Zephyr Energy PLC hailed the tremendous progress made in its first half of 2021 which saw it deliver the State 16-2LN-CC horizontal well as a key proof-of-concept for its plans in Utah.
The company, in its interim results, said the well yielded a significant suite of data – it was drilled down 14,370 feet vertically and 4,555 feet horizontally into the targeted Cane Creek reservoir.
Presently, the well is being prepared for hydraulic stimulation and in the coming weeks it will undergo production testing. This will be a key potential catalyst for the company and its plans in Utah.
Also significant in the period was the acquisition of interests across 22 wells in the region. Seven wells were already in production and a further 15 are awaiting completion as producers. These assets yielded average production of 148 barrels per day net to Zephyr in the second quarter, with an average realised price of US$52.90 per barrel.
“The first six months of the 2021 financial year, and the period since, were a time of tremendous progress and intense activity during which Zephyr transformed from a single project exploration company into a self-sustaining, cash-generating, carbon-neutral oil and natural gas producer,” Zephyr said in its statement.
“During this period, significant additional operational and technical milestones were met on our Paradox Project.
“In addition, the company completed five separate acquisitions which resulted in a growing portfolio of operated and non-operated assets located in two established US oil producing basins.”
In terms of the financial results the company noted a cash balance of US$9.2mln, following a US$13.9mln equity raise in April.
The company generated US$900,000 of revenue from the production assets for the half, since acquisition in March, and it noted that second half revenues would be higher as it would include the whole six months and also the addition of further production wells.
Zephyr reported a net loss of US$1mln from continuing operations in the half.
Chief executive Colin Harrington, meanwhile, commented: “Zephyr is now ideally positioned as a cash generating platform from which to deliver significant future growth for our shareholders.
"We've worked tirelessly to meet or exceed the goals and timelines we publicly set for ourselves, while doing so on budget and in a low-cost manner - and I'm particularly proud that we successfully executed our strategy in line with our twin core values of being responsible stewards of investors' capital and responsible stewards of the environment in which we work.
"The next few months will continue to see a flurry of corporate and operational activity as we target production from the Paradox project, increase non-operated production and accumulate cash flows from our assets in the Williston Basin.
"These are exciting times, and we look forward to keeping all our stakeholders updated on our progress."