Zephyr Energy's new CPR significantly increases Paradox project's resources

Zephyr Energy has reported a substantial increase in recoverable reserves at its Paradox Basin project, with an updated Competent Person’s Report (CPR) showing a 93-fold rise in 1P reserves to 14.8 MMboe and a 25-fold increase in 2P reserves to 35.3 MMboe. The report estimates undiscounted free cash flows exceeding $400 million and total recoverable resources of 74.2 MMboe, valued over $880 million. This significant validation has prompted Zephyr to open a data room to multiple potential partners, aiming to accelerate drilling and commercial production from the asset.

Analysis

Zephyr Energy's new CPR significantly increases Paradox project's resources Published: 07:29 06 Oct 2025 BST Zephyr Energy PLC (AIM:ZPHR, OTCQB:ZPHRF) has announced a substantial increase in recoverable reserves at its Paradox Basin project in Utah, with an updated Competent Person’s Report by Sproule-ERCE International. Proved recoverable reserves (1P) have increased 93-fold, Zephyr said, rising to 14.8 million barrels of oil equivalent. The report also showed a 25-fold increase in proved and probable (2P) reserves to 35.3 million barrels of oil equivalent. Sproule estimated undiscounted free cash flows from the project would exceed $400 million. "We are delighted with the results of the CPR which clearly demonstrate the excellent progress made at the Paradox project through our successful operations," chief executive Colin Harrington said. "The CPR further validates the considerable scale of the Paradox project, which is why we have launched a process to identify partners to accelerate drilling and the delivery of value from the asset." Harrington added: "The completion of the CPR is an exciting moment for the company as we seek to advance the Paradox project into full commercial production and secure a project partner." Notably, the Sproule report focused on the Cane Creek reservoir in a 20,000-acre portion of the 46,000-acre Paradox project for which Zephyr has 3D seismic data. It also estimates total recoverable resources across the Cane Creek reservoir at 74.2 million barrels of oil equivalent, worth over $880 million, as well as 270 million barrels of prospective resources. Zephyr has now opened a data room to multiple potential partners, which are currently reviewing the project data, and the company expects the CPR will now allow for more substantive discussions to take place. Zephyr Energy's updated Competent Person’s Report (CPR) for its Paradox project represents a significant de-risking event and a material uplift in asset valuation. The report from Sproule-ERCE International documents a 93-fold increase in proved (1P) recoverable reserves to 14.8 million barrels of oil equivalent (MMboe) and a 25-fold rise in proved and probable (2P) reserves to 35.3 MMboe. This reserves upgrade is underpinned by an estimated undiscounted free cash flow potential exceeding $400 million from the project. Importantly, this valuation is derived from just the Cane Creek reservoir within a 20,000-acre section of the total 46,000-acre project area, suggesting substantial un-booked potential in the remaining acreage and prospective resources of 270 million barrels. Management is now leveraging this external validation to attract a strategic partner, having opened a data room to accelerate the project's transition to full commercial production and monetize the asset's now-quantified scale.

Key Decisions for Investors

• View the CPR as a major de-risking event and a significant catalyst, providing a new, credible valuation floor for the Paradox project against which the company's market cap should be assessed.
• The primary focus for investors should now be on the progress of the farm-out process; the announcement of a credible partner and the terms of any joint venture will be the next key determinant of the company's valuation.
• Consider that while the CPR is highly positive, its scope is limited to 20,000 of the 46,000 acres, implying that significant further upside may exist but remains contingent on future exploration, appraisal, and funding.