Zephyr Energy PLC (LON:ZPHR) has told investors that the drill crew for its State 16-2 well in Utah has been operating around the clock since the December spud and progress to date is fully in line with expectations.
The company also noted that following the spud it subsequently received the third US$600,000 tranche of the US$2mln grant funds allocated by the US Department of Energy. A final tranche of US$200,000 is due once drilling operations are complete.
Zephyr highlighted that its strategic goal for 2021 is to establish production and positive cash flow, either with its existing assets or through acquisition.
The company said it intends to end this year with “a balanced asset base that contains a mix of production and substantial long-term development upside.”
Zephyr’s chief executive Colin Harrington said the coming weeks will be filled with activity.
“2021 promises to be a very exciting year for the company, both from the continued development of our Paradox project and with an acceleration of our efforts in the broader acquisition market,” he said.
“Any acquisitions made will have to conform to our strict search criteria, most notably the ability to accelerate production and cash flows to the company.”
Harrington added: “The goal for Zephyr over the next twelve months is straightforward – we want to transform the company into a well-capitalised producer of oil and natural gas, with strong positive cash flow and significant growth potential in its asset portfolio.”
Zephyr noted that it continues to see progress for its proposed acquisition of the McCoy lease in Colorado, though the timeline for development has been delayed by the current operator of the project.
The company said it will continue to monitor progress on the project and will make an investment decision on whether to proceed once a firm development schedule is established.
“We continue to be excited about the potential McCoy acquisition, and will make an investment decision at the point of development when we can properly assess the timing and economic drivers of the project,” Harrington added.