The Zephyr Energy PLC (LON: ZPHR) share price barely moved after the company announced its financial results for Q4 2022 and the full year. Investors barely reacted to news that the oil and gas firm had grown its revenues over seven times to $42.9 million from the $6 million reported in the previous year.
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In addition, the Rocky Mountain oil and gas company revealed that it had sold 543,948 barrels of oil equivalent (boe) during the entire year, which was at the higher end of its guidance for the 2022 financial year, representing an over six-fold increase to the 88,037 boe sold in 2021.
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The company’s average daily oil sales were 1,490 boepd compared to the 263 boepd sold in 2021. The firm also hedged 171,000 barrels of oil in the 2022 financial year at a weighted average price of US$98.04 per barrel.
Investors barely reacted to the oil and gas company’s impressive performance in the past financial year, maybe because they were focused on the lower prices that have characterised the markets since October 2022.
Zephyr Energy’s production in 2023 is projected to be between 1,550 and 1,750 boepd, marking a slight improvement to the 2022 figures. Therefore, it is evident that 2022 was a pivotal year for the company, and it may never report such an impressive increase in production numbers again.
Still, I expected a better reaction from investors. Still, the markets are rarely rational, especially during short-term periods. The company now has 223 low-risk, high-margin producing wells operated by top-tier Williston Basin operators such as Slawson.
Colin Harrington, Chief Executive of Zephyr, said:
“I am delighted with the growth and strong cash flows generated from our Williston portfolio during 2022. We comfortably exceeded our initial FY 2022 revenue guidance, and production was within the upper end of the forecast range. Cash flows generated from these operations have been reinvested back into both our operated and non-operated asset portfolios, and we expect continued growth in 2023. We fully expect this year's Williston project production to exceed last year's once again.”
*This is not investment advice.
The Zephyr Energy share price rose briefly on the company’s Q4 and FY 2022 results. What’s next?
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