Pantheon Resources plc ("Pantheon" or "the Company"), the AIM-quoted oil and gas exploration company with a 100%(1) working interests in projects covering 160,000 acres, all covered by 3D seismic and conveniently located adjacent to transportation and pipeline infrastructure on the Alaska North Slope, provides the following update:
Talitha #A well
As previously announced, the Talitha #A well reached target depth at 10,452 ft; was logged, sidewall cored, and encountered oil in all four targeted horizons. Preliminary analysis for all of these zones at this location was very encouraging, particularly for the Shelf Margin Deltaic ("SMD"), Basin Floor Fan and Kuparuk horizons. Flow testing each of these zones sequentially from deepest to shallowest, prior to the end of the drilling season is the goal.
The highly encouraging results in the Kuparuk formation, which were better than expected, have warranted a change of plans to test the Kuparuk more thoroughly. Necessarily, this has added additional complexity and time to testing of this formation and has resulted in a delay to the planned testing timetable. The Kuparuk formation is an important target on the Alaska North Slope because of its large scale and enormous regional productive capability. In order to carry out a more detailed testing operation it was decided to set a 4 ½ inch liner across the Kuparuk instead of the original plan to test in the open hole.
However, because of equipment failures and technical issues, the formation started to become damaged in its current location and it has not been possible to effectively set the 4 ½ inch liner. The damage occurred to the geologic formations above the Kuparuk, a sequence of thick shales and clays, which swelled while the hole was open during the delay. Accordingly, the Company has made the decision to drill a new modestly angled sidetrack into the Kuparuk. The plan is to set and cement the 4 ½ inch liner within the sidetrack, perforate the Kuparuk and commence testing. It is estimated that the sidetrack will take 2-3 days to drill some 650 feet through the Kuparuk Formation approximately 25-50 feet lateral distance from the discovery location, which should allow a better testing operation.
Despite this delay the Company believes there remains sufficient time for testing operations on the other horizons being the SMD and the Basin Floor Fan (in addition to the Kuparuk).
(1) The transfer of the 10.8% WI in the Talitha project acquired from Otto Energy remains conditional upon approval by the Alaska Department of Natural Resources.
Jay Cheatham, CEO of Pantheon Resources, said:
"As far as problems go, it's a good problem to have because it was driven by the preliminary data being better than expected at this location and warrants the opportunity to be tested rigorously. The Kuparuk is a major potential resource in Pantheon's acreage in and around this location where the Company has invested in securing key leases. However, the delay caused by adapting the drilling plan may impact our ability to test all zones as effectively as we would like before the end of the drilling season. We hope and believe this won't be the case and intend to make full use of all available time. As always, we caution that testing is critical to establish the commercial viability of the oil that appears present in the Talitha structure; it is essential that we undertake this process thoroughly.
"Fortuitously, the the Alaska North Slope is currently experiencing unseasonably cold weather which we estimate may extend the drilling season into early April. We remain extremely excited about the commercial potential of the SMD, Basin Floor Fan and Kuparuk horizons, any one of which could be company makers for us, if successful."
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Further information:
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Pantheon Resources plc
+44 20 7484 5361
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Jay Cheatham, CEO
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Justin Hondris, Director, Finance and Corporate Development
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Canaccord Genuity plc (Nominated Adviser and broker)
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Henry Fitzgerald-O'Connor, James Asensio, Angelos Vlatakis
+44 20 7523 8000
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Blytheweigh
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Tim Blythe, Megan Ray, Alice Mclaren, Madeleine Gordon-Foxwell
+44 20 7138 3204
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OEL Price at posting:
0.9¢ Sentiment: Buy Disclosure: Held
(20min delay)