Zephyr Energy plc, the Rocky Mountain oil and gas company focused on responsible resource development, provides an update on its project in the Paradox Basin, Utah, U.S. (the "Paradox") where the Company is in the final stages of preparation ahead of the spud of its 'dual-use' State 16-2 well.
The Company initially targeted a spud date by 31 December - and it remains firmly on track to deliver this key corporate objective.
Over the last two months, the Company made significant progress on important milestones to ensure that it can safely deliver a successful well on time and within budget. During this period, the Company:
· Assembled a project drilling team with substantial Paradox Basin drilling expertise;
· Secured all permits and satisfied all pre-operational conditions;
· Completed remediation works on the road leading to the State 16-2 site;
· Finished all other site preparations, including the completion of work to responsibly plug and permanently abandon an existing inactive well on the pad;
· Awarded the rig contract to Cyclone Drilling Inc. ("Cyclone"), a leading provider of purpose-built rigs in the Rocky Mountain region. The specific rig under contract is Cyclone Rig #34; and,
· Received the first $600,000 tranche of grant funds allocated by the U.S Department of Energy and its National Energy Technology Laboratory (the "DOE") for the drilling of the well.
Today, the Company is pleased to announce that a conductor rig is on-site at the State 16-2 pad, where it has commenced work to drill and set conductor casing. This initial drilling will be completed shortly and will provide a stable base for the main rig, Cyclone Rig #34, as well as provide protections for the surface formations during drilling operations.
Zephyr has also been informed that Cyclone Rig #34, having completed its previous work in Wyoming, has now commenced mobilisation to the State 16-2 site. Once on site next week, the equipment will be rigged up over a period of a week in preparation to drill the stratigraphic well to approximately 9,850-foot true vertical depth. Drilling, once spudded, is expected to take between 30-40 days and will seek to acquire continuous core and electronic log data from the Cane Creek reservoir, as well as a comprehensive log suite across other shallower reservoirs.
In addition, the Company can confirm that it has received the second US$600,000 tranche of the US$2 million grant funds allocated by the DOE for the drilling of the well. A further US$600,000 is due once drilling has commenced and the final balance of US$200,000 will be received by Zephyr once additional routine well development milestones are met.
Colin Harrington, Zephyr's Chief Executive, said "Given these unusual times, I'm particularly proud that our team continues to work through significant hurdles in order to deliver the drilling of this well on the timeline - and in the responsible manner - that we originally promised. It's an exciting moment for the Company and its stakeholders as we begin to unlock the considerable value from our Paradox project."