REG - Zephyr Energy PLC - Award of rig contract

Zephyr EnergyAnnouncement

23/12/2024 07:00

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RNS Number : 0894R  Zephyr Energy PLC  23 December 2024

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.

 

23 December 2024

 

Zephyr Energy plc

("Zephyr" or the "Company")

 

Award of rig contract

 

Zephyr Energy plc (AIM: ZPHR) (OTCQB: ZPHRF), the Rocky Mountain oil and
gas company focused on responsible resource development and carbon-neutral
operations, provides an update on the Company's flagship project in
the Paradox Basin, Utah, U.S. (the "Paradox project") where the Company is
preparing to drill an extended lateral (the "extended lateral") from the
existing wellbore of the State 36-2 LNW-CC-R well (the "well").

 

Award of rig contract

 

Following the securing of the wellbore-level funding, details of which were
announced on 18 December 2024, the Company is pleased to announce that it has
signed a rig contract with Nabors Drilling USA ("Nabors") for its B29 rig
(the "rig") to drill the extended lateral.

 

Nabors is a global drilling contractor which operates one of the world's
largest land drilling fleets, and has a wealth of onshore U.S. drilling
experience.

 

The rig is well-suited to drill the extended lateral and manage the high
reservoir pressures expected to be encountered at the well.  The rig and crew
are currently wrapping up a sustained and successful drilling campaign in a
nearby basin and are expected to mobilise to the well site by mid- January.

 

In the meantime, the Company has mobilised a workover rig to the site in order
to pull production tubing and prepare the wellbore ahead of the larger Nabors
drilling rig moving to site.

 

Outlook for 2025

 

The drilling of the extended lateral is expected to commence in January
2025.  The well will be drilled horizontally from near the base of the
existing wellbore and is expected to target an additional 5,500 feet of the
Cane Creek reservoir. Zephyr's management estimates that ultimate recoveries
from the well, following its completion, could be up to two million barrels of
oil equivalent.

 

Following the completion of the extended lateral, the Nabors rig will be
demobilised and equipment for the completion and production testing of the
well will be moved to site. It is currently expected that the results from the
production test on the well will be available by the end of March 2025.

 

Once the results from the production test are known and considered sufficient,
the Company will work to finalise gas processing and related infrastructure
requirements for the project, in order to tie in both the well and the State
16-2 LN-CC well as soon as practicable.

 

 

 Colin Harrington, Zephyr's Chief Executive, said:

"We are delighted to secure Nabor's B29 rig within our time frame, and we
believe the rig is ideally suited to drill this well. Our primary goal is to
deliver a safe and effective drilling operation, with full drilling operations
expected to commence early in the New Year.

"Now that the funding for this well is secured and the rig contract is in
place, we can look forward to 2025 with optimism and confidence. I'm pleased
we've reached the end of 2024 on such a positive note, with all the pieces in
place for us to deliver on our key strategic objective of opening up the next
prolific onshore U.S. oil and gas play.

"We will continue to provide regular updates on progress and, in the meantime,
I would like to thank our stakeholders for their ongoing support and wish
everyone a safe and peaceful holiday season."

Contacts:

 

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

 Colin Harrington (CEO)

 Chris Eadie (Group Finance Director and Company Secretary)

 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

 Canaccord Genuity Limited - Joint-Broker                      Tel: +44 (0)20 7523 8000

 Henry Fitzgerald-O'Connor / Charlie Hammond

 Celicourt Communications - PR

 Mark Antelme / Felicity Winkles / Ali AlQahtani               Tel: +44 (0) 20 7770 6424

 

 

 

 

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 46,000-acre leaseholding 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.

 

 

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