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 update on recent progress on its non-operated assets in the Williston Basin, North Dakota, United States of America ("U.S.") and on its flagship project in the Paradox Basin, Utah, U.S (the ''Paradox project").
Williston Basin update
In March 2021, Zephyr completed the acquisition of non-operated working interests in five wells located on three separate pads operated by Whiting Petroleum Corporation ("Whiting"):
· The producing Iverson 11-14HU well;
· The S-Bar 11-7HU and 11-7TFHU wells (which were drilled but not completed ("DUC" wells) at the time of acquisition); and,
· The Feehan 11-9HU and 11-9TFHU wells (which were also DUC wells at the time of acquisition).
In the period since the acquisition closed, Zephyr has received two scheduled monthly revenue payments from the Iverson well. In addition, the S-Bar and Feehan wells were completed by Whiting - completion operations progressed as envisioned, at expected lateral lengths, and ahead of initial schedule.
Zephyr is now pleased to announce that the S-Bar wells have been placed into production, also ahead of forecast schedule, and the Feehan wells are expected to be placed into production within the next month. Zephyr will update Shareholders on production rates in the coming weeks, once the wells have cleaned up and reached peak initial rate.
Preparations continue ahead of the drilling of the State 16-2LN CC lateral appraisal well (the "lateral") which is scheduled to spud in July and which will target the Company's first production from the Paradox project. Final permitting is expected shortly and vendor negotiations (including the rig contract) are expected to be finalised in the coming weeks.
The additional evaluation work related to the overlying reservoirs continues to progress, and it is the Company's intention to update the market by the end of the month once final analysis has been received from our third party partners and consultants.
A reminder that Colin Harrington, Zephyr's Chief Executive Officer, will be presenting at Proactive Investors' One2One Virtual Forum tomorrow, Thursday 17th June 2021.
Colin will be presenting (via online webinar) at 6.00pm and will give an update on the Company's ongoing activities, followed by a Q&A session.
If you would like to join the event, please register in advance at the following link:
Colin Harrington, Chief Executive of Zephyr, said: "We have a great deal of activity going on across our project portfolio and I'm delighted with how everything is progressing. We are particularly gratified that Whiting, the operator of five of our Williston wells, worked to accelerate the completion and production dates on the four DUC wells. When we initially agreed to terms on the acquisition of these interests, we ran our economics at a price of US$45 per barrel of oil. With current pricing at over $70 per barrel, we now envisage significant cash flow generation from this part of our portfolio over the coming months.
"On our flagship Paradox project, we have a fascinating period ahead of us. Preparations for our forthcoming drilling programme continue to move ahead at full speed and we are also excited to finish the evaluation work around the exploration potential of the overlying reservoirs, with more detail on this to come shortly.
"There is significant activity expected across our asset portfolio in the coming weeks, and I look forward to presenting our story to investors tomorrow evening."