Pantheon Resources plc ("Pantheon"), 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 conveniently located adjacent to transportation and pipeline infrastructure on the Alaska North Slope, provides the following update:
Talitha #A well
Testing operations at the Talitha #A well were delayed several days over the past week due to blizzard conditions on the Alaska North Slope which, along with logistical issues, prevented transit along the ice road and Dalton Highway. Weather conditions have since improved meaning operations have resumed and testing has now commenced on the Kupurak horizon, with the Talitha #A well currently flaring natural gas as it cleans up. Whilst this is an encouraging sign, the Company cautions that it is too early to make a definitive assessment as to the ultimate commerciality of the Kupurak horizon. Results will be announced at the conclusion of testing operations.
In addition to flow testing, the Company also plans to perform Pressure Transient Analysis to maximize knowledge of the Kuparuk reservoir in order to enhance conceptual development plans and economics for any potential development.
Pantheon also advises that with the end of the season fast approaching the Company is making plans to demobilize the Nordic Calista #3 drilling rig. Only the testing spread and flow tanks are needed to complete flow testing operations on the Kuparuk. Testing of the shallower target zones, all of which have encountered hydrocarbons, is anticipated to commence next drilling season. Delaying the testing operation into next season, instead of being rushed as part of current operations, will give Pantheon time to undertake a detailed evaluation of all the data and will put the Company in an excellent position to undertake an extensive production testing operation across all the hydrocarbon bearing zones.
In addition to the traditional scientific techniques used at Talitha #A to evaluate wellbore data such as logging and sidewall coring, Pantheon has also engaged the use of Volatile Analysis Service ("VAS") to provide a more comprehensive analysis. VAS is a partnership between Baker Hughes and Advanced Hydrocarbon Stratigraphy and is a Cryo-Trap Mass Spectrometry analysis which effectively conducts a very detailed analysis of rock cuttings both on site and in the laboratory. This work includes analyzing the presence of hydrocarbons and reservoir quality from the rock cuttings. The work has been completed over the Brookian section of the wellbore, with the Kuparuk yet to be completed. The VAS has independently concluded there are strong indicators of oil pay zones at several stratigraphic levels within the Brookian section of the wellbore (Shelf Margin Deltaic, Slope Fan System, and two separate zones within the Basin Floor Fan) with the oils having 40 degree API gravity with an estimated error of plus or minus five degree API. It also concluded that good reservoir properties appear present in the notable potential oil pay zones.
This work is particularly important considering the shallower Brookian oil zones will not be tested in this current operation. Independent data and analysis from VAS reinforce the Company's opinion that it has made oil discoveries in multiple zones including all predrill targets in this wellbore (four Brookian horizons), allowing the Company to move forward with confidence in the planning of a major testing operation in the next winter season.
Jay Cheatham, CEO of Pantheon Resources, said:
"Flow testing at Kuparuk to date is further encouraging news for Pantheon - a case of 'so far, so good'. Now that we have finally begun testing, the weather won't have as severe an impact. We are flaring gas as the well cleans up and we would then expect oil to follow. As has been well documented, we have had operational difficulties drilling the Kuparuk in this well, but future well design should ensure these issues aren't repeated. However, we had to persevere; it was simply too good a target.
"If successful, the Kuparuk would be of enormous value to Pantheon considering its location adjoining the Trans Alaska Pipeline and Dalton Highway. Our pre-drill resource estimate for the Kuparuk horizon alone was 1.4 billion barrels of oil in place with 341 million barrels of recoverable oil. We will leave the wellbore in perfect condition to come back next winter and test the shallower four zones, all of which encountered hydrocarbons.The next testing operation will not require any drilling and can be tested using a low cost work over rig."
"Despite this encouraging news, as always I caution shareholders that we must wait for completion of testing before we can draw any definitive conclusions about the well. Until then, we remain cautiously optimistic."