Zephyr Energy PLC (AIM:ZPHR, OTCQB:ZPHRF, FRA:VD5N) has approved additional engineering and well work at its Paradox project in Utah as it prepares for initial gas-processing capacity of up to 15 million standard cubic feet per day, three times its earlier 5 mmscf/d base case.
The work will be funded from existing cash and run in parallel with Enbridge’s regulatory process to uprate operating pressures on the 16-inch pipeline that will carry Zephyr’s gas into the Williams-operated Northwest Pipeline system.
Initial volumes are planned from the State 36-2R and Federal 28-11 wells. Detailed engineering is underway for a modular processing system, while work to equip, tie in and return the two wells to production will follow completion of the final design.
Chief executive Colin Harrington said the board had gained confidence that Enbridge’s regulatory process would “conclude in a satisfactory manner”, allowing Zephyr to commit funding ahead of formal approval.
Enbridge has completed a mandatory in-line inspection of the pipeline and is carrying out visual inspections of four short sections, with no safety concerns identified so far. Regulatory approval nevertheless remains the key requirement for first gas, with its timing still uncertain.
Zephyr is also progressing potential farm-out discussions and a proposed US$15 million commodity purchase agreement announced on 27 July.
