Zephyr Energy PLC (AIM:ZPHR, OTCQB:ZPHRF) said it has suspended drilling operations at its new well on the Paradox project to ensure safety following a significant and unexpected influx of hydrocarbons from an apparent natural fracture network.
The company told investors that at a depth of around 9,598 feet the State 36-2 LNW-CC well encountered the influx of hydrocarbons, where the well intersected the fracture network – the hydrocarbons were diverted safely to surface and flared.
It is now analysing all options for the well's safe completion, which may include running production casing and completing the well without further drilling – the intended lateral section would not be completed and fracking is not likely necessary either.
"While we've long planned to artificially stimulate the reservoir in order to achieve hydrocarbon production from the well, we've always known that encountering a natural fracture network was both a drilling risk and a feature that could significantly enhance the overall potential productivity of the well,” said Zephyr Energy chief executive Colin Harrington in a statement.
“As such, all necessary procedures and precautions were in place in the event the well encountered an over-pressured natural fracture network. Whilst we're in an early phase of assessment, previous wells in the Paradox Basin which successfully targeted natural fractures have historically been prolific production wells.”
Harrington added: “I want to reiterate that the safety of our team and our contractors is our top priority, and continuing to maintain a safe operational environment is of paramount importance to us.
“I'd like to note that over the past two months, our operations team dealt with an exceedingly challenging drilling environment, which included mechanical issues and significant weather impacts from the historic atmospheric river system flowing over and from California.
“While delays in isolation can be frustrating, the result is we now have confirmed hydrocarbon presence, significant reservoir over-pressure and the presence of a highly permeable natural fracture network at this location - all very encouraging signs for an economic and productive well.”