Zephyr Energy PLC on Monday updated on its flagship Paradox project in the US state of Utah, noting a delay to its work programme as a result of a well control incident.
Zephyr Energy is an oil and gas company focused on resource development from carbon-neutral operations in the Rocky Mountain region of the US.
Shares in the firm were down 6.0% at 3.34 pence on Monday afternoon in London.
Zephyr said the State 36-2 LNW-CC well currently remains ‘static and under control,’ with the company currently in the process of pulling the production tubing out of the hole as some joints were compressed, compromised or stuck due to the high pressures experienced during a well control incident and subsequent well control efforts.
To date, around 7,000 feet of 8,900 feet of tubing has been pulled and inspected. The company is now moving to remove and inspect the remaining joints while keeping the wellbore static.
Once the tubing work is complete, a final cement squeeze will be performed and then the casing will be perforated across the reservoir interval prior to production testing the well.
Zephry noted that although recent operations have been ‘slower than initially expected’, it still expects to deliver a production test in the near term.
‘This methodical and patient approach is necessitated by the expected high pressure and substantial apparent deliverability of the well and reservoir, as witnessed during the earlier phases of the operation,’ the company noted.
Zephyr said it expects to recover the vast majority of costs associated with the well control incident and has already received $800,000 from its insurer regarding its initial claim.
Away from the State 36-2 LNW-CC well, Zephyr said additional acreage for the Paradox Basin acquired in August 2022 has now been added to the White Sands Unit following approval from the US Bureau of Land Management.
As a result, 5,000 high-graded acres with near-term development potential have been added to the WSU, and roughly 5,395 acres deemed by the company to be ‘less suitable’ for future development have been relinquished.
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