Pantheon Resources plc shares operational and corporate update

Alkaid #2 update

The Alkaid #2 effectively returned to creation on 21 February, pursuing the cleanout of the sand blockage in the final 1000 ft (c.20{38557cf0372cd7f85c91e7e33cff125558f1277b36a8edbab0100de866181896}) of the wellbore. The IP30 generation rate is calculated at c.505 bpd of liquid hydrocarbons consisting of c.180 bpd oil, c.325 bpd of condensate and all-natural gas liquids (NGLs), alongside with c.2300 mcfpd pure gas, following shrinkage. The quantum of liquid and fuel production flowing without artificial carry from Alkaid #2 demonstrates the superior deliverability of the reservoir, which is a important de-risking party for Alkaid enhancement. When separated and marketed, condensate and NGLs are estimated to attain 80{38557cf0372cd7f85c91e7e33cff125558f1277b36a8edbab0100de866181896} – 90{38557cf0372cd7f85c91e7e33cff125558f1277b36a8edbab0100de866181896}, or likely higher, of ANS crude oil cost (ANS crude generally trades at a quality to WTI oil). Post cleanout, move premiums were in the beginning marginally higher than pre-cleanout suggesting that even with the sand blockage the ultimate 1000 ft was connected and presently contributing to the main wellbore by the fractures speaking with just about every other. Alkaid #2 also penetrated the shallower shelf margin deltaic (SMD) reservoir, which administration estimate to comprise over 400 million bbl recoverable useful resource. The addition of these means to any likely Alkaid enhancement will significantly increase economic returns. The information collected implies the SMD has appreciably better reservoir traits than the Alkaid anomaly.

As has been formerly disclosed, it is thought that the Alkaid #2 properly fracked into a fuel cap ensuing in a a lot greater gasoline oil ratio than that encountered at the nearby Alkaid #1 effectively which is in the identical reservoir. It is believed that this is Alkaid #2 precise, and appropriately, foreseeable future wells, must be drilled deeper to stay away from the gasoline cap and so ought to generate a a lot improved GOR. Alkaid #2 has now made for more than 50 days and output has resumed in line with the pre-cleanout drop profile.

The Alkaid #2 exam has been a extended and complicated effectively and has created considerable facts in de-jeopardizing the play. The enterprise believes this end result is Alkaid #2 specific and not a reflection on the Alkaid reservoir which manufactured movement test outcomes of 108 bpd and a substantially decreased GOR from a solitary 6 ft fracked and examined section in the Alkaid #1 effectively. Both Alkaid #1 and #2 have confirmed the existence of a materials hydrocarbon procedure with really excellent reservoir deliverability, which the enterprise firmly thinks supports the scenario for a industrial progress. As earlier stated, long term advancement wells will be drilled deeper to prevent the gasoline cap which ought to end result in a far richer GOR.

Alkaid #2 – context

Alkaid represents less than 4{38557cf0372cd7f85c91e7e33cff125558f1277b36a8edbab0100de866181896} of Pantheon’s useful resource base, is unbiased of Pantheon’s other discoveries, and is Pantheon’s very first creation exam perfectly in a new geological participate in type. As is standard for 1st time operations in new fields, there is a mastering curve with any 1st effectively that will be optimised above subsequent wells to generate the best results.

In Pantheon’s strain examination, financial modelling as reviewed in the company’s 24 January webinar, a development was modelled with a perfectly drilling value of US$19.5 million which modelled a 50{38557cf0372cd7f85c91e7e33cff125558f1277b36a8edbab0100de866181896} enhance in excess of the then estimate of US$13 million. The company has ongoing to analyse and evaluate this determine and at the moment estimates development drilling costs to be in the location of +/- US$13.5 million for each well. Making use of the US$13.5 million properly value, assuming a 10 000 ft lateral and no improvement in productiveness, Alkaid growth economics yield a +20{38557cf0372cd7f85c91e7e33cff125558f1277b36a8edbab0100de866181896} IRR at an US$80 ANS crude selling price. If Pantheon achieves effectiveness and optimisation enhancements as discussed by Phillip Gobe in the company’s latest webinar and as discussed earlier mentioned, these returns will boost considerably. These stand-on your own economics are based mostly on building the 76.5 million boe resources at Alkaid and do not involve the SMD.

Commissioning an impartial professional report

Pantheon is pleased to announce that it has commissioned Netherland Sewell & Associates, a leader in petroleum assets analysis, and 1 of the most respected names in impartial reserves reporting, to undertake an unbiased qualified report around the company’s Theta West and Alkaid tasks. On top of that, SLB is updating the dynamic reservoir products across Pantheon’s portfolio. These reviews will operate in parallel to the farmout approach as nicely as providing investors and financiers an independent assessment of the resources.

Jay Cheatham, CEO, explained: “We are pleased that output tests at Alkaid #2 has recommenced and established the effective ability of the reservoir. Offered the substantial GOR noticed, we will find and design and style long term wells with longer laterals to minimise gas and boost liquid hydrocarbon production. The initial nicely in any new enjoy kind is a finding out physical exercise.

“It is value remembering that Alkaid is the smallest task in the Pantheon portfolio creating up much less than 4{38557cf0372cd7f85c91e7e33cff125558f1277b36a8edbab0100de866181896} of Pantheon’s estimated learned methods. Its area on the Dalton freeway, along with the exam at Alkaid #1, produced it an great applicant for screening and output. Pantheon will now raise its focus on the more substantial oil jobs in Pantheon’s portfolio as it starts a farmout procedure to undertake long run pursuits. The large Theta West oil accumulation with assets of more than 17 billion barrels of oil in area is Pantheon’s main asset. A big portion of the Theta West oil accumulation is in a shallower reservoir than anything else in our portfolio and analogous to large oil fields in other pieces of the earth.”

Bob Rosenthal, Specialized Director, stated: “Obtaining stabilised the very well, the extended-time period generation exam will now give us precious details to approach upcoming wells with improved oil manufacturing abilities. We IP’d at about 500 barrels of oil and condensate and virtually 500 barrels of fuel to oil equivalent, equalling 1000 boe/d which in fact implies fantastic reservoir deliverability. We are in speak to with a significant volume of hydrocarbons, and our details obviously demonstrates the successful capability of the reservoir which in my look at was the largest risk in this task! I was questioned regularly above the previous yr about the commerciality of our tasks. As mentioned above working with our current output knowledge we however think this will eventually be industrial. Our crew, which contains amongst the very best oil company providers in the planet, have currently commenced in depth reservoir reports to optimise movement premiums in industrial advancement. As Jay suggests, we only want to position foreseeable future wells in greater locations following owning identified and now efficiently analyzed the reservoir. Our occupation now is to optimize drilling and completions to maximise the likely commerciality of Alkaid as well as continue on to evaluate the likely of our other main discoveries which incorporate our significant discovery at Theta West.”

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