As the recent well test on the State 36-2 LNW-CC-R well from Zephyr Energy's Paradox project reflected considerable well productivity, the company announced an updated Competent Person's Report (CPR) that was compiled by independent energy consulting and advisory firm, Sproule-ERCE International Limited
This acknowledgement has allowed Zephyr Energy to transition the Paradox project from appraisal to development, as the well test revealed high reservoir pressure, reservoir quality and liquid yields, leading to a significant boost in recoverable reserves across all reserve categories.
Based on the performance of the Cane Creek reservoir on 20,000 acres held within Zephyr's White Sands Unit, the CPR confirmed a 93-fold increase in Proved Recoverable Reserves (1P Reserves), demonstrating the site's scale and immediate production potential. It will be able to deliver 14.8 million net barrels of oil equivalent proved recoverable reserves, an increase from 0.16 million net boe in the 2022 CPR.
Speaking of the Paradox project, Colin Harrington, Chief Executive of Zephyr, said, "To date, we have drilled two successful, one-mile horizontal wells utilising different completion technologies and both demonstrated strong deliverability and expanded our completion design options for the greater field development. We have also gathered a substantial amount of data that will help inform future development plans. Furthermore, we have acquired significant infrastructure that will enable us to bring the project into full production, including gas gathering lines, plant infrastructure, permits and future water disposal wells, and we are close to securing gas export capacity. All this has been achieved at low development costs, especially when compared with many other new field startups of a similar size, and this infrastructure should enable accelerated project development once a suitable partner is secured. It should be noted that while acceleration of drilling activity and increased gas processing capacity won't change undiscounted free cash flow totals, they would enhance the current NPV-10 value of the project by bringing forward future cashflows."
