REG - Zephyr Energy PLC - State 16-2 LN-CC well – Production test commenced

Zephyr EnergyAnnouncement

01/12/2022 07:00

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RNS Number : 1908I  Zephyr Energy PLC  01 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.

 

 

1 December 2022

Zephyr Energy plc

(the "Company" or "Zephyr")

 

 State 16-2 LN-CC well - Commencement of production test

 

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 that, following the completion of
facilities construction and commissioning operations, the next phase of
production testing has commenced on the State 16-2 LN-CC well (the "well") and
hydrocarbons are now flowing from the well.  The well is located on the
Company's flagship project in the Paradox Basin, Utah, in the United States of
America (the "U.S.") (together the "Paradox project").

 

The well was successfully drilled, completed, and tested in December 2021.
Initial production rates peaked at approximately 1,100 barrels of oil
equivalent per day despite production being constrained and heavily choked
throughout the initial production test due to surface equipment limitations,
details of which were announced by the Company on 8 December 2021.

 

Since the initial test, Zephyr's operations team, working with specialised
facility consultants, spent significant time designing and augmenting surface
facilities at the well in order to:

a) test plans for improved flow assurance;

b) prepare for eventual gas export and continual production operations; and,

c) obtain further production data for overall well and field management.

Further updates from the production test are expected to be provided as
appropriate in the coming weeks.

Colin Harrington, Zephyr's Chief Executive, said: "I am pleased to announce
that following the completion of the significant upfront planning, design,
construction and commissioning operations, the next phase of production
testing has commenced and hydrocarbons are once again being produced from the
well.

"I would especially like to commend our operations team and contractors who
worked tirelessly to get the facilities completed and the test underway,
particularly as this work has taken place in parallel with the ongoing
drilling of our State 36-2 LNW-CC well.

"We look forward to keeping our stakeholders informed as the test progresses
over the coming weeks - and, as always, we will endeavour to operate in line
with our core mission:  to be responsible stewards of our investors' capital
and responsible stewards of the environment in which we work."

 

     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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