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Northern Paradox Basins Rediscovered by Zephyr
01/17/2022
Zephyr Energy of the Rocky Mountains announced on Dec. 8 that its field testing of the State 16-2LN-CC well at its Paradox Basin project in Utah provided a substantial basis for further development.
Zephyr reported that after 23 days of production testing the well demonstrated the ability to extract a larger hydrocarbon resource than initially estimated. It is now planned to outfit the well and facilitate the sale and/or export of hydrocarbons.
The research may have allowed the discovery of eight high-grade hydrocarbon reservoirs under the opportunity that was initially being investigated. A total of 200 wells could be drilled, creating a potential resource of 125 million barrels of oil equivalent.
This milestone was achieved when the company's State 16-2LN-CC horizontal well became the first with a hydraulically-stimulated completion to flow hydrocarbons in the Northern Paradox Basin.
A rate-constrained daily rate of 716 barrels of oil equivalent per day (boepd) was achieved with limited pressure drawdown and a rate-constrained maximum rate of 1,083 boepd.
Based on initial simulation modeling, Zephyr concludes that 2,100 boepd plateau rates would be possible when the well is fully equipped and not rate-constrained.
In an investor presentation, Zephyr said that gas rates may reach plateaus of 10 million square cubic feet per day and 500 boepd of liquids.
Zephyr's predrill estimates of up to 0.85 million barrels of oil equivalent (mmboe) are significantly lower than the growth potential of State 16-2LN-CC resulting from production testing.
To maximize this potential, hydraulically stimulated resources must be developed instead of assuming that they are naturally fractured, as was thought before the evaluation of the most recent well data.
Zephyr forecasts that the reserve will produce strong economics for its new gas condensate wells based on a highly successful appraisal of the reserve. According to the company, up to 200 well locations are potentially available across the eight identified overlying reservoirs.
In light of the new production forecasts and realized oil prices of $65 per barrel and $3 per thousand cubic feet of gas, Zephyr calculates the well's net present value to be $12.5 million at a 10% discount rate (NPV-10).
Due to the substantial potential for an increase in project size, Zephyr's Board has committed to exploring the idea of a multi-well drilling program in the near future, as additional drilling could help better define and unlock the considerable potential value of this asset.
Zephyr's Board, however, will not rush into an investment in Paradox, according to Zephyr CEO Colin Harrington, and will only deploy company capital if the risks/rewards are favorable.
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BP's South Haynesville Natural Gas Passed MiQ’s Certification with Flying Colours: a Straight-A Student
BPX Energy achieved an admirably low level of methane emissions, ranking among the best performing players in Haynesville Shale, around 0.05%! And MiQ awarded the company with an A grade certification. BPX very well may be one of the cleanest natural gas producers in all of Texas.
XCL Resources Requests FTC Green Light for Purchasing Altamont Energy
XCL Resources is seeking approval from the Federal Trade Commission (FTC) for its proposed acquisition of Altamont Energy LLC, another Utah-based oil producer. This initiative is backed by XCL's parent entity, EnCap Investments LP, a notable private equity firm. Discussions about purchasing Colorado-based Altamont Energy began in the previous summer, as highlighted in FTC documentation.
In Wyoming during 2023, the oil and gas industry experienced various trends and developments. Wyoming ranked 8th nationally in both crude oil and natural gas production, significantly contributing to the economy through property and severance taxes. The state had a peak of 27,951 producing wells in 2022, including oil and gas wells, with 33 operating gas plants processing nearly 97% of the state's gas production. Notably, 21 of Wyoming's 23 counties produce oil and/or natural gas, with Converse County leading in crude oil production and Sublette County in natural gas production. U.S. Energy Information Administration (EIA) predicted that crude oil production across the United States would increase to 12.8 million b/d in 2024. Throughout 2023, oil production in Wyoming showed an upward trend, with more than 95 million barrels expected to be produced, an increase of about 3 million barrels from 2022. This rise in oil production was partly attributed to the completion of 110 newly drilled oil wells in the first half of the year, mainly in the Powder River Basin. However, natural gas production faced a decline due to the aging of wells and a low number of new gas wells being completed. Only 18 new gas wells were finished in the first half of 2023, with a noted interest in drilling applications, suggesting potential future developments.
XCL Resources is seeking approval from the Federal Trade Commission (FTC) for its proposed acquisition of Altamont Energy LLC, another Utah-based oil producer. This initiative is backed by XCL's parent entity, EnCap Investments LP, a notable private equity firm. Discussions about purchasing Colorado-based Altamont Energy began in the previous summer, as highlighted in FTC documentation.
Tallgrass Energy has started a new open season for the Pony Express Pipeline, and this is the second time they're doing it in 2024. They're looking for companies that want to move their crude oil from the Williston Basin and are offering special rates as an incentive. This 30-day event kicked off on March 11. To get the full details, companies need to sign a confidentiality agreement with Tallgrass.