RE: Zphr11 Dec 2023 21:55
Complements of PortfolioPower
ZPHR heading for year lows...
Apparently news is due?
It really needs an solid update regarding the paradox basin to really lift the SP.
They say they have insurance money to cover a fresh drill? BUT were planning a further drill next year anyway... so do they just sit and wait until they sell enough oil from their other wells to fund this or will they raise?
The Oil price sliding has battered the SP alongside the disastrous events at paradox that has put them in this situation..
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Reminder.......
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"State 36-2 well update
As previously announced, in April 2023 Zephyr's State 36-2 well experienced a control incident during which hydrocarbons flowed unconstrained for four days due to the failure of a safety valve. The well was brought under control with no injuries and limited environmental impact, and the Company has subsequently undertaken comprehensive well work operations to assess the future viability of the existing wellbore.
During the incident, multiple joints of the well's 2 7/8-inch production tubing were compromised, and Zephyr's operations team has been working methodically to remove and inspect the remaining joints while keeping the wellbore static. Operations to retrieve the damaged tubing have progressed slower than expected due to the poor condition of the tubing, as exhibited by the multiple damaged and buckled joints retrieved that led to the need for milling operations and resulted in shorter retrievals per trip. Recent operations have not resulted in sufficient recoveries to justify the continuation of the ongoing cost of the well work versus the estimated cost to redrill the well.
As a result, the Company's board of Directors (the "Board") has reviewed multiple alternatives to target the significant productivity of the reservoir at this location, and has elected to proceed with a redrill of a "twinned" well from an adjacent location on the same drilling pad.
The Company retains full well control insurance coverage and expects to recover substantially all costs associated with the well control incident, including those associated with the redrill.
Zephyr has a pre-existing approved permit for a second well on the pad, a permit which will be amended to target the same natural fracture network at the same location in the Cane Creek reservoir as the State 36-2 well.
Timing of the redrill will be dependent upon securing an appropriate rig contract and other ancillary services, with a current target for redrill in the first quarter of 2024. Alternatives for nearer term tie-in of production from the State 16-2 and State 28-11 wells are being considered in parallel"