Zephyr Energy prepares for ‘timely spud’ of the State 16-2 well
said it continues to make progress as it prepares to spud the 'dual-use' State 16-2 well in the Paradox Basin, Utah, U.S, before the end of this year.
As previously announced, Zephyr is working with a project team led by the University of Utah's Energy & Geoscience Institute ("EGI"), in collaboration with the Utah Geological Survey (the "UGS") and other Utah-based partners, to drill the vertical State 16-2 well.
This project is sponsored by the U.S. Department of Energy and its National Energy Technology Laboratory (“DOE") which has granted the first $2m of well expenditure.
Up to $1m of incremental expenditure in excess of the DOE's grant will be funded by Zephyr, utilising a portion of the proceeds from its recent oversubscribed equity placing.
With well funding secured, Zephyr said it now remains focused on the operational preparations for the drilling of the well. It noted that the first $0.6m tranche of DOE funding has now been received which will be used to cover near-term costs at the site of the well.
Zephyr said it has bolstered its operations team by appointing Bruce Houtchens, described as a ‘highly experienced’ Drilling Manager, to assist the Company on the State 16-2 project.
Shares in Zephyr Energy have soared by over 70% since August 2020 to open 7.41% this morning at 0.7p following the announcement.
Bruce previously served as Manager of Drilling & Completions for Fidelity Exploration & Production, the most active and successful driller in the Paradox Basin over the last decade.
At Fidelity, Bruce coordinated all drilling and completions operations in the Paradox Basin and the Bakken, with direct management of annual drilling budgets of up to $400m.
Meanwhile, the Company said a detailed initial well design is largely completed, which will allow it to commence the tender process for project contracts.
"I am delighted with the progress made to ensure a successful and timely spud of the State 16-2 well,” said Colin Harrington, Zephyr's Chief Executive.
"In particular, I'm very pleased to welcome Bruce to our project team - I'm not aware of anyone who's drilled more successful horizontal Paradox Basin wells over the last decade.
"I'd also like to continue to thank the EGI and our other Utah-based partners, all of whom are working very hard to assist Zephyr with the launch of this exciting project. I'm very encouraged by the momentum that we are building,” added Harrington.
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