REG - Zephyr Energy PLC - 36-2 LNW-CC well – Drilling Operations Commenced

Zephyr EnergyAnnouncement

21/11/2022 07:00

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RNS Number : 0352H  Zephyr Energy PLC  21 November 2022

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.

 

 

21 November 2022

Zephyr Energy plc

(the "Company" or "Zephyr")

 

 State 36-2 LNW-CC well - Drilling Operations Commenced

 

 

Zephyr Energy plc (AIM: ZPHR), the Rocky Mountain oil and gas company focused
on responsible resource development and carbon-neutral operations, is pleased
to announce that drilling operations have commenced on the State 36-2 LNW-CC
well (the "well") at its flagship project in the Paradox Basin, Utah, in the
United States of America ("U.S.") (the "Paradox project").

 

Summary of drilling operations

 

Over the last week, CWC Ironhand Drilling Rig 118 ("Rig 118") mobilised to the
well-site, where it was subsequently assembled and tested.  In addition, all
necessary ancillary service providers arrived on site to support drilling
operations.

 

The fully-funded well will target the Cane Creek reservoir, and drilling is
planned to a total depth ("TD") at 20,456 feet measured depth (9,598 feet true
vertical depth) incorporating a 10,346 feet horizontal reservoir section.
The well's objective is to further delineate the Cane Creek reservoir
beyond the productive State 16-2 LN-CC well and the nearby Federal 28-11 well
(which was recently acquired by Zephyr and is currently shut-in due to
infrastructure constraints, details of which were announced by the Company
on 14 September 2022).

Drilling operations are expected to take approximately 30 days.  After
reaching TD and dependent on schedule and availability, a completion crew will
subsequently be mobilised by the Company to hydraulically stimulate the
horizontal portion of the well, immediately after which production testing
shall commence.  Further updates will be provided in due course.

Colin Harrington, Zephyr's Chief Executive, said: "The commencement of
drilling of the State 36-2 LNW-CC well is another landmark moment for the
Company in its pursuit of unlocking the significant potential upside value
from the Paradox project.

I'd like to thank our many partners and contractors who worked tirelessly
through challenging conditions to meet our ambitious timeline following
receipt of the final permit earlier this month. The focus now turns to
drilling and operating in the safest and most effective manner possible, and I
know this commitment is shared by all personnel on the drill site.

"While Zephyr's primary objective for the well is to target production from
the Cane Creek reservoir, we also plan to use the drilling operation to
acquire important additional data from overlying reservoir targets.

"We look forward to keeping our stakeholders informed as drilling progresses
over the coming weeks, and, as always, we will endeavour to operate in line
with our core mission:  to be responsible stewards of our investors' capital
and responsible stewards of the environment in which we work."

 

Dawn rises over the CWC Ironhand Drilling Rig 118 at the State 36-2 LNW-CC
well

 

 

 

     Contacts

 Zephyr Energy plc                                                   Tel: +44 (0)20 7225 4590

 Colin Harrington (CEO)

 Chris Eadie (CFO)

 Allenby Capital Limited - AIM Nominated Adviser                     Tel: +44 (0)20 3328 5656

 Jeremy Porter / Vivek Bhardwaj

 Turner Pope Investments - Joint-Broker                              Tel: +44 (0)20 3657 0050

 James Pope / Andy Thacker

 Panmure Gordon (UK) Limited - Joint-Broker                         Tel: +44 (0) 20 7886 2500

 John Prior / Hugh Rich / James Sinclair-Ford / Harriette Johnson

 Celicourt Communications - PR

 Mark Antelme / Felicity Winkles                                    Tel: +44 (0) 20 8434 2643

 

 

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 US$40-45 million of
revenue, net to Zephyr, in 2022.  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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