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.

Zephyr Energy plc

(the "Company" or "Zephyr")

2 May 2023

Hedging programme update

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 announce an update on its hedging programme related to oil production from its non-operated asset portfolio in the Williston Basin, U.S. (the "Programme").   

With the majority of hedged volumes from last year's Programme now produced, Zephyr's Board of Directors (the "Board") has elected to enter into additional oil hedge agreements.  Volumes hedged for the nine months ending 31 December 2023 have increased from 94,000 barrels ("bbls") to 137,000 bbls, with BP Energy Company ("BP"), one of the world's leading energy trading houses, continuing to serve as the counterparty.

Under the terms of the Programme, Zephyr holds crude oil commodity swap agreements, which settle on a monthly basis, at the following prices:

·Q2 2023: 52,000 bbls at an average US$86.84/bbl

·Q3 2023: 45,000 bbls at an average US$83.57/bbl

·Q4 2023: 40,000 bbls at an average US$83.42/bbl

·Q1 2024: 27,000 bbls at an average US$82.20/bbl

The Programme has been structured to provide cashflow surety related to the Company's debt obligations, as well as to derisk funding requirements for the Company's activity at its flagship project in the Paradox Basin, Utah, U.S while allowing for additional exposure to future fluctuations in prices.

The Board will continue to monitor prices and may add additional hedges if appropriate. 

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Notes to Editors

Zephyr Energy plc (AIM: ZPHR) (OTCQB: ZPHRF) is a technology-led oil and gas company focused on responsible resource development from carbon-neutral operations in the Rocky Mountain region of the United States.  The Company's mission is rooted in two core values: to be responsible stewards of its investors' capital, and to be responsible stewards of the environment in which it works.

Zephyr's flagship asset is an operated 45,000-acre leaseholding located in the Paradox Basin, Utah, 25,000 acres of which has been assessed to hold, net to Zephyr, 2P reserves of 2.6 million barrels of oil equivalent ("mmboe"), 2C resources of 34 mmboe and 2U resources 240 mmboe.

In addition to its operated assets, the Company owns working interests in a broad portfolio of non-operated producing wells across the Williston Basin in North Dakota and Montana. 

The Williston portfolio currently consists of working-interests in over 200 modern horizontal wells which are expected to provide production of 1,550 - 1,750 barrels of oil equivalent per day, net to Zephyr, in 2023.Cash flow from the Williston production will be used to fund the planned Paradox Basin development. In addition, the Board will consider further opportunistic value-accretive acquisitions.