Zephyr Energy Plc aims to monetise its Utah gas resources through a fast-tracked cryptocurrency mining venture this summer.
The company, in a statement, said that the crypto facility could be operational in as little as eight to 12 weeks, in tandem with the start of production from the State 16-2LN-CC well.
Gas produced from the well will fuel on-site power generators which will drive the crypto operation.
It is expected that Zephyr will fund the initial investment for the planned 1 megawatt facility from existing cash resources or via third party investment. The CAPEX bill is estimated to be under US$2mln and Zephy reckons the crypto facility will achieve capital payback in less than two years, based on current crypto values.
Liquid production from the well will be sold to local refineries in Utah, the company added, meanwhile, longer-term and higher volume gas production from the Paradox project is envisaged to supply into gas infrastructure that was recently purchased by Dominion Energy, from 2023 onwards.
Zephyr told investors it is now in the advanced stages of planning for a slated three-well drill programme at the Paradox project, where work is slated to start in the second half of 2022.
“We are hugely excited to embark on the next steps to open up the Paradox Basin resource play. The completion of our highly successful initial well test gave the Zephyr team the comfort to proceed with detailed evaluations of both near and long-term off-take solutions for the gas volumes from the State 16-2LN-CC well.
“The plan announced today allows us to both accelerate near-term production and benefit from long term gas sales optionality should the economic returns from the co-located crypto-mining facility meet internal expectations.”
Harrington added: “While the Dominion infrastructure is envisioned to be the long-term solution for the majority of our gas production from the Paradox project, the construction of the co-located crypto-mining facility is an excellent interim step.
“We believe it has potential to be a profitable opportunity for Zephyr and we hope to have production from the State 16-2LN-CC well and the crypto-facility online in as little as eight to 12 weeks.”
“Our planned crypto-mining facility will enable Zephyr to meet its near-term objectives – it will allow us to accelerate revenues from the State 16-2LN-CC well, to earn additional revenues from the crypto-mine infrastructure, and to enable a long-term test which will provide valuable information about the well’s production profile.”