Zephyr Energy PLC - State 16-2 Well Update
Prior to publication, the information contained within this announcement was deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation No. 596/2014. With the publication of this announcement, this information is now considered to be in the public domain.
Zephyr Energy plc
(the "Company" or "Zephyr")
State 16-2 Well Update
Drilling & data acquisition completed ahead of schedule;
113 feet of continuous core and open hole logs secured;
initial indications suggest presence of hydrocarbons across multiple reservoir intervals;
data evaluation efforts now underway
Zephyr Energy plc (AIM: ZPHR), the
Zephyr is delighted to announce that the State 16-2 stratigraphic test well was successfully drilled to a measured depth of 9,745 feet total depth ("TD"). Drilling operations were safe and effective, were conducted in accordance with Covid-19 related guidance and restrictions, and were completed well within the Company's forecast timeframe.
Zephyr's primary objective was to drill and set casing at 6,437 feet measured depth in order to provide a host wellbore for a future horizontal side track. The Company achieved this goal within 13 days from spud - and subsequently reached TD within 19 days of spud, a marked improvement over historical drilling efforts in this part of the
Zephyr's secondary objective was to acquire new data to improve the understanding of its
· Approximately 113 feet of continuous whole core across the historically productive
· Rotary side wall cores in seven shallower exploration targets; and
· Gamma ray, neutron density, resistivity, formation lithoscanner and sonic wireline log data across the bulk of the Paradox Formation, all of which add significant new petrophysical information to our existing suite of geologic data.
The 113 feet of
Initial indications show similar log responses to offset wells, suggesting the presence of hydrocarbons in multiple reservoir intervals. The Company will now begin the work to integrate all log and core data to fully explore the initial findings in these complex reservoirs. The analyses will then be combined with Zephyr's existing 3D seismic data, and Shareholders will be updated with detailed results as they become available over the coming weeks.
Now that drilling and data acquisition operations are complete, the State 16-2 well will be temporarily plugged back at 6,437 feet TD. This provides Zephyr the opportunity to economically re-utilise the existing wellbore as the sidetrack host from which a future horizontal appraisal well can be drilled. Planning for this horizontal lateral is already underway, and it will seek to target a series of features identified by our high-quality 3D seismic data. If successful, the State 16-2 lateral would deliver first commercial production from the Company's
"Our drilling team and contractors worked diligently to deliver a safe and effective operation - one which reached our
"The ability to reduce drilling time is important in many ways. Most significantly, it demonstrates that with a modern drilling rig, advanced tools and an experienced operations team, development of our leasehold may be executed more quickly and at a lower cost than previous estimates, which therefore increases our already bullish view of future project economics and value.
"The securing of the continuous core is also significant. Our State 16-2 drilling operation successfully acquired the first substantive rock samples from the
"It's important to bear in mind the relatively untested potential of the
"I'd like to conclude with a note of gratitude for our team, our partners and our contractors. This well was drilled around the clock in challenging conditions, through snow storms and sub-zero temperatures, and the work kept twenty-two dedicated people away from their families over the holidays. Their collective performance was exemplary, as was their adherence to our COVID-19 protocols. I'd like to thank them all, once again, for their hard work, resilience and professionalism."
* Whidden, K.J., Anna, L.O., Pearson, K.M., and Lillis, P.G., 2012,
Assessment of undiscovered oil and gas resources in the
Zephyr Energy plc
Tel: +44 (0)20 7225 4590
Allenby Capital Limited - AIM Nominated Adviser
Tel: +44 (0)20 3328 5656
Turner Pope Investments - Broker
Tel: +44 (0)20 3657 0050
Flagstaff Strategic and Investor Communications
Tel: +44 (0) 20 7129 1474
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.
Background to the 16-2 well
As previously announced, Zephyr has been working with a project team led by the University of Utah's Energy & Geoscience Institute ("EGI"), in collaboration with the Utah Geological Survey (the "UGS") and other
Entitled "Improving Production in
As part of this study, the EGI and UGS originally planned to drill a vertical stratigraphic test well to gather data to improve the understanding of the
Over a period of several months, the project team analysed multiple potential well locations across the
The Company's location was selected for a number of reasons, including the quality of the Group's underlying 3D seismic data (which can be tied into the well results to build a stronger integrated predictive model) as well as a favourable surface location which will be sited on a pre-existing pad.
A key part of this plan was to design the well in such a way that it could not only be used to obtain all the data required by the research project, but so that it could also be re-used by the Company in the future as the host for a lateral appraisal well. This approach not only reduces environmental impact but it will also potentially significantly reduce future well costs for the Company.
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