TIDMPANR
RNS Number : 5502K
Pantheon Resources PLC
29 August 2023
29 August 2023
Pantheon Resources plc
Independent Expert Report confirms Best Estimate Contingent
Resource estimates totalling 962 million barrels for Kodiak
Field
Pantheon Resources plc (AIM: PANR) ("Pantheon" or the "Company"
or the "Group"), the oil and gas company operating on Alaska's
North Slope, is pleased to advise that it has received an
Independent Expert Report ("IER") which provides an estimate of
contingent resources recoverable from its 100% Working Interest
Kodiak project, formerly known as Theta West ("Kodiak"). A full
copy of the report will be published on the Company's website.
Kodiak Field Contingent Resource Estimates
Pantheon is pleased to announce receipt of an IER prepared by
Netherland, Sewell & Associates ("NSAI") on the Lower Basin
Floor Fan reservoir of the Company's Kodiak project (the "Kodiak
NSAI IER"). A summary of the resource estimate is outlined
below.
Gross 100% Working Interest Contingent Resources
Resource Category Oil NGLs Residual Total Marketable
(million (million Gas Liquids*
bbls) bbls) (BCF) (million bbls)
Low Estimate
(1C) 145.4 292.4 2,151.7 437.8
---------- ---------- --------- -----------------
Best Estimate
(2C) 314.6 647.9 4,465.2 962.5
---------- ---------- --------- -----------------
High Estimate
(3C) 647.8 1,366.4 8,822.7 2,014.2
---------- ---------- --------- -----------------
* Pantheon addition of Oil & NGLs
Pantheon has also commissioned NSAI to complete a similar IER on
the Alkaid horizon at the Ahpun project, with expected completion
in Q4 2023.
Pantheon Management Commentary on the Kodiak NSAI IER
The 2C estimates (best estimates) of oil and natural gas liquids
("NGLs") total 962.5 million barrels of marketable liquids. As
previously advised by management, the NGLs on Pantheon's projects
are of material value as they can be blended with the oil and the
combined stream of oil, condensate and NGLs has been estimated by
management to yield approximately 90% of the value of the Alaska
North Slope ("ANS") price per barrel.
The management believe the Kodiak NSAI IER supports the
Company's development plans for the Kodiak project, which will
involve development of leases totaling some 126,000 acres
(including the recently awarded additional acreage), delineated by
the Company's proprietary 3D seismic and confirmed by three wells
(Pipeline State 1, Talitha-A and Theta West-1). The field is
defined as the hydrocarbon bearing horizons contained within the
large basin floor fan between the Hue Shale top seal and the
underlying HRZ shale, from their downdip pinchout east of Talitha-A
running to over 15 miles northwest into the new "chimney acreage"
acquired in the 2022 area wide lease sale. The Company believes
that this is one of the largest basin floor fan systems discovered
onshore in the past few decades. This will be discussed in the
Company's forthcoming webinar and accompanying press release.
Figure 1: Kodiak Project Horizon (illustrative type log)
Source: Pantheon Management
Figure 2: Location of Kodiak and Ahpun Projects
Source: Pantheon Management
Company Plans for Further Appraisal of Kodiak
The absence of wireline electric logs or sidewall cores taken at
Theta West-1, due to hole stability issues and the limited time
available at the end of the drilling season, has meant that the
highest resolution data that captures the thinly interbedded
reservoir in the Kodiak field is limited to the Talitha-A well. The
Company plans to drill the next Kodiak well significantly updip
from the Talitha-A and the Theta West-1 wells, where management
believe the lower depth of burial ("Dmax") should lead to improved
reservoir characteristics compared to both Talitha-A and Theta
West-1. The Company has completed a detailed geological model
taking into account data from wells in the immediate area which
include the producing Tarn and Meltwater fields.
Pantheon plans to drill the next Kodiak appraisal well in the
recently acquired leases, some five miles northwest of Theta
West-1. Based on the Company's petrophysical analysis noted above,
a Theta West-2 well in that location would be expected by
management to encounter a reservoir section with 37% of the pay
interval exhibiting porosities at or above 12% and permeabilities
of greater than 0.1 milliDarcies - the typical cut-off for
recognising reservoirs as conventional, which typically yield
higher flow rates and hydrocarbon recovery rates. The reservoirs in
the structural updip portion on the Theta West structure are
expected by management to exhibit the highest quality on Pantheon's
acreage, in its largest trapping mechanism.
The Company plans to cut full cores and acquire a full suite of
wireline logs and representative fluid samples/flow tests in future
appraisal wells to address the contingencies in NSAI's evaluation.
Demonstrating the character of the reservoir at the most granular
possible level creates potential for future increases to
recoverable resource estimates.
Rig Contracted for Shelf Margin Deltaic ("SMD") test at
Alkaid-2
Pantheon is pleased to confirm that the All-American Oil Rig 111
has been formally contracted for the re-entry of the Alkaid-2 well
to test the SMD horizon. Pantheon has also awarded all major
service provider contracts necessary for the operation.
Finalisation of necessary permits for the operation is ongoing,
with mobilisation of the rig targeted for September.
Webinar
A presentation covering the NSAI Kodiak IER together with a
comprehensive discussion on the Company's analysis and Kodiak
development concepts will be shared in a webinar in the coming
month. Further information will be provided once details have been
finalised.
David Hobbs, Pantheon's Executive Chairman, said: "I am
delighted with this result. Netherland, Sewell & Associates is
one of the most highly regarded firms in the industry, whose
opinions carry great weight. They conducted an intensive review of
the data that validates Pantheon's assessment of the scale of the
resource. We remain on track to meet our strategic goal of
delivering sustainable market recognition of $5 - $10 per barrel of
recoverable resources."
Jay Cheatham, Pantheon's Chief Executive Officer, said: "This
really is a big deal. A credible third-party estimate of nearly one
billion barrels of recoverable liquids for a company the size of
Pantheon is an incredible achievement, validating our geological
model. This is the first IER conducted on our largest asset and
will have enormous value in financing discussions and in attracting
potential partners. As I have repeatedly said, big oilfields
continue to get bigger, and with additional wells and data points
we expect this contingent resource to grow and for some or all to
be classified as reserves once we achieve a Final Investment
Decision."
Bob Rosenthal, Pantheon's Technical Director, said: "I am
extremely proud of this achievement and the validation that we have
discovered something special! For perspective, it is very rare to
see certified resources of this size, particularly onshore and near
to infrastructure. This first report supports the work conducted by
a broad technical group that has included our partners at SLB,
eSeis, AHS Baker Hughes among others. NSAI's evaluation of Kodiak
is a transformational milestone on the path to commercialisation. I
remind shareholders that this report on Kodiak only covers the
Lower Basin Floor Fan, based on three wells and our proprietary 3-D
seismic data set. There is clear potential for further growth in
these numbers as continuing appraisal provides more granular
data."
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 David Hobbs, a
qualified Petroleum Engineer and a member of the Society of
Petroleum Engineers, who has nearly 40 years' relevant experience
within the sector.
The estimates in the Kodiak NSAI IER have been prepared in
accordance with definitions and guidelines set forth in the 2018
Petroleum Resource Management System (PRMS) approved by the Society
of Petroleum Engineers (SPE).
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").
-S-
Further information, please contact:
+44 20 7484
Pantheon Resources plc 5361
David Hobbs, Executive Chairman
Jay Cheatham, CEO
Justin Hondris, Director, Finance and Corporate
Development
Canaccord Genuity plc (Nominated Adviser and
broker)
Henry Fitzgerald-O'Connor, James Asensio, Gordon +44 20 7523
Hamilton 8000
BlytheRay
+44 20 7138
Tim Blythe, Megan Ray, Matthew Bowld 3204
Glossary
ANS Price : The price of Alaska North Slope crude loaded at
Valdez and delivered to a US West Coast Refinery.
Bbls: barrels
Contingent Resource : Those quantities of petroleum estimated,
as of a given date, to be potentially recoverable from known
accumulations by application of development projects, but which are
not currently considered to be commercially recoverable owing to
one or more contingencies.
For Contingent Resources, the general cumulative terms
low/best/high estimates are used to estimate the resulting 1C/2C/3C
quantities, respectively. The terms C1, C2, and C3 are defined for
incremental quantities of Contingent Resources:
A. C1: Denotes low estimate of Contingent Resources. C1 is equal to 1C.
B. C2: Denotes Contingent Resources of same technical confidence
as Probable, but not commercially matured to Reserves.
C. C3: Denotes Contingent Resources of same technical confidence
as Possible, but not commercially matured to Reserves.
When the range of uncertainty is represented by a probability
distribution, a low, best, and high estimate shall be provided such
that:
A. There should be at least a 90% probability (P90) that the
quantities actually recovered will equal or exceed the low
estimate.
B. There should be at least a 50% probability (P50) that the
quantities actually recovered will equal or exceed the best
estimate.
C. There should be at least a 10% probability (P10) that the
quantities actually recovered will equal or exceed the high
estimate.
The Kodiak NSAI IER highlights the following contingencies:
1. Acquisition of additional technical data that demonstrate
producing rates and volumes sufficient to sustain economic
viability across the acreage.
2. Approval of a field development plan and regulatory permits.
3. Demonstration of viable gas and water utilization or disposal methods.
4. Demonstration of ability to market oil and natural gas liquids (NGLs).
5. Commitment to fund and complete the development project.
If these contingencies are successfully addressed, some portion
of the contingent resources estimated in the report may be
reclassified as reserves.
NGLs : Natural gas liquids (NGL) are components of natural gas
that are separated from the gas state in the form of liquids.
Overriding Royalty Interest (ORRI) : A royalty granted to a
third party other than the royalty payable to the State of
Alaska.
Working Interest : The legal ownership of the leases awarded by
the State of Alaska. Pantheon's Net Revenue Interest (NRI) in the
leases is less than 100% by virtue of royalties payable to the
State and any ORRI. In the case of the Kodiak project, the State
royalties vary between 12.5% and 16.67%. Management estimates that
the average NRI is approximately 85%.
Notes to Editors
Pantheon Resources plc is an AIM listed Oil & Gas company
focused on developing the Ahpun and Kodiak fields located on state
land on the Alaska North Slope ("ANS"), onshore USA where it has a
100% working interest in 193,000 acres. Management estimates these
fields to produce Expected Ultimate Recovery of contingent
resources amounting to some 2 billion barrels of marketable liquids
to be delivered through the Trans Alaska Pipeline System
("TAPS").
Pantheon's stated objective is to demonstrate sustainable market
recognition of a value of $5-$10/bbl of recoverable resources by
end 2028. This will require targeting Final Investment Decision
("FID") on the Ahpun field by the end of 2025, building production
to 20,000 barrels per day of marketable liquids into the TAPS main
oil line, and applying the resultant cashflows to support the FID
on the Kodiak field by the end of 2028.
A major differentiator to other ANS projects is the close
proximity to existing roads and pipelines which offers a
significant competitive advantage to Pantheon, allowing for
materially lower infrastructure costs and the ability to support
the development with a significantly lower pre-cashflow funding
requirement than is typical in Alaska.
The Company's project portfolio has been endorsed by world
renowned experts. Netherland, Sewell & Associates ("NSAI")
estimate a 2C contingent recoverable resource in the Kodiak project
that total 962.5 million barrels of marketable liquids and 4,465
billion cubic feet of natural gas. NSAI is currently working on
preparation of an Independent Expert Report for the Ahpun
Field.
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