In conversation with Thomas Warner, Colin Harrington, the CEO of Zephyr Energy PLC, provides an in-depth update on the company's operations in the Paradox Basin.
The discussion covers the challenges and opportunities surrounding the State 36-2 LNW-CC well, the promising prospects of the Greentown Federal 28-11 well, and the company's strategic expansion into the Salt Wash Field.
This interview offers valuable insights into Zephyr Energy's multi-faceted approach to maximising shareholder value.
Thomas Warner: We've received an update on the 36-2 well, which has been causing some trouble. Can you elaborate on the decision you've reached?
Colin Harrington: Absolutely. We have a significant hydrocarbon discovery, which is both a challenge and an opportunity. The blowout on the well was due to a faulty valve. We've spent months working on it, and after multiple trips in and out of the hole, we've decided to redrill the well from the same pad. This will help us set up very nicely for next year.
TW: How much of a setback in terms of timing are we talking about?
CH: We aim to be drilling by the first half of next year, if not before. The board has just made this decision, and the primary driver of timing will be getting a drill contract.
TW: Moving on to the 28-11 well, could you bring us up to speed?
CH: Certainly. The 28-11 well is producing about 50 barrels a day. We're going to take the workover rig from the 36-2 and put it on the 28-11 to do some small related work like replacing a pump. This will be a great steady producer for us, especially at these commodity prices.
TW: It seems a shame you have to flare the gas rather than just finding a way to sell it.
CH: As soon as our gas processing is up and running, we'll be able to sell the gas as well. We're pushing forward as fast as we can. We're not a one-trick pony; we have a lot of underlying work that's going on and a lot of value that's being created.
TW: You've also announced some more acreage. Will that keep you busy in the next few months?
CH: We're really excited about this. We plan to take the rig that will redrill the 36-2 and move it to the Salt Wash Field afterwards to drill a well there. We think it ties in very nicely with what we're doing. We're looking forward to a strong drilling campaign next year.
TW: How are you planning to fund these new ventures?
CH: Everything we're doing will be done from existing cash resources, not from any type of equity raise. We've got a lot of cash flow that's coming in the first half of next year.
TW: What are the long-term prospects for Zephyr Energy in light of these developments?
CH: We're committed to making the Paradox project work. We have a significant discovery, and we're doing our best to generate the most value for the company. We're also looking at partnerships on the infrastructure side to help us build that out. All in all, we're setting up very nicely for the future.