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LONDON - Zephyr Energy plc (AIM:ZPHR) (OTCQB:ZPHRF) is moving forward with gas infrastructure development at its Paradox Basin project in Utah following a successful production test on its State 36-2 LNW-CC-R well, according to a company press release issued Thursday.
The company is equipping the well pad for production, reinstating a 6-inch pipeline gathering system, and deploying gas processing infrastructure with planned capacity to handle 5-10 million cubic feet of natural gas daily. The processing will also enable sales of condensate and natural gas liquids.
At current commodity prices, this processing capacity could generate gross gas and oil revenues of approximately $1.6-$3.2 million per month, excluding NGL sales. The company noted that the light condensate produced is expected to sell at a premium to other crudes.
Zephyr is in advanced discussions regarding gas export via a nearby 16-inch pipeline, which has a tie-in point 70 meters from the company’s gas plant site. The company has commissioned Sproule to prepare an updated Competent Person’s Report on the Paradox project, with results expected in the third quarter of 2025.
Separately, Zephyr is completing due diligence for its proposed $7.3 million acquisition of working interests in over 400 wells across Rocky Mountain basins. The acquisition is expected to add an estimated 600,000 barrels of oil equivalent of 2P producing reserves and 400 barrels of oil equivalent per day of current production, which is 85% oil.
The acquisition will give Zephyr strategic entry into the Powder River Basin in Wyoming and the Denver-Julesburg Basin in Colorado. The company has applied for regulatory approval to become an operator of record in Colorado, Wyoming, and North Dakota, with the acquisition on track to complete in the near term with an effective date of June 1, 2025.
The company recently completed a £10.5 million equity placing to support these initiatives.
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