Zephyr Energy, the Rocky Mountain oil and gas company focused on responsible resource development from carbon-neutral operations, has provided an update on the ongoing production testing at the State 16-2LN-CC well in Utah, and to report on third quarter (‘Q3’) performance from its non-operated portfolio in the Williston Basin, North Dakota.
The Company is delighted to announce the first flowing hydrocarbons from the State 16-2LN-CC well, even as production testing and well clean-up efforts remain ongoing. The production of hydrocarbons marks a major milestone for Zephyr, particularly as this is the first horizontal well in the wider Paradox Basin to flow hydrocarbons using a modern hydraulically stimulated completion.
Combined with a substantial increase in Q3 production and associated cashflow from Zephyr’s non-operated asset portfolio in the Williston Basin, the Company is well positioned to continue in the pursuit of its goal to develop a new hydraulically stimulated resource play in the onshore U.S. oil and gas sector.
State 16-2LN-CC well update overview
- The State 16-2LN-CC well was put on flowback on 28 October 2021, under a heavy 7/64 inch choke in order to prevent formation damage during early stages of flowback;
- The well is now successfully flowing hydrocarbons;
- Although production rates are facility constrained at present, the well is demonstrating highly encouraging daily average flow rates of 420 barrels of oil equivalent per day (“boepd”) with recent hourly rates of over 690 boepd on a slightly less restricted 12/64 inch choke setting;
- In addition to hydrocarbons, the well continues to flowback completion fluids at approximately 1,200 barrels per day and production testing remains ongoing:
- Fluid composition is evolving as additional completion fluid is recovered, with ultimate expected gas/oil ratios yet to be determined.
- The well has demonstrated limited pressure drawdown to date despite the high liquid rate, an additional encouraging sign which may indicate a large connected volume.
- Results to date suggest the State 16-2LN-CC is a successful proof of concept well with highly positive implications for the utilisation of hydraulic stimulation completions across the multiple reservoir zones and across the Company’s 37,613-acre lease position within the Paradox Basin.
While the production testing phase remains ongoing, the results to date mark a major milestone for Zephyr. Over the coming weeks, Zephyr will attempt to address the facility constraints in order to further reduce choke levels and ascertain maximum potential production rates. The Company will make further announcements once the well testing is completed, hydrocarbon mix becomes better understood and well flows become representative of longer-term reservoir performance.