Prior to publication, the information contained within this announcement was deemed by the Company to constitute inside information as stipulated under the UK Market Abuse Regulation. With the publication of this announcement, this information is now considered to be in the public domain.

20 March 2023

Zephyr Energy plc

(the "Company" or "Zephyr")

State 36-2 LNW-CC well production test to commence

Zephyr Energy plc (AIM: ZPHR) (OTCQB: ZPHRF), the Rocky Mountain oil and gas company focused on responsible resource development and carbon-neutral operations, is pleased to provide an update on operations on the State 36-2 LNW-CC well (the "State 36-2 well" or the "well") at the Company's flagship project in the Paradox Basin, Utah, U.S.  

Commencement of State 36-2 well production test

On 8 March 2023 the Company announced, amongst other matters, that planning for the State 36-2 well production test had completed and that all services for the test have been procured.

The Company is pleased to announce that a Zephyr-contracted service rig has now been mobilised to the well-site and operations on the ground have commenced. This has been achieved in spite of the difficult winter weather conditions recently encountered in Utah.  

Workover operations (which will include perforating the well in the productive portion of the Cane Creek reservoir) and subsequent production testing are estimated to take four to six weeks, with the ultimate timeline dependent upon field conditions.

As the well is expected to flow from natural fractures, no hydraulic stimulation is expected at this time. The production testing is therefore expected to be completed quicker than the equivalent testing on the Company's hydraulically stimulated State 16-2 LN-CC well (as there are no significant completion fluids to flow back during well clean-up operations).

The production test will be paid for from the Company's existing cash resources.

Colin Harrington, Zephyr's Chief Executive, said:

"I am pleased to announce our continued progress on the State 36-2 well, especially in light of the challenging weather conditions, and I want to thank our operations team for continuing to move the project forward in a safe and effective manner. 

"We look forward to the results of the production test, which we expect will provide critical information to help us determine the optimal development programme for the Paradox project. 

"We look forward to updating Shareholders once the test has been completed."

Contacts

Qualified Person

Dr Gregor Maxwell, BSc Hons. Geology and Petroleum Geology, PhD, Technical Adviser to the Board of Zephyr Energy plc, who meets the criteria of a qualified person under the AIM Note for Mining and Oil & Gas Companies - June 2009, has reviewed and approved the technical information contained within this announcement.

Notes to Editors

Zephyr Energy plc (AIM: ZPHR) (OTCQB: ZPHRF) is a technology-led oil and gas company focused on responsible resource development from carbon-neutral operations in the Rocky Mountain region of the United States.  The Company's mission is rooted in two core values: to be responsible stewards of its investors' capital, and to be responsible stewards of the environment in which it works.

Zephyr's flagship asset is an operated 45,000-acre leaseholding located in the Paradox Basin, Utah, 25,000 acres of which has been assessed to hold, net to Zephyr, 2P reserves of 2.6 million barrels of oil equivalent ("mmboe"), 2C resources of 34 mmboe and 2U resources 240 mmboe.

In addition to its operated assets, the Company owns working interests in a broad portfolio of non-operated producing wells across the Williston Basin in North Dakota and Montana. 

The Williston portfolio currently consists of working-interests in over 200 modern horizontal wells which are expected to provide production of 1,550 - 1,750 barrels of oil equivalent per day, net to Zephyr, in 2023.  Cash flow from the Williston production will be used to fund the planned Paradox Basin development. In addition, the Board will consider further opportunistic value-accretive acquisitions.