TIDMZPHR
RNS Number : 8702O
Zephyr Energy PLC
11 February 2021
11 February 2021
Zephyr Energy plc
(the "Company" or "Zephyr")
Company Presentation and updated well and project economics
Zephyr Energy plc (AIM: ZPHR), the Rocky Mountain oil and gas
company focused on responsible resource development, is pleased to
advise that a new Corporate Presentation will shortly be available
on its website at
https://www.zephyrplc.com/investors/reports-presentations/
As announced on 8 February, the Company's Chief Executive
Officer, Colin Harrington, will be delivering this presentation at
the Proactive Investors One2One virtual investor forum this
evening, which starts at 18:00 GMT and which can be accessed
through the following link
https://event.webinarjam.com/register/903/1nnlvtpg4
The Corporate Presentation provides details of on the Company's
project in the Paradox Basin, Utah, U.S. (the "Paradox" or the
"Paradox project") and on the State 16-2 well that was recently
drilled. In addition, and further to the Company's announcement on
25 January 2021, the presentation includes revised economic
forecasts for the Paradox project, updated to reflect current
commodity prices.
The Company's Paradox acreage is estimated to hold the
following:
-- Net 2C contingent recoverable resources of over 12 million
barrels of oil equivalent ("mmboe") from 30 wells;
-- Net present value of approximately US$120 million
(pre-Federal Income Tax), using a flat oil price of US$55 per
barrel of oil ("BO") and a ten percent discount rate ("NPV -10");
and
-- Net present value of approximately US$148 million
(pre-Federal Income Tax), using a flat oil price of US$60 per BO
and a ten percent discount rate ("NPV -10").
The above estimates only include forecast resources in the Cane
Creek reservoir and do not include the significant potential upside
from additional overlying reservoirs which are being evaluated
following the drilling of the State 16-2 well. The estimates were
calculated in accordance with the Company's Competent Persons
Report ("CPR") prepared by Gaffney Cline & Associates ("Gaffney
Cline") in June 2018, and will be revised further once all data
from the State 16-2 well has been processed.
A potential side track lateral on the State 16-2 well (the
"State 16-2LN-CC") is forecast to have strong economics as a
standalone investment. Utilising production profiles generated from
Gaffney Cline's CPR, and updated with a $55 per BO and $60 per BO
prices, the Board estimates the lateral side track could generate
the following on a 2C basis:
Initial gross oil production rate: 780 barrels of oil per day
Estimated Ultimate Recovery: 550,000 BO and 1.8 billion cubic feet of gas
Return on Invested Capital: 232% at $55/BO; 314% at $60/BO
Single well net NPV-10: $5.7 million at $55/BO; $6.7 million at $60/BO
The Board believes that the Paradox project has the potential to
be a project of considerable scale versus Zephyr's current market
capitalisation, and the drilling of the State 16-2LN-CC side track
lateral would be a major step forward as Zephyr seeks to unlock the
considerable potential value of the project. The decision on
whether to drill the side track lateral will be made once the
Company has full results from all of the data acquired, and the
Board currently expects to be able to make that decision by the end
of March.
Contacts:
Zephyr Energy plc Tel: +44 (0)20 7225 4590
Colin Harrington (CEO)
Chris Eadie (CFO)
Allenby Capital Limited - AIM Nominated Tel: +44 (0)20 3328 5656
Adviser
Jeremy Porter / Liz Kirchner
Turner Pope Investments - Broker Tel: +44 (0)20 3657 0050
Andy Thacker / Zoe Alexander
Flagstaff Strategic and Investor Communications
Tim Thompson / Mark Edwards / Fergus Tel: +44 (0) 20 7129
Mellon 1474
Glossary of Terms and Definitions
1C Low Estimate of Contingent Resources
2C Best Estimate of Contingent Resources
3C High Estimate of Contingent Resources
CONTINGENT RESOURCES
Those quantities of petroleum estimated, as of a given date, to
be potentially recoverable from known accumulations by application
of development projects, but which are not currently considered to
be commercially recoverable due to one or more contingencies.
Contingent Resources may include, for example, projects for
which there are currently no viable markets, or where commercial
recovery is dependent on technology under development, or where
evaluation of the accumulation is insufficient to clearly assess
commerciality. Contingent Resources are further categorized in
accordance with the level of certainty associated with the
estimates and may be sub-classified based on project maturity
and/or characterized by their economic status.
Background to the 16-2 well
As previously announced, Zephyr has been working with a project
team led by the University of Utah's Energy & Geoscience
Institute ("EGI"), in collaboration with the Utah Geological Survey
(the "UGS") and other Utah-based partners. The project is sponsored
by the U.S. Department of Energy and its National Energy Technology
Laboratory (the "DOE").
Entitled "Improving Production in Utah's Emerging Northern
Paradox Unconventional Oil Play," the project's goal is to assess
and perform optimisation analyses for more focused, efficient and
less environmentally-impactful oil production strategies in the
northern Paradox Basin, particularly in the Pennsylvanian Paradox
Formation's Cane Creek shale and adjacent clastic zones.
As part of this study, the EGI and UGS originally planned to
drill a vertical stratigraphic test well to gather data to improve
the understanding of the Paradox Basin play. It was planned that
the proposed well would target the Cane Creek and potentially the
C18/19 reservoirs, acquiring both core data and a comprehensive
well log suite in order to provide valuable new basin data.
Over a period of several months, the project team analysed
multiple potential well locations across the Paradox Basin, and the
Company was delighted that the EGI and UGS selected Zephyr's
Paradox acreage as the location on which to drill the well.
The Company's location was selected for a number of reasons,
including the quality of the Group's underlying 3D seismic data
(which can be tied into the well results to build a stronger
integrated predictive model) as well as a favourable surface
location which will be sited on a pre-existing pad.
After Zephyr's Paradox acreage was selected as the location for
the test well, Zephyr worked with its project partners to construct
a project plan that maximised opportunity for all parties.
A key part of this plan was to design the well in such a way
that it could not only be used to obtain all the data required by
the research project, but so that it could also be re-used by the
Company in the future as the host for a lateral appraisal well.
This approach not only reduces environmental impact but will also
significantly reduce future lateral well costs for the Company.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
MSCFLFSDFEILLIL
(END) Dow Jones Newswires
February 11, 2021 12:48 ET (17:48 GMT)
Zephyr Energy (AQSE:ZPHR.GB)
Historical Stock Chart
From Jun 2024 to Jul 2024
Zephyr Energy (AQSE:ZPHR.GB)
Historical Stock Chart
From Jul 2023 to Jul 2024