Zephyr Energy PLC (LON:ZPHR) is hitting the ground running in North Dakota where all recently acquired wells are now expected to be online for production ahead of schedule by the end of July.
The Iverson 11-14HU well was designated as a producer at the time of acquisition and the company has confirmed its first oil payment, with US$140,663 received for volumes produced in February (when the well yielded some 110 barrels of oil per day net to Zephyr).
Zephyr, in a statement, noted that well completion operations are already underway on the four S-Bar and Feehan DUC wells and will subsequently be tied into nearby infrastructure. As production is anticipated to start in July, payments for production from a total of five wells is anticipated by September.
“I'm delighted that the company has officially delivered a key corporate objective in becoming a cash-flowing oil producer,” said Colin Harrington, chief executive.
He added: “We look forward to substantially increased cashflows in the very near term.
READ: Zephyr turns producer as it completes acquisition
“This provides us with an excellent platform on which to build, particularly with the envisioned incremental production coming online at a time of strong commodity pricing.”
"Over the last few weeks, Zephyr has transformed into a fully-funded, self-sustaining platform with the potential for significant organic growth from the forthcoming drilling programme on our Paradox project. In addition, we will continue to be opportunistic in the pursuit of attractive, near-term, high-return, low-risk non-operated assets, especially as current market conditions are favourable for growth through acquisition.”
Harrington meanwhile also highlighted that the successful acquisition deal is “a strong example of what can be achieved in the current market”.
The Zephyr boss described the project as a first-class asset with low initial costs and potential to grow.
“The acreage is in an excellent location and provides both near-term drilling exposure and future drilling optionality.
“While the initial scale of the acquisition is small, for a minimal upfront cost Zephyr now has potential to participate in up to 24 highly economic wells over the next two years.
“Given the continued improvement in drilling costs and robust oil price environment, the company believes this acreage will provide attractive near-term cash flow returns and is an excellent complement to our growing portfolio of non-operated production assets.”
Elsewhere, the company is looking forward to first production from its interests in the Paradox basin, in Utah.
Permitting, detailed drill planning and vendor selection work is underway for the drilling of the State 16-2 CC LN well.
It is on-track for drilling in July, Zephyr noted.