REG - Zephyr Energy PLC - Award of Federal Drilling Permits

Zephyr EnergyAnnouncement

02/11/2022 07:16

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RNS Number : 0493F  Zephyr Energy PLC  02 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.

 

 

2 November 2022

 

Zephyr Energy plc

("Zephyr" or the "Company")

 

Award of Federal Drilling Permits

 

Zephyr Energy plc (AIM: ZPHR) (OTCQB: ZPHRF), the Rocky Mountain oil and gas
company focused on responsible resource development from carbon-neutral
operations, is pleased to announce that, further to the Company's announcement
on 24 October 2022, it has received approval of its Application for Permit to
Drill ("APD") from the U.S. Bureau of Land Management (the "BLM"), the final
regulatory approval required to spud the State 36-2 LNW-CC well on its project
in the Paradox Basin, Utah, U.S. (the "Paradox project").  Zephyr
simultaneously received approval of its APD for the State 36-3 LN-C9
exploration well, which has been permitted to target the shallower C9
reservoir and which is planned to be drilled from the same well pad.

 

The State 36-2 LNW-CC well is fully-funded and will target the Cane Creek
reservoir. Drilling is planned to a total depth 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).

 

In parallel with the permitting process, Zephyr has completed all road and
site preparation work at the well-site in order to spud the well as soon as
possible following the execution of a rig contract.  The Company is in the
process of finalising a rig contract, and will update the market on the
expected timeline for the spud of the well upon award of the contract.  The
timeline for drilling two additional wells (the State 36-3 LN-C9 exploration
well and the non-operated Kirkwood Oil & Gas well targeting the oil-prone
Cane Creek reservoir near the Cane Creek Field) will be determined after the
State 36-2 LNW-CC has been drilled, factoring in infrastructure capacity and
rig availability.

 

 

Colin Harrington, Zephyr's Chief Executive, said:

 

"We are delighted to have cleared the final regulatory hurdle for the spud of
the 36-2 LNW-CC well and are close to finalising the rig contract. Once the
rig contract is awarded, Zephyr will recommence its Paradox drilling activity
which we believe will be a major step forward in our efforts to unlock what
may be substantial potential across our 45,000 acres of Paradox Basin
holdings.

 

"We look forward to sharing further updates on the drilling programme,
including expected completion and testing schedules, once the rig contract has
been awarded.

"As we embark on this potentially transformational drilling programme, I would
like to reiterate that our mission, as always, is to be responsible stewards
of investors' capital while also being responsible stewards of the
environment."

 

 

 

 

 

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 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 is planning a
three well drilling program commencing later this year 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$35-40 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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