REG - Zephyr Energy PLC - Operations update

Zephyr EnergyAnnouncement

08/02/2024 07:15

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RNS Number : 4117C  Zephyr Energy PLC  08 February 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.

 8 February 2024

Zephyr Energy plc

("Zephyr" or the "Company")

 

Operations update

 

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 provide an update on its operated project in the
Paradox Basin, Utah (the "Paradox project") and on its non-operated project in
the Williston Basin, North Dakota (the "Williston project").

Paradox Project

Zephyr's operations team continues to progress planning for the forthcoming
"twinned" and fully-funded redrill of the State 36-2 well (the "State 36-2R
well"). The Company retains full well control insurance and expects to recover
substantially all costs associated with the redrill.

In late 2023, to ensure an optimal drilling outcome for the State 36-2R well,
Zephyr's team commenced detailed internal well-planning processes
(supplemented by multiple high-pressure/high temperature specialist service
providers) and continued its extensive interaction with the Company's well
control insurance providers. This process has now concluded and resulted in an
updated drilling plan which has been submitted to state and federal regulators
for approval.

Recently competed operational work has included:

•     Completion of the State 36-2R well geologic programme;

•     Completion of the well basis of design, and completion of all
third-party reviews thereon;

•     Completion of the site water plan;

•   Bid processes for major services, including the rig contract, which are
ongoing with bids in hand and selection underway;

•    A sundry notice has been submitted to the State of Utah and the U.S.
Bureau of Land Management (the "BLM") to amend the existing drilling permit at
the well site; and

•    Gas and Natural Gas Liquids ("NGL") processing and sales and
marketing contracts (including gas transportation) are at an advanced state.

The sundry notice to the existing permit is expected to result in an expedited
approval process from the State of Utah and the BLM and once approved, the
Company plans to move rapidly to execute a rig contract and finalise timing of
the drilling.

Although dependent on weather conditions and rig availability, it is
management's intention to commence drilling as soon as possible once permits
are received.

Williston Project

As widely reported in the media, the Company notes this winter's historically
cold conditions in the Williston Basin which, combined with certain gas
processing constraints, resulted in temporary shut-ins to various portions of
the basin's overall oil production primarily during the month of January.

Zephyr is in contact with its operating partners to assess the impact of any
temporary disruptions as related to its own working interests, and expects to
provide further updates as part of its fourth quarter 2023 trading update on
the Williston project which will be released by the end of February 2024.

 

Colin Harrington, Zephyr's CEO, commented:

"Our team continues its intensive and robust planning process for the State
36-2R well and once the sundry amendment to the drilling programme is
approved, we will seek to expedite operations at site to commence drilling
operations as soon as possible.

"The team has done excellent work in progressing major contracts and
infrastructure solutions, and we look forward to providing continued news flow
over the coming weeks and months."

 

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

 Hugh Rich / James Sinclair-Ford

 Celicourt Communications - Public Relations       Tel: +44 (0) 20 7770 6424

 Mark Antelme / Felicity Winkles / Ali AlQahtani

 

 

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 lease holding of over 46,000 gross
acres 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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