REG - Zephyr Energy PLC - Award of Grant Funding

Zephyr EnergyAnnouncement

09/12/2022 07:00

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RNS Number : 1439J  Zephyr Energy PLC  09 December 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.

 

 

9 December 2022

Zephyr Energy plc

(the "Company" or "Zephyr")

 

Award of Grant Funding

Additional $1m from U.S. Department of Energy

to further develop understanding of Cane Creek and overlying reservoirs

 

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 announce the signing of an amended cooperation
agreement detailing an additional US$1.0 million in non-dilutive research
grant funding for the Company.  These funds will be utilised for data
gathering purposes during the ongoing drilling of Zephyr's State 36-2 LNW-CC
well (the "well") in the Paradox Basin, Utah, U.S. (the "Paradox project").

 

Zephyr initially received a total of US$2.1 million in U.S. government-backed
research grant funding for operations at its State 16-2 well in 2020 and 2021
(as first announced by the Company on 2 September 2020).  Since then,
Zephyr's technical team has worked closely with the research project team
which is 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 funding continues to be
sponsored by the U.S. Department of Energy and its National Energy
Technology Laboratory (the "DOE").

 

The objective of the additional funding is to acquire further geological data
to assist in the understanding of the Cane Creek reservoir and of the
additional reservoirs overlying the Cane Creek reservoir.

 

The following is a summary of the main objectives related to the additional
grant monies:

 

·    To fund a Distributed Acoustic Sensor (DAS) fibre in the lateral
portion of the well in order to evaluate the stimulation and any
post-stimulation fluid production. This will assist Zephyr and the EGI with
understanding frac geometry and will latterly measure inflow rates along the
horizontal part of the well.

·  To deploy QuadCombo and lithoscanning logging tools, to further evaluate
the shallow Paradox Formation, and the C9 clastic zone in particular.

·    To obtain additional cuttings for use in fracture analysis.

 

Zephyr will acquire the data during the ongoing drilling operations on the
well and will have full access to the results of the research project, which
are expected to provide significant insight into both the Cane Creek and
overlying reservoirs.

 

The Board hopes the results will materially assist Zephyr in its efforts to
maximise the chance of success and optimise efficiencies with future well
planning and drilling operations, especially in relation to planned
exploration drilling in the overlying Paradox Formation exploration zones and
the C9 reservoir zone in particular.

 

Colin Harrington, Zephyr's Chief Executive, said: "I am delighted to announce
the award of this incremental research funding, the results of which are
expected to further enhance our technical understanding of the Cane Creek and
overlying reservoirs. The expected output from this analysis will assist with
future well planning and drilling operations, particularly in relation to the
C9 overlying reservoir, as we look to unlock further value from our Paradox
project.

 

I would like to thank the DOE, the EGI and the UGS for their continued focus
and investment in the Paradox, and we are excited to be further aligned with
their respective organisations.

 

We look forward to keeping our stakeholders updated with the results from this
research and from our ongoing drilling and production test operations."

 

     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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