In its latest set of quarterly numbers, Zefiro Methane [CBOE:ZEFI] generated record consolidated revenues of USD9.4 million, an approximate 10% increase from the quarter ending March 31, 2024. The well-remediation specialist, which only listed on Cboe Canada this spring, is already demonstrating the profitability of its business model.
The increase in revenue resulted in a record gross profit of USD 2.9 million (approximate 31% gross profit margin). Zefiro generated adjusted earnings before interest, taxes, depreciation, and amortization of USD 222,453. The company is pioneering a formula that sees it capping methane-producing wells in the US and generating carbon credits, which it then sells into the credits market.
Zefiro Founder and Chief Executive Officer Talal Debs told investors that Zefiro’s growth vector is expanding rapidly: “We have come a long way in the last year. Our corporate milestones, combined with our financial success, tell a story of momentum that is positioning the company as a market leader driven by innovation, foresight, and impact. Our growing team brings the highest level of expertise to detecting and mitigating the large and often dangerous legacy problem of toxic methane emissions.”
Wholesale energy sales
Zefiro has already announced the presale of a portion of its carbon offset portfolio to EDF Trading. EDF is a leading player in international wholesale energy and part of EDF Group, a global leader in low-carbon energies. Zefiro has expanded its efforts to seal potentially hazardous oil and gas wells and these credits, verified by certified third-party auditors, will be generated from this initiative.
The company said it is also actively exploring commercialization opportunities to address the needs of corporate players who have committed to a carbon-neutral footprint by using high-quality offsets such as those originated by Zefiro. Demand within the market for high quality, certified carbon credits is already increasing, so this could turn into a major revenue-generating opportunity for the company.
- Zefiro Methane to partner with Fiùtur on carbon credit data
- Zefiro Methane completes Pennsylvania’s first well-plugging project under Jobs Act
- Zefiro Methane subsidiary buys stake in well plugging equipment specialist
Zefiro has also expanded its oil and gas well-plugging operations into Oklahoma, which is expected to result in key growth within numerous markets critical to the environmental services industry, including Louisiana and other southern states, and the expansion of the company’s portfolio of high-quality carbon offset products. The company also continues to aggressively build out its business in Appalachia.
US government support for Zefiro’s well-capping program
Zefiro has now successfully completed Pennsylvania’s first-ever Infrastructure Investment and Jobs Act-funded oil well-remediation project. The federal legislation allocated USD 4.7 billion to help address the nationwide proliferation of abandoned oil and gas wells. This included granting over USD 300 million to the Commonwealth of Pennsylvania alone.
The company has also initiated numerous commercial transactions to bolster its environmental services capabilities. The series of strategic transactions began with the acquisition of Appalachian Well Surveys, an Ohio-based wireline company. This move provided Zefiro with the resources needed to expand their operational capacity within key markets and become the energy sector’s first comprehensive “end-of-life” provider for entities seeking to meet their well-retirement targets.
Zefiro has also purchased a minority ownership stake in Winterhawk Well Abandonment. Winterhawk manufactures specialized downhole tools and technologies designed to expand casing in oil and gas wells. Zefiro subsidiary Plants & Goodwin, Inc. and Winterhawk entered into an exclusive patent license agreement for Winterhawk’s U.S. patents and the ability to sublicense Winterhawk products to other entities operating in the United States.
Zefiro Methane’s carbon-offset market activities
In addition to these strategic investments in the well-remediation services division, Zefiro also took steps to advance its accessibility throughout the global carbon offset marketplace. Specifically, the company announced a strategic partnership with Fiùtur. As we reported previously, Fiùtur is a multi-party technology platform that provides digital measurement, verification, and data governance framework services to environmental remediation companies.
The agreement is aimed at expanding access to Zefiro products throughout the offering’s entire “lifecycle.” It stipulates that Zefiro will begin deploying its comprehensive methane leak abatement services through Fiùtur’s digital trust and verification platform during Q4 of 2024 and participate in Fiùtur’s Series A fundraising campaign.
Zefiro confirmed it is also pursuing global initiatives to market its carbon credit portfolio to multinational corporations and global market participants, including through high-quality carbon offset exchanges.
