Zephyr Energy signs Nabors rig contract for Utah project

Rocky Mountains-focused oil group Zephyr Energy has signed a rig contract with American drill contracts Nabors at its flagship project in the Paradox Basin, Utah.

Zephyr is to use Nabors' B29 rig to drill an extended lateral from the existing wellbore of the State 36-2 LNW-CC-R well in January.

The company expects ultimate recoveries from the well, following its completion, could be up to two million barrels of oil equivalent.

Following drilling of the extended lateral, equipment for the completion and production testing of the well will be moved to site, with results from the production test on the well will be available by the end of March.

"We are delighted to secure Nabor's B29 rig within our time frame, and we believe the rig is ideally suited to drill this well. Our primary goal is to deliver a safe and effective drilling operation, with full drilling operations expected to commence early in the New Year," said Zephyr's chief executive Colin Harrington.

"Now that the funding for this well is secured and the rig contract is in place, we can look forward to 2025 with optimism and confidence. I'm pleased we've reached the end of 2024 on such a positive note, with all the pieces in place for us to deliver on our key strategic objective of opening up the next prolific onshore US oil and gas play."

Zephyr's shares were up 1.7% at 3.05p by 0850 GMT.