Zephyr Energy (ZPHR ), a US-focused oil and gas company, announced initial 4Q and FY22 results related to its non-operated asset portfolio in the Williston Basin, North Dakota.
The producer reported fourth quarter revenues of US$7.4m and expects FY22 revenues to come in at US$42.9m, a sevenfold increase compared to FY21, and in excess of Zephyr's initial FY22 guidance of US$35-40m.
Q4 sales volumes averaged 1,192 boepd, resulting in total sales for FY22 of 543,948 boe, at the high end of Zephyr's FY22 guidance. Again, this represents more than a sixfold increase year-on-year. Sales volumes for FY22 averaged 1,490 boepd, compared to FY21's 263 boepd.
Zephyr's 4Q operating income was US$6.3m and FY22 operating income was US$35.7m. The company reiterated its production guidance of 1,550-1,750 boepd net for FY23.
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Even after such a strong year, hitting the high end of FY23 production guidance of 1,550-1,750 boepd net would represent another significant annual increase.
Zephyr's non-operated asset base in Williston is a diverse 223 wells, including 17 that came online in 4Q. In December, Zerphyr acquired 6 newly drilled wellbores, expected to come online in the next few months. Overall, 8 new wells in which Zephyr has a working interest should come online by June 2023, expected to significantly increase daily production rates at Williston.
Zephyr hedged 171k barrels of oil in FY22 at a weighted-average price of US$98.04/barrel. Over the next 5 months the company has hedged 157k barrels at a weighted-average price of US$86.89/barrel. Zephyr's net interests across the basin currently average 6.3% per well, equivalent to 15 gross wells, all utilising horizontal drilling.
Overall, Zephyr is looking at another busy year, and we would expect another production and revenue increase in 2023. the company to get notified of future quarterly updates.
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