REG - Zephyr Energy PLC - Successful initial results from production test

Zephyr EnergyAnnouncement

07/05/2025 07:00

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RNS Number : 5882H  Zephyr Energy PLC  07 May 2025

 

 

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.

 

7 May 2025

Zephyr Energy plc

("Zephyr" or the "Company")

 

Successful initial results from State 36-2R well production test

 

Zephyr Energy plc (AIM: ZPHR) (OTCQB: ZPHRF) is pleased to provide initial
results from the production test on the State 36-2 LNW-CC-R well (the "well")
at the Company's flagship project in the Paradox Basin, Utah, U.S. (the
"Paradox project").

 

During the production test, the well was tested at multiple flow rates in
order to gather data to determine the flow capacity of the well, to provide an
early estimate of potential resource volumes, and to obtain high quality fluid
samples. We are pleased to report that the production test successfully
delivered on all these key objectives, and, most importantly, the test data
gathered suggests that there is more than sufficient deliverability for a
commercial well.

 

 

 

Initial production test observations include:

·    A peak rate of 2,848 barrels of oil equivalent per day ("boepd")
(11.9 million standard cubic feet per day ("mmscf/d") and 856 barrels of oil
per day ("bopd")) on a 18/64-inch choke setting, which was achieved with no
material drop in bottom hole pressure.

 

·    During a separate, planned 48-hour period of stable flow, the well
delivered steady production rates averaging 3-4 mmscf/d and 200-400 bopd
(700-1,066 boepd total), at a choke setting of 8/64-inch, with no material
drop in bottom hole pressure.

 

·    Well test data and interpretation suggest that there is more than
sufficient well deliverability for a commercial well.

 

·    Data gathered from a fibre optic cable run along the length of
lateral suggests that inflow of hydrocarbons across the length of the lateral
is occurring, indicating the potential for a much larger reservoir volume to
be drained compared with the initial completed interval of 130 feet in the
previous production test (as announced on 6 September 2024).

 

·    Elevated condensate-yields were observed (in a range of 60-200
barrels of oil ("bo") per million standard cubic feet ("mmscf") with an 85
bo/mmscf average).  While liquid yields will vary across the field area and
in time as the reservoir pressure drops during field production, the overall
elevated liquid yields are expected to be a significant driver of enhanced
project economics.

 

·    Water cut was less than 0.5% throughout the duration of the
test. This continued evidence of limited water production is another
potential boost to the well's economics by reducing the need for expensive
water disposal processes.

 

·    Produced gas and condensate fluid samples have been collected and a
detailed fluid laboratory analysis is currently underway to further
characterise the field's fluid fill and composition.

 

The well test results suggest that the chosen completion strategy (hydra-jet
abrasive perforation and matrix acidisation) was highly successful, and the
test data results fit well with the Company's P50 estimate of reservoir
properties.  It should be noted that no fracture stimulation was performed to
achieve this excellent well deliverability result. Fracture stimulation could
offer further upside potential for both the well, and for the broader Paradox
project development.

 

Further results from the production test, including estimated ultimate
recoveries, will be announced when available.

 

 

Colin Harrington, Zephyr's Chief Executive, said:

 

"I could not be more pleased with the initial results from this latest
production test.  Our team has worked exceptionally hard to crack the code to
deliver highly economic production from this under-explored basin, and with
today's news I believe we have made huge strides forward.

 

While the early results on this single well are fantastic and demonstrate
commerciality, I am even more encouraged when considering the potential
implications for the broader development of our Paradox project."

 

 

 

 Contacts                                                       Tel: +44 (0)20 7225 4590

 Zephyr Energy plc

 Colin Harrington (CEO)

 Chris Eadie (Group Finance Director and 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

 Canaccord Genuity Limited - Joint-Broker                      Tel: +44 (0)20 7523 8000

 Henry Fitzgerald-O'Connor / Charlie Hammond

 Celicourt Communications - PR

 Mark Antelme / Felicity Winkles / Ali AlQahtani               Tel: +44 (0) 20 7770 6424

 

 

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 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.

 

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