What's Happening?
Zephyr Energy plc has released an updated Competent Person’s Report (CPR) for its Paradox basin assets in Utah, indicating a significant increase in reserves and resource estimates. The report, prepared by Sproule-ERCE International Ltd., highlights a 93-fold increase in proved recoverable reserves (1P) to 14.8 million net barrels of oil equivalent (boe), up from 0.16 million net boe in 2022. The 1P reserves are expected to generate over $115 million in undiscounted free cash flow, with a net present value (NPV-10) of approximately $36 million. Additionally, proved and probable reserves (2P) have risen 25-fold to 35.3 million net boe, with an estimated undiscounted free cash flow of about $400 million and an NPV-10 of $101 million. The total recoverable resources estimate has increased 3.5 times to 74.2 million net boe, reflecting the full-field development potential of the Cane Creek reservoir.
Why It's Important?
The significant increase in reserves and resources positions Zephyr Energy as a key player in the U.S. onshore oil and gas sector, particularly in the Intermountain West. This development underscores the potential of the Paradox basin as a promising area for oil and gas production. The increase in reserves not only enhances Zephyr's asset value but also strengthens its financial outlook, potentially attracting strategic partners and investors. The company's transition from appraisal to full-scale production could lead to increased economic activity and job creation in the region, contributing to local and national energy security.
What's Next?
Zephyr Energy plans to advance the Paradox project into commercial production and is seeking a strategic partner to support this transition. The company is likely to focus on optimizing production processes and exploring further development opportunities within the basin. Stakeholders, including investors and local communities, will be closely monitoring the project's progress and its impact on regional economic development.
