Zephyr Energy plc provided an update on operations on the State 36-2 LNW-CC well (‘the well') at the Company's project in the Paradox Basin, Utah, U.S. Drilling of the well commenced on 20 November 2022, with the prime objective to target potential production from the Cane Creek reservoir (the ‘reservoir'). Over the past week, having reached the reservoir at a depth of 9,598 feet true vertical depth, the well experienced a significant influx of hydrocarbons which consequently led to suspension of drilling operations while the well was stabilised. The influx was caused by the well intersecting an apparent major natural fracture network in the reservoir, and the resultant flowing hydrocarbons are currently being diverted safely at surface through the drilling rig flare stack whereby they are subsequently flared.

Throughout this period, Zephyr's operations team followed due well control procedure and stabilised the well without incident. Zephyr's team is analysing all options for the well's safe completion, which may include running production casing and completing the well without drilling the remainder of the planned lateral. It is also likely that planned hydraulic stimulation will not be required for the well.