TIDMPANR
RNS Number : 8111V
Pantheon Resources PLC
19 April 2021
19 April , 2021
Pantheon Resources plc
Operational update, Talitha #A well
Pantheon Resources plc ("Pantheon" or the "Company"), the
AIM-quoted oil and gas exploration Company with a 100% working
interest in projects spanning c.160,000 acres covered by 3D seismic
and advantageously located adjacent to transportation and pipeline
infrastructure on the Alaska North Slope, provides the following
update following the conclusion of operations at the Talitha #A
well:
Talitha #A well - conclusion of operations and overview
Operations at the Talitha #A well have concluded with the well
suspended for future testing operations. The well encountered five
stacked, independent oil-bearing reservoir zones over a 3700 ft
interval which m anagement believes has validated its earlier
assertion of over 1 billion barrels recoverable oil potential from
this multi-billion barrel oil in place play at Talitha. Testing of
the deepest of these zones, the Kuparuk formation, which flowed
high-quality light oil intermittently at rates up to 100 BOPD, a
disappointing rate, encountered a number of operational issues. The
Kuparuk horizon at this location was overpressured which was both
unexpected and unlike any known Kuparuk well regionally, which
caused challenges in testing. The four normally pressured shallower
zones, all of which encountered light oil and offer excellent
potential based upon analysis to date, will be tested in a future
program.
The Company collected an enormous amount of drilling, logging
and testing data which will be evaluated. Additionally, Pantheon
has engaged the experts at Baker Hughes and Advanced Hydrocarbon
Stratigraphy ("AHS") to provide Volatile Analysis Service ("VAS"),
a comprehensive, sophisticated and independent evaluation of
hydrocarbon presence in the well bore, using mass spectrometry
analysis of well cuttings. Pantheon also used conventional data
collection techniques including 'Logging While Drilling', mud
logging, side wall cores and an entire suite of wireline logs.
Baker Hughes AHS identified five independent highly prospective
zones with high oil saturations and low or moderate water
saturations. These correlate directly to Pantheon's five target
zones.
Comprehensive analysis of the VAS and wireline data from these
zones over the forthcoming months will enable the Company to fully
optimize its testing program for next season, as well as enabling
lengthier flow tests.
Update on testing of the Kuparuk horizon
The Kuparuk proved more geologically complex than expected. The
well encountered +/- 60 ft of well-developed sand with high
resistivity readings, indicating the presence of hydrocarbons,
independently confirmed by VAS. Talitha #A demonstrated the key
elements of a proven hydrocarbon system in the Kuparuk formation
with the presence of movable high-quality (+/- 42deg API) oil,
however during testing the well-produced oil intermittently along
with solution gas, with formation water fresher than anticipated.
These flow rates were not consistent with our expectation based on
Talitha logs compared to nearby Kuparuk field production.
A comprehensive analysis of the Kuparuk, supported by third
party experts, has already commenced to gain a greater
understanding of the atypical reservoir characteristics
encountered. Based upon analysis to date, the Kuparuk very much
remains a viable target on the Company's acreage. Early analysis
suggests that the Kuparuk horizon at this location might respond
better to different drilling fluids and techniques, however
ultimate recoveries may be lower than originally estimated. This
work is just starting, and a formal conclusion will be reported
when completed.
Well Strategy
The Talitha #A well location was selected as the optimal
location for the shallower Shelf Margin Deltaic horizon, the
primary target of the well. The Kuparuk at this location is some
800 ft downdip from its ideal 'updip' position and was a secondary
target.
Our technical team prioritised testing the Kuparuk formation and
ultimately recommended deferring plans to test the shallower
horizon during this drilling season because the well logs of the
Kuparuk indicated much better developed reservoir than at Pipeline
State #1, comparable to those in highly productive nearby Kuparuk
fields. Based upon the well logs (and regional comparatives), the
associated disappointing flow rates, were a surprise.
Update on shallower horizons
Pantheon is extremely encouraged by the analysis of the
shallower zones in the Talitha #A well. The reservoir qualities are
in line with expectations, the oil appears to be lighter than
expected and an additional significant zone has been discovered,
increasing the total resource potential significantly. These zones
are all independent of the Kuparuk and will be tested next
winter.
Talitha #A reached a total depth of 10,456 ft and confirmed five
potentially productive zones, all of which were oil bearing as
follows (from shallowest to deepest):
(i) Shelf Margin Deltaic ("SMD")
(ii) Slope Fan System
(iii) Upper Basin Floor Fan
(iv) Lower Basin Floor Fan
(v) Kuparuk
An enormous volume of high-quality data has been collected from
drilling Talitha #A which has both de-risked these zones for future
drilling, and increased confidence of their viability. The Basin
Floor Fan ("BFF") zone was thicker than expected and encountered
more reservoir than expected. The Upper BFF is an additional zone
with good reservoir properties. The Slope Fan System was
encountered as anticipated and will benefit from additional work
prior to next season's testing. The SMD was not as well developed
as anticipated at Talitha #A, however based on our new data
Pantheon now interprets that the SMD extends across the Alkaid
project, and better developed as it extends south east across the
Dalton Highway. This significantly increases the resource near the
highway.
The VAS process entailed taking samples every 10-20 ft of well
depth, hermetically sealing approximately half of those samples to
avoid any evaporation of hydrocarbons, with the other half of the
samples tested after exposure to air. These samples are then
subjected to mass spectrometry analysis in the Baker Hughes AHS VAS
lab. Significantly, the VAS analysis confirmed the presence of
continuous stacked oil-bearing reservoir zones over a 3,700 ft
interval starting at the regional top seal above the Shelf Margin
Deltaic reservoir zone down to target depth at 10,456 ft. Every
single sample taken over this interval extracted oil.
Future activity
Pantheon's immediate focus is to complete the analysis of the
Talitha #A well, including a comprehensive study to better
understand the implications for the Kuparuk across Pantheon's
acreage. At the same time Pantheon intends to recommence its
farmout strategy to attract a suitable industry partner to best
exploit this large play.
Pantheon's potential for the shallower zones has increased and
been de-risked with the discovery of oil based on logging, sidewall
core data and analysis from Baker Hughes AHS in each of these
formations. Accordingly, the Company has started work on updating
its resource estimates across these shallower zones.
The discovery of oil in the Basin Floor Fan will become an area
of intense focus as this is part of the significant Theta West
prospect, Pantheon's largest target, now considerably de-risked by
the Talitha #A result. Theta West will test the exceptionally large
Basin Floor Fan in a better structural location and hence should
attract strong partner interest in drilling this significant
prospect.
Bob Rosenthal, Technical Director, said:
"Like all exploration wells on the Alaska North Slope, the
primary objective of this well was to gain valuable data for
assessment both technically and economically. At a geological level
we have amassed an enormous volume of high-quality data,
independently supported by the leading industry experts. The bottom
line is that Talitha #A has confirmed five separate zones, all
hydrocarbon bearing, and which collectively have significantly
increased our estimate of oil in place on our 100% controlled
acreage."
"A great frustration is that we simply ran out of time to test
all the zones. This cloud has a silver lining - when we plan to
come back this coming winter, we will have the twin luxuries of a
testing program incorporating the results of a thorough analysis of
the dataset, and a much longer testing window. This can be
accomplished with a small rig and at a much reduced cost. The
Kuparuk itself is not yet fully understood, but we believe still
offers tremendous potential if drilled differently given its
inherent geologic properties. This experience is normal in the
industry in any first well drilled in a new area. I would like to
thank our exceptional technical team for their extraordinary
efforts on this well over the past few months."
Jay Cheatham, CEO, said:
"Today's news is a tale of two stories. We are of course
disappointed not to deliver the high tested flow rates we were
hoping for from the Kuparuk. We will continue our analysis of this
complex zone as we believe it still offers great potential for our
Company. The shallower (Brookian) zones continue to grow and evolve
as we receive new data. Baker Hughes AHS have independently
confirmed our belief. We anticipate providing an upgrade to
management's resource estimates once analysis is completed."
"While the testing of the Kuparuk has not gone to plan, we set
an incredibly high bar to attempt to drill and test four
independent zones in one North Slope winter drilling season. If we
had the VAS data before drilling, we would likely have drilled and
tested the Kuparuk formation differently. The Baker Hughes AHS
analysis has concluded there are strong indicators of five oil pay
zones across some 3700 ft. This technology is proven and
successfully used in other parts of Alaska and North America. The
Basin Floor Fan discovery at this downdip location sets up a
significant and low risk opportunity and is sure to attract
international partner attention. We have learned that our acreage
contains a vast hydrocarbon play, located along and close to the
Dalton Highway and the Trans Alaska Pipeline. We have de-risked
this play significantly which will lead to upgrades in due
course."
-Ends-
Cautionary Statement: The estimated quantities of petroleum that
may be potentially recovered by the application of a future
development project relate to undiscovered accumulations. These
estimates have both an associated risk of discovery and a risk of
development. Further exploration, appraisal and evaluation are
required to determine the existence of a significant quantity of
potentially movable hydrocarbons.
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, Angelos
Vlatakis +44 20 7523 8000
Blytheweigh
Tim Blythe, Megan Ray, Alice McLaren, 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.
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
API The American Petroleum Institute gravity, or API gravity ,
is a measure of how heavy or light a petroleum liquid is compared
to water: if its API gravity is greater than 10, it is lighter and
floats on water; if less than 10, it is heavier and sinks.
Ft feet
BOPD Barrels Oil Per Day
Notes to Editors
Pantheon Resources plc is an AIM listed Oil & Gas
exploration and production focused on several large projects
located on the North Slope of Alaska ("ANS"), onshore USA. A major
differentiator to other ANS projects is its close proximity to
transport and pipeline infrastructure. 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.
On the North Slope of Alaska, Pantheon holds working interests
of 100% in projects spanning c.160,000 acres and covered by c.1,000
square miles of proprietary 3D seismic. The Company has received
Independent Expert Reports certifying a Contingent Resource of
76.5MMBO (million barrels of oil) recoverable on its Greater Alkaid
project and 302MMBO Prospective Resource at its Talitha
project.
.
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