TIDMPANR
RNS Number : 9939I
Pantheon Resources PLC
08 December 2022
08 December 2022
Pantheon Resources plc
Receipt of reservoir modelling report from Schlumberger
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 announce the receipt of a report from
Schlumberger Limited ("Schlumberger"). A copy of the executive
summary to the report is provided at the end of this announcement
and a copy will be uploaded to the Company's website at
https://www.pantheonresources.com/
Completion of Phase 1 of Schlumberger reservoir modelling
project
A static and dynamic reservoir model of Pantheon's subsurface
geological projects has now been completed by the world's largest
oil service company, Schlumberger, over Pantheon's three project
areas which encompass the four distinct oil reservoirs within the
current Pantheon acreage footprint; (i) Alkaid, (ii) the Slope Fan
System, (iii) the Shelf Margin Deltaic (SMD) and (iv) the Basin
Floor Fan system. Pantheon engaged Schlumberger to undertake this
project more than six months ago in order to develop a highly
detailed body of work to assist in reservoir modelling, development
modelling and as an important tool in Pantheon's data room to allow
potential future farm in partners to gain a greater understanding
of the potential, characteristics and scale of Pantheon's projects.
This reservoir model represents completion of the first phase of
the project. Schlumberger's report represents the most
comprehensive model completed on evaluating the discovered oil
resource and the productive potential.
The Schlumberger model is extremely detailed, comprising c. 13
million individual three dimensional cells within the c. 153,000
acres of Pantheon's current leasehold. This model is extremely
comprehensive, having been developed over the past six months and
involved in excess of 1,000 man-hours with a team of reservoir,
geological and geophysical specialists at Schlumberger and is an
important step toward modelling reservoir development scenarios and
attracting future project partners and supporting project
financing, which is part of Pantheon's corporate development
strategy. That next phase of the project will similarly require
significant man hours over a number of months.
The summary findings of reservoir modelling:
Net Oil in Place
(Billion barrels
of oil)
=========================== ==================
Lease Area/Unit P50
------------------
Alkaid Unit 1.67
------------------
Theta West Lease 10.9
------------------
Talitha Unit including SE
SMD 5.26
------------------
Total 17.8 billion Bbls
------------------
Schlumberger's modelling of oil in place ("OIP") is prepared on
a project area basis (i) Alkaid Unit, (ii) Theta West leases, and
(iii) Talitha unit, whereas Pantheon's estimates are based upon the
project formations themselves: (i) Alkaid, (ii) Shelf Margin
Deltaic, (iii) Slope Fan System, and (iv) Basin Floor Fans, and are
therefore not perfectly comparable, but nevertheless provide an
excellent overview and importantly, are comparable on a sum total
basis.
Overall, the Schlumberger modelling estimates the reservoirs
contain 17.8 billion barrels net OIP versus Company estimates of 23
billion barrels of OIP. The Schlumberger model OIP numbers are
approximately 70+% of Pantheon's estimates for the Theta West
(Lower Basin Floor Fan) which accounts for the primary variance
between the overall Pantheon and Schlumberger estimates.
Schlumberger's OIP estimates for Theta West were constrained to the
project's 3D footprint with more conservative reservoir parameters
than Pantheon's at the lease boundaries. With additional drilling
data points, potential exists for Schlumberger's modeling estimates
to increase in the future. Pantheon believe that the reservoir
improves in quality to the north of Theta West #1 both within and
outside our current leasehold, which is the primary reason Pantheon
bid on new acreage in that area in the November 2022 Alaska lease
sale. The recently acquired acreage and its resource potential is
not considered in the Schlumberger report nor the Pantheon current
estimates. The next Schlumberger project phase, commencing shortly,
will address these differences along with developing a dynamic
development model to predict overall recoveries.
Schlumberger has not provided an estimate on recovery factors,
which was outside the scope of this first phase of the project.
Schlumberger's work is ongoing, and the recovery factors will be
covered in the next phase of their work.
In addition to their modelling of oil in place, Schlumberger
also modeled individual well recoveries for three separate
reservoirs (shown below) over an illustrative one-mile lateral
length (c. 5,300 feet). Whilst a nominal one-mile lateral has been
used as the basis for modelling, longer lateral lengths are
expected to yield higher production volumes. As previously
announced, Pantheon's development plan is based on what it believes
is the optimum lateral length of 8,000 to 10,000 feet:
Single Horizontal Well Oil EUR Production Forecast (1-mile
lateral length)
Schlumberger Base Case Forecast:
-- Alkaid: IP 30 days = 775 bopd; Oil Cum @ 30 years=1.1 MMBO
-- Theta West BFF: IP 30 days = 1060 bopd; Oil Cum @ 30 years=1.5 MMBO
-- Talitha SMD: IP 30 days = 791 bopd; Oil Cum @ 30 years=1.2 MMBO
The Schlumberger estimate of 775 IP 30 days is broadly in line
with Pantheon's predictions of IP of 150 BOPD per 1000 feet of
lateral. The Schlumberger estimate is actually a 30-day IP rate
versus Pantheon's of an initial IP rate after clean up.
For illustrative purposes only, applying Pantheon's estimated
10% recovery factor to Schlumberger's estimated 17.8 billion
barrels of oil in place would imply the Pantheon leasehold has the
potential to contains 1.78 billion barrels of recoverable oil. The
dynamic model is applicable toward predicting ultimate well and
reservoir recoveries for differing development scenarios which is
critical for ascertaining the commercial potential of the
resource.
Alkaid #2 update
Pantheon is currently in a production testing operation at
Alkaid #2. As previously reported, Pantheon utilized a coiled
tubing unit (CTU) to remediate a sand blockage inside the
horizontal production liner. Ideally, a workover rig would have
been used to remove the production tubing in a relatively
straightforward operation to clear the blockage without the
constraints of working inside the tubing, however the lack of
availability of a suitable workover rig caused the Company to use a
CTU which is a more delicate and potentially less effective method.
Fortunately, the CTU was effective in clearing most, but not all,
of the blockage and flow testing has resumed. The well is still
early in the cleanup phase with encouraging initial results. As
always however, the Company cautions that despite early positive
data, a definitive assessment of commerciality cannot be made until
flow testing operations have concluded. The Company will report
back to shareholders in due course.
Jay Cheatham, CEO, said, "The Schlumberger report and the
derived model is a great result and an important tool that oil
companies can use when evaluating our project in our data room.
Just a few years ago a 13 million cell model would have been beyond
comprehension and is only now possible with modern computing power
combined with the data that we have assembled over the past decade.
It also highlights the tremendous benefits that modern technology
brings to the industry and that we will benefit from going forward
- including advancements in seismic interpretation, drilling and
completion methodologies, improvements in drilling and
recoveries.
"The results further bolster our own confidence. Applying
management's estimate of recovery factor of 10 percent to OIP
calculates over 1 billion barrels of recoverable oil onshore USA
adjoining major underutilized export infrastructure in a stable tax
and royalty environment. The Schlumberger numbers speak volumes
about the overall quality of the resource and provide valuable
industry validation.
"Alkaid #2 is a case of so far, so good. In this booming oil
market, we have encountered significant supply chain issues for
equipment and materials causing a knock on effect on our timetable,
but it is still all to play for at Alkaid and we remain cautiously
optimistic. As previously stated, it makes sense to observe the
results of Alkaid #2 before making final decisions on our forward
activity plan and to engage in potential farmout discussions."
Bob Rosenthal, Technical Director, said "I have been beyond
impressed with the quality of work and the attention to detail
shown by the Schlumberger team. The amount of time and effort to
develop this model is extraordinary. It will significantly enhance
the intended future farmout process as this model provides
potential farm-in companies industry validation, confidence in the
data and the project potential. Companies can use this giant model
to manipulate parameters/assumptions for their own analysis. I
can't wait to start working with them on the next phase of the
project which will, amongst other modeling, predict overall
reservoir recoveries. I believe our current estimate of 10% has the
potential to be conservative based on what we are seeing at the
moment and again remembering we are using unconventional technology
on conventional reservoirs."
The Schlumberger Report
Schlumberger has constructed 3D geological and geophysical
static and sector specific dynamic reservoir models capturing three
main reservoir plays; being Shelf Margin Deltaic (SMD), Slope Fan
(SF) and Basin Floor Fan (BFF) to aid appraisal and development
execution in the Alkaid, Talitha and Theta West areas, calculated
volumetric and production forecasts.
The Oil in Place numbers modelled in this report do not
constitute an Independent Resource Estimate.
Glossary
Bbls Barrels of oil
bopd Barrels of oil per day
IP Initial Production
IP30 Average oil production rate over the first 30 days
MMBO Millions of barrels of oil
OIP or Oil Is a specialist term in petroleum geology that refers
in Place to the total oil content of an oil reservoir
Oil Cum @ 30 Cumulative oil production over 30 years (per well)
years
P50 P50 is defined as 50% of estimates exceed the P50
estimate (and by definition, 50% of estimates are
less than the P50 estimate).
Recovery Factor The recoverable amount of hydrocarbon initially
in place, normally expressed as a percentage
-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, Matthew Bowld +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 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").
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.
The Schlumberger Report
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END
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