Zephyr Energy PLC (AIM:ZPHR) State 36-2 LNW-CC well update

Substantial hydrocarbons encountered – revised completion options being evaluated

Zephyr Energy plc (AIM: ZPHR), the Rocky Mountain oil and gas company focused on responsible resource development and carbon-neutral operations, provides an update on operations on the State 36-2 LNW-CC well (“the well”) at the Company’s flagship project in the Paradox Basin, Utah, U.S.

Drilling of the well commenced on 20 November 2022, with the prime objective to target potential production from the Cane Creek reservoir (the “reservoir”).

Over the past week, having reached the reservoir at a depth of 9,598 feet true vertical depth, the well experienced a significant influx of hydrocarbons which consequently led to suspension of drilling operations while the well was stabilised. The influx was caused by the well intersecting an apparent major natural fracture network in the reservoir, and the resultant flowing hydrocarbons are currently being diverted safely at surface through the drilling rig flare stack whereby they are subsequently flared. Throughout this period, Zephyr’s operations team followed due well control procedure and stabilised the well without incident.

Zephyr’s team is analysing all options for the well’s safe completion, which may include running production casing and completing the well without drilling the remainder of the planned lateral. It is also likely that planned hydraulic stimulation will not be required for the well.

Further announcements will be made after additional analysis has been completed and once Zephyr selects the appropriate operational path forward.

Colin Harrington, Zephyr’s Chief Executive, said:

“First and foremost, I want to reiterate that the safety of our team and our contractors is our top priority, and continuing to maintain a safe operational environment is of paramount importance to us.

“While we’ve long planned to artificially stimulate the reservoir in order to achieve hydrocarbon production from the well, we’ve always known that encountering a natural fracture network was both a drilling risk and a feature that could significantly enhance the overall potential productivity of the well. As such, all necessary procedures and precautions were in place in the event the well encountered an over-pressured natural fracture network.

“Whilst we’re in an early phase of assessment, previous wells in the Paradox Basin which successfully targeted natural fractures have historically been prolific production wells.

“I’d like to note that over the past two months, our operations team dealt with an exceedingly challenging drilling environment, which included mechanical issues and significant weather impacts from the historic atmospheric river system flowing over and from California. While delays in isolation can be frustrating, the result is we now have confirmed hydrocarbon presence, significant reservoir over-pressure and the presence of a highly permeable natural fracture network at this location – all very encouraging signs for an economic and productive well.

“We will keep the market updated as we select the appropriate operational path forward to complete and produce the well.”


Zephyr Energy plc

Colin Harrington (CEO)

Chris Eadie (CFO)

Tel: +44 (0)20 7225 4590

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