REG - Zephyr Energy PLC - Update on helium project & State 36-2R well test

Zephyr EnergyAnnouncement

29/08/2024 07:00

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RNS Number : 0711C  Zephyr Energy PLC  29 August 2024

Prior to publication, the information contained within this announcement was
deemed by the Company to constitute inside information as stipulated under the
UK Market Abuse Regulation. With the publication of this announcement, this
information is now considered to be in the public domain.

 

29 August 2024

Zephyr Energy plc

("Zephyr" or the "Company")

 

Salt Wash helium project update;

State 36-2R well production test and evaluation nearing completion

 

Zephyr Energy plc (AIM: ZPHR) (OTCQB: ZPHRF), the Rocky Mountain oil and gas
company focused on responsible resource development from carbon-neutral
operations is pleased to provide an update on the production test on the State
36-2R LNW-CC well (the "State 36-2R well") and the Company's farm-in to the
Salt Wash helium project (the "farm-in"), a previously producing asset with
proven oil, gas and helium reserves located three miles to the south of
Zephyr's Paradox project in Utah, U.S. (the "Salt Wash project").

Salt Wash project update

A key term in the farm-in agreement on the Salt Wash project is the
requirement for Zephyr to commence drilling operations on a well on the
farm-in acreage (the "commitment well") by 1 September 2024 (as announced by
the Company on 26 June 2024).

The Company is pleased to report that initial operations at the site of the
proposed commitment well have commenced, including drilling pad preparation
and fencing the perimeter of the site.  In the coming weeks, a spudder
drilling rig will be mobilised to the well location and a 30-inch hole will
then be drilled to a depth of approximately 100 feet and 20-inch conductor
casing will be set.

While activity on the pad has begun, the Company does not expect full drilling
operations to commence until the first half of 2025, in line with its
operational commitments to the field leaseholders.

Zephyr remains in active conversations with industry and financial parties
regarding the potential funding of up to 100% of the costs of the well at the
asset level, and the Company's board of directors continues to appraise the
available options with the key objective of maximising value for Zephyr
Shareholders.

State 36-2R well production test update

At the State 36-2R well, the Company is pleased to confirm that, further to
its announcement of 23 July 2024, the acidisation operation was executed
successfully, following which a second phase of production testing and related
evaluation commenced and is ongoing. As part of this process, the well has
been tested at varying rates and choke settings over multiple pre-planned time
periods. All field work to date has been conducted safely and in line with
expectations, and the Company plans to conclude its technical analysis and
expects to announce the results from the test within the next ten days.

 

Colin Harrington, Zephyr's CEO commented:

"I would like to thank our partners on the Salt Wash project for their
continued cooperation.  We are making steady progress on the project,
particularly in advancing funding options, and we look forward to getting full
drilling operations underway next year.

"We remain confident in the significant potential value uplift the Salt Wash
project represents, and we fully intend to unlock this value for our
Shareholders.  Additionally, we look forward to the completion of the State
36-2R well production test and sharing the results in the coming days."

 

 Contacts                                                       Tel: +44 (0)20 7225 4590

 Zephyr Energy plc

 Colin Harrington (CEO)

 Chris Eadie (Group Finance Director and Company Secretary)

 Allenby Capital Limited - AIM Nominated Adviser                Tel: +44 (0)20 3328 5656

 Jeremy Porter / Vivek Bhardwaj

 Turner Pope Investments - Joint-Broker                         Tel: +44 (0)20 3657 0050

 James Pope / Andy Thacker

 Panmure Liberum Limited - Joint-Broker                        Tel: +44 (0) 20 7886 2500

 Mark Murphy / Kieron Hodgson / James Sinclair-Ford

 Celicourt Communications - PR

 Mark Antelme / Felicity Winkles / Ali AlQahtani               Tel: +44 (0) 20 7770 6424

 

Notes to Editors

Zephyr Energy plc (AIM: ZPHR) (OTCQB: ZPHRF) is a technology-led oil and
gas company focused on responsible resource development from carbon-neutral
operations in the Rocky Mountain region of the United States.  The
Company's mission is rooted in two core values: to be responsible stewards of
its investors' capital, and to be responsible stewards of the environment in
which it works.

 

Zephyr's flagship asset is an operated 46,000-acre leaseholding located in
the Paradox Basin, Utah, 25,000 acres of which has been assessed to hold,
net to Zephyr, 2P reserves of 2.6 million barrels of oil equivalent ("mmboe"),
2C resources of 34 mmboe and 2U resources 270 mmboe.

 

In addition to its operated assets, the Company owns working interests in a
broad portfolio of non-operated producing wells across the Williston
Basin in North Dakota and Montana. Cash flow from
the Williston production will be used to fund the planned Paradox
Basin development. In addition, the Board will consider further opportunistic
value-accretive acquisitions.

 

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