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Auctus Advisers Research Note, 27 June 2023

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Waiting on Well 36-2 Test

  • FY23 production, revenue and operating income had been reported previously.
  • At Well 36-2, two thirds of the tubing has already been pulled out and Zephyr is cautiously progressing the activity to pull out the rest. This can take a few more weeks. The timing of the well test is the main factor driving the delivery of first production in the Paradox.
  • Well 16-2 is expected to be worked-over once Well 36-2 has been tested. We understand the results of the analysis subsequent to the testing of the well are consistent with a salt blockage. The company is performing some further work on salt precipitation mitigation measures with vendors and testing different water samples.
  • The surface facilities will be sized according to the stabilized flow rates achieved at both wells.
  • Dominion continues to be expected to start delivering gas to Green River in late 3Q23 or early 4Q23.
  • We re-iterate our target price of £0.18 per share in line with our ReNAV.

Auctus Advisers Research Note, 27 June 2023