AUS
NZ
UK
CA
USA
FRA
GER
ESP
ITA
NLD
PRT
SWE
GRC
IND
POL
BRA
ZAF
RUS
CHN
UAE
Highlights:
-
Zephyr Energy PLC will proceed with drilling an extended lateral on the State 36-2R well in the Paradox Basin, Utah, following a successful production test.
-
The initiative aims to significantly increase ultimate recoveries from the well, with estimates suggesting potential yields of up to two million barrels of oil equivalent.
-
The project may be supported by new investment, as Zephyr has signed a non-binding letter of intent with a US-based entity to fund the extension costs.
Zephyr Energy PLC {LSE:ZPHR} has announced its decision to proceed with drilling an extended lateral on the State 36-2R well, located in the Paradox Basin of Utah. This step aligns with previously anticipated strategies and aims to substantially enhance the ultimate recoveries from the well.
Recent successful production tests have indicated that the well can produce rates exceeding 2,100 barrels of oil equivalent per day. Following this promising performance, estimates now suggest that the well could yield as much as two million barrels of oil equivalent. This potential increase in production underscores the importance of the extended lateral approach, which is expected to deliver a larger and more productive well.
Chief Executive Colin Harrington highlighted that the combination of an extended lateral and acidization could be the key to unlocking long-term development for the Paradox project. The strategic decision reflects the company's commitment to optimizing production capabilities while addressing the operational challenges within the basin.
In addition to the drilling plans, Zephyr Energy announced it has signed a non-binding letter of intent with a US-based entity, which is expected to fully fund the estimated costs associated with the well extension. Drilling operations are scheduled to commence before the end of 2024 or in early 2025, contingent upon rig availability and weather conditions.
Harrington expressed optimism regarding the funding process for the extended lateral, emphasizing the company's readiness to secure a rig contract and additional equipment once the funding is finalized. This development marks a significant milestone for Zephyr Energy as it seeks to enhance production efficiency and capitalize on the potential of the Paradox Basin.
