Zephyr Energy PLC (LON:ZPHR) provided an update on its recently acquired interests in the Williston Basin, North Dakota, where wells are in the process of being brought online for production.
The company acquired non-operated interests in the package of wells back in March. In a statement, today, Zephyr said it has received two monthly revenue payments for the producing Iverson 11-14HU well.
Four wells – two at the S-Bar area and two at Feehan - were drilled but uncompleted (DUC) at the time of the deal and all have now been completed. The S-Bar wells have been brought into production so far and the Feehan wells are expected to be placed into production within the next month.
"We have a great deal of activity going on across our project portfolio and I'm delighted with how everything is progressing,” said chief executive Colin Harrington. “We are particularly gratified that Whiting, the operator of five of our Williston wells, worked to accelerate the completion and production dates on the four DUC wells.”
“When we initially agreed to terms on the acquisition of these interests, we ran our economics at a price of US$45 per barrel of oil. With current pricing at over US$70 per barrel, we now envisage significant cash flow generation from this part of our portfolio over the coming months.”
At the same time, Zephyr updated investors on the group’s flagship project in the Paradox basin, in Utah, where drilling on the State 16-2LN CC lateral appraisal well is slated to start in July.
The company said final permitting is expected to be concluded in the coming weeks.
It is presently conducting some extra evaluation work, related to the overlying reservoirs, and it expects to update the market again by the end of June.
"On our flagship Paradox project, we have a fascinating period ahead of us,” Harrington said.
“Preparations for our forthcoming drilling programme continue to move ahead at full speed and we are also excited to finish the evaluation work around the exploration potential of the overlying reservoirs, with more detail on this to come shortly.
"There is significant activity expected across our asset portfolio in the coming weeks, and I look forward to presenting our story to investors tomorrow evening," he said, referring to Proactive Investors' One2One Virtual Forum.
North Dakota acquisition
In March, Zephyr raised £10mln of new equity and struck the deal to acquire the package of producing wells in the Bakken Formation.
READ: Zephyr Energy raises £10mln as it seals 'perfect' Bakken acquisition
The asset package was described at the time as “a perfect addition” and an “ideal complement” to the Paradox base. Harrington said that the company had negotiated the acquisition on highly favourable economic terms.