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Highlights:
- Rig Secured for Key Well: Zephyr Energy PLC (LSE:ZPHR) contracts Nabors Drilling USA's B29 rig for its Paradox Basin project in Utah.
- Significant Oil Recovery Potential: The extended lateral well targets 5,500 additional feet of the Cane Creek reservoir, with estimated recoveries of up to 2 million barrels of oil equivalent.
- Production Testing in Early 2025: Drilling begins in January, with production testing anticipated by March 2025 and integration of wells following soon after.
Zephyr Energy PLC (LSE:ZPHR, OTCQB:ZPHRF) has achieved a significant milestone in its Paradox Basin project in Utah by securing a rig contract with Nabors Drilling USA. The move paves the way for drilling an extended lateral well, targeting the Cane Creek reservoir, as the company accelerates its plans for oil and gas production in the region.
Rig Contract Finalised
The agreement with Nabors Drilling USA brings the B29 rig to the Paradox Basin, with operations set to commence in January 2025. The drilling program includes an extended lateral section, targeting an additional 5,500 feet of the Cane Creek reservoir. The well aims to unlock substantial resources, with potential recoveries estimated at up to 2 million barrels of oil equivalent.
"We are delighted to secure Nabor's B29 rig within our time frame, and we believe the rig is ideally suited to drill this well,” stated Colin Harrington, Zephyr Energy’s chief executive. He expressed confidence in the rig’s capabilities and emphasized the project’s alignment with Zephyr’s strategic objectives.
Preparations Underway
Work has already begun to ensure seamless execution. A workover rig has been mobilized to prepare the existing wellbore, setting the stage for the arrival of the larger B29 drilling rig by mid-January. This preparatory phase will enable Zephyr to maintain its ambitious schedule and ensure the well is drilled efficiently and effectively.
Production Testing and Integration
Zephyr anticipates concluding production testing by March 2025. Following this phase, the company plans to finalize gas processing and infrastructure upgrades, facilitating integration of the new extended lateral well with existing wells at the Paradox Basin site. These steps are critical to optimizing production and achieving operational efficiency.
A Positive Outlook for 2025
Harrington highlighted the significance of securing funding and the rig contract, marking a strong finish to 2024 and setting a positive tone for the coming year. “Now that the funding for this well is secured and the rig contract is in place, we can look forward to 2025 with optimism and confidence,” he said.
He also emphasized the project’s broader strategic importance, noting its role in potentially unlocking the next prolific onshore U.S. oil and gas play. As Zephyr progresses, stakeholders can expect regular updates, reflecting the company’s commitment to transparency and operational success.
Conclusion
Zephyr Energy’s proactive steps at the Paradox Basin project underscore its commitment to delivering on ambitious production targets while positioning itself as a key player in the U.S. onshore oil and gas sector. With drilling set to begin and infrastructure plans in motion, 2025 promises to be a pivotal year for the company’s growth trajectory.
