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Energy Co. in U.K. To Acquire Helium Asset in U.S.
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Given its current prices, the helium at this property, both discovered and prospective, could be "very valuable," noted an Auctus Advisors report.

Zephyr Energy Plc (ZPHRF:OTCQB; ZPHR:LSE) agreed to acquire, for US$600,000, a majority stake in a 1,047-acre parcel having proven helium reserves in the Salt Wash Field in Utah's Paradox Basin, reported Auctus Advisors analyst Stephane Foucaud in an October 18 research note.

433% Return Projected

Auctus reiterated its £0.16 per share target price on the United Kingdom-based energy company, currently trading at about £0.03 share price.

The difference between these prices implies a material potential return for investors of 433%.

Potential Value of Helium

Foucaud highlighted that the helium in the Salt Wash plot Zephyr is acquiring could be "very valuable" given the estimated quantity present and current helium prices, as high as US$1,000 per thousand cubic foot (US$1,000/Mcf). The parcel has been shown to have 70,000−190,000 cubic feet (70−190 Mcf) of discovered helium plus another 40−66 Mcf of prospective helium.

"Using our valuation for the Topaz helium project (Pulsar Helium), the unrisked value of [130 Mcf] of helium at Salt Wash could be about US$60 million (about £0.03 per share)," Foucaud wrote. "Many nearby Paradox Basin operators are already producing co-mingled helium in commercial quantities, and there is an active local offtake market for helium."

Terms of Agreement

The share of the Salt Wash plot Zephyr is acquiring is at least a 75% working interest, reported Foucaud. The total consideration for this is two payments of US$300,000, the first due upfront and the second due 60 days post-transaction.

The seller may opt back in for 25% interest after the first well is drilled. Zephyr plans to spud the well in H1/24.

About Salt Wash

The Salt Wash field sits three miles south of Zephyr's White Sands Unit, Foucaud relayed. After being discovered in 1961, it produced 1,650,000 barrels of oil from a 15-foot oil rim and 11,700,000,000 cubic feet of natural gas.

A 500-feet gas column above the oil rim contains 1.4−1.7% helium, 22% hydrocarbon, and 72% nitrogen, noted Foucaud.

Twinning of 36-2 Well Planned

In other news pertaining to the Paradox Basin, reported Foucaud, in Q1/24, Zephyr intends to twin the original State 36-2 location well, at which tubing got damaged earlier this year. The company expects the cost of this future work to be covered by insurance.

"The 36-2 well bore may have future reuse potential, such as a vertical host for a new target," the analyst wrote.

Well-Funded for 2024

Foucaud indicated that with cash on hand plus the first cash flow from the Slawson wells anticipated in Q1/24, Zephyr should have enough capital to fund next year's work plan.

Auctus estimated its cost at about US$23 million.

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Important Disclosures:

  1. Doresa Banning wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor.
  2. The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.

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Disclosures for Auctus Advisors, Zephyr Energy Plc., October 18, 2023

Zephyr Energy Plc (“Zephyr” or the “Company”) is a corporate client of Auctus Advisors LLP (“Auctus”). Auctus receives, and has received in the past 12 months, compensation for providing corporate broking and/or investment banking services to the Company, including the publication and dissemination of marketing material from time to time.

MiFID II Disclosures This document, being paid for by a corporate issuer, is believed by Auctus to be an ‘acceptable minor non-monetary benefit’ as set out in Article 12 (3) of the Commission Delegated Act C(2016) 2031 which is part of UK law by virtue of the European Union (Withdrawal) Act 2018. It is produced solely in support of our corporate broking and corporate finance business. Auctus does not offer a secondary execution service in the UK. This note is a marketing communication and NOT independent research. As such, it has not been prepared in accordance with legal requirements designed to promote the independence of investment research and this note is NOT subject to the prohibition on dealing ahead of the dissemination of investment research.

Author The research analyst who prepared this research report was Stephane Foucaud, a partner of Auctus.

Not an offer to buy or sell Under no circumstances is this note to be construed to be an offer to buy or sell or deal in any security and/or derivative instruments. It is not an initiation or an inducement to engage in investment activity under section 21 of the Financial Services and Markets Act 2000.

Note prepared in good faith and in reliance on publicly available information Comments made in this note have been arrived at in good faith and are based, at least in part, on current public information that Auctus considers reliable, but which it does not represent to be accurate or complete, and it should not be relied on as such. The information, opinions, forecasts and estimates contained in this document are current as of the date of this document and are subject to change without prior notification. No representation or warranty either actual or implied is made as to the accuracy, precision, completeness or correctness of the statements, opinions and judgements contained in this document.

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Disclaimer This note has been forwarded to you solely for information purposes only and should not be considered as an offer or solicitation of an offer to sell, buy or subscribe to any securities or any derivative instrument or any other rights pertaining thereto (“financial instruments”). This note is intended for use by professional and business investors only. This note may not be reproduced without the prior written consent of Auctus. The information and opinions expressed in this note have been compiled from sources believed to be reliable but, neither Auctus, nor any of its partners, officers, or employees accept liability from any loss arising from the use hereof or makes any representations as to its accuracy and completeness. Any opinions, forecasts or estimates herein constitute a judgement as at the date of this note. There can be no assurance that future results or events will be consistent with any such opinions, forecasts or estimates. Past performance should not be taken as an indication or guarantee of future performance, and no representation or warranty, express or implied is made regarding future performance. This information is subject to change without notice, its accuracy is not guaranteed, it may be incomplete or condensed and it may not contain all material information concerning the company and its subsidiaries. Auctus is not agreeing to nor is it required to update the opinions, forecasts or estimates contained herein. The value of any securities or financial instruments mentioned in this note can fall as well as rise. Foreign currency denominated securities and financial instruments are subject to fluctuations in exchange rates that may have a positive or adverse effect on the value, price or income of such securities or financial instruments. Certain transactions, including those involving futures, options and other derivative instruments, can give rise to substantial risk and are not suitable for all investors. This note does not have regard to the specific instrument objectives, financial situation and the particular needs of any specific person who may receive this note. Auctus (or its partners, officers or employees) may, to the extent permitted by law, own or have a position in the securities or financial instruments (including derivative instruments or any other rights pertaining thereto) of the Company or any related or other company referred to herein, and may add to or dispose of any such position or may make a market or act as principle 5 | Page Prepared by Auctus Advisors LLP See final two pages for important disclosures in any transaction in such securities or financial instruments. Partners of Auctus may also be directors of the Company or any other of the companies mentioned in this note. Auctus may, from time to time, provide or solicit investment banking or other financial services to, for or from the Company or any other company referred to herein. Auctus (or its partners, officers or employees) may, to the extent permitted by law, act upon or use the information or opinions presented herein, or research or analysis on which they are based prior to the material being published.

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