Zephyr Energy (AIM:ZPHR) shares advanced, rising 12.21% to 3.8p, after acquiring 2,294 acres of Utah Trust Lands Administration leases in the Paradox Basin.
The acreage was nominated for auction by Zephyr itself and secured through a sealed-bid process, carrying a five-year primary term and a 16.67% lease royalty.
The deal follows a circa 27,000-acre acquisition announced on 26 June, making this the second Paradox Basin land addition within a week and bringing the company's total operated position to more than 72,000 gross acres, the majority held at a 100% working interest.
The Paradox project's White Sands Unit, covering 20,000 acres of that total, underpins a 2025 independent Competent Persons Report confirming 2P reserves of 35.3 million barrels of oil equivalent and total recoverable resources of 74.2 million barrels of oil equivalent.
"With every acquisition of regional acreage, we consolidate and increase the attractiveness of our regional holdings," said chief executive Colin Harrington.
Zephyr has nominated additional leases to the north of the White Sands Unit that are expected to be auctioned in September 2026, signalling further potential expansion of the position.
Still capable of a re-rating says analyst
Panmure Liberum analyst Ashley Kelty reckons the underlying investment case remains intact for Zephyr, saying the Paradox Basin assets are still capable of driving a material re-rating once the company secures a farmout partner and hits development milestones, even as near-term execution has disappointed.
The analyst, in a note, repeated a Buy rating but cut the price target to 9.9p, from 11.6p
Kelty notes that fiscal 2025 revenue fell to US$13.9 million from US$24.3 million, with net loss narrowing to US$10.8 million from US$19.6 million as impairments dropped out, but flags that production declined to 829 barrels of oil equivalent per day from 1,149 boe/d, hurt by natural declines and the Slawson wells sitting offline for much of the year; the State 36-2R well flowtest, which achieved a peak rate of 2,848 boe/d, is described as highly encouraging despite the broader frustration at the slow pace of Paradox Basin development.
