RCS - Pantheon Resources - Commencement of Operations - Re-entry of Alkaid-2

Pantheon ResourcesAnnouncement

27/09/2023 07:00

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RNS Number : 7485N  Pantheon Resources PLC  27 September 2023

27 September 2023

Pantheon Resources plc

 Commencement of Operations - Re-entry of Alkaid-2

Pantheon Resources plc (AIM: PANR) ("Pantheon" or the "Company" or the
"Group"), the oil and gas company with a 100% working interest in the Kodiak
and Ahpun projects, collectively spanning 193,000 contiguous acres in close
proximity to pipeline and transportation infrastructure on Alaska's North
Slope, is pleased to advise that operations for the re-entry at Alkaid-2 have
now commenced.

 

Objectives

 

The Alkaid-2 re-entry has three primary objectives:

 

(i) to gather the best possible reservoir fluid samples for pressure-volume
temperature ("PVT") analysis;

(ii) to determine initial reservoir pressure; and

(iii) test the improvements in the frac design discussed in recent Company
webinars

 

The objective of the operations at Alkaid-2 is not to target maximum flow
rates. Pantheon will deliberately restrict the flow rates to minimise gas
production into the well bore and allow optimum data collection.

Re-entry to assess SMD

 

The Alkaid-2 well was positioned to target the Zone of Interest ("ZOI") in the
optimum location and is on the edge of the mapped SMD reservoir.
Notwithstanding the thinner SMD interval at this location when compared to the
core of the Ahpun Field, the well encountered encouraging hydrocarbon
indications en route to the deeper ZOI.

 

The programme of operations to achieve the three primary objectives includes:

 

1.    Make well safe in preparation for operations

2.    Run a plug to isolate the Alkaid ZOI below the SMD horizon

3.    Perforate a limited section to ensure injection pressures are high
enough to propagate the frac lobes horizontally as desired

4.    Pump 11,000 bbls of water and 400,000 lbs of 100 mesh sand

5.    Flow back slowly to prevent or limit gas flashing in the reservoir
(i.e. exsolving from solution in an uncontrolled manner) in order to gather
the most representative fluid samples possible

6.    Monitor pressures throughout to assess frac efficiency and original
reservoir pressure.

 

 

Jay Cheatham, CEO, said: "We are pleased that operations for the re-entry at
Alkaid-2 have now begun. As stated, we are not targeting maximum flow rates,
instead, this programme is designed to allow for as much data gathering as
possible. Whilst the location of the Alkaid-2 well is not ideal for the
shallower SMD horizon, the Company was pleasantly surprised to have logged oil
pay when drilling through the SMD en route to the primary target, the ZOI.
This has provided a low cost option to assess both the productivity of the
shallower horizon and test our improved frac design."

 

Background

 

The Alkaid-2 well was drilled in 2022 and was positioned to prioritise testing
of the primary target (or 'zone of interest', "ZOI"), being the oil zone
successfully flow tested in the Alkaid-1 well in 2019. Testing of the ZOI was
compromised in Alkaid-2 as a result of wellbore blockages, necessitating a
number of cleanout and other remedial operations. Ultimately, the ZOI produced
an IP30 production rate of c.505 barrels per day ("BPD") of marketable liquid
hydrocarbons consisting of oil, condensate and NGLs, as well as natural gas.

 

As previously announced, extensive analysis has been undertaken on the
Alkaid-2 ZOI results with the data supporting a commercial development based
upon 10,000ft lateral development wells, a doubling of the frac efficiency to
40% and assuming no improvement in reservoir quality. The data indicates that
well productivity has the potential to improve materially based upon better
frac design. Tony Beilman, Pantheon's recently appointed Senior VP of
Engineering, and an expert in fracking in North America, believes that with
iterative optimisation, Pantheon has the potential to meet typical performance
benchmarks, a 4x improvement upon that achieved in the ZOI. One of the primary
objectives of the upcoming Shelf Margain Deltaic test is to assess the
efficacy of an updated frac design.

 

 

 

-ENDS-

 Further information, please contact:

 

 Pantheon Resources plc                                       +44 20 7484 5361
 David Hobbs, Executive Chairman

 Jay Cheatham, CEO
 Justin Hondris, Director, Finance and Corporate Development

 Canaccord Genuity plc (Nominated Adviser and broker)
 Henry Fitzgerald-O'Connor, Gordon Hamilton                   +44 20 7523 8000

 BlytheRay
 Tim Blythe, Megan Ray, Matthew Bowld                         +44 20 7138 3204

 

 

Notes to Editors

Pantheon Resources plc is an AIM listed Oil & Gas company focused on
developing the Ahpun and Kodiak fields located on state land on the Alaska
North Slope ("ANS"), onshore USA where it has a 100% working interest in
193,000 acres. Management estimates these fields to produce Expected Ultimate
Recovery of contingent resources amounting to some 2 billion barrels of
marketable liquids to be delivered through the Trans Alaska Pipeline System
("TAPS").

Pantheon's stated objective is to demonstrate sustainable market recognition
of a value of $5-$10/bbl of recoverable resources by end 2028. This will
require targeting Final Investment Decision ("FID") on the Ahpun field by the
end of 2025, building production to 20,000 barrels per day of marketable
liquids into the TAPS main oil line, and applying the resultant cashflows to
support the FID on the Kodiak field by the end of 2028.

A major differentiator to other ANS projects is the close proximity to
existing roads and pipelines which offers a significant competitive advantage
to Pantheon, allowing for materially lower infrastructure costs and the
ability to support the development with a significantly lower pre-cashflow
funding requirement than is typical in Alaska.

The Company's project portfolio has been endorsed by world renowned experts.
Netherland, Sewell & Associates ("NSAI") estimate a 2C contingent
recoverable resource in the Kodiak project that total 962.5 million barrels of
marketable liquids and 4,465 billion cubic feet of natural gas. NSAI is
currently working on estimates for the Ahpun Field.

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