Zephyr Energy PLC (AIM:ZPHR, OTCQB:ZPHRF) told investors that it has now finalised its planning for the completion and production testing of the State 36-2 well, which is part of the Paradox project in Utah.
It comes after Zephyr in January reported that the well had intersected a major natural fracture network in the Cane Creek reservoir leading to a significant influx of hydrocarbons into the wellbore.
Operations in the field are due to begin on the State 36-2 well in the next two weeks, starting with a workover using a service rig prior to production. Altogether, the work programmes are expected to run for four to six weeks.
"We're excited to production test the State 36-2 well, an operation which will commence shortly and which (due to the fact we're testing a natural fracture) is anticipated to take significantly less time than the State 16-2 well production test, which is still in the late flow back phase to clean up all injected completion fluids,” chief executive Colin Harrington said in a statement.
Meanwhile, at Zephyr’s State 16-2 well, the company has confirmed stable albeit constrained flows of oil and gas during testing.
The well was, as previously announced, hampered by severe weather and surface facility commissioning issues and as such the company noted that it had brought the well into testing at moderate rates and it saw intermittent blockages (which Zephyr says built up and cleared multiple times).
During testing the company measured a controlled production rate averaging 433 barrels of oil equivalent per day (boepd), comprising 2mln cubic feet of gas and 100 barrels of oil per day, which flowed continuously.
At flow rates above 433 boepd, the well performance "became limited", Zephyr noted.
Zephyr also commented that it was in the early stages of testing the well at higher rates when its mandated flaring limits were reached.
The company now intends to assess whether the performance issues are the result of normal flowing conditions or are related to the completion process used for the well.
Harrington added: "Once the root cause is diagnosed, I'm confident our team will devise appropriate mitigation measures as needed, and our plan will be to seek additional authority for continued testing as we seek a greater understanding of the potential upside of the well.
“It's important to remember that the Paradox is an emerging play and one in which we are breaking new ground, and while start-up issues are not unexpected, our goal is to learn and improve with each subsequent phase of operations.
"We look forward to updating investors on the results from the State 36-2 production test and once the results from the test are analysed, we expect to be in a position to announce our plans for future drilling and infrastructure plans on the Paradox project."