Acquisition were paid in conjunction with Zephyr's existing portfolio.

Colin Harrington, Chief Executive of Zephyr, said: "It is almost exactly twelve months since we announced Zephyr's first non-operated acquisition in the Williston Basin, and I'm absolutely delighted with the rapid growth and strong cash flows generated by the five portfolio acquisitions completed to date.   Our non-operated portfolio is now an excellent balance of 185 low-risk, high margin working-interests ("WIs") alongside strong operators, with another 16 wells expected to come online over the next six months.

"This highly attractive portfolio, assembled prior to the current increase in the commodity price environment, is now delivering substantial cashflows which will enable the ongoing development of our flagship Paradox project - at a time when we are in the midst of planning a three well drilling programme for the second half of this year.

"I am thrilled that we received circa US$6 million of cashflow in March, the first full month of integrated revenues, and I'd like to thank our management team and the Operator of the wells for their efforts in completing the Acquisition integration so quickly."

"It's an exciting time for Zephyr and we look forward to keeping Shareholders regularly updated on progress in the near term and, in particular, we look forward to receiving and releasing the results from our Paradox Basin Competent Persons Report in the coming days. As always, we will continue to strive to be responsible stewards of our investors' capital and responsible stewards of the environment in which we work."

Q1 2022 production update

Q1 2022 operational production rates from the Company's Williston Basin portfolio averaged 1,643 boepd net to Zephyr, according to field estimate data.

Further volume and price data is expected to be published quarterly once detailed production and sales information becomes available.

Net cash receipts to Zephyr in March 2022 were circa US$6 million. This reflects production revenues accrued to Zephyr from its existing portfolio as well as from the Acquisition.

The Company has not currently hedged any production to date but is planning to hedge a substantial portion of its forecast non-operated production in the near future.

Background

Zephyr began the 2022 calendar year with WIs in 15 non-operated wells on production.  Following completion of the Acquisition, which completed on 17 February 2022, the Company acquired additional WIs in 163 producing wells. 7 additional wells came online during the first quarter of 2022, giving the Company WIs in 185 wells on or available for production.

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.