The Rocky Mountain oil and gas firm Zephyr Energy on Dec. 8 reported positive results from production testing at the State 16-2LN-CC well at its Paradox Basin project in Utah which it says provide ‘substantial justification’ for wider development of the Paradox project.

After 23 days of production testing, Zephyr said the well has demonstrated the potential to drain a larger hydrocarbon resource and with stronger economies than initially forecast. The company is now proceeding with plans to equip the well and facilitate the export and/or sale of hydrocarbons.

The company’s State 16-2LN-CC well was the first well in the Northern Paradox Basin to flow hydrocarbons from a horizontal well with a modern hydraulically stimulated completion design. 

During the test, the well averaged rate-constrained daily rates of 716 barrels of oil equivalent per day (boepd) with rate-constrained highs of 1,083 boepd achieved with limited pressure drawdown.

Zephyr highlighted that initial simulation modeling suggests possible plateau rates of 2,100 boepd are possible when the well is fully equipped and no longer rate-constrained.

Gas rates, which are substantially higher than expected, could reach production plateau rates of 10 million square cubic feet of gas per day and 500 boepd of liquids, Zephyr told investors.

Initial data from the production testing suggests the State 16-2LN-CC has a single well potential Estimated Ultimate Recovery (“EUR”) of 2.65 million barrels of oil equivalent (mmboe), which is significantly higher than Zephyr’s pre-drill estimates of up to 0.85 mmboe.

The test indicates ‘a highly successful appraisal of a substantial new gas condensate resource’ and one which Zephyr forecasts will deliver strong single well economics.

Using updated production forecasts and realized prices of $3 per thousand cubic feet of gas and $65 per barrel of oil, Zephyr estimates that the well will pay out in under seven months and have a net present value at a 10% discount rate (NPV-10) of $12.5 million.

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