TIDMZPHR
RNS Number : 2976N
Zephyr Energy PLC
29 September 2021
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.
29 September 2021
Zephyr Energy plc
(the "Company" or "Zephyr")
Zephyr commences 100% carbon-neutral operations
Zephyr Energy plc (AIM: ZPHR) (OTCQB: ZPHRF), the Rocky Mountain
oil and gas company focused on responsible resource development, is
pleased to announce it has successfully commenced 100% carbon
neutral operations ahead of its 30 September 2021 target. This
leading initiative is designed to ensure that all hydrocarbons
produced by the Company from this point forward have a "net-zero"
operational carbon impact.
Over the last four months, Zephyr worked with the Prax Group
("Prax") - a British multinational independent oil refining,
trading, storage, distribution and retail conglomerate dealing in
crude oil, petroleum products and bio-fuels - to prepare for the
commencement of this initiative. Prax , which has trading offices
in London, Singapore and the U.S., helped Zephyr measure and
mitigate the Company's greenhouse gas ("GHG") emissions, with
mitigation efforts primarily focused on the purchase of Verified
Emission Reductions (or "VERs") from reputable pre-vetted
developers of sustainable projects. Emissions to be mitigated
include those from Zephyr's current corporate carbon footprint, its
non-operated production assets in the Williston Basin, and from its
operated project in the Paradox Basin.
The cost to purchase the appropriate number of VERs to offset
Zephyr's growing operational footprint currently averages under $1
per barrel of oil equivalent produced, although the net cost to
Zephyr may be considerably less given the potential to sell oil
volumes at a premium as a result of the anticipated "net-zero"
operational carbon status of those volumes. Zephyr has further
entered into an agreement in which Prax will be responsible for
marketing the oil produced from its Paradox project, with the
purchase of the VERs offset from revenue payments due to
Zephyr.
Zephyr's work to establish a carbon-zero footprint has been
focused on its Scope 1 GHG impacts(1) , which cover all direct
emissions from Zephyr-owned or controlled sources - from the
drilling and production of operated and non-operated hydrocarbons
through to transport to the refinery, as well as all other
corporate emissions.
Zephyr's Board also understands that mitigating the Company's
operational CO2 impact is only a first step - emissions from the
ultimate end-use of produced volumes have a significant CO2 impact
as well. Going forward, Zephyr pledges to work with potential
end-users of its products to explore routes to more fully offset
its product CO2 (Scope 3 Emissions(1) ) to the greatest extent
possible.
Colin Harrington, Chief Executive of Zephyr, said :
"I am delighted we've now achieved our ambitious target to
commence carbon-neutral operations this year. This groundbreaking
initiative is a tangible demonstration of our determination to
deliver on our core values of being both responsible stewards of
our investors' capital and responsible stewards of the environment.
It's also work that will continue as we grow the Company.
"From an operational standpoint, Zephyr is working to increase
oil production volumes from our non-operated portfolio as well as
finalising preparations to complete and test production from the
first well on our flagship Paradox project. With this new phase
comes an increased carbon impact, which is why the timing is
absolutely right to launch our carbon-neutral initiative.
"Delivering on the target to reach carbon neutrality by the end
of September was a challenge, and the work will continue as our
volumes increase and the VER market evolves. I am highly grateful
for our continued collaboration with Christopher Dillman and his
team at the Prax Group for their overall assistance, especially
regarding our measurement, mitigation and marketing efforts.
"Zephyr's Board is unanimous in its belief that good
environmental & operational performance + good governance =
superior investor returns. Today's announcement is illustrative of
our determination to embed these key principals at the very heart
of the Company."
Contacts:
Zephyr Energy plc Tel: +44 (0)20 7225
Colin Harrington (CEO) 4590
Chris Eadie (CFO)
Allenby Capital Limited - AIM Nominated Tel: +44 (0)20 3328
Adviser 5656
Jeremy Porter / Liz Kirchner
Turner Pope Investments - Broker Tel: +44 (0)20 3657
James Pope / Andy Thacker 0050
Flagstaff Strategic and Investor Communications Tel: +44 (0) 20 7129
Tim Thompson / Mark Edwards / Fergus 1474
Mellon
About the Prax Group: Headquartered in the UK, the Prax Group is
a British multinational independent oil refining, trading, storage,
distribution, and retail conglomerate dealing in petroleum products
and biofuels. The Group has established principal offices in
London, Houston and Singapore, and additional satellite offices
across the world.
Footnotes:
(1.) Scope 1 emissions are reported as Direct GHG emissions from
equipment or other sources owned (partly or wholly) and / or
operated by the company. For increased clarity when reporting
Direct GHG emissions, those Scope 1 emissions associated with
energy sold to others can be reported separately as Direct
emissions from exported energy.
Where an operation purchases energy already transformed into
electricity, heat or steam, the GHGs emitted to produce this energy
are Scope 2 and reported as Indirect GHG emissions from imported
energy. The 2015 update of the GHG Protocol distinguishes between
two calculation approaches, 'location' and 'market based' for Scope
2 emissions and it is helpful for companies using this standard to
highlight which method is used in their reporting.
You can report Scope 3 emissions as Other indirect emissions,
which refer to GHG emissions related to your company's value chain
(see Module 1 Reporting process). The GHG Protocol supplemented its
standard with its 2011 publication of the Corporate Value Chain
(Scope 3) Accounting and Reporting Standard [10]. Of the 15
categories of Scope 3 emissions defined in this standard, Category
11 'Use of sold products' is the most relevant to the oil and gas
industry. There is a growing stakeholder interest related to Scope
3 disclosures. In 2016, IPIECA published Estimating petroleum
industry value chain (Scope 3) greenhouse gas emissions [11] to
provide additional oil industry methodology guidance for the 15
categories.
.
Definitions are taken from sustainability reporting guidance for
the oil and gas industry. IOGP Report 437. 4(th) Edition 2020.
www.ipieca.org
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