Zephyr Energy PLC (AIM:ZPHR, OTCQB:ZPHRF) has revealed that the initial production from the Slawson-operated wells has surpassed expectations, boosting significantly the firm’s production volumes.
The company, in a statement, said that the Slawson wells, part of its non-operated asset portfolio in the Williston Basin, North Dakota, have averaged a flow rate of 897 barrels oil equivalent per day (boepd) net to Zephyr.
It supports a robust forecast for the year-end production run rate, now estimated between 1,450 and 1,700 boepd. This marks an improvement of around 50% on the preceding quarter and around 43% year on year.
“We are extremely pleased to report the strong initial production rates from the Slawson wells, which now form a significant portion of our non-operated Williston Basin portfolio,” Zephyr chief executive Colin Harrington said.
“The new volumes will provide a significant boost to our Q4 2023 sales and provide additional cash flows to the company in line with our stated strategy of leveraging non-operated investments to fund the ongoing development of the Paradox project.”
Zephyr's interest in the Slawson wells ranges between 11% and 32%.
In terms of reserves, the wells are believed to hold approximately 550,000 barrels of oil equivalent net to Zephyr.
Additionally, Zephyr provided an update on its Paradox project where the team is advancing the planning for the 'twinned' redrill of the State 36-2 well, known as the State 36-2R well.
Harrington, meanwhile, added: “As 2023 draws towards an end, this positive development will result in Zephyr ending the year at a higher production run rate than last year.
“Over the last 12 months, the company has continued to make significant progress with the Paradox project … In addition, the team has made great progress developing potential gas marketing and gas processing partnerships, and we look forward to providing updates when agreements are executed.
"We have grounds for considerable optimism as we look towards 2024, which is set to be extremely active and characterised by substantial news flow.”
“We continue to prepare for the exciting State 36-2R well redrill, for which we believe substantially all costs will be covered through insurance, and after which we hope to utilise the same rig for a second well. In addition to further delineating the extent of the Paradox project with the drill bit, we also look forward to delivering first regular cash flows from the Paradox project as we progress from exploration to production in the area.”