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Highlights:
- Peak Production Milestone: Zephyr’s State 36-2R well at Paradox achieved peak production rates of over 2,100 barrels of oil equivalent per day.
- Financial Stability: Williston Basin assets provide strong cash flows, covering costs and supporting ongoing growth.
- Strategic Expansion: Zephyr is in advanced discussions for funding to support further development at the Paradox project.
Zephyr Energy PLC (LSE:ZPHR) has provided a positive outlook for its operations following a productive first half of 2024, according to chief executive Colin Harrington’s update in the company’s interim results. The focus has been on the Paradox project in Utah, where recent well testing at the State 36-2R well achieved peak production rates exceeding 2,100 barrels of oil equivalent per day (boepd), marking a key milestone in the project’s transformation into a revenue-generating asset.
Harrington highlighted that Zephyr made significant capital investments during the first half of the year to advance the Paradox project, with successful drilling and production tests validating its potential. He also noted that discussions with U.S.-based institutions are underway regarding potential funding opportunities at the wellbore and asset levels, which could support the next phase of development at Paradox.
In addition to the progress at Paradox, Zephyr’s non-operated assets in the Williston Basin continue to bolster its financial position. The company reported first-half revenue of $13.6 million, a slight increase from the $13.4 million posted in the same period last year, with average net sales volumes of 1,239 boepd, totaling 225,672 barrels over six months.
Gross profit was reported at $10 million, underscoring the efficiency and high-margin nature of its operations. Harrington emphasized the Williston project’s role as a strong cash flow driver, enabling Zephyr to cover general administrative costs and debt service, while also providing capital to support growth initiatives in both the Paradox and Williston regions.
Looking forward, Zephyr aims to leverage its robust cash position and ongoing developments to achieve its strategic objectives. “We have an exciting period ahead of us and I believe, more than ever, that we have the pieces in place to enable us to deliver on our strategic objectives successfully,” Harrington stated.
