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.
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.
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.
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."