Zephyr Energy PLC (AIM:ZPHR, OTCQB:ZPHRF) has delivered what it described as highly encouraging production testing results from its latest well at the Paradox project, in Utah, where initial rates reached a peak of 1,350 barrels oil equivalent per day.
The company, in a statement, said it had completed the initial phase of the production test on the State 36-2R well, which demonstrated high reservoir deliverability.
The peak production rate achieved during the test was 1,350 barrels of oil equivalent per day, though it was still constrained and ‘choked back’.
Importantly, the test showed almost zero evidence of water production, which is a boost to the project economics.
"We're delighted with the results from the initial production test,” chief executive Colin Harrington said.
“The well demonstrated excellent deliverability and consistently higher condensate yields than expected, both of which are highly encouraging signs for the underlying value of our wider Paradox asset base.
"The condensate barrels produced from the well to date have been tested and were sold at a price close to current WTI crude oil prices (inclusive of trucking costs), which indicates that future barrels could be in strong demand in the local refinery market.”
Zephyr said that the well’s condensate yield averaged 180 barrels per 1,000 mscf produced and peaked at over 600 barrels of condensate per day.
It also noted evidence that the natural fracture network at this location may be partially obstructed by heavyweight drilling mud or compartmentalized by faulting. The company plans to acidize the well to remove any drilling mud emulsions and improve connectivity with the larger reservoir.
"Our next step is to further clean out the nearby reservoir to attempt to maximise the well's connectivity with the larger reservoir, and then immediately run a second production test,” Harrington added.
“The data from that test will be used to determine our future offtake and processing requirements.”