Zephyr Energy : Turner Pope Research Note, 16th May 2023

Turner Pope Research Note, 16th May 2023

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Zephyr has released Q1 2023 results from its Williston Basin portfolio, along with an update from State 36-2 LNW-CC following the well control incident announced on 11 April 2023. Hydrocarbon production from the Group's non- operated asset portfolio performed exactly in line with expectations as more wells entered their initial decline phase which (combined with lower commodity prices) resulted in a modest reduction in operating income compared with Q4 2022. This is projected to be more than compensated by the Slawson Exploration ('Slawson') operated wellbore interests coming online, although delays related to completion of surface facilities on their well pad means this is now forecast to occur in October 2023, roughly three months behind their original schedule. Zephyr intends to provide an update in relation to its FY 2023 production guidance at that time. Meanwhile, the Board's top priority remains to deliver a safe and successful production test of the State 36-2 LNW-CC well and looks forward to further updating shareholders when this commences in the coming weeks. We would draw your attention to the various disclaimers in the document both at the beginning and at the end of the note. Retail clients (as defined by the rules of the FCA) must not rely on the research document. In particular you should note that the research document is a non-independent marketing communication. The analyst who has prepared the research is aware that TPI provides research to Zephyr Energy plc. Accordingly the research has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibitions on dealing ahead of its dissemination. The information in the document is published solely for information purposes and is not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. The material contained in the document is general information intended for recipients who understand the risks associated with equity investment in smaller companies. It does not constitute a personal recommendation as defined by the FCA or take into account the particular investment objectives, financial situation or needs of individual investors nor provide any indication as to whether an investment, a course of action or the associated risks are suitable for the recipient.

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