REG - Pantheon Resources - Operational Update, Alkaid #2 Well

Pantheon ResourcesAnnouncement

25/10/2022 07:00

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RNS Number : 9456D  Pantheon Resources PLC  25 October 2022

25 October 2022

 

Pantheon Resources plc

Operational Update, Alkaid #2 Well

 

Pantheon Resources plc ("Pantheon" or "the Company"), the AIM listed oil and
gas company with a 100% working interest in all of its oil projects spanning
c. 153,000 acres adjacent and near to transportation and pipeline
infrastructure on the Alaska North Slope ("ANS"), is pleased to provide the
following operational update:

Alkaid #2 - Operational Update

Production testing operations at Alkaid #2 have commenced with the well in the
clean-up phase and showing positive early indications of oil production from
the reservoir. During this clean-up phase, in addition to the fluid
production, the strong flow back has yielded frac sand production higher than
expected, which is not uncommon in similar completion procedures.

The Alkaid #2 well is being shut in as part of the planned procedure to
transition from temporary flow back facilities to larger permanent facilities,
and a coiled tubing unit will be used to clean out the wellbore. Additionally,
Pantheon will undertake a pressure build-up operation by placing a pressure
"bomb" in the production packer and allowing formation pressure to increase
for several days. This will allow for analysis of multiple reservoir
parameters and is a standard reservoir engineering analytical tool.

The operations to date have recovered approximately 10% of the frac fluid
used, with oil cuts averaging from 8% to 12%. Typically, a better indication
of ultimate production performance can be ascertained after recovering over
40% of the frac fluid, which the Company expects to achieve over the coming
weeks.

Alkaid #2 has produced initial fluid flow with rates in the thousands of
barrels per day, including a strong sand production response which the Company
will address to ensure sand is not restricting the wellbore. Pantheon is
awaiting delivery of a coiled tubing unit to clean out the well bore prior to
recommencement of flow test operations.

Jay Cheatham, CEO, said: "We have seen promising indications of reservoir
performance, with oil cuts showing early in the flow back process. Often, the
first real indications of oil occur much later. Whilst the production of frac
sand is inconvenient, as is the waiting time for obtaining a coiled tubing
unit, it is not an uncommon occurrence in multistage fracture stimulation
completions in conventional reservoirs and will be dealt with once the unit
arrives. We hope to complete our clean-up programme at Alkaid #2 over the next
several weeks and we will announce the results of flow testing once complete.

"It is encouraging that the reservoir response to the stimulation procedure
has been very good, as we have experienced strong initial fluid flows measured
in the thousands of barrels per day. Remember, these are conventional
reservoirs that have superior reservoir qualities compared to shales, and
given it is our first well completion applying stimulation techniques in these
reservoirs it requires a little patience as we better understand our reservoir
characteristics on the North Slope.

"Whilst the early data is very encouraging, I reiterate my previous statements
that we cannot make a definitive assessment of the ultimate commerciality of
the well until flow testing operations have concluded. However, we remain
optimistic."

Michael Duncan, VP Operations & Engineering, said: "As our first
horizontal well on the North Slope, we are quickly learning how this formation
produces and responds to various flow parameters. We are very early in
flowback and cleanup with only 10% of frac fluid recovered, yet significantly,
we have already seen oil production which is greatly encouraging.

"Prior to entering initial production, it is common practice to clean out a
wellbore. We are using a planned outage for tie-in of our permanent facilities
to perform a well pressure build up as well as the wellbore clean out. It has
been a good operating season thus far, and we eagerly anticipate having a
fully operational system soon. The production of frac sand is a nuisance which
has cost us some time during the early stages of flowback, however is not
believed to change the potential of the well."

 

Glossary

 Pressure bomb  A thick-walled container, usually steel, used to hold devices that determine
                and record pressure or temperature in a wellbore

 

 

-Ends-

 

 

Further information:

 

 Pantheon Resources plc                                       +44 20 7484 5361
 Jay Cheatham, CEO
 Justin Hondris, Director, Finance and Corporate Development

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

 BlytheRay
 Tim Blythe, Megan Ray, Madeleine Gordon-Foxwell              +44 20 7138 3204

 

 

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.

 

Notes to Editors

Pantheon Resources plc is an AIM listed Oil & Gas company focused on
several large projects located on the North Slope of Alaska ("ANS"),
onshore USA where it has a 100% working interest in 153,000 highly
prospective acres with potential for multi billion barrels of oil recoverable.
A major differentiator to other ANS projects is its close proximity to
transport and pipeline infrastructure which offers a significant competitive
advantage to Pantheon, allowing for materially lower capital costs and much
quicker development times. 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 conventional 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 materially below that of offshore wells.

 

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)
incorporated into, or forms part of, this announcement. The information
contained within this announcement is considered to be inside information
prior to its release.

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