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Highlights:
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Zephyr Energy PLC has confirmed plans to drill an extended lateral on the State 36-2R well in the Paradox Basin, Utah, aiming to significantly boost oil recovery.
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Recent production tests indicated robust rates exceeding 2,100 barrels of oil equivalent per day, leading to revised estimates of potential yields reaching up to two million barrels of oil equivalent.
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The drilling operation is set to commence by late 2024 or early 2025, contingent on rig availability and weather conditions, with plans for funding support already in place.
Zephyr Energy PLC {OTC:ZPHRF} has announced a strategic decision to proceed with drilling an extended lateral on the State 36-2R well located in the Paradox Basin, Utah. This initiative is expected to significantly enhance the ultimate recoveries from the well, positioning the company for improved production outcomes.
The decision follows successful recent production tests, which demonstrated production rates surpassing 2,100 barrels of oil equivalent per day. As a result, new estimates indicate that the well could potentially yield as much as two million barrels of oil equivalent. This positive development underscores the operational efficacy and future potential of the Paradox project.
Colin Harrington, Chief Executive, stated that extensive efforts have been made to determine the optimal approach for both the well and the broader Paradox project. He highlighted that combining the extended lateral drilling with acidization techniques could yield a highly productive well, serving as a cornerstone for the project's long-term development.
To support this ambitious undertaking, Zephyr Energy has signed a non-binding letter of intent with a US-based entity, which is anticipated to provide full funding for the estimated costs associated with the extension. Drilling operations are planned to initiate before the end of 2024 or in early 2025, depending on the availability of drilling rigs and prevailing weather conditions.
Looking ahead, Harrington expressed enthusiasm for finalizing the funding arrangements for the extended lateral in the upcoming weeks, after which the company will commence the process of securing a drilling contract and acquiring necessary equipment. This proactive approach demonstrates Zephyr Energy's commitment to enhancing its operational capabilities and maximizing resource recovery in the Paradox Basin.
