Turner Pope Research Note, 27 March 2024
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| Zephyr has provided an update on its Salt Wash Helium project (‘the Project’). While stating that it is not seeking for helium to become a primary focus of the Group, the Board do consider it offers significant and currently unrecognised potential value for Shareholders, particularly in consideration of the growing supply-demand imbalance that has recently been seen to drive prices up to US$1,000 per million standard cubic feet (‘mscf’), while also being able to further utilise its team’s significant experience in the Paradox Basin. Noting recent market interest in helium-related companies and considering that the economics for the Project are attractive based on its helium content alone notwithstanding further upside from oil and gas development, several funding options are now being appraised. Having received informal proposals, including potential funding for 100% of the drill at the asset level that falls within timing obligations of the Farm-in agreement (‘the Farm-in’), the Board is now considering the best alternative to maximise value. Zephyr will provide an update on the above matters in due course. 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. |
