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.
17 April 2024
Zephyr Energy plc
("Zephyr" or the
"Company")
State 36-2R well drilling operations
update
Zephyr Energy plc (AIM: ZPHR), the Rocky
Mountain oil and gas company focused on responsible resource
development and carbon-neutral operations, is pleased to provide an
operational update on the State 36-2 LNW-CC-R well (the "new well")
at its flagship project in the Paradox Basin, Utah, U.S. (the
"Paradox project").
Further to the Company's announcement on 22
March 2024, the Helmerich & Payne Rig 257 has begun rigging up
operations to spud the initial, surface section of the new well in
the coming days. All necessary ancillary service providers
have also arrived on site to support the Company's drilling
operations.
The new well, for which the Company expects to
recover substantially all the drilling costs incurred through the
well control insurance policy that it had in place for the State
36-2 LNW-CC well (the "original well"), will target the same Cane
Creek reservoir and the over pressured, gas bearing natural
fracture system that was proven during the drilling of the original
well. Drilling at the new well is planned to reach a total depth
("TD") at 10,362 feet measured depth (9,600 feet true vertical
depth) incorporating a 270-foot horizontal reservoir section (see
Figure 1 below). The new well has also been designed to allow the
drilling of a longer, 10,000-foot horizontal section later, should
that be required.
The key objectives of the new well
are:
o To successfully
complete drilling operations to TD safely and without harm to
people, the environment or
equipment.
o To successfully
twin the original well and intersect the same Cane Creek reservoir
natural fracture system identified by it.
o To confirm the
presence of hydrocarbons as found by the original well, and further
appraise the Cane Creek reservoir at Zephyr's federal White Sands
Unit.
o Should the
original well result be replicated, to assess the reservoir
productivity by flow testing the new well.
Drilling operations are expected to take
approximately 30 days from the date of spud. After reaching
TD, a completion and well test crew will be mobilised to complete
the short horizontal section and test any productive natural
fracture system intersected by the new well.
Colin
Harrington, Zephyr's CEO commented: "We are excited about the commencement
of drilling operations with a goal to deliver a safe and timely
drilling operation followed by a successful well
test."
"We look
forward to keeping our stakeholders updated as drilling progresses
and believe that these operations will be the catalyst to further
unlock the significant potential of the Paradox
project."
Further
Information
Figure
1. Map of the top Cane Creek reservoir
illustrating the well design and targeting of the new well relative
to the original well which found productive hydrocarbon-bearing
natural fractures. The trajectories of the original well and new
well are shown in red and blue respectively.
The new well's key objective is to target the
natural fracture productivity intersected (see Figure 2 below) by
the original well by entering the Cane Creek reservoir close to the
original well bore. This will be achieved by using all offset
geological and geophysical information to help steer the well and
then to perform two phases of electromagnetic ranging to locate the
steel casing of the original well bore. This will allow the Company
to attempt to closely replicate the original well trajectory and
target the reservoir conditions found there as best as possible.
Should that goal be achieved then the new well will be tested to
assess reservoir productivity and its implications for the greater
field development.
Figure
2. Geological cross section of the Cane Creek
reservoir, illustrating the structural form of the reservoir at
this well location and the location of the gas bearing natural
fractures targeted by the well along the fold hinge (see section A
- A' in Figure 1).
Contacts:
Zephyr Energy plc
Colin Harrington (CEO)
Chris Eadie (Group Finance
Director)
|
Tel:
+44 (0)20 7225 4590
|
Allenby Capital Limited - AIM Nominated
Adviser
Jeremy Porter / Vivek
Bhardwaj
|
Tel:
+44 (0)20 3328 5656
|
Turner Pope Investments - Joint Broker
James Pope / Andy
Thacker
|
Tel:
+44 (0)20 3657 0050
|
Panmure Gordon (UK) Limited -
Joint Broker
Hugh Rich / James
Sinclair-Ford
|
Tel:
+44 (0) 20 7886 2500
|
Celicourt Communications - Public Relations
Mark Antelme / Felicity Winkles /
Ali AlQahtani
|
Tel: +44 (0) 20 7770 6424
|
Qualified Person
Dr Gregor Maxwell, BSc Hons. Geology
and Petroleum Geology, PhD, Chief Operating Officer of Zephyr
Energy plc, who meets the criteria of a qualified person under the
AIM Note for Mining and Oil & Gas Companies June 2009, has
reviewed and approved the technical information contained within
this announcement.
*Estimates of resources and reserves
contained within this announcement have been prepared according to
the standards of the Society of Petroleum Engineers. All estimates
are internally generated and subject to third party review and
verification.
Notes to Editors
Zephyr Energy plc (AIM: ZPHR)
(OTCQB: ZPHRF) is a technology-led oil and gas company
focused on responsible resource development from carbon-neutral
operations in the Rocky Mountain region of the
United States. The Company's mission is rooted in two core values:
to be responsible stewards of its investors' capital, and to be
responsible stewards of the environment in which it
works.
Zephyr's flagship asset is an
operated lease holding of over 46,000 gross acres located in
the Paradox Basin, Utah, 25,000 acres of which has
been assessed to hold, net to Zephyr, 2P reserves of 2.6 million
barrels of oil equivalent ("mmboe"), 2C resources of 34 mmboe and
2U resources 270 mmboe.
In addition to its operated assets,
the Company owns working interests in a broad portfolio of
non-operated producing wells across the Williston
Basin in North Dakota and Montana. Cash flow
from the Williston production will be used to fund the
planned Paradox Basin development. In addition, the Board
will consider further opportunistic value-accretive
acquisitions.