TIDMPANR
RNS Number : 7853A
Pantheon Resources PLC
03 January 2018
03 January, 2018
Pantheon Resources plc
Spudding of VOBM#5 and operational update
Pantheon Resources plc ("Pantheon" or "the Company"), the
AIM-quoted oil and gas exploration company with a working interest
in several conventional project areas in Tyler and Polk Counties,
onshore East Texas, provides the following operational update:
Spudding of VOBM#5, Polk County, 75% working interest
Pantheon is pleased to announce that the Unit Petroleum Rig #319
rig has spudded the VOBM#5 well, onshore Polk County, in which
Pantheon has a 75% working interest. The VOBM#5 well is a step out
development well from the VOBM#1 well and will be drilled
vertically to a depth of circa 14,500 feet, targeting the Eagle
Ford/Woodbine sandstone formation.
Drilling operations are expected to take +/- 45 days on a
trouble free basis and results from the well will be announced when
drilling and, if appropriate, testing operations are complete. If
successful this well can be hooked up into the existing Polk County
gas processing facility rapidly after completion by laying a
production line to the nearby VOBM#1 location.
Polk County gas production, Tyler County, 58% working interest
(70% until payout of certain costs)
Gas production volumes from the Polk County gas processing
facility are currently averaging circa 3,000 mcf/d. In line with
initial testing, the VOBM#3 well has experienced variability in
production volumes which is believed to result from the well being
located towards the edge of the reservoir as previously announced.
Analysis is currently underway and it is probable that the operator
will perform an intervention, such as acidization, in order to
increase flow rates further.
The VOBM#1 well has also experienced reduced flow rates through
the narrow 12/64(th) inch choke, which has yet to be increased;
however, both the flowing tubing pressure and the shut in tubing
pressure responses remain excellent. The reduced flow rates are
thought to be caused by possible lower permeability in the
reservoir given that the bottom hole location is over 1,500 feet
offset from the initial target. This is because the favourable log
responses encountered in the pilot hole resulted in the well being
completed vertically, in the pilot hole itself, rather than
horizontally as planned. In the analogous Double A Wells field,
wells with similar pressure characteristics to that of VOBM#1 have
proved to be exceptional wells. Likewise, Double A Wells field
wells in areas exhibiting lower permeability have responded
extremely well to fracture stimulation procedures, which is a
possible consideration for VOBM#1 once analysis is complete.
Given the extremely favourable log and pressure responses at
VOBM#1, the Directors remain of the view that the resource
potential for the West Double A mini basin remains unchanged, and
that the potential remains for VOBM#1 to exceed P50 estimates.
VOBM#4 well testing update, Tyler County, 75% working
interest
As announced in December, three separate hydrocarbon bearing
Wilcox zones were encountered during drilling, analogous to key
wells in the Tyler and Hardin Counties' Jazz field. It is intended
that each of these zones will be isolated and, if warranted, tested
individually. One or more of these zones may require fracture
stimulation, consistent with the treatment of the most comparable
wells in the Jazz field. Detailed log and cross sectional analysis
is currently underway with third party specialists across key Jazz
field wells in order to determine the optimal techniques prior to
the commencement of flow testing. Subject to this analysis and the
availability of completion equipment and crews it is estimated that
flow testing operations on VOBM#4 will occur in the coming
weeks.
As previously announced, electric logs and natural gas shows
encountered during the drilling of VOBM#4 indicated the presence of
hydrocarbons in a potentially significant reservoir in the targeted
Wilcox formation. As always however, whilst results from logging
are highly encouraging, the significance of these results cannot be
definitively assessed until flow testing operations have been
undertaken.
Jay Cheatham, CEO, said:
"I am very pleased to have spudded VOBM#5, commencing our 2018
drilling campaign. This well is closer to the centre of the West
Double A Wells mini-basin and, if successful, will add to existing
production and cash flow. Given this location, I expect this to be
an excellent well. I remind shareholders we have discovered
commercial hydrocarbons in all six of our wells in two
counties.
"The reduced production volumes through our Polk County gas
plant aren't what we anticipated, but need to be better understood
before we can make a more informative assessment of any
implications. Certainly in the most important well, VOBM#1, I
remain confident that this well should exceed our P50 estimates and
be an extremely good well for us. The excellent pressure and log
characteristics are indicative of a large reservoir. The decline
was a surprise and could not have been foreseen, particularly given
the promising flow test and log data, but could be an indicative
characteristic of a tight reservoir in this location which would
make sense given the wellbore is offset by some 1,500 feet from the
intended target and is further away from the centre of the
mini-basin. It is well documented that the Double A Wells field
exhibited variability in reservoir quality, with many wells
responding favourably to treatment, resulting in some fantastic
well outcomes. Given we are still producing on a very narrow choke
to better understand a possible treatment for this well, there is
significant upside in the production volumes. It is too early to
make a definitive assessment, however, early indications suggest a
large but tight reservoir in this specific location. Consistant
with experience at Double A Wells field, locations in the centre of
the West Double A mini-basin should exhibit superior reservoir
properties.
"Our initial analysis of the Wilcox at our location in Tyler
County appears to be similar to the Lower Wilcox production at the
Jazz Field. Unit Petroleum has been very successful with their most
recent wells based on the knowledge gained from drilling multiple
wells. We hope to use that experience on VOBM#4."
-Ends -
Further information:
+44 20 7484
Pantheon Resources plc 5361
Jay Cheatham, CEO
Justin Hondris, Director, Finance
and Corporate Development
Stifel Nicolaus Europe Limited (Nominated +44 20 7710
Adviser and broker) 7600
Callum Stewart
Ashton Clanfield
Nicholas Rhodes
+44 20 3727
FTI Consulting 1000
Ed Westropp
James Styles
For further information on Pantheon Resources plc, see the
website at: www.pantheonresources.com
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.
The information contained within this RNS is considered to be
inside information prior to its release.
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) is incorporated into, or forms part of, this
announcement.
Glossary
mcf/d thousand cubic feet per day
P50 denotes a best estimate scenario of Prospective
Resources
This information is provided by RNS
The company news service from the London Stock Exchange
END
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