ADVFN UK Market News

Author: Fiona Craig

  • European Stocks Hold Near Three-Week Lows as Investors Await Iran Sanctions: DAX, CAC, FTSE100

    European Stocks Hold Near Three-Week Lows as Investors Await Iran Sanctions: DAX, CAC, FTSE100

    European equities were little changed on Monday, remaining close to three-week lows as escalating economic tensions between the United States and Iran kept investors cautious. A modest retreat in crude oil prices provided some relief, but broader risk appetite remained subdued.

    The pan-European Stoxx Europe 600 Index slipped 0.1% in early trading, keeping the benchmark around levels last seen in early August.

    Germany’s DAX, France’s CAC 40 and London’s FTSE 100 were all broadly unchanged as investors awaited further details on Washington’s planned measures against Tehran.

    U.S. Threatens Iran With “greatest financial offensive”

    Geopolitical developments in the Persian Gulf remained the principal focus after Washington intensified its economic pressure on Iran over the weekend.

    The U.S. threatened Tehran with what it described as “the greatest financial offensive ever marshalled,” with sweeping sanctions expected to be announced on Monday. The measures are intended to target foreign countries and trading partners that continue to provide economic support to Iran.

    Iranian officials responded by threatening to halt all energy exports originating from the Persian Gulf if Washington continues its economic campaign.

    Markets were awaiting a press conference from U.S. Treasury Secretary Scott Bessent scheduled for 1:00 p.m. EDT on Monday, when further details of the sanctions are expected.

    Brent crude futures fell around 1.5% to approximately $91.80 a barrel on Monday, offering some respite after prices climbed 5% last week.

    However, continuing disruption to shipping through the Strait of Hormuz is restricting seaborne crude oil and LNG movements. The reduced flows are maintaining a supply-risk premium in energy markets and adding to concerns about global inflation.

    Nvidia Earnings Put AI Spending in the Spotlight

    Nvidia (NASDAQ:NVDA) is due to report second-quarter results after the U.S. closing bell, providing a major test for global technology stocks and investor enthusiasm surrounding artificial intelligence.

    Attention will focus on whether continued AI capital expenditure can support elevated valuations among the world’s largest technology companies.

    AI hyperscalers have increasingly turned to credit markets, issuing substantial amounts of debt to finance data-centre expansion. Any evidence of slowing revenue growth or weaker-than-expected guidance from Nvidia could therefore weigh on technology shares, including European markets with significant exposure to the sector.

    Jackson Hole Speech Could Shape Rate Expectations

    Federal Reserve Chair Kevin Warsh is also scheduled to deliver a keynote address at the Jackson Hole Economic Policy Symposium.

    Investors in bond and equity markets will closely examine his comments for indications of whether the Federal Reserve intends to leave interest rates unchanged in September following a divided 9-3 FOMC vote.

    Persistent inflationary pressure linked to elevated energy prices could complicate the policy outlook and potentially increase the likelihood of another rate increase.

    BW Offshore Slides After Profit Forecast Cut

    Among individual European stocks, BW Offshore (TG:XY81) fell 14% after the company lowered its pre-tax profit forecast.

    The sharp decline stood out during an otherwise subdued European session dominated by geopolitical uncertainty, energy-market risks and anticipation ahead of major U.S. economic and corporate events.

  • FTSE 100 Slips as Iran Sanctions Concerns and Asian Tech Selloff Weigh

    FTSE 100 Slips as Iran Sanctions Concerns and Asian Tech Selloff Weigh

    UK equities moved slightly lower on Monday as investors awaited tougher U.S. sanctions against Iran while a steep decline in Asian technology shares contributed to a broader risk-off tone across global markets.

    As of 03:18 ET (07:18 GMT), the FTSE 100 was down 0.03%. Germany’s DAX declined 0.25%, while France’s CAC 40 slipped 0.18%. Sterling was little changed against the U.S. dollar, with GBP/USD trading at 1.3643.

    Iran Sanctions Remain in Focus

    Investor attention remained firmly on Washington as markets awaited further economic measures targeting Tehran.

    U.S. Treasury Secretary Scott Bessent described the campaign as entering an “endgame” in a post on social media platform X and warned of an “economic D-Day”.

    Iran’s Supreme National Security Council Secretary Mohsen Rezaei responded by warning that Tehran could stop oil exports through the Strait of Hormuz. He also said countries supporting the U.S. campaign could be regarded as committing an “act of war”.

    The comments kept geopolitical risks at the forefront for investors, particularly given the Strait of Hormuz’s importance to global energy supplies.

    Asian Technology Shares Come Under Pressure

    Negative sentiment was reinforced by heavy selling across Asian technology stocks. South Korea’s KOSPI fell sharply, while Hong Kong’s Hang Seng dropped approximately 2.1%.

    Samsung Electronics and Alibaba were among the notable technology names under pressure during the Asian session, adding to caution ahead of several potentially significant events for global markets this week.

    Investors are preparing for Nvidia’s (NASDAQ:NVDA) earnings on Wednesday, while Federal Reserve Governor Kevin Warsh’s speech at Jackson Hole later in the week is also expected to attract attention.

    Johnson Says Iran Conflict Entering “new phase”

    Speaker Mike Johnson said in an interview with Fox News that the United States was moving into a “new phase” of the conflict with Iran and that allied countries would provide assistance.

    Johnson also said Republicans could retain control of the House of Representatives even if the conflict continued through the November midterm elections.

    Oil Prices Fall While Gold Advances

    Oil prices moved lower despite the continuing geopolitical uncertainty. Brent crude declined 1.7% to $91.09 a barrel, while WTI fell 2.1% to $85.25.

    Gold moved in the opposite direction as demand for defensive assets increased. December gold futures gained 0.42% to $4,700.31, while spot gold rose 0.9% to $4,644.70.

    UK Round-Up

    Shell (LSE:SHEL) has reportedly attracted interest from ExxonMobil, LyondellBasell, Apollo and Kuwait Petroleum for its U.S. chemicals operations.

    The portfolio could be valued at as much as $8 billion, according to a Financial Times report on Monday, as Shell considers the disposal of underperforming chemicals assets.

  • Shell’s US Chemicals Assets Attract Interest From Exxon and LyondellBasell – FT

    Shell’s US Chemicals Assets Attract Interest From Exxon and LyondellBasell – FT

    Exxon Mobil (NYSE:XOM) and LyondellBasell NV (NYSE:LYB) are reportedly among the potential buyers considering Shell’s (LSE:SHEL) US chemicals operations, as the British energy group looks to dispose of underperforming assets.

    The portfolio could be valued at as much as $8 billion, according to a Financial Times report on Monday citing people familiar with the process.

    Apollo and Kuwait Petroleum Arm Also Reportedly Interested

    Private equity group Apollo and the chemicals division of Kuwait Petroleum Corporation have also shown interest in the assets, the report said.

    Potential buyers submitted non-binding bids last month as Shell moves forward with the sale process.

    The US portfolio comprises four facilities located across Louisiana, Texas and Pennsylvania. Among the assets is Shell’s Monaca petrochemicals complex in Pennsylvania, which began operating in 2022.

    Monaca Complex Represents Major Shell Investment

    Shell invested approximately $14 billion in the Monaca facility, which has annual production capacity of up to 1.6 million tonnes of polymers.

    A sale of the wider US chemicals portfolio for around $8 billion would therefore represent a substantial discount relative to the capital Shell has invested in its American chemicals operations, according to the report.

    The potential disposal comes as Shell seeks to streamline its portfolio and reduce exposure to operations that have delivered weaker returns.

    European Chemicals Assets Also Being Marketed

    Shell is also working with advisers on plans to market its chemicals operations in Europe, the Financial Times reported.

    Those assets are expected to attract a considerably lower valuation than the US portfolio.

    The moves indicate a broader effort by Shell to reshape its chemicals exposure as the energy major reviews the performance and strategic role of the division within its wider global operations.

  • Synectics Shares Rise Following Interim Results Webcast and New Contract Momentum

    Synectics Shares Rise Following Interim Results Webcast and New Contract Momentum

    Synectics (LSE:SNX) shares climbed 3.6% to 191.7p during today’s session as investors responded to the security technology group’s interim results webcast, product developments and recent contract momentum.

    The company presented its unaudited results for the first half of 2026 during a live investor webcast hosted on the Investor Meet Company platform at 11:00 a.m. BST. The presentation was available to both existing shareholders and prospective investors.

    Management Highlights Progress With “5P” Strategy

    Chief Executive Amanda Larnder used the presentation to outline progress with Synectics’ “5P” strategy, which is designed to transform the company from a predominantly project-led operation into a more scalable, product-and-partner-led business.

    Synectics estimates that the strategy addresses a serviceable market worth approximately £2 billion. Management highlighted encouraging early progress during the first half, alongside important new business wins across transport, leisure and hospitality, critical national infrastructure and energy.

    The company acknowledged that H1 2026 represented a transitional period as the new operating model was implemented. However, management believes Synectics’ established market position and reputation provide a strong foundation from which to pursue further growth.

    Interim Dividend Maintained at 2.2p

    The board reiterated its progressive dividend policy and maintained the interim distribution at 2.2 pence per share, signalling continued confidence in the company’s longer-term prospects.

    Synectics also reaffirmed a deliverable outlook for the full year, providing investors with further reassurance as the group progresses through its strategic transformation.

    Synergy SEARCH Adds AI Capabilities

    Further support for the company’s product-led strategy came from the launch of Synergy SEARCH, a new artificial intelligence-powered capability for its Synergy platform.

    The technology enables users to search live and recorded video rapidly using natural-language queries, representing another step in Synectics’ efforts to expand its product offering and increase the scalability of its technology platform.

    Commercial momentum was also supported by a separate US$2.4 million contract to provide the Synergy platform for a major casino property in the United States.

    Synectics Outperforms Cautious Market Backdrop

    The company-specific developments helped Synectics stand out during a mixed session for UK equities, while modest declines across US stock indices contributed to a generally cautious global market backdrop.

    The combination of the investor presentation, maintained dividend, reaffirmed full-year expectations, new AI-enabled product functionality and recent contract success provided several catalysts for renewed investor interest in the AIM-listed shares.

    Synectics traded between 180p and 195p during the session. Despite the latest advance, the shares remain substantially below their 52-week high of 350p, leaving scope for further recovery if the company’s transition towards a more scalable product-and-partner-led model continues to deliver results.

  • Barclays Favors Safestore as Big Yellow and Shurgard Face Growth Risks

    Barclays Favors Safestore as Big Yellow and Shurgard Face Growth Risks

    Barclays upgraded Safestore (LSE:SAFE) to “overweight” from “equal weight” on Monday while downgrading Big Yellow (LSE:BYG), Shurgard (EU:SHUR) and Unite (LSE:UTG) to “underweight” as the bank reassessed its European real estate coverage using a greater emphasis on free cash flow.

    The brokerage cited a combination of softer growth expectations, operational challenges and macroeconomic risks behind the rating changes.

    Barclays also lowered Merlin Properties (EU:MRL) to “equal weight” from “overweight” and Swiss Prime Site (USOTC:SWPRF) to “equal weight” from “overweight.” SEGRO (LSE:SGRO), meanwhile, was upgraded to “equal weight” from “underweight” following the board-approved takeover offer from Prologis.

    Barclays Shifts Valuation Focus to Free Cash Flow

    As part of the review, Barclays said it was replacing its previous total accounting return methodology with a framework based predominantly on free cash flow, supplemented by dividend discount models where appropriate.

    The change reflects the bank’s view that listed property companies should increasingly be valued as operating businesses capable of generating contractually supported income and expanding cash flow, rather than being assessed mainly through periodic changes in the value of their property portfolios.

    Under the revised methodology, Barclays forecasts five years of free cash flow per share. Capitalised interest, maintenance spending and other sustaining capital expenditure are deducted from recurring earnings when calculating these forecasts.

    Free cash flow typically carries an 80% weighting in the brokerage’s valuation, with dividend discount models accounting for the remaining 20%. A larger weighting may be assigned to the dividend model where cash-flow forecasts are considered less dependable.

    European Real Estate Viewed as “defensive growth”

    Barclays said European listed property should increasingly be regarded as “defensive growth”, supported by predictable contractual income and limited new supply.

    Other characteristics supporting this assessment include embedded rental reversion or indexation, manageable recurring capital expenditure, disciplined development activity and opportunities to increase cash flow through acquisitions.

    However, the outlook differs substantially between individual property segments and companies, prompting Barclays to make several significant changes to its ratings and earnings forecasts.

    Safestore Remains Preferred Self-Storage Stock

    Within self-storage, Barclays highlighted a less favourable operating backdrop than during the pandemic. Industry capacity has expanded by approximately 30% since COVID-19, while customer demand has moved away from the elevated levels recorded during that period.

    The brokerage reduced its adjusted EPRA EPS forecasts for Safestore by 3% for fiscal 2026 and by 11% for fiscal 2030. Despite these reductions, Safestore remains Barclays’ preferred exposure to the self-storage sector.

    The bank retained a 670 pence price target for Safestore, while acknowledging challenges including weaker occupancy, affordability pressures and rising customer-acquisition costs.

    Big Yellow and Shurgard Downgraded

    Barclays made larger reductions to its forecasts for Big Yellow, cutting adjusted EPRA EPS estimates by 7% for fiscal 2027 and 25% for fiscal 2030.

    The stock was downgraded to “underweight” with an 820 pence price target, with Barclays pointing to a weaker medium-term free cash flow outlook compared with Safestore.

    Shurgard was also moved to “underweight”, accompanied by a €22 price target. Barclays lowered its earnings estimates by 9% for fiscal 2026, with the reductions increasing to approximately 21%-22% for fiscal 2028 through 2030.

    The brokerage cited continuing lease-up risks and weakness across Shurgard’s existing portfolio as factors behind the more cautious stance.

    Unite, Merlin and Swiss Prime Site Ratings Lowered

    Unite was downgraded to “underweight” with a 460 pence price target. Barclays identified competitive pricing, occupancy levels and rental growth as important risks facing the student accommodation group.

    Merlin Properties was cut to “equal weight” with a €14.70 target. The bank expects higher operating costs within the company’s data-centre business, together with a partner promotion, to restrict near-term earnings growth.

    Swiss Prime Site was also downgraded to “equal weight”, with Barclays setting a 125 Swiss franc target. The brokerage said the company’s defensive qualities were becoming increasingly reflected in its current share price.

    SEGRO Upgraded Following Prologis Offer

    Barclays raised SEGRO to “equal weight” from “underweight” and set a 970 pence price target following the agreed takeover proposal from Prologis.

    The valuation is closely linked to the agreed offer of 978 pence per SEGRO share together with a 22.54 pence final dividend.

    Barclays nevertheless highlighted the potential downside should the transaction fail to complete, setting out a downside scenario of 740 pence per share in that event.

  • Tracsis Meets FY26 Expectations and Completes £48 Million Mistral Data Acquisition

    Tracsis Meets FY26 Expectations and Completes £48 Million Mistral Data Acquisition

    Tracsis (LSE:TRCS) delivered full-year trading in line with market expectations for the year ended 31 July 2026, while completing the £48 million acquisition of rail software specialist Mistral Data. Revenue increased to approximately £85.5 million and adjusted EBITDA reached around £13.5 million, with the performance benefiting from the Events division that has since been sold.

    Year-End Cash Reaches £19.4 Million

    Tracsis ended the financial year with cash of £19.4 million before taking account of proceeds from the disposal of its Events business.

    Following the sale, the group is increasingly concentrating on higher-margin software and data technology operations, with an emphasis on generating a greater proportion of recurring revenue. Management is also pursuing a more streamlined structure following the Events disposal and a series of acquisitions.

    The completion of the “One Tracsis” operating model represents another element of this strategy, bringing the group’s activities under a more integrated organisational framework.

    £48 Million Mistral Data Deal Expands Rail Software Portfolio

    Tracsis has now completed its £48 million acquisition of Mistral Data, a UK specialist in rail software. The transaction was financed through a combination of existing cash and a significant drawdown from the group’s £40 million revolving credit facility.

    Following the acquisition, pro forma net debt stands at approximately 1.5 times EBITDA.

    Mistral’s cloud-native products complement Tracsis’s existing technology portfolio and are expected to strengthen the group’s position within the UK rail software market. The enlarged business will target continued demand for digital technology designed to improve operational efficiency, safety and passenger experience across the rail industry.

    Tracsis is now focused on integrating Mistral and identifying opportunities to generate additional growth from the combined product offering.

    Acquisitions Support Software-Focused Transformation

    The Mistral transaction follows Tracsis’s recent acquisition of Vesputi and forms part of the group’s wider transformation into a more focused software and data technology business.

    Alongside portfolio changes and the implementation of the One Tracsis structure, these acquisitions are intended to increase exposure to recurring software revenues and position the company to benefit from long-term investment in transport technology and infrastructure.

    Tracsis is scheduled to publish its full FY26 results on 19 November 2026, when investors will receive further detail on the impact of the portfolio restructuring, recent acquisitions and prospects for the enlarged group.

    Financial Stability Offset by Valuation Concerns

    Tracsis’s outlook benefits from underlying financial stability, improving cash generation and positive longer-term share price momentum.

    However, profitability indicators remain mixed, while valuation represents a more significant constraint. The shares trade on a particularly elevated price-to-earnings multiple and offer a relatively low dividend yield, limiting valuation support despite the group’s improving strategic position.

    More About Tracsis

    Tracsis plc is a UK transport technology company providing software, hardware, data capture, analytics and GIS services across the rail and wider transport markets.

    Its rail technology operations cover areas including resource and asset optimisation, smart ticketing, customer-facing retail platforms and safety systems. The group’s data, analytics and consultancy activities support intelligent transport networks, smart city planning and environmental decision-making.

    Tracsis serves customers including Network Rail, UK train operating companies, the Department for Transport, Transport for London, local authorities and major engineering businesses, as well as freight and transit operators in North America.

    The group has combined organic growth with an active acquisition strategy, completing nineteen transactions since 2008 as it increasingly focuses its portfolio on software and data technologies aligned with long-term transport infrastructure investment.

  • Georgina Energy Raises £1.25 Million to Advance Hussar Drilling Programme

    Georgina Energy Raises £1.25 Million to Advance Hussar Drilling Programme

    Georgina Energy plc (LSE:GEX) has raised £1.25 million through an equity placing to support its Hussar drilling programme and provide additional working capital. The company issued 10,000,000 new ordinary shares at a price of 12.5 pence each, alongside warrants allowing participating investors to acquire further shares at 14 pence over a five-year period.

    Funding Primarily Targeted at Hussar Programme

    The majority of the proceeds will be directed towards advancing drilling activities at Hussar, with the remainder available for general working capital purposes.

    The fundraising provides Georgina Energy with additional capital as it progresses its exploration plans, although the issue of new shares will result in dilution for existing shareholders.

    Investors participating in the placing have also received warrants with an exercise price of 14 pence per share. These warrants will remain exercisable for five years and could provide the company with further funding if exercised.

    Issued Share Capital to Rise to 270.9 Million Shares

    Admission of the 10,000,000 new shares to the London Stock Exchange’s main market is expected on 27 August 2026.

    Following admission, Georgina Energy will have 270,861,707 ordinary shares in issue. The updated figure also represents the company’s total voting rights, providing shareholders with the revised denominator for determining whether they are required to disclose changes in their holdings under applicable UK regulations.

    Financial Position Remains a Key Risk

    Georgina Energy’s outlook continues to be constrained by its financial position. The company currently generates no revenue and remains loss-making, with negative cash flow and negative equity alongside increasing debt levels.

    Technical momentum provides some support, with recent indicators presenting a comparatively more positive picture. However, valuation remains difficult to assess while the company continues to report negative earnings and does not offer an indicated dividend yield.

    More About Georgina Energy plc

    Georgina Energy plc is a London-listed energy company focused on developing exploration opportunities, including its Hussar project.

    The company’s ordinary shares trade under the ticker GEX on the London Stock Exchange’s main market. Its current strategy centres on progressing its exploration and drilling programmes while using access to the UK capital markets to support project development.

  • MS International Secures €19.4 Million NATO Naval Gun Systems Contract

    MS International Secures €19.4 Million NATO Naval Gun Systems Contract

    MS International (LSE:MSI), through its defence subsidiary MSI Defence Systems, has secured a €19.4 million contract from a NATO member country for the supply of three advanced MSI-DS 30mm naval gun systems. The systems will incorporate counter-uncrewed aerial system capabilities, strengthening the company’s exposure to growing demand for multi-threat naval defence technology.

    Systems to Combine Radar, Optical Detection and Fire Control

    The three naval gun systems will incorporate radar and optical detection technologies alongside the proprietary MSI-DS Fire Control System. The integrated configuration is designed to provide protection against a range of threats, including surface vessels, semi-submersible targets and uncrewed aerial systems.

    Deliveries under the contract are expected to begin towards the end of 2027, in accordance with the customer’s wider programme schedule.

    The order adds to MS International’s defence backlog and reinforces the company’s position as a supplier of integrated naval weapon systems to NATO customers. The delivery timetable also provides additional medium-term revenue and operational visibility for the group’s defence activities.

    Strong Balance Sheet Supports Outlook

    MS International’s broader outlook is supported by solid financial fundamentals, including a conservatively financed balance sheet and improved profitability.

    These strengths are partially offset by a history of uneven cash flow and a softer revenue and earnings performance during 2026. Technical indicators currently present a neutral-to-mixed picture, while valuation appears broadly reasonable rather than particularly inexpensive, especially given the relatively modest dividend yield.

    More About MS International

    MS International plc operates in the defence sector through its wholly owned subsidiary MSI Defence Systems Limited, which is based in Norwich, UK.

    MSI Defence Systems specialises in naval gun systems and integrated weapons technology designed to protect naval platforms against threats across multiple domains. Its systems combine weapon, detection and fire-control technologies, positioning the business to address growing demand for adaptable naval defence capabilities among NATO and allied countries.

  • Tower Resources Raises £325,000 as African Farm-Out Approvals Progress

    Tower Resources Raises £325,000 as African Farm-Out Approvals Progress

    Tower Resources (LSE:TRP) has reported further progress towards securing regulatory approvals for its previously announced farm-out agreements with Prime Global Energies in Namibia and Cameroon. Completion of the approval processes is expected to trigger initial payments and provide access to further funding for the company’s African exploration activities.

    Namibia and Cameroon Approvals Move Forward

    In Namibia, the deed of assignment covering PEL 96 is currently with the Upstream Petroleum Unit for final checks before being submitted for ministerial execution. Completion would allow Tower to move ahead with planned activities across the licence with the financial support of its farm-out partner.

    Progress is also being made in Cameroon, where the approval documentation relating to the Thali licence is awaiting execution at the Presidency. Final approval represents an important step towards funding and advancing the proposed NJOM-3 well.

    The two farm-out transactions are central to Tower’s strategy of bringing in external capital to progress its exploration portfolio while limiting the amount of funding required directly from shareholders.

    Tower Raises £325,000 for Working Capital

    While it waits for proceeds from the farm-out transactions, Tower has raised £325,000 through a subscription for approximately 2.36 billion new shares at a discount to the prevailing market price.

    The company has also granted broker warrants covering around 59.1 million shares, with an exercise price representing a 100% premium to the subscription price.

    Following admission of the newly issued shares, Tower’s total issued share capital will increase to approximately 45.2 billion shares. Although the transaction results in further dilution for existing investors, the proceeds provide additional working capital while the company awaits completion of the regulatory processes and receipt of farm-out funding.

    External Funding Remains Critical

    Tower’s financial position remains challenging, with the company generating no reported revenue while continuing to record losses and negative free cash flow. As an exploration-stage business, it therefore remains dependent on external financing and farm-out partnerships to fund its operations and development plans.

    Technical indicators also remain weak, with the shares trading below major moving averages and signalling an established downward trend. While valuation may appear inexpensive based on certain price-to-earnings measures, such metrics provide limited insight given the company’s underlying losses, lack of operating revenue and continuing cash requirements.

    More About Tower Resources

    Tower Resources is an AIM-quoted oil and gas exploration company focused on upstream opportunities in Africa. Its principal assets include the PEL 96 licence offshore Namibia and the Thali licence in Cameroon.

    The company uses farm-out partnerships as a central part of its financing strategy, bringing in external partners to help fund exploration, appraisal and drilling programmes. Its portfolio provides exposure to frontier and emerging African hydrocarbon basins, although the early-stage nature of its projects carries significant exploration, financing and execution risks.

  • Zephyr Energy Expands Paradox Project Capacity Ahead of Pipeline Approval

    Zephyr Energy Expands Paradox Project Capacity Ahead of Pipeline Approval

    Zephyr Energy (LSE:ZPHR) is investing in additional engineering and well-related work at its Paradox Basin project in Utah as it prepares for potentially higher initial gas production. The decision reflects the board’s confidence that regulatory approval will be obtained to increase operating pressures on Enbridge’s 16-inch pipeline, which would provide greater export capacity for gas produced from the project.

    Gas Processing Capacity Increased to 15 MMscf/d

    Engineering work is progressing on a modular gas processing system designed to handle as much as 15 million standard cubic feet of gas per day. This represents approximately three times the capacity assumed under Zephyr’s previous base-case plans.

    Initial production is expected to come from the State 36-2R and Federal 28-11 wells. Additional volumes could subsequently be introduced from existing and future wells, depending on available cash flow and the receipt of necessary permits.

    By installing infrastructure capable of processing higher volumes from the outset, Zephyr is positioning the Paradox project for a potentially faster ramp-up as it moves towards commercial gas production.

    Enbridge Pipeline Inspection Work Progresses

    Enbridge has completed the mandatory in-line inspection of the pipeline and is now undertaking routine excavation and visual inspection work. No issues have been reported from the process so far.

    Zephyr is carrying out its own field preparations in parallel with this regulatory and inspection work. The strategy is intended to minimise the time between receiving the necessary pipeline approvals and delivering first gas from the Paradox project.

    The company is also continuing discussions regarding a potential farm-out of the project and is progressing a proposed US$15 million commodity purchase agreement. These initiatives could provide additional funding support as Zephyr advances development and seeks to expand production.

    Financial Performance Remains a Constraint

    Zephyr’s outlook continues to be affected by weakening financial performance, including declining revenue, sustained net losses and a significant deterioration in cash generation. Operating and free cash flow were both negative in 2025.

    Technical indicators are more constructive, although an RSI of around 78 points to overbought conditions that could limit confidence in further near-term share price gains. Valuation also provides limited support while the company remains loss-making, resulting in a negative price-to-earnings ratio, while no dividend yield is currently indicated.

    More About Zephyr Energy

    Zephyr Energy plc is a technology-led oil and gas company focused on responsible resource development in the Rocky Mountain region of the United States. Its principal operated asset is the approximately 70,000-acre Paradox project in Utah.

    The project includes the 20,000-acre White Sands Unit, which has independently assessed 2P reserves of 35.3 million barrels of oil equivalent and total recoverable resources of 74.2 million barrels of oil equivalent.

    Zephyr also owns a portfolio of non-operated production interests across the Williston Basin and other parts of the Rocky Mountain region. These assets are supported by a US$100 million strategic partnership intended to accelerate growth and strengthen cash generation as the company expands its regional upstream operations.