I could not be more pleased with the initial results from this latest production test - CEO Colin Harrington
Zephyr Energy PLC (AIM:ZPHR, OTCQB:ZPHRF) has reported strong early results from a production test at its State 36 2R well in Utah, delivering a peak rate of nearly 2,850 barrels of oil equivalent per day without the need for fracture stimulation.
The AIM-listed company said the test, conducted at its Paradox Basin project, showed stable and commercial flow rates over multiple settings and time periods, with minimal water production and high liquid yields, factors that could significantly enhance project economics.
“The production test successfully delivered on all key objectives,” Zephyr said in a statement. “Most importantly, the test data gathered suggests that there is more than sufficient deliverability for a commercial well.”
During one flow period, the well reached a peak of 2,848 barrels of oil equivalent per day, comprising 856 barrels of oil and 11.9 million standard cubic feet of gas, on an 18/64 inch choke. The company said this performance came with “no material drop in bottom hole pressure”, suggesting strong reservoir support.
A separate 48-hour flow test at a more constrained 8/64 inch choke yielded steady rates of between 700 and 1,066 barrels of oil equivalent per day, again with stable pressure.
Zephyr also reported promising technical findings. Fibre optic sensors along the well’s horizontal section indicated hydrocarbon inflow across the full lateral length, suggesting a larger portion of the reservoir may be contributing to production than initially tested. Previous results were based on a 130 foot interval.
Liquid yields from the gas stream were also high, averaging 85 barrels per million cubic feet of gas and ranging between 60 and 200 barrels. These yields are expected to drive stronger returns, though Zephyr noted that liquid rates would vary over time and location as reservoir pressure declines.
Water production remained below 0.5 per cent throughout the test, reducing the likely cost of water handling and disposal, often a significant expense in onshore US wells.
Fluid samples have been collected and are undergoing laboratory analysis to further define the composition and characteristics of the field.
The company said its completion strategy, using hydrajet perforation and acid stimulation, proved effective, and the well's performance matched its P50 estimate for reservoir quality. Zephyr added that the well was completed without fracture stimulation, which could still be applied in the future to further boost output.
"I could not be more pleased with the initial results from this latest production test. Our team has worked exceptionally hard to crack the code to deliver highly economic production from this under-explored basin, and with today's news, I believe we have made huge strides forward," said CEO Colin Harrington.
"While the early results on this single well are fantastic and demonstrate commerciality, I am even more encouraged when considering the potential implications for the broader development of our Paradox project."
Further data, including estimates for total recoverable volumes, will be released in due course.