Zephyr Energy PLC plans to spud State 16-2 well today. Primary objectives are to drill a mildly deviated well (8° maximum inclination) to about 9.815 ft TVD to acquire up to 100 ft of continuous core from Cane Creek reservoir. Zephyr also plans to run a comprehensive well log suite across the entire Paradox formation, which includes the primary Cane Creek reservoir target and at least five other potential reservoir zones to gain additional insight into the potential of the secondary targets.
Drilling operations are expected to take 30-40 days from spud. Core and log results are expected within 3 months from completion of drilling. Once finished, the well will be temporarily plugged back at 6,450 ft TVD. Zephyr (or a farm-in partner) can then reuse the vertical wellbore as a sidetrack host for a horizontal appraisal. By reusing the vertical portion of the well, the company estimates the total costs of drilling a future horizontal appraisal well will be reduced from about $6 million to about $3 million.
Over the last week, the Cyclone rig mobilized to the well site where it was subsequently assembled and tested. All ancillary services and service providers also are now on site to support drilling operations.
Zephyr has been working with the University of Utah's Energy & Geoscience Institute, the Utah Geological Survey, and other Utah-based partners to assess and perform optimization analyses for more focused, efficient, and less environmentally impactful oil production strategies in northern Paradox basin, particularly in Pennsylvanian Paradox formation's Cane Creek shale and adjacent clastic zones. The project is sponsored by the US Department of Energy and its National Energy Technology Laboratory (DOE-NETL).
Spudding of the State 16-2 will allow Zephyr to draw down the third $600,000 tranche of $2 million grant funds allocated to the project by DOE-NETL. The balance of DOE funding, a further $200,000, will be received by Zephyr in one final tranche at completion of operations.