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.

24 March 2026

Zephyr Energy plc

("Zephyr" or the "Company")

Operations Update

Zephyr Energy plc (AIM: ZPHR) (OTCQB: ZPHRF) is pleased to provide an operations update, including:

·    A significant increase in hydrocarbon production from the Company's non-operated asset portfolio during the fourth quarter of 2025 ("Q4") compared to the second and third quarters of 2025 ("Q2" and "Q3" respectively).  Overall, non-operated production was 55% higher in Q4 than in Q2;

·    Approximately 25% of forecast March 2026 and 33% of the next twelve months non-operated oil production is currently hedged, with the remainder fully exposed to the recent favourable commodity price environment;

·    Further non-core acreage divestments which generated material cash proceeds for the Company.  These divestments have significantly enhanced the economics of the Company's recent US$7.3 million acquisition, and will serve to support additional activity on Zephyr's flagship project in the Paradox Basin, Utah, U.S. (the "Paradox project"); and,

·    Continued progress towards delivering first commercial production from the Paradox project.

Q4 non-operated asset portfolio - preliminary production results

·    Q4 non-operated production was 983 barrels of oil equivalent per day ("boepd"), net to Zephyr, versus average net production in Q2 and Q3 of 632 boepd and 925 boepd respectively.

o  The increase in production during the second half of 2025 was primarily due to the US$7.3 million acquisition of working interests in accretive, mature proved developed producing assets, the completion of which was announced on 26 August 2025 (the "Acquisition"), offset by standard decline of the existing non-operated portfolio.

·    At 31 December 2025, Zephyr's portfolio consisted of interests in over 600 gross wells (or approximately 30 net wells) available for production, versus 228 gross wells (or 16 net wells) at the end of Q2.  Zephyr's portfolio now consists of well and acreage interests in Utah, Colorado, Wyoming, Montana and North Dakota, providing strong diversity across multiple operators and basins.

·    During Q4, the Company hedged a total of 24,000 barrels of oil ("bbls") at a weighted average price of US$65 per barrel of oil ("bbl").

·    In early March 2026, Zephyr hedged a further 75,000 bbls over the next twelve months at a weighted average price of US$67 per bbl (equivalent to approximately 33% of forecasted non-operated oil production over the same period). The remainder of Zephyr's non-operated production is currently unhedged.

o  For volumes produced in March 2026, 25% of forecast production was hedged and the remainder remains unhedged, providing significant exposure to current favourable commodity prices.

o  In light of existing market volatility, Zephyr will continue to evaluate additional hedges on an opportunistic basis.

Further non-core acreage divestments

As part of the Company's ongoing portfolio management, Zephyr is pleased to announce that it has completed two divestments of non-core, non-producing assets obtained in conjunction with the Acquisition:

·    Approximately 160 acres of non-operated, undeveloped lease holding located in Colorado, for which Zephyr received a total cash consideration of US$1.3 million.

·    Certain royalty interests and a working interest in a non-producing wellbore in the Powder River Basin, Wyoming, U.S. Total consideration received by Zephyr was US$802,000, comprising a cash component of US$400,000 and the buyer's assumption of US$402,000 of near-term capital expenditure liability. 

·    No producing working interests were included in either of the divestments.

These two divestments follow the US$1.14 million divestment (or US$1.04 million after post-closing adjustments) of non-producing Powder River Basin acreage (announced 30 December 2025), and the US$670,000 sale of an operated well (announced concurrently with the closing of the Acquisition).

By way of context, the US$7.3 million purchase price of the Acquisition was valued by the Company solely on the basis of the producing assets acquired. However, the transaction also included approximately 6,350 undeveloped, non-producing acres in the Williston, Powder River, Denver-Julesburg and other Rocky Mountain basins. 

Following the completion of the Acquisition, Zephyr's team undertook a detailed evaluation of this undeveloped acreage in order to determine its current and future value potential.  The Company deemed the acreage divested to date to be non-core, with the potential for significant future capital expenditure and/or long lead times for development.

Since the completion of the US$7.3 million Acquisition, the acquired assets have:

·    Generated circa US$4.7 million in total consideration from the divestment of non-core assets (comprised of US$3.5 million in cash proceeds and the divestment of US$1.2 million in near-term plugging, abandonment and capital liabilities);

·    Generated US$1.7 million in cash flow from acquired production (through December 2025); and 

·    Generated US$2.5 million in approved investment opportunities through the Company's US$100 million strategic partnership with a U.S. based capital provider, from which Zephyr will receive additional cash flows once the capital provider has achieved a threshold return.

As these acreage disposals and partnership opportunities have not included the sale of any material producing assets, Zephyr's team believes it has further significantly enhanced the economics and significantly shortened the payback period of the Acquisition. 

The Company is currently evaluating options for the remaining undeveloped acreage acquired.

Paradox project update

The Company continues to make progress towards delivering first commercial production from the Paradox project.

At present, a team under the supervision of Enbridge Inc. ("Enbridge") (the owner and operator of the 16-inch gas pipeline that will export gas from Zephyr's Powerline Road Gas Plant to the Williams Northwest Pipeline system) is on-site conducting an in-line inspection of the pipeline. The aim of the operation is to validate pipeline integrity at the original design operating pressure prior to the receipt of additional gas volumes from Zephyr's assets.

Further operational work being conducted by Enbridge includes survey, engineering, environmental, land and right-of-way work, as well as progressing the regulatory process required to operate bi-directional flow on the existing Enbridge pipeline. This will allow both the export of gas to the Northwest Pipeline and the supply of gas to customers in the City of Green River.  Enbridge will construct, own, operate, and maintain the modified 16-inch pipeline facility.

Zephyr continues to evaluate marketing and joint venture/farm-in partners with the potential to accelerate further development of the Paradox project.  Given the recent strength of the western U.S. gas markets, the Company is encouraged by interest received to date from potential partners. 

At present, Zephyr is in receipt of indicative non-binding proposals which would provide hydrocarbon marketing solutions and funding for additional drilling, and the Company will update the market as appropriate.

Extension of broker warrants

On 29 March 2021, the Company announced that it had issued its broker, Turner Pope Investments ("TPI"), 32,500,000 warrants to subscribe for up to 32,500,000 new ordinary shares of 0.1 pence each in the share capital of the Company (the "broker warrants"). The broker warrants were issued as part of TPI's fees for work undertaken in relation to the Company's placing of ordinary shares announced at the time. The broker warrants are exercisable at a price of 3p per new ordinary share and are valid until 15 April 2026. Zephyr's board of directors has now agreed to extend the expiry date of these warrants to 15 April 2027. All other terms of the broker warrants remain unchanged.

Colin Harrington, Chief Executive of Zephyr, said:

"I am pleased to report on the multiple benefits that the Acquisition has provided for the Company.

"Not only have we seen a healthy increase in our production levels, but also our opportunistic acreage disposals have provided considerable additional resources which can be recycled back into the Paradox project.

"We are making continued progress on the Paradox project, and we look forward to providing further updates on the farm-out process and ongoing gas offtake discussions in due course."

"In the interim, we are monitoring global events closely and will be responsive with regard to further portfolio management and hedging activity as opportunities arise."

Contacts

Qualified Person

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.

Notes to Editors

Zephyr Energy plc (AIM: ZPHR) (OTCQB: ZPHRF) is a technology-led oil and gas company focused on responsible resource development in the Rocky Mountain region of the United States.

Its flagship operated asset is the 46,000-acre Paradox project in Utah, where an independent 2025 Competent Persons Report by Sproule International confirmed 2P reserves of 35.3 million barrels of oil equivalent ("boe") and total recoverable resources of 74.2 million boe.

Zephyr also holds a portfolio of non-operated production interests across the Williston and other Rocky Mountain basins, supported by a US$100 million strategic partnership designed to accelerate growth and enhance cash flow.