REG - Zephyr Energy PLC - State 36-2 LNW-CC well update

Zephyr EnergyAnnouncement

11/04/2023 07:00

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RNS Number : 7822V  Zephyr Energy PLC  11 April 2023

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.

 

 

 

 

Zephyr Energy plc

(the "Company" or "Zephyr")

 

11 April 2023

 

 

State 36-2 LNW-CC well update

 

Zephyr Energy plc (AIM: ZPHR) (OTCQB: ZPHRF) provides an update on
operations on the State 36-2 LNW-CC well (the "State 36-2 well" or the "well")
at the Company's flagship project in the Paradox Basin, Utah, U.S.

 

On 19 January 2023 the Company announced that it had intersected a major,
highly-pressured, natural fracture network while drilling the well. This
resulted in a significant influx of hydrocarbons into the wellbore. The well
was subsequently stabilised, and on 20 March 2023 the Company announced that
workover and subsequent production test operations were set to commence.

 

On 7 April 2023, as workover operations were being completed, what appears to
be a failure in a safety valve led to a significant well control incident
despite multiple attempts to secure the well by the rig crew.  As a result,
hydrocarbons were released from the well in an uncontrolled manner.

 

In keeping with safety procedures, all personnel were safely evacuated without
injury.  All relevant authorities were notified and a specialist well control
team (recommended by the Company's insurers) was deployed in order to bring
the well under control as quickly as possible.

 

The Company can now report that well control efforts have proved successful.
While the well pad has been impacted by hydrocarbon residue, efforts are
already under way to remove impacted soil as well as to clean the service rig
and ancillary equipment. Although it is unclear at this time as to the total
volume of gas and condensate released, surface impacts appear to be limited to
an immediate area around the pad, and the Company plans to conduct a
confirmatory environmental survey in the near term.

 

Regarding progression and timing of the planned well test, the Company will
provide a further update in due course once it has had the opportunity to
comprehensively assess the situation and complete any necessary additional
well work prior to testing.

 

 

 

        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

 Celicourt Communications - Public Relations

 Mark Antelme / Felicity Winkles                    Tel: +44 (0) 20 8434 2643

 

 

Qualified Person

 

Dr Gregor Maxwell, BSc Hons. Geology and Petroleum Geology, PhD, Technical
Adviser to the Board of Zephyr Energy plc, who meets the criteria of a
qualified person under the AIM Note for Mining and Oil & Gas Companies
- June 2009, has reviewed and approved the technical information contained
within this announcement.

 

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 to hold,
net to Zephyr, 2P reserves of 2.6 million barrels of oil equivalent ("mmboe"),
2C resources of 34 mmboe and 2U resources 240 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.

 

The Williston portfolio currently consists of working-interests in over 200
modern horizontal wells which are expected to provide production of 1,550 -
1,750 barrels of oil equivalent per day, net to Zephyr, in 2023.  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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