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
Colin Harrington (CEO)
Chris Eadie (CFO)
|
Tel:
+44 (0)20 7225 4590
|
Allenby Capital Limited - AIM Nominated
Adviser
Jeremy Porter / Vivek
Bhardwaj
|
Tel:
+44 (0)20 3328 5656
|
Turner Pope Investments - Joint Broker
James Pope / Andy
Thacker
|
Tel:
+44 (0)20 3657 0050
|
Panmure Gordon (UK) Limited -
Joint Broker
Hugh Rich / James
Sinclair-Ford
|
Tel:
+44 (0) 20 7886 2500
|
Celicourt Communications - Public Relations
Mark Antelme / Felicity Winkles /
Ali AlQahtani
|
Tel: +44 (0) 20 7770 6424
|
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.