REG - Pantheon Resources - Further Results from the Flow Testing of Megrez-1

Pantheon ResourcesAnnouncement

19/05/2025 07:00

For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20250519:nRSS1836Ja&default-theme=true

RNS Number : 1836J  Pantheon Resources PLC  19 May 2025

 

 

 

 

 

19 May 2025

 

Pantheon Resources plc

Further Results from the Flow Testing of the Megrez-1

 

Pantheon Resources plc (AIM:PANR, OTCQX: PTHRF) ("Pantheon" or the "Company"),
an oil and gas company developing the Kodiak and Ahpun oil fields in close
proximity to pipeline and transportation infrastructure on Alaska's North
Slope, today announces further progress from the Megrez-1 flow testing
programme and guidance on the timing of future activities.

Key Highlights

 

Lower Prince Creek ("LPC") formation:

·      A cement squeeze of the casing annulus was successfully completed
to meet regulatory requirements and enable testing throughout the wellbore
without limitation.

·      An initial unstimulated flow test was performed on the LPC
horizon to eliminate reservoir performance uncertainties that might result
from introducing frac water into the reservoir, which could have impacted oil
mobility.

·      Although reservoir fluids (including oil and gas) were recovered
during initial flow, production was water-dominated, largely consistent with
the outcome in TS1.

·      The Company will now defer hydraulic fracture stimulation of the
LPC horizon until full post-well analysis can be completed and reservoir
properties are better understood. The Company's guidance at this time is that
no recoverable oil resource should be attributed to this LPC interval.

 

Forward Work Programme:

·      The next test will be the Lower Sagavanirktok 3 horizon ("L. Sag.
3"). Perforation and flow testing of this shallower high porosity and
permeability zone will assess oil mobility in the best remaining candidate
reservoir to determine the commercial oil potential in this wellbore.

·      Further testing of the Upper Prince Creek and remaining L. Sag.
horizons will depend upon the results of L. Sag. 3.

·      Ahpun field development planning and the regulatory application
process is proceeding as scheduled, independent of Megrez-1 outcomes.

·      Pantheon continues to plan for the Dubhe-1 commercial
demonstration well, located in the Ahpun field western topsets, with
activities targeted to commence during summer 2025.

 

Further Analyses of Upper Schrader Bluff - Topset 1 ("TS1"):

·      Following the flow testing of TS1 as announced on 14 April 2025,
further analysis has provided additional insights into reservoir properties
that may explain the lack of oil mobility, despite oil saturations exceeding
50%. Analogous reservoirs in industry have required months of continuous flow
before mobile oil arrived in the wellbore.

·      Pantheon would be able to return to TS1 in the future once
permanent production facilities are in place, which would allow for longer
term flow testing to proceed at lower cost.

·      This new information does not guarantee that oil will flow at
commercial rates in a subsequent test of the TS1 horizon, however the high oil
saturations and other data indicate a need for future testing. The Company's
guidance continues to be that no recoverable oil resource should be attributed
to the Upper Schrader Bluff topsets.

 

Analysis of Megrez-1 Flow Programme to Date

 

The Megrez-1 programme was planned to test multiple independent horizons. The
TS1 interval was fracture stimulated in two stages and flow tested over 12
days starting 3 April 2025. Although no appreciable oil or gas was recovered
at surface, post-test core and log analysis has confirmed oil saturations
exceeded 50% - well above expected oil mobility thresholds. The table below
summarises the results of the CoreLab analysis for two cores from TS1 and one
from LPC.

 ROTARY SIDEWALL ANALYSIS

                                                      Permeability               Saturation (At Surface)            Saturation (Calc Reservoir)         Grain
 Depth    Formation                         Porosity  Klinkenberg  Kair          Oil                 Water          Oil               Water             Density
 (ft)                                       (%)       (md)         (md)          % Pore Volume       % Pore Volume  % Pore Volume     % Pore Volume     (g/cm3)
 6875.00  Lower Prince Creek                14.78     .036         .087          46                  36             58                42                2.687
 7185.10  Upooer Schader Bluff Topset 1     15.37     .032         .069          48                  43             54                46                2.657
 7435.00  Upooer Schader Bluff Topset 1     16.93     .091         .163          46                  44             53                47                2.702

 

Post flow test analysis indicates the reservoir is most likely oil wet. An
"oil wet" reservoir is a type of petroleum reservoir where the rock surfaces
are preferentially coated or attracted to oil rather than water. In other
words, the rock has a higher affinity for oil, and thus oil tends to
preferentially adhere to the rock grains, while water occupies the centre of
the pore spaces and flows more freely.

In such systems, if there is mobile oil, it typically only appears after
extended flowback periods, as per industry research and analogues. Given the
daily expense associated with well test operations on the North Slope of
Alaska and no imminent sign of oil mobility, the Company decided to stop the
testing after 12 days to preserve capital for the remainder of the Megrez
tests and the upcoming Ahpun development. Longer term testing of the TS1
horizon can be achieved far more economically in the future once permanent
production facilities are in place.

A casing annulus cement squeeze was then performed to ensure well integrity
and enable testing  of shallower zones without limitation. The LPC interval,
which has higher oil saturations than TS1 as measured by logs and cores and
was seen as more likely to flow oil, was tested using a conservative,
unstimulated method (swabbing and nitrogen gas lift) to maximise our
understanding of test data by avoiding altering reservoir wettability or any
other reservoir properties through the process of fracking and the
introduction of frack fluids.  Although quantities of oil and gas were
recovered initially,  similar to the deeper TS1 test, the flow quickly became
dominated by low-salinity water. Therefore the flow test was suspended and a
decision was made to defer fracture stimulation in this interval until a full
post-well analysis is complete.

 

Together, TS1 and LPC results confirm significant in-place hydrocarbons and
point to a shared oil-wet system that will likely require production-scale
infrastructure and prolonged testing to evaluate commercial flow potential.
 It is unknown whether the oil wettability seen in TS1 and LPC horizons
applies to all 1,340 vertical feet of identified net pay in the well.

 

The next operation will be to move up hole to test the shallower L.Sag. 3
interval, which offers materially superior porosity and permeability, and thus
represents the greatest remaining chance of mobile oil. Based upon that
outcome, additional targets in the Upper Prince Creek and L. Sag. may also be
tested. If mobile oil is not produced, further testing on the well will be
suspended.  Post-well evaluation will inform optimal recovery approaches.

The results and associated analysis for Megrez-1 are independent of the Ahpun
or Kodiak reservoirs which have different reservoir properties and from which
mobile oil flows have been demonstrated.  Ahpun West and Kodiak have combined
independently certified 2C Contingent Resources of c. 1.6 billion barrels of
liquids and 6.6 TCF (trillion cubic feet) of natural gas which are unaffected
by the results of Megrez-1.  The Ahpun field development planning and
regulatory application process will proceed as scheduled, regardless of these
Megrez-1 outcomes.

Pantheon remains on track to commence drilling operations on the Dubhe-1
commercial demonstration well, located in the Ahpun field topsets, in summer
2025.

Webinar

The Company intends to host an investor update via Investor Meet Company on 21
May 2025, 17:30 BST.

The presentation is open to all existing and potential shareholders. Questions
can be submitted pre-event via your Investor Meet Company dashboard up until
20 May 2025, 12:00 BST, or at any time during the live presentation.

Investors can sign up to Investor Meet Company for free and add to meet
PANTHEON RESOURCES PLC via:

https://www.investormeetcompany.com/pantheon-resources-plc/register-investor

Investors who already follow PANTHEON RESOURCES PLC on the Investor Meet
Company platform will automatically be invited.

Max Easley, Chief Executive Officer of Pantheon Resources, commented: "The
initial flow test in the Lower Prince Creek formation has shown improved but
similar reservoir characterists as TS1.  Core analysis across both intervals
has reinforced our view that this is a substantial, oil-charged system with
unique characteristics that we're continuing to define through careful,
stepwise appraisal. The data indicate material oil saturations and reservoir
properties that would, under normal circumstances, support commercial
production rates, but our challenge is one of engineering, to determine if/how
we can engineer them to flow commercially.

"Both  zones could become attractive candidates for future development once
permanent facilities enable longer-term, cost-effective flowback and
processing. In the near term, we're eager to test the Sagavanirktok interval,
a much higher porosity and permeability reservoir."

David Hobbs, Chairman, commented: "The results of testing so far have been
undeniably disappointing. As soon as we have completed testing operations on
Megrez-1, we will be progressing permitting and planning for the Ahpun
commercial demonstration well, a core milestone in advancing Phase 1 of the
Alaska LNG project. This will allow a relentless focus on the transition from
exploration and appraisal  to development and future production of our
existing independently certified resource base."

 

For further information, please contact:

Corporate Contact
Pantheon Resources plc

Justin Hondris
contact@pantheonresources.com (mailto:contact@pantheonresources.com)

Nominated Adviser and Broker

Canaccord Genuity Limited

Henry Fitzgerald-O'Connor, James Asensio, Charlie Hammond

+44 20 7523 8000

Public Relations Contact
BlytheRay

Tim Blythe, Megan Ray, Matthew Bowld

+44 20 7138 3204

USA Investor Relations Contact

MZ Group

Lucas Zimmerman, Ian Scargill

+1 949 259 4987
PTHRF@mzgroup.us (mailto:PTHRF@mzgroup.us)

 

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 Max Easley, a qualified Petroleum Engineer and a member of
the Society of Petroleum Engineers, who has 33 years' relevant experience
within the sector.

The information contained within this Announcement is deemed by Pantheon
Resources PLC to constitute inside information as stipulated under the Market
Abuse Regulation (EU) No. 596/2014 as it forms part of UK law by virtue of
the European Union (Withdrawal) Act 2018 ("MAR").

 

About Pantheon Resources

Pantheon Resources plc is an AIM listed Oil & Gas company focused on
developing its 100% owned Ahpun and Kodiak fields located on State of Alaska
land on the North Slope, onshore USA. Independently certified best estimate
contingent recoverable resources attributable to these projects currently
total c. 1.6 billion barrels of ANS crude and 6.6 Tcf of associated natural
gas. The Company owns 100% working interest in c. 259,000 acres.

Pantheon's stated objective is to demonstrate sustainable market recognition
of a value of $5-$10/bbl of recoverable resources by end 2028. This is based
on bringing the Ahpun field forward to FID and producing into the TAPS main
oil line (ANS crude) by the end of 2028. The Gas Sales Precedent Agreement
signed with AGDC provides the potential for Pantheon's natural gas to be
produced into the proposed 807mile pipeline from the North Slope to
Southcentral Alaska during 2029. Once the Company achieves financial
self-sufficiency, it will apply the resultant cashflows to support the FID on
the Kodiak field planned, subject to regulatory approvals, targeted by the end
of 2028 or early 2029.

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 shorter development timeframes, materially lower
infrastructure costs and the ability to support the development with a
significantly lower pre-cashflow funding requirement than is typical in
Alaska. Furthermore, the low CO2 content of the associated gas allows export
into the planned natural gas pipeline from the North Slope to Southcentral
Alaska without significant pre-treatment.

The Company's project portfolio has been endorsed by world renowned experts.
Netherland, Sewell & Associates estimate a 2C contingent recoverable
resource in the Kodiak project that total 1,208 mmbbl of ANS crude and 5,396
bcf of natural gas. Cawley Gillespie & Associates estimate 2C contingent
recoverable resources for Ahpun's western topset horizons at 282 mmbbl of ANS
crude and 803 bcf of natural gas. Lee Keeling & Associates estimated
possible reserves and 2C contingent recoverable resources totalling 79 mmbbl
of ANS crude and 424 bcf natural gas.

For more information visit www.pantheonresources.com
(http://www.pantheonresources.com) .

 

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  FURGPUGCAUPAUAB