Shares of Zephyr Energy PLC (LON: ZPHR) rallied 5.08% after announcing positive results from the State 16-2LN-CC well, where it conducted a diagnostic fracture injection test (DFIT).
The results of the DFIT showed strong evidence supporting further measures to support development in the Paradox Basin.
Zephyr intends to use the well located in Utah as a proof of concept, with the latest results revealing the project’s potential as a hydraulically stimulated resource play (HSRP).
The energy company has completed the drilling campaign, having drilled 14,370 metres down and 4,555 feet horizontally, with the initial analysis showing the extensive distribution of hydrocarbons across the horizontal section.
Zephyr intends to take the next step in the HSRP project, which will involve a testing programme designed to substantially reduce risk and open up a wider systematic and predictable development of the project.
Colin Harrington, Zephyr Energy’s CEO, said: “I’m thrilled with the continued progress from the well site. This marks tremendous progress, and the board’s subsequent decision to move forward with an HSRP completion is a clear indication of the significant value which we believe may exist through that development route.”
The company expects to have the production results from its first well in late October, which will test the viability of its chosen strategy.
Zephyr intends to keep honing its drilling and completing techniques on the project for a long time to come. In addition, the firm intends to use the completed drilling project to understand the oil well reservoirs and how best to well length, spacing and completion design.
Harrington added: “We now believe that our acreage holds multiple opportunities within both the Cane Creek and the shallower clastic reservoirs to support the drilling of additional wells to delineate the acreage.”
Zephyr Energy shares have formed a triangle pattern and could break out in either direction over the coming days. Traders should wait for a convincing breakout in either direction before opening new trades, given that triangle patterns are usually pretty volatile.
*This is not investment advice.
Zephyr Energy share price.
Zephyr Energy shares rallied 5.08% to trade at 6.41p, rising from Wednesday’s closing price of 6.10p.
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