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Zephyr Energy says its “thrilled” with initiation data from State 16-2 well

“We expect to receive multiple rounds of reservoir information, and we look forward to updating shareholders with our initial findings later this week”

Zephyr Energy PLC - Zephyr Energy says its “thrilled” with initiation data from State 16-2 well

Zephyr Energy PLC (LON:ZPHR) told investors it has successfully plugged the State 16-2 well for future re-entry and horizontal follow-up, whilst well data is analysed.

The explorer noted that it has secured 113 feet of continuous core from the Cane Creek reservoir. Overall some 31 sidewall cores were also gathered from 11 overlying secondary reservoirs, which is more than the pre-drill goal of 20 samples from 7 reservoirs. Well logs were also taken across most of the Paradox formation.

Initial indications from the data suggests the presence of hydrocarbons in multiple reservoir intervals, Zephyr said. It is expected that initial results will be announced on January 29.

"We are thrilled with the results of the State 16-2 drilling campaign, and we eagerly await more detailed analysis from the data acquired,” said Zephyr chief executive Colin Harrington, in a statement.

“We expect to receive multiple rounds of reservoir information, and we look forward to updating shareholders with our initial findings later this week. In the meantime, in order to maintain our significant momentum, we are moving full steam ahead with preparations for the potential horizontal lateral. 

“Detailed planning and permitting is well underway - and in the event we elect to undertake the next phase of drilling, we will be well-positioned to move forward on an expedited basis.”

Harrington added: “We very much look forward to the continuation of our joint efforts to unlock the significant economic value of the Paradox Basin while always minimising the impact on the environment in which we work."

No impact as Biden makes changes to permitting

Zephyr also noted its plans and its interpretation of the current permitting situation in the United States under the Biden administration.

The US government has in recent days launched a new directive to grant temporary decision-making powers for Federal land leasing and permitting decisions to senior personnel within the Department of Interior.

It is broadly anticipated that this will see decisions for drill permits take longer than the prior 60-day process that was in place.

“Zephyr has long anticipated the potential for a slowdown on federal lease sales and permitting under a new administration, and welcomes the Biden Administration's efforts to undertake a responsible review of current practices,” the company said.

“The board believes Zephyr's core mission - to develop resources economically and responsibly, with the utmost care and minimal environmental impact - is well aligned with the aims of the new administration.”

“The temporary senior-level review on new federal leasing does not impact Zephyr's current leases, as the company dedicated significant resources over the last eighteen months to solidify all existing federal leases across the entirety of its acreage within its 3D seismic position.”

Zephyr noted that the State 16-2 well is located on Utah state land, and permits for drilling within state lease boundaries are unaffected by the temporary Federal permit review. 

Similarly, it already holds two fully approved federal drilling permits for wells on the Paradox which have not yet been drilled.

Quick facts: Zephyr Energy PLC

Price: 2.47 GBX

Market: LSE
Market Cap: £16.46 m

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