REG - Zephyr Energy PLC - Grant funding from U.S. DOE & drilling update

Zephyr EnergyAnnouncement

29/05/2024 07:15

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RNS Number : 2367Q  Zephyr Energy PLC  29 May 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.

 

29 May 2024

Zephyr Energy plc

(the "Company" or "Zephyr")

 

Award of additional grant funding from U.S. Department of Energy; and,

State 36-2R well drilling update

 

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 receipt of additional grant funding
from the U.S. Department of Energy (the "DOE") for upcoming operations on the
State 36-2R LNW-CC well (the "State 36-2R well") at its project in the Paradox
Basin, Utah (the "Paradox project"). The Company also provides a further
update on current drilling operations on the State 36-2R well.

Grant Funding from U.S. Department of Energy

Following similar U.S. government grants awarded to the Company in the past,
Zephyr has obtained an incremental US$250,000 non-dilutive research grant from
the DOE to support well testing activity on the State 36-2R well. This brings
the total DOE grant funding made available to the Company to US$3.65 million
in recent years.

The grant is administered by the University of Utah's Energy & Geoscience
Institute ("EGI"). Zephyr's technical team continues to work closely with the
EGI, the Utah Geological Survey (the "UGS") and other Utah-based partners
in utilising DOE research funds to fully evaluate the potential overall
productivity of the Paradox Basin.

The objective of the incremental grant is to fund a detailed evaluation of the
State 36-2R production data from the forthcoming State 36-2R well production
test.

State 36-2R well drilling operations update

Drilling operations continue to proceed safely and in line with management's
expectations. The 8 ½ inch section is currently drilled to a depth of 9,940
feet, with the planned section total depth of 10,075 feet to be reached
imminently.  After reaching the section total depth, a casing string will be
set and cemented in place, just above the final Cane Creek reservoir target.

After casing and cementing, drilling will re-commence on the final reservoir
section of the State 36-2R well.  The objective for this short section is to
safely and successfully land the well within the Cane Creek reservoir (the
"Cane Creek") and drill approximately 270 feet horizontally to intersect the
productive natural fracture system encountered in the original well. After
reaching planned final total depth and setting a production liner, the
drilling rig will be demobilised, and the well will be prepared for production
testing.

Across current operations on the 8 ½ inch section of the State 36-2R well,
Zephyr's team has utilised sophisticated MagTraC ranging equipment to ensure
that the State 36-2R well intersects the Cane Creek reservoir as close as
possible to the State 36-2 LNW-CC well (the "original well"). At the most
recent range measurement taken at 9,800 feet measured depth, the State 36-2R
well was only seventeen feet from the original wellbore, with ultimate
intersection on track for less than ten feet of range between the wells. While
this ranging and steering process resulted in slower drilling over the last
ten days, Zephyr's operations team is pleased with the precision of the
targeting of the upcoming intersection with the reservoir.

Colin Harrington, Zephyr's Chief Executive, said: "We are incredibly grateful
to the DOE and our Utah research partners for their ongoing support, both
financially and in terms of our broader collaboration as we jointly seek to
understand and optimise the full potential of the 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 even further aligned
with their respective organisations. We feel their involvement is a strong
endorsement of the Paradox project and of the professional. detailed way in
which we are operating in Utah.

"I am also highly pleased to report that drilling operations on the State
36-2R well continue safely and with such precision. We will continue to keep
our stakeholders fully informed about ongoing drilling operations and the
subsequent production test."

 Contacts

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

 Colin Harrington (CEO)

 Chris Eadie (Group Finance Director & 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

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

 Hugh Rich / James Sinclair-Ford

 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.

Certain statements in this announcement, are, or may be deemed to be, forward
looking statements. Forward looking statements are identified by their use of
terms and phrases such as ''believe'', ''could'', "should" ''envisage'',
''estimate'', ''intend'', ''may'', ''plan'', ''potentially'', "expect",
''will'' or the negative of those, variations or comparable expressions,
including references to assumptions. These forward-looking statements are not
based on historical facts but rather on the Directors' current expectations
and assumptions regarding the Company's future growth, results of operations,
performance, future capital and other expenditures (including the amount,
nature and sources of funding thereof), competitive advantages, business
prospects and opportunities. Such forward looking statements reflect the
Directors' current beliefs and assumptions and are based on information
currently available to the Directors.

 

 

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