Completion of Acquisition & Divestment of Wells

Prior to publication, the information contained within this announcement was deemed by the Company to constitute inside information as stipulated under the UK Market Abuse Regulation. With the publication of this announcement, this information is now considered to be in the public domain.

 26 August 2025

Zephyr Energy plc

("Zephyr" or the "Company")

Completion of Acquisition and

Divestment of Operated Wells

Further to its announcements on 24 June and 30 July 2025, Zephyr Energy plc (AIM: ZPHR) (OTCQB: ZPHRF) is pleased to announce the completion of its US$7.3 million acquisition of working interests in accretive, mature proved developed producing ("PDP") assets in core Rocky Mountain basins, U.S. (the "Acquisition"). The Acquisition has an effective date of 1 June 2025, with cash flow accruing to Zephyr from that date.

In addition to the PDP assets, the Acquisition includes attractive, near-term proven undeveloped ("PUD") upside and additional acreage with potential for future development.

Upon the completion of the Acquisition, the Company elected to divest a small package of the newly acquired operated wells in North Dakota and Wyoming (the "divested assets") to a neighbouring private upstream operator. In exchange for the divested assets, Zephyr received total consideration of US$1.5 million, comprised of US$679,000 in cash and the assumption of US$822,000 in mostly near-term plugging and abandonment liabilities.

Based on management forecasts, the Acquisition, adjusted for the sale of the divested assets, will add production of approximately 388 barrels of oil equivalent per day ("boepd") net to Zephyr in the first month of production (versus an initial, pre-divestiture estimate of 400 boepd). Zephyr will continue to actively manage its asset portfolio and will consider both acquisitions and divestitures which are deemed value-accretive and in the best interests of Shareholders.

In addition to the existing production, the Acquisition has already provided investment opportunities suitable for Zephyr Hawk LLC, the US$100 million strategic partnership announced by the Company on 13 May 2025 (the "Joint Venture"). From the 1 June 2025 effective date, the Acquisition has provided 18 new development well participation opportunities suitable for Joint Venture funding (an increase from the 5 opportunities at the time the transaction was initially agreed upon).

Colin Harrington, Zephyr's Chief Executive, commented: "We are delighted to complete the Acquisition, which adds high-margin production and additional proved reserves to our existing asset base. We now have cash-flowing non-operated investments across key Rocky Mountain regions, our longstanding area of focus. In particular, this enhanced geographical position will give us a new foothold into active developments in the Powder River Basin, as well as increased exposure in the Williston Basin.

"The Acquisition also provides us with the opportunity to execute the first transactions through our US$100 million Joint Venture, and we look forward to advancing further opportunities through the Joint Venture.

"I'd like to reiterate that Zephyr has always actively managed its asset portfolio to create Shareholder value, and the Acquisition has offered immediate opportunities to do so. During the period between the signing of the initial Letter of Intent and the completion of the Acquisition, we received an offer related to the divested assets. In addition to providing immediate cash consideration and the assumption of near-term liabilities, the sale of the divested assets also saves significant future costs related to maintaining operatorship in two new jurisdictions. As such, we elected to divest these wells immediately after their acquisition, without significant impact to our previously released Acquisition production forecasts.

"We look forward to providing further updates on the Acquisition and our Paradox project, where we expect to publish a revised Competent Person's Report in the near-term."

Williston project update

The Company will provide the results of hydrocarbon sales and production from its non-operated Williston project for the second quarter of 2025 ("Q2") as part of its half-year financial results which are expected to be published by the end of September 2025.

The Q2 results will incorporate production from the Acquisition, which became effective on 1 June 2025.

Notes to Editors

Zephyr Energy plc (AIM: ZPHR) (OTCQB: ZPHRF) is a technology-led oil and gas company focused on responsible resource development from carbon-neutral operations in the Rocky Mountain region of the United States. The Company's mission is rooted in two core values: to be responsible stewards of its investors' capital, and to be responsible stewards of the environment in which it works.

Zephyr's flagship asset is an operated 46,000-acre leaseholding located in the Paradox Basin, Utah, 25,000 acres of which has been assessed to hold, net to Zephyr, 2P reserves of 2.6 million barrels of oil equivalent ("mmboe"), 2C resources of 34 mmboe and 2U resources 270 mmboe.

In addition to its operated assets, the Company owns working interests in a broad portfolio of non-operated producing wells in core Rocky mountain basins. Cash flow from the Williston production will be used to fund the planned Paradox Basin development. In addition, the Board will consider further opportunistic value-accretive acquisitions.