Zephyr Energy PLC (LON:ZPHR) is counting down to spudding of the US government-funded State 16-2 well in Utah, with the programme slated to start before the end of 2020.
The company is working with a project team led by University of Utah's Energy & Geoscience Institute (EGI), as previously announced, and, the project is sponsored by the US Department of Energy (DOE) and its National Energy Technology Laboratory.
It means that the first US$2mln of well spending is funded via a DOE grant, and up to US$1mln of incremental funding will be covered by Zephyr - using funds raised in its recent oversubscribed placing.
READ: Zephyr says its fully funded for State 16-2 well
Updating on progress, Zephyr noted that the first US$600,000 tranche of DOE funding has now been received. This cash is being used to cover bonding, permitting and preliminary groundworks at the site of the 16-2 well.
Zephyr has added to its operations team hiring Bruce Houtchens to assist the project. He is a highly experienced drilling manager and was previously Manager of Drilling & Completions for Fidelity Exploration & Production, the most active and successful driller in the Paradox Basin. A detailed well design is now largely complete, allowing the company to tender for project contracts.
"I am delighted with the progress made to ensure a successful and timely spud of the State 16-2 well,” said Colin Harrington, Zephyr chief executive in a statement.
"In particular, I'm very pleased to welcome Bruce to our project team - I'm not aware of anyone who's drilled more successful horizontal Paradox Basin wells over the last decade.”
He added: "I'd also like to continue to thank the EGI and our other Utah-based partners, all of whom are working very hard to assist Zephyr with the launch of this exciting project.
“I'm very encouraged by the momentum that we are building.”