Zephyr Energy PLC on Tuesday said it has raised £3.2 million in a placing and subscription, to help fund its flagship project in the Paradox Basin in Utah, US.
Zephyr Energy is an oil & gas exploration and development company in the Rocky Mountains in the US.
The company said the placing and subscription was for a total of 90.0 million new shares, priced at 3.5 pence each. The fundraise price represents a 5.4% discount to the closing price of 3.7p on Monday.
Zephyr Energy shares were down 6.7% to 3.45p each in London on Tuesday afternoon.
Zephyr said the proceeds of the fundraising will be used to fund an estimated $3.7 million of incremental near-term capital expenditure at the company’s flagship project in the Paradox Basin. This is expected to include a production test on the company’s State 36-2 LNW-CC well, as well as future infrastructure and gas processing costs.
In the Paradox Basin, operations to prepare the State 36-2 well for production test continue at a methodical and expected pace, the company added. It aims to production test the well prior to the end of June.
Chief Executive Colin Harrington said: ‘The proceeds raised ensure we remain in a strong position to further advance the Paradox project development, and the Board believes that the minimal dilution to shareholders will be outweighed by continued progress and positive newsflow expected over the coming months, both with regards to the upcoming well test and with the cash generative Slawson wells coming on stream by Q4 this year.’
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