TIDMPANR
RNS Number : 8045U
Pantheon Resources PLC
02 April 2019
2 April, 2019
Pantheon Resources plc
Alkaid Well Update
Pantheon Resources plc ("Pantheon" or "the Company"), the
AIM-quoted oil and gas exploration company with working interests
in several conventional project areas in Tyler and Polk Counties,
onshore East Texas, as well as onshore North Slope of Alaska,
provides the following update in relation to the testing of the
Alkaid well located on the Alaska North Slope:
Highlights: Alkaid Well, Alaska North Slope, Pantheon 100%
working interest
-- Following the successful flow test of the primary target, the
Brookian Formation (Brookian "zone of interest" or "ZOI") at
c.8,100 ft depth in the Alkaid well, which confirmed the well as an
oil discovery, flow testing operations moved up the hole to the
shallower West Sak and Ugnu secondary targets.
-- Testing of the West Sak secondary target has now occurred,
with the well encountering low salinity (brackish) water. The Ugnu
and West Sak secondary targets were independent of the Brookian
ZOI, however the presence of brackish water in the West Sak has
significantly downgraded the probability of success in the the Ugnu
Formation, given these zones are close to each other and have very
similar log responses.
-- As a result of the confirmation of the oil discovery in the
Brookian ZOI, Pantheon has decided to suspend and seek approval to
'freeze protect' the Alkaid well bore, preserving it as a future
development well and this process is expected to take up to two
weeks.
-- As previously announced on 25 March, the Alkaid well is
considered a material success for the Company, flowing 80 - 100
bopd of light (40 degree API oil) from a 6 foot perforated interval
as previously reported. Future development wells will be
horizontal, stimulated and perforated over much larger intervals
which will deliver significantly larger production rates.
-- The Brookian ZOI Is estimated to have 400 feet of gross pay
and 240 feet of net pay. Flow testing and data received exceeded
expectations and have material positive implications for reserve
and production potential for the Alkaid project, as well as for
increasing probabilities of success of other Brookian targets on
the acreage, most notably Phecda, the adjoining prospect.
-- Application has been made to the State of Alaska to suspend
and 'freeze protect' the wellbore for use as a future development
well and producer.
Flow testing operations at Alkaid have now been concluded with
the well confirmed as a new field oil discovery in the primary
Brookian ZOI. The shallower West Sak secondary target horizon at
c,5,450 ft encountered low salinity water, suggesting the horizon
to be non-commercial and the decision was made not to test the
other secondary target Ugnu horizon. Although the Ugnu target zone
is independent from West Sak, the nature of the West Sak results
and its similar log response to Ugnu, the result has significantly
altered the risk profile and chance of success of the Ugnu
zone.
Given the excellent results which exceeded expectations from the
primary target, the Brookian ZOI, it has been decided to suspend
the well as a future producer. Alkaid's close and favourable
proximity to the Dalton Highway and the Trans Alaska Pipeline
(TAPS) should result in a significantly shorter permitting and
development schedule compared to typical North Slope of Alaska
developments.
Pantheon has applied to the State of Alaska to suspend and
'freeze protect' the Alkaid well bore, preserving it as a future
development well and producer. If approved, this work will take an
additional two weeks taking operations through to the end of the
operating (weather) season which has been experiencing warmer than
usual temperatures recently. Future operations may involve
re-entering the well and drilling a horizontal section through the
oil zone. The Alkaid well successfully tested high quality 40
degree API oil from the Brookian ZOI which has an estimated 240
feet of net oil pay (400 feet gross oil pay), and the discovery
confirms the high tech geophysics work done on the Great Bear
acreage and improves the prospectivity of Pantheon's other Brookian
prospects where 3D seismic has already been acquired and prospects
delineated. In particular, the Alkaid result is believed to have
materially positive implications for the adjoining Phecda prospect
which is now upgraded and considered a step out appraisal from the
Alkaid location. These two projects will now likely be part of a
single development plan, favourably located adjacent to the Dalton
highway and TAPS pipeline. The better than expected results in the
zone of interest will also impact the pre drill P50 Technically
Recoverable Resource estimates which will be assessed in the near
future.
Jay Cheatham, CEO, said:
"Despite today's news on the secondary targets, Alkaid has been
a great success for Pantheon, exceeding our expectations in the
primary target, and upgrading the adjoining Phecda prospect which
appears analogous on seismic. The Alaska team of geologists,
engineers, drillers, service providers and all others are to be
commended for delivering an excellent incident free result for
Pantheon. Our decision to apply to the State to suspend and freeze
protect Alkaid now was impacted significantly by the "brackish
water" produced in the West Sak and also by the recent
exceptionally warm weather on the North Slope. It is imperative to
preserve the Alkaid discovery well for future production. The
Alkaid success provides ongoing confidence on future drilling
operations where the high tech geophysics applied to Alkaid can be
replicated across the entire portfolio and deliver material success
as has been the case with other operators chasing this similar play
in adjoining leases.
The Company will immediately set about reworking and analysing
all key data from our Alaskan programme which will include
reviewing the pre-drill conceptual development plans on Alkaid as
well formulating plans for future farm out discussions. Work will
also commence in the short term reviewing geological models for
East Texas operations with a view to re-drilling VOBM#1 as a
side-track or as a new well once analysis has been completed. The
Company will update shareholders as to timing expectations once
analysis has been completed."
-S-
Further information:
Pantheon Resources plc +44 20 7484 5361
Jay Cheatham, CEO
Justin Hondris, Director, Finance and Corporate
Development
Arden Partners plc (Nominated Adviser and broker) +44 20 7614 5900
Paul Shackleton
Daniel Gee-Summons
Notes to Editors
Pantheon Resources plc is an AIM listed Oil & Gas
exploration and production company with assets in East Texas and on
the North Slope of Alaska, onshore USA.
The Group's stated objective is to create material value for its
stakeholders through oil exploration, appraisal and development
activities in high impact, highly prospective assets, in the USA; a
highly established region for energy production with
infrastructure, skilled personnel and low sovereign risk. All
operations are onshore USA, with drilling costs an order of
magnitude below that of offshore wells.
In East Texas, Pantheon holds a 50% to 75% working interest (and
in present discussions to increase this to 100% working interest
for non-cash consideration) in several conventional prospects in
Tyler & Polk Counties, in an area of abundant regional
infrastructure, and in proximity to the prized Double A Wells
Field. P50 Technically Recoverable Resources are estimated at 157
million barrels of oil equivalent.
In Alaska, following its acquisition of the assets of Great Bear
Petroleum in January 2019, Pantheon holds working interests ranging
between 10% and 90% of prospects covered by over 1,000 square miles
of 3D seismic with P50 Technically Recoverable Resources estimated
at 1.7 billion barrels of oil. An additional 0.4 billion barrels of
P50 Technically Recoverable Resources was estimated to apply the
Winx-1 Western Acreage acreage blocks, however this number is
subject to downward revision following the disappointing Winx
result in March 2019 and following the Alkaid testing result
announced today. This work will be conducted over the coming months
and an updated resource assessment provided once work is
completed.
For further information on Pantheon Resources plc, see the
website at: www.pantheonresources.com
The information contained within this RNS is considered to be
inside information prior to its release. Neither the contents of
the Company's website nor the contents of any website accessible
from hyperlinks on the Company's website (or any other website) is
incorporated into, or forms part of, this announcement.
In accordance with the AIM Rules - Note for Mining and Oil &
Gas Companies - June 2009, the information contained in this
announcement has been reviewed and signed off by Jay Cheatham, a
qualified Chemical & Petroleum Engineer, who has over 40 years'
relevant experience within the sector.
Cautionary Statement: The estimated quantities of petroleum that
may be potentially recovered by the application of a future
development project relate to undiscovered accumulations. These
estimates have both an associated risk of discovery and a risk of
development. Further exploration, appraisal and evaluation are
required to determine the existence of a significant quantity of
potentially movable hydrocarbons.
GLOSSARY
BOPD Barrels of Oil per day
API The American Petroleum Institute gravity, or API gravity, is
a measure of how heavy or light a petroleum liquid is compared to
water: if its API gravity is greater than 10, it is lighter and
floats on water; if less than 10, it is heavier and sinks.
NPV Net Present Value
ZOI Zone of interest (primary target)
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END
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