REG - Zephyr Energy PLC - State 36-2R well drilling operations update

Zephyr EnergyAnnouncement

17/04/2024 07:01

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RNS Number : 8799K  Zephyr Energy PLC  17 April 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.

 

17 April 2024

 

 

Zephyr Energy plc

("Zephyr" or the "Company")

 

State 36-2R well drilling operations update

 

Zephyr Energy plc (AIM: ZPHR), the Rocky Mountain oil and gas company focused
on responsible resource development and carbon-neutral operations, is pleased
to provide an operational update on the State 36-2 LNW-CC-R well (the "new
well") at its flagship project in the Paradox Basin, Utah, U.S. (the "Paradox
project").

Further to the Company's announcement on 22 March 2024, the Helmerich &
Payne Rig 257 has begun rigging up operations to spud the initial, surface
section of the new well in the coming days.  All necessary ancillary service
providers have also arrived on site to support the Company's drilling
operations.

The new well, for which the Company expects to recover substantially all the
drilling costs incurred through the well control insurance policy that it had
in place for the State 36-2 LNW-CC well (the "original well"), will target the
same Cane Creek reservoir and the over pressured, gas bearing natural fracture
system that was proven during the drilling of the original well. Drilling at
the new well is planned to reach a total depth ("TD") at 10,362 feet measured
depth (9,600 feet true vertical depth) incorporating a 270-foot horizontal
reservoir section (see Figure 1 below). The new well has also been designed to
allow the drilling of a longer, 10,000-foot horizontal section later, should
that be required.

The key objectives of the new well are:

o  To successfully complete drilling operations to TD safely and without harm
to people, the environment or equipment.

o  To successfully twin the original well and intersect the same Cane Creek
reservoir natural fracture system identified by it.

o  To confirm the presence of hydrocarbons as found by the original well, and
further appraise the Cane Creek reservoir at Zephyr's federal White Sands
Unit.

o  Should the original well result be replicated, to assess the reservoir
productivity by flow testing the new well.

Drilling operations are expected to take approximately 30 days from the date
of spud.  After reaching TD, a completion and well test crew will be
mobilised to complete the short horizontal section and test any productive
natural fracture system intersected by the new well.

Colin Harrington, Zephyr's CEO commented: "We are excited about the
commencement of drilling operations with a goal to deliver a safe and timely
drilling operation followed by a successful well test."

"We look forward to keeping our stakeholders updated as drilling progresses
and believe that these operations will be the catalyst to further unlock the
significant potential of the Paradox project."

 

Further Information

 

Figure 1. Map of the top Cane Creek reservoir illustrating the well design and
targeting of the new well relative to the original well which found productive
hydrocarbon-bearing natural fractures. The trajectories of the original well
and new well are shown in red and blue respectively.

The new well's key objective is to target the natural fracture productivity
intersected (see Figure 2 below) by the original well by entering the Cane
Creek reservoir close to the original well bore. This will be achieved by
using all offset geological and geophysical information to help steer the well
and then to perform two phases of electromagnetic ranging to locate the steel
casing of the original well bore. This will allow the Company to attempt to
closely replicate the original well trajectory and target the reservoir
conditions found there as best as possible. Should that goal be achieved then
the new well will be tested to assess reservoir productivity and its
implications for the greater field development.

 

Figure 2. Geological cross section of the Cane Creek reservoir, illustrating
the structural form of the reservoir at this well location and the location of
the gas bearing natural fractures targeted by the well along the fold hinge
(see section A - A' in Figure 1).

 

Contacts:

 

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

 Colin Harrington (CEO)

 Chris Eadie (Group Finance Director)

 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

 

Qualified Person

Dr Gregor Maxwell, BSc Hons. Geology and Petroleum Geology, PhD, Chief
Operating Officer 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.

*Estimates of resources and reserves contained within this announcement have
been prepared according to the standards of the Society of Petroleum
Engineers. All estimates are internally generated and subject to third party
review and verification.

 

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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