Zephyr Energy advances State 36-2R well testing and secures new financing

Zephyr Energy, a Rocky Mountain oil and gas company focused on responsible development, announced today that it is currently cleaning up the State 36-2R well in preparation for a production test.

While the clean-up process is taking longer than anticipated due to a conservative approach, production testing is expected to begin soon after it's complete. Zephyr will provide another update once testing commences.

On the financing side, their lender, First International Bank & Trust (FIBT), reaffirmed their US$15.15 million revolving credit facility after a review.

Additionally, FIBT provided Zephyr with a new US$5.6 million loan with a four-year term and a 10% interest rate. This new loan, along with existing cash, allowed Zephyr to fully repay the bridge loan used to fund the Slawson wells. These developments lowered Zephyr's overall interest rate and saved them an estimated US$579,000 annually.

On another note, Zephyr received an extension on their drilling deadline for their Salt Wash Field farm-in acreage. The new deadline is September 1st, 2024. Zephyr is currently exploring options to potentially cover all the costs of the well at the asset level and is considering the best course of action for their shareholders.

Zephyr's CEO, Colin Harrington, expressed his satisfaction with the progress on the State 36-2R well and the positive financing news.

“We are well-prepared to begin testing production volumes once the clean-up phase of the 36-2R well is complete. Additionally, the successful redetermination and favorable terms of the new loan underscore the robustness of our asset base and financial health,” he said.

Harrington also acknowledged the progress made at the Salt Wash Field and ongoing discussions with potential partners, emphasizing the company’s strategic focus on maximizing shareholder value through these initiatives.