TIDMZPHR
RNS Number : 7983P
Zephyr Energy PLC
14 February 2023
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.
14 February 2023
Zephyr Energy plc
(the "Company" or "Zephyr")
State 36-2 LNW-CC well update
Well cased, natural fracture reservoir to be production
tested
Future horizontal lateral potential remains
Zephyr Energy plc (AIM: ZPHR) (OTCQB: ZPHRF), the Rocky Mountain
oil and gas company focused on responsible resource development and
carbon-neutral operations, is pleased to provide an update on
operations on the State 36-2 LNW-CC well ("the well") at the
Company's flagship project in the Paradox Basin, Utah, U.S.
As announced by the Company on 19 January 2023, the well
intersected a major natural fracture network in the Cane Creek
reservoir which led to a significant influx of hydrocarbons into
the wellbore. This influx was managed and safely controlled, which
subsequently allowed for the drilling of an additional 132 feet
into the fractured and productive Cane Creek reservoir, at which
point the Company elected to run production casing down the total
depth of the well.
Operations to run 7-inch production casing were successful. The
well has now been made fully safe and the CWC Ironhand 118 drilling
rig has been released. In the coming weeks and subject to service
availability, the Company plans to commence production testing and
potential completion of the fractured Cane Creek reservoir
interval.
In addition to near-term testing, the running of the 7-inch
casing string provides the Company with the optionality to return
to the well (should it elect to do so) to drill an extended lateral
at a later date. A subsequent lateral would enable the Company to
test for further natural fracture presence at this location within
the Cane Creek reservoir, and also enable the well to be completed
by hydraulic stimulation across a longer lateral should Zephyr seek
to increase well productivity in the future.
Initial results indicate that the well penetrated a folded and
naturally fractured Cane Creek reservoir, features which have been
highly productive in other Cane Creek wells. Pore pressure analysis
suggests that the well encountered very high reservoir
overpressure, with formation pressures estimated at around 9,300
pounds per square inch (which is broadly consistent with previously
drilled offset wells).
The well further delineates the presence of natural gas and
condensate within a large structural compartment, and at a new
location within Zephyr's acreage and 3D seismic coverage - which
provides additional confirmation of Zephyr's model for hydrocarbons
in place across the acreage position.
Colin Harrington, Zephyr's Chief Executive, said:
"The State 36-2 LNW-CC well was a challenging and lengthy
operation, more difficult than expected but not atypical when
drilling in an immature, remote and highly over-pressured basin.
Despite the challenges, we have managed to move the bar again and
delivered what would appear to be another productive well on our
acreage.
"It is worth noting that previous operators drilled three
vertical wells on this acreage, only one of which was productive.
Zephyr has now drilled two wells in the Cane Creek reservoir, both
of which appear to be productive - a fact which highlights the
benefits of utilising modern 3D seismic data and drilling with
modern oilfield technologies, practices and services.
"Our next step is to commence the well test which we aim to get
underway in the coming weeks, subject to weather and service
availability. Production at the State 16-2 LN-CC remains ongoing as
well, and the Company will update the market as soon as that test
has concluded."
Contacts
Zephyr Energy plc Tel: +44 (0)20 7225
Colin Harrington (CEO) 4590
Chris Eadie (CFO)
Allenby Capital Limited - AIM Nominated Tel: +44 (0)20 3328
Adviser 5656
Jeremy Porter / Vivek Bhardwaj
Turner Pope Investments - Joint-Broker Tel: +44 (0)20 3657
James Pope / Andy Thacker 0050
Panmure Gordon (UK) Limited - Joint-Broker
John Prior / Hugh Rich / James Sinclair-Ford Tel: +44 (0) 20 7886
/ Harriette Johnson 2500
Celicourt Communications - PR
Mark Antelme / Felicity Winkles
Tel: +44 (0) 20 8434
2643
Qualified Person
Dr Gregor Maxwell, BSc Hons. Geology and Petroleum Geology, PhD,
Technical Adviser to the Board 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.
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 45,000-acre leaseholding
located in the Paradox Basin, Utah, 25,000 acres of which has been
assessed by third party consultants Sproule International to hold,
net to Zephyr, 2P reserves of 2.1 million barrels of oil equivalent
("mmboe"), 2C resources of 27 mmboe and 2U resources 203 mmboe.
Following the successful initial production testing of the recently
drilled and completed State 16-2LN-CC well, Zephyr has planned a
three well drilling program - commencing in 2022 with the State
36-2 LNW-CC well - to further delineate the scale and value of the
project.
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.
The Williston portfolio currently consists of working-interests
in over 200 modern horizontal wells which are expected to provide
production of 1,550 - 1,750 barrels of oil equivalent per day, net
to Zephyr, in 2023. 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.
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