Successful Acquisition of Key Leases in State of Alaska’s North Slope Areawide Lease Sale
Pantheon Resources plc (“Pantheon” or “the Company”), the AIM listed 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 (“ANS”), is pleased to provide the following operational update:
Successful Bidding at State of Alaska’s North Slope Areawide Lease Sale
Pantheon is pleased to announce the successful acquisition of approximately 40,000 acres in the State of Alaska’s North Slope Areawide Lease sale. Pantheon was successful on all bids submitted. The new leases are strategically positioned in two areas contiguous or adjacent to the Company’s current acreage on its north western boundary, covering the extension of the Theta West project, and east, capturing the area adjacent to the junction of the Alkaid Unit and the Talitha Unit.
Pantheon had a competitive advantage in bidding for this acreage given its sole use of the proprietary 3D seismic which covers the leases, and which is not currently accessible by any 3rd parties. These acreage additions are a direct result of detailed technical work completed by Pantheon’s technical team and its consultants at eSeis following the successful Theta West #1 discovery well drilled earlier this year.
Pantheon’s winning bids averaged $28.00 per acre, significantly lower than the average of the winning bids recorded on other acreage in the sale. When the leases are officially awarded by the State of Alaska, estimated to be in six to 12 months’ time, they will come with a 10-year initial term, an annual rental of $10 per acre, and a royalty rate of either 12.5% (four leases, 5,760 acres) or 16.67% (13 leases, 34,240 acres). These additions allow Pantheon to continue to strategically high grade its acreage based on the recent technical work completed by its team.
Alkaid #2 – Operational Update
As previously reported, the Alkaid #2 well encountered a sand blockage during the early clean up phase of flow testing. The sand was sent for analysis and was confirmed to be sand introduced during the fracture stimulation operations and not formation sand. A coiled tubing unit (“CTU”) was ordered to clean out the wellbore and has now arrived on location following a 10 day delay.
Clean out operations continue at the Alkaid #2 well. During the wellbore cleanout operations, conservative pumping rates are required due the tight tolerances between the outside diameter of the CTU and the inside diameter of the production tubing. Once these clean out procedures have been finalised, flow testing operations will resume thereafter. This delay has not impacted the potential of the Alkaid #2 well.
Bob Rosenthal, Technical Director, stated :
“Acquiring these leases was a highly successful outcome for Pantheon and importantly, the acreage is in very close proximity to the established export infrastructure. Our team has spent over a decade working this area, enhanced recently with advanced geophysical evaluation and the analysis of the huge dataset gained in our successful drilling of the Theta West #1, Talitha #A and Alkaid #2 wells this year.
“The new Theta West acreage is in the same trap as our existing resource and the new Alkaid acreage covers a mapped extension of the Shelf Margin Deltaic (SMD) and Alkaid anomalies. The Theta West acreage is structurally shallower and updip from the Theta West #1 well and should yield better reservoir properties. Accordingly, we expect to report a material upgrade to our Theta West project resource in due course. The acreage adjacent to the Alkaid and Talitha Units is strategic as it allows continued development opportunities along the Dalton Highway, along with the potential for a resource upgrade.”
Jay Cheatham, CEO, added:
“Having watched the evolution of these plays as the combination of the 3D seismic and the petrophysical analysis developed, I am delighted that Pantheon was the successful bidder on this acreage. The geographic location both in terms of the geological plays in contiguous acres and in relation to the export infrastructure were important considerations. Management believes this new acreage adds significant resource potential to our existing management estimates of 23 billion barrels of oil in place and over two billion barrels of recoverable resource, which we have continued to high grade.
“As to the operations at Alkaid #2, I reiterate my previous comments that the blockages are inconvenient and have caused us delays, but the potential of Alkaid #2 is unchanged. As is always the case, we cannot make a definitive assessment of the ultimate commerciality of the well until flow testing operations have concluded. However, we remain optimistic. I look forward to working with the State of Alaska on these leases and the development of our projects on the North Slope.”
Pantheon Resources plc
+44 20 7484 5361
Jay Cheatham, CEO
Justin Hondris, Director, Finance and Corporate Development
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