AUS
NZ
UK
CA
USA
IND
Highlights:
- New Drilling Phase: Zephyr Energy prepares to extend the State 36-2R well at Paradox Basin by 5,500 feet, targeting additional reservoir potential.
- Full Funding Secured: The next phase of operations, costing $7 million, will be financed without equity dilution, supported by a US-based industry investor.
- Regulatory and Operational Progress: Approvals and well planning completed, with drilling expected to commence in Q1 2025.
Zephyr Energy PLC (LSE:ZPHR) has announced its plans for an extended drilling phase at its flagship Paradox Basin project in Utah. The company is set to enhance the productivity of the State 36-2R LNW-CC well, following a successful testing programme earlier this year.
Chief Executive Colin Harrington expressed confidence in the expansion, stating, “We are excited to be making material progress towards recommencing drilling operations on the well, and we believe that the extended lateral, combined with an effective acidisation completion, will deliver a large and highly productive well.”
Drilling Expansion Details
The upcoming drilling phase aims to extend the horizontal section of the State 36-2R well by an additional 5,500 feet within the Cane Creek reservoir. This significant extension builds on the existing 130-foot horizontal section and is expected to unlock a larger portion of the addressable reservoir.
Zephyr has secured the necessary regulatory approvals, and well planning has been completed. The company is now in the process of procuring equipment and selecting service providers, with drilling anticipated to begin in the first quarter of 2025.
Full Funding Secured Without Equity Dilution
The estimated cost of the drilling project stands at $7 million. Zephyr has confirmed that the funding process is progressing well, backed by an experienced US-based industry investor. The company expects to finalize the binding documentation in the coming weeks, securing the required capital without any equity dilution at the company level.
“This proposed funding will fully support the next phase of our operational activity, ensuring that we can move forward without impacting existing shareholders,” Harrington added.
Strategic Partnerships and Advisory Expansion
In addition to operational updates, Zephyr announced an expansion of its advisory team. Canaccord Genuity Limited has been appointed as a joint broker, joining Turner Pope Investments, which remains in its role as joint broker. This strengthened advisory team reflects the company’s strategic focus on advancing its Paradox Basin operations while maintaining robust financial oversight.
Positive Outlook for Paradox Basin Operations
Zephyr’s latest move to extend the State 36-2R well represents a key step in unlocking the full potential of the Paradox Basin project. The combination of increased drilling depth, effective well completion strategies, and secure financing positions Zephyr for a strong start in 2025.
The company’s proactive approach to securing funding without equity dilution and its strategic partnership expansion underline its commitment to delivering value and advancing its flagship project efficiently. With drilling expected to commence early next year, investors and stakeholders will be keenly watching Zephyr’s progress as it aims to transform the State 36-2R well into a major production asset.
