TIDMPANR
RNS Number : 7260N
Pantheon Resources PLC
24 January 2023
24 January, 2023
Pantheon Resources plc
Alkaid #2 webinar and update
Pantheon Resources plc ("Pantheon" or "the Company"), the
AIM-quoted 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, confirms that as previously announced, a webinar
presentation and Q&A will be held at 5.30pm GMT today and is
open to all shareholders and other interested parties. Registration
details are provided at the bottom of this RNS.
A copy of the PowerPoint presentation to be delivered during the
Webinar will be uploaded to the Company's website at
https://www.pantheonresources.com/ shortly beforehand.
Additionally, a recording of the Webinar will also be uploaded to
the Company website once available .
About the Webinar
In this Webinar the management team will provide further detail
on the interim results and subsequent analysis and interpretation
of the Alkaid #2 well, together with a detailed Q&A session.
The presentation includes certain updated information
including:
1. Rig mobilization for cleanout of blockage at Alkaid #2
Pantheon confirms that the Nordic Calista #2 rig is scheduled to
mobilize to the Alkaid #2 location tomorrow. Once on location it
will set up prior to pulling the tubing and packer from the
wellbore and commencing the cleanout of the sand blockage.
Operations for the cleanout are estimated to take approximately 10
days and the rig will remain on location all this time in case
required further.
2. Alkaid #2 analysis and update
Subsequent to the Company's last update on Alkaid #2, detailed
analysis has been undertaken to better understand the higher than
expected gas production. Pantheon has undertaken extensive analysis
with SLB (previously known as Schlumberger) and other consultants
and have collectively concluded that the frack has possibly
intercepted a gas cap at the extreme updip portion of the Alkaid
anomaly. The possible gas cap is not significant, estimated to
represent approximately 2% of the gross rock volume of the Alkaid
resource, yet would explain the gas production volumes. Analysis
suggests this possible gas cap could be avoided in future wells by
positioning the lateral sections a little deeper in the reservoir.
Analysis has also confirmed that the entirety of the lateral
section of the wellbore is in the oil zone.
3. Modelling of potential commerciality of Alkaid
In order to demonstrate potential project economics, Pantheon
has developed a conceptual development model for the Alkaid anomaly
(not including the shallower Shelf Margin Deltaic ("SMD") formation
which is also oil bearing) based upon the actual flow rates (137.5
barrels per 1000 ft of unblocked wellbore - and for conservatism
ignoring potential improvements to flow rate that may arise as the
well cleans up beyond its present 40%) and actual hydrocarbon mix
(oil, NGLs & condensate) detailed in its announcement of 30
December, 2022. At current pricing, this production stream would
generate approximately $40,000 per day in gross revenue once
facilities are installed to separate and capture the NGLs and
condensate.
The modelling(1) which was undertaken for illustrative purposes
only, supports that the Alkaid project can be commercial at current
production rates and hydrocarbon composition. A sensitivity table
is provided below showing NPV's and IRR's at various pricing
scenarios. Alkaid is highly leveraged to improvements in flow rates
and product pricing.
PANR adjusted mix per bbl
WTI price
held flat $60/bbl $70/bbl $80/bbl
------------ ------------- -------------
IRR 11% 20% 30%
------------ ------------- -------------
NPV(10) $12,000,000 $223,000,000 $423,000,000
------------ ------------- -------------
Please see footnote (i) below for key assumptions and basis of
preparation
4. Pricing of the liquid production stream at Alkaid #2
A detailed analysis of the valuation of the components of the
liquid hydrocarbon stream at Alkaid#2 has been undertaken and it is
estimated that the current production mix of oil/condensate and
NGL's would achieve +80%-90% of the Alaska North Slope Crude price
("ANS crude"). ANS crude usually trades at a premium to WTI. Some
of the more valuable NGL's known to be present but which were not
measurable at this point have been excluded from this calculation
for conservatism, but would be extracted in a development scenario,
providing additional upside. Additionally, should the ratio of oil
continue to improve as the Alkaid#2 well cleans up beyond the
present 40%, then this would provide additional upside to the
modelled numbers above.
Registration Details
Those wishing to participate can register for the Webinar via
the link below:
https://www.bigmarker.com/share-talk/Pantheon-Resources-Update-on-Interim-Results-of-Alkaid-2-Horizontal-Well
Attendees should use the latest version of Chrome, Safari or
Firefox for the best experience.
Alternatively, investors can download the IOS application for
Big Marker, or dial in via telephone. Dial in details are outlined
below:
Dial: USA (312) 248-9348
Dial: UK (0)1793 250421
Attendee Dial-in ID Number: 254429
Attendee Dial-in Passcode: 6708
Jay Cheatham, CEO, said: "We do not believe our Alkaid#2 result
has been fully understood by the market and we have worked hard to
compile as much information as possible to present to the
investment community in this webinar. The production test is still
ongoing and far from complete as less than 40% of the estimated
frac fluid has been recovered and hence there is still scope for
further production improvement. Despite this, we can demonstrate
that even at current rates/hydrocarbon mix our modelling points to
this as a commercial oil development. As is always the case, we
remind shareholders that a definitive assessment on commerciality
cannot be made until flow testing operations are completed, however
our entire technical team including our consultants are optimistic
and confident we will ultimately have a commercial discovery at
Alkaid, the smallest project in our overall portfolio."
Bob Rosenthal, Technical Director, said: "We have a fantastic
team presenting to shareholders later today. We have a lot to cover
and a huge Q&A session as we attempt to clarify some of the
misconceptions permeating in the investment community, so we will
take our time to be as comprehensive and transparent as possible.
There is much misinformation in the market about this well and what
it means, and I am confident that shareholders will be comforted by
what they hear. It is clear we have confirmed a huge hydrocarbon
system at Alkaid; our job now is to optimize drilling and
completions to maximise the potential commerciality of Alkaid as
well as continue to assess the potential of our other major
discoveries which include our large basin floor fan discovery at
Theta West. Our operations at Alkaid are important in establishing
a production and development base on the North Slope of Alaska
which will aid the operations across all our portfolio."
Footnotes:
(1) Conceptual development model, for illustrative purposes only
for the Alkaid anomaly project only (i.e.. excluding SMD) to
demonstrate potential project economics. Management estimate. Based
upon Alkaid #2 update at the 40% cleanup stage of testing as
reported on 30.12.2022 ie 137.5 bbls of liquid hydrocarbons (a
combination of oil, NGL's, condensate) per 1000ft of unblocked
wellbore at the starting (and maximum) flow rate and declining from
there. Assumptions: 56 development wells drilled, draining 68
million barrels of liquid hydrocarbons (vs current P50 estimate of
76.5 mmbo). Modelled drilling and completion cost per well
increased by 50% to $19.5m. Hydrocarbon prices based upon the
calculated value today of the liquid hydrocarbon mix encountered at
Alkaid#2 held flat. Post production taxes and royalties, pre
federal income tax.
It is not intended to represent the Company's estimate of full
field economics; rather it models the actual flow rates and product
mix reported on 30.12.2022. Should flow rates or the ratio of oil
to other hydrocarbons improve, then we would expect the projections
to improve materially. Ultimate commerciality can only be assessed
upon the conclusion of flow testing operations.
-S-
Further information, please contact:
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
Gordon Hamilton +44 20 7523 8000
BlytheRay
Tim Blythe, Megan Ray, Matthew Bowld +44 20 7138 3204
Glossary
bbl Barrel
BOPD Barrels of oil per day
ft Feet
mmbo Million Barrels of Oil
NGL Natural Gas Liquid
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").
-Ends-
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.
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