Zephyr Energy PLC has acquired oil and gas assets to aid development of its Paradox basin gas project in Utah. The assets will allow Zephyr to substantially reduce capital required to build the necessary gas export infrastructure for its forecast gas production from Paradox.
The acquisition includes 21 miles of natural gas gathering lines, the Powerline Road gas processing plant (which is not currently in operation), rights-of-way for additional gathering lines, active permits, five existing wellbores, and additional acreage which is partly contiguous to the company's operated White Sands Unit.
Consideration for the acquisition was $750,000, which was satisfied by a payment from Zephyr's existing cash resources. As the new owner, Zephyr has assumed responsibility for all future decommissioning, plugging, and abandonment liabilities associated with the assets. Estimated replacement cost of the acquired pipelines and plant exceeds $10.6 million.
Paradox basin has produced 10 MMboe to date, mostly from the Cane Creek field and reservoir.
Zephyr now operates 45,000 gross acres in Paradox basin. The company holds 75% or greater in most of the acreage.
