Rocky Mountains oil and gas company Zephyr Energy PLC has released its second-quarter results for the Williston Basin, North Dakota, alongside operational insights into its Paradox Basin project in Utah and State 36-2 LNW-CC well.
In the Williston Basin, Zephyr reported quarterly revenues of US$7.1 million (£5.6 million), a rise from the first quarter's US$6.3 million.
Operating income for the second quarter was US$4.2 million, a decrease from the previous quarter's US$5.7 million, though sales volumes averaged 1,385 barrels of oil equivalent per day, showing an increase from the first quarter's average of 1,093 bopd.
As of 30 June 2023, Zephyr had 223 wells ready for production.
Zephyr's board has decided to participate in Continental Resources’ plans to drill 10 new wells in a prime section of the Williston Basin, allocating approximately US$205,000 to the endeavour.
Zephyr expands land holdings in Paradox Basin
In the Paradox Basin, Utah, Zephyr acquired an additional 640 leased acres, believed to be promising for mid to long-term development. Part of the Utah School and Institutional Trust Lands Administration, the land is near Zephyr's White Sands Unit and gas export facilities.
This acquisition is a strategic move by Zephyr to manage its Paradox Basin portfolio, resulting in a strong land position that the board believes is hard to match in the current regulatory climate.
Zephyr now oversees more than 46,000 acres in the Paradox Basin.
State 36-2 LNW-CC well update
Regarding the State 36-2 LNW-CC well in the Paradox Basin, operations have been steady but were impacted by the recent extreme heat in the US Southwest.
To ensure safety, work was restricted to nighttime, but with improving conditions, daytime operations are set to recommence.
Zephyr noted that it has insurance coverage for well control and expects to recover most costs linked to the reduced operations.
"Zephyr's profitable and diverse non-operated asset base continues to deliver low risk, high margin cash flows for the company,” said Colin Harrington, chief executive of Zephyr.
Harrington added: “Near-term growth includes our investment in the newly drilled and completed Slawson-operated wells which are expected to significantly boost non-operated production rates when brought online in the autumn.
“The new wells proposed by Continental will also help to grow volumes over the upcoming year and demonstrate continued growth from the existing non-operated portfolio.
"On our operated Paradox project, our near-term priority is to deliver a safe and successful production test of the State 36-2 LNW-CC well, and we look forward to updating shareholders when the test commences."