Zephyr Energy completes drilling at Paradox Basin, prepares for production testing

Zephyr Energy plc has successfully completed drilling operations at the State 36-2 LNW-CC-R well, a key project in the company’s Paradox Basin development. The well was drilled to a total measured depth of 15,288 feet, marking a significant milestone in the company’s efforts to expand hydrocarbon production in Utah.

The drilling operations were conducted safely and efficiently, with Zephyr Energy confirming that the well’s trajectory correlated well with 3D seismic data, demonstrating the company’s ability to navigate the structurally complex Cane Creek reservoir. The extended lateral section was drilled with 97% accuracy within the target reservoir, reinforcing confidence in the well’s potential.

One of the most encouraging signs during drilling was the presence of elevated mud gas levels, with notable peaks recorded throughout the process. This suggests a strong hydrocarbon presence, aligning with Zephyr Energy’s expectations for commercial production. The completion of drilling marks the transition to the production testing phase, which is expected to determine the well’s viability as a long-term producing asset.

How Will Zephyr Energy Proceed With Production Testing?

With drilling operations now concluded, Zephyr Energy’s operations team is preparing to run casing across the wellbore to secure its structural integrity. Following this, the Nabors rig will be demobilised from the site, making way for equipment mobilisation for the completion and production testing phase.

Production testing is a critical step in the Paradox Basin development, as it will provide key data on hydrocarbon flow rates, reservoir pressure, and overall well performance. Zephyr Energy expects to complete this process and announce the results by March 2025, offering a clearer picture of the well’s commercial potential.

The data from production testing will play a pivotal role in guiding future drilling operations within the Paradox Basin. If the results indicate strong hydrocarbon flow, Zephyr Energy may accelerate development in the region, further leveraging its 46,000-acre leaseholding.

What Is the Strategic Importance of the Paradox Basin for Zephyr Energy?

Zephyr Energy’s presence in the Paradox Basin is a cornerstone of its long-term strategy, as the region holds significant untapped hydrocarbon resources. The company’s operated leaseholding spans 46,000 acres, with a substantial portion already assessed to contain proven and probable (2P) reserves of 2.6 million barrels of oil equivalent (mmboe). Additionally, estimates suggest contingent (2C) resources of 34 mmboe and prospective (2U) resources of 270 mmboe, positioning the area as a highly valuable asset in Zephyr Energy’s portfolio.

The company has adopted a technology-led approach to resource development, incorporating advanced seismic data analysis and precision drilling techniques to maximise reservoir productivity. The ability to drill extended laterals with high accuracy, as demonstrated in the State 36-2 LNW-CC-R well, reflects Zephyr Energy’s expertise in navigating the geological complexities of the Cane Creek reservoir.

Beyond its production potential, Zephyr Energy’s operations in the Paradox Basin align with its commitment to carbon-neutral resource development. The company has emphasised environmentally responsible drilling practices while optimising operational efficiency. This approach not only enhances long-term sustainability but also strengthens Zephyr Energy’s position as a forward-thinking player in the oil and gas sector.

How Is Zephyr Energy Funding Its Growth Strategy?

In addition to its operated assets in the Paradox Basin, Zephyr Energy holds working interests in a diverse portfolio of non-operated producing wells across the Williston Basin in North Dakota and Montana. These assets provide a steady stream of cash flow, which the company is strategically reinvesting into its Paradox Basin development.

This funding model allows Zephyr Energy to advance drilling and testing operations without relying solely on external financing. The company’s ability to generate revenue from its non-operated wells creates a self-sustaining growth cycle, ensuring financial flexibility as it expands its footprint in Utah’s hydrocarbon-rich formations.

Moreover, Zephyr Energy’s board remains open to opportunistic acquisitions, seeking value-accretive assets that complement its existing portfolio. This strategy reinforces the company’s ambition to build a robust and diversified production base across key oil and gas regions in the United States.

What Comes Next for Zephyr Energy?

The completion of drilling at the State 36-2 LNW-CC-R well marks a critical milestone, but Zephyr Energy’s focus now shifts to production testing and data analysis. If the test results confirm commercially viable hydrocarbon flow, the company may proceed with further well completions and development drilling in the Paradox Basin.

The upcoming test results will also provide valuable insights into reservoir characteristics, influencing Zephyr Energy’s broader strategic planning. With a combination of advanced drilling technology, a strong resource base, and a disciplined financial strategy, the company is well-positioned to capitalise on Utah’s untapped hydrocarbon reserves.

As the energy sector continues to evolve, Zephyr Energy remains committed to responsible resource development, balancing operational growth with environmental stewardship. With production testing results expected by March 2025, stakeholders will be closely watching for further updates on the Paradox Basin’s potential as a key oil and gas hub.