TIDMPANR
RNS Number : 2623L
Pantheon Resources PLC
30 December 2022
30 December, 2022
Pantheon Resources Plc
Operational update
Pantheon Resources plc ("Pantheon" or the "Company" or the
"Group"), the AIM-quoted oil company with 100% working interest in
approximately 153,000 acres located adjacent to transportation and
pipeline infrastructure on State Land on the Alaska North Slope, is
pleased to provide the following operational update on the Alkaid
#2 well.
Operational update - Alkaid #2
As previously announced, the lateral section of the Alkaid #2
wellbore is partially blocked with approximately 1,000 feet of frac
sand which (i) has restricted tested flow rates due to the lack of
contribution from the blocked section, and (ii) has necessitated a
more conservative testing protocol in order to not exacerbate the
blockage, which has resulted in a slower 'cleanup phase'.
Encouragingly, despite the blockage, the well is flowing
naturally into Pantheon's recently commissioned permanent
production facilities located on the Dalton Highway at a rate of
over 500 barrels per day ("bpd") of hydrocarbon liquids which
includes oil, condensate and natural gas liquids ("NGL's"), as well
as significant natural gas, from an estimated 4,000 ft of lateral.
Importantly, it is estimated that the well is still less than 40%
of the way through cleanup phase, so potential exists for these
rates to further improve. Crude oil is processed on location and
oil sales are underway. To date over 7,000 barrels of 38-41 degree
API oil has been trucked and sold into the Trans Alaska Pipeline
System. This oil is lighter than existing North Slope oil
production and hence a welcome addition to the production
stream.
A proportion of the gas production is used to generate power
across all the facilities that are now electrically powered and
operational, reducing flaring and providing cost savings to
operations at this location.
Production
At this early clean up stage, Alkaid #2 is delivering
hydrocarbon liquid rates near expectations over the 4,000 ft
unblocked section, with gas rates well above original prognosis.
Sustained daily production over more than the last 30 days has
averaged over 500 barrels per day of hydrocarbon liquids, of which
circa 200 bpd of crude oil and over 300 bpd being condensate and
NGLs, all of which can be sold either by blending into the pipeline
or trucking to an Alaskan refinery. Gas rates are above 2.5 mmcfd
which is higher than originally anticipated, however this is not
believed to be from a gas cap but coming out of solution near the
well bore. This is not considered a long term problem as excess gas
could be reinjected into the reservoir for pressure maintenance.
This combined hydrocarbon deliverability to date confirms the
forecasted reservoir properties and highlights the potential
deliverability of the Alkaid reservoir. The Company is confident
there is upside above these rates as it is apparent that only a
portion of the completed wellbore is contributing to the production
stream; and it is estimated that the well has produced to date less
than 40% of the volume of frac fluid used in the stimulations.
Sand
As previously announced, the flow rate is restricted by the
accumulation of sand in the horizontal portion of the well bore
also slows down well cleanup. This is not uncommon in long
horizontal wells that have been treated with multi stage fracture
stimulations. With the correct equipment, removing the sand and
cleaning the well is a simple operation which is currently planned
for January. The sand blockage in the well bore was identified
early in the production test, however no winterized workover rig
was available which prohibited the removal of the tubing and a
proper clean out at that time. Instead, a coiled tubing unit
("CTU") was used to conduct a through-tubing cleanout, but was
unable to reach the full well depth and hence was partially
successful with more than 1,000 ft remaining blocked and untouched
by the CTU clean out. A rig is available in January to clean out
the entire well bore and is expected to open the entirety of the
lateral allowing the full potential of the well to be revealed and
at the same time accelerating the clean up phase.
In advance of the clean out the Company plans to shut in and
perform reservoir diagnostics, a normal oilfield practice, to
gather additional data.
Jay Cheatham, CEO, said: "The Alkaid #2 well is delivering a
total hydrocarbon liquid mixture exceeding 500 bpd from what we
believe is from only c.4,000 feet of lateral. The liquid mixture
includes high quality oil with associated condensates and NGL that
are saleable through TAPS. The total hydrocarbon production rates
confirm we have tapped into a significant hydrocarbon system. To
have this level of production at this stage in the "clean up" phase
of production testing remains positive. The current reservoir
performance is compromised by the sand blockage and we will not
have a true indication of reservoir performance until the entire
well bore is clean. We are deliberately using a conservative
approach in flow testing of not 'pulling on the reservoir' too
hard, allowing the natural healing of the fractures to minimise
future sand flow. Overall, we're very encouraged with the
preliminary results of the production test and the fact that we
have permanent facilities for treating and selling our oil as well
as utilizing our gas to power our operations on location. Despite
this encouragement however, we remind shareholders as we always do,
that a definitive assessment of the well cannot be made until flow
testing operations have concluded and we are still too early in the
process.
"We expect flow rates after the clean out to improve. The
location of Alkaid, immediately adjacent to the Dalton Highway,
again highlights the significant advantage we have to other
operators on the North Slope in expediting our oil developments.
These initial positive testing results have increased our
confidence in pursuing an Alkaid #3 well, subject to funding, which
would be a high impact appraisal well to test the Shelf Margin
Deltaic, the reservoir target immediately above the discovered oil
at Alkaid #1 and #2. A success at Alkaid #3 would be a commercially
impactful well with material resource implications and would also
leverage off the established production facilities for important
near term cashflow and it could be drilled outside of the
traditional winter drilling season."
Glossary
Bpd Barrells per day
Bopd Barrells of oil per day
Mmcfd Millions of cubic feet per day
Ft Feet
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 Robert Rosenthal,
a qualified Petroleum Geologist, who has over 40 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").
Cautionary Statement: Certain statements and estimates contained
in this announcement carry an associated risk of accuracy as such
statements and estimates are based upon information available at
the time of making such statements. Actual results could differ
materially from expectations set out in such statements. Among
other factors, this could be as a result of changes in economic,
market, geological and political factors, the success of future
drilling and geological success, the risk of future drilling
changes in the regulatory environment and other government actions,
fluctuations in the price of oil and exchange rates, and business
and operational risk management.
-Ends-
Further information:
Pantheon Resources plc
Jay Cheatham, CEO +44 20 7484 5361
Justin Hondris, Director, Finance and Corporate
Development
Canaccord Genuity L imited (Nominated Adviser
and broker)
Henry Fitzgerald-O'Connor, James Asensio, 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 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.
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 or visit 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.
END
UPDGGBDDRXXDGDG
(END) Dow Jones Newswires
December 30, 2022 02:00 ET (07:00 GMT)
Pantheon Resources (LSE:PANR)
Historical Stock Chart
From Mar 2024 to Apr 2024
Pantheon Resources (LSE:PANR)
Historical Stock Chart
From Apr 2023 to Apr 2024
