Pantheon Resources (AIM:PANR) Interim Results (unaudited) for the six months ended 31 December 2022

Pantheon Resources plc (“Pantheon” or “the Company”), the AIM-quoted oil and gas exploration and production company with 100% working interests in several conventional projects on the North Slope of Alaska, announces its interim results for the six months ended 31 December 2022 (the “Period”), together with operational highlights for the half year and the period beyond.



· Drilling and long term production testing of the Alkaid #2 well – confirmed discovery

· Confirmed better than expected reservoir deliverability; very positive for future development

· Flow data and hydrocarbon mix adversely impacted by fracking intercepting a gas cap

· Future Alkaid wells to be positioned slightly deeper within the >400ft section to avoid the gas cap

· SLB (previously Schlumberger) completion of first module of project review and estimated Pantheon’s projects to contain 17.8 billion barrels of oil in place

· Receipt of a report by the independent experts at Baker Hughes AHS (‘Advanced Hydrocarbon Stratigraphy’) titled “Pantheon Great Bear Theta West 1 well: Characterization of a World Class Petroleum System Using AHS’s Cuttings’ Volatiles Stratigraphy.”

· Recent appointment of independent non-executive director, Mr David Hobbs, +40 years’ experience

· Strengthening of operational team – recent appointment of Tony Beilman, +40 years drilling, completions and production experience

· Wood Mackenzie (‘WoodMac’) report Pantheon’s Theta West #1 well as “the fourth largest discovery well globally in 2022”. Consistent with Pantheon’s own assessment WoodMac characterise Theta West as a contingent resource requiring additional drilling and testing before potentially being considered commercial.


· Loss for the period $1.6 million (2021: $4.4 million). Impacted by $4.8 million net credit from mark to market revaluation of derivative component and interest expenses on the Convertible Bond

· G&A slightly higher at $3.7 million (2021: $3.2 million) reflecting the growth in the operational activity

· Cash on hand 31 December 2022: $16.3 million (2021: $92.7 million)

· Cash on hand 30 March 2023: $10.8 million

Jay Cheatham, CEO of Pantheon Resources, said:

“The period to 31 December 2022 and beyond has continued to be one of great achievement for our Company with an enormous volume of work having been undertaken, further supporting our confidence in our projects. Globally recognised WoodMac referred to Theta West #1 as being the fourth largest discovery well of 2022. Importantly, it is the only onshore well in the top four. AHS Baker Hughes also referred to Theta West #1 as a ‘World Class Petroleum System.’ We should all be very proud of these achievements. As I stated last year, which I repeat again, Pantheon’s projects have the potential to be a nationally significant oil resource in a safe jurisdiction onshore USA.

“We do understand that Pantheon’s share price has suffered, as a result of a number of factors including the results at Alkaid which represents less than 4% of our resource, social media mistruths, a lower oil price, and rising interest rates.. I reiterate again to shareholders that we see great potential in the Alkaid project. We know the flow test result was impacted because our fracks intercepted a gas cap. We will adjust for this in future wells by positioning them a little deeper and would expect to see significant improvement. Alkaid #2 was designed as a test well to gain data to optimise future wells. This is industry standard practice – at Prudhoe Bay, America’s largest oilfield and only 20 miles north of us, the initial wells were dry holes! Alkaid was anything but a dry hole; far from it, our modelling points to Alkaid being a potential commercial development.”

Further information:

Pantheon Resources plc

+44 20 7484 5361

Jay Cheatham, CEO

Justin Hondris, Director, Finance and Corporate Development

Notes to Editors

Pantheon Resources plc is an AIM listed Oil & Gas company focused on several large projects located on the North Slope of Alaska (“ANS”), onshore USA where it has a 100% working interest in 153,000 highly prospective acres with potential for multi billion barrels of oil recoverable. A major differentiator to other ANS projects is its close proximity to transport and pipeline infrastructure which offers a significant competitive advantage to Pantheon, allowing for materially lower capital costs and much quicker development times. The Group’s stated objective is to create material value for its stakeholders through oil exploration, appraisal and development activities in high impact, highly prospective conventional assets, in the USA; a highly established region for energy production with infrastructure, skilled personnel and low sovereign risk. All operations are onshore USA, with drilling costs materially below that of offshore wells.

For further information on Pantheon Resources plc, see the website at:



The period 1 July 2022 and beyond has seen Pantheon continue to progress its projects across its large Alaskan portfolio spanning 153,000 acres, which management estimate to contain over 20 billion barrels of oil in place and more than 2 billion recoverable barrels of oil. At the same time, the macro energy environment we faced during the first half of 2022 faded somewhat in the last half year and into 2023 in reaction to global macroeconomic and geopolitical events. Supply chain issues impacted operations at Alkaid #2 materially, as did high cost inflation which was particularly impacted by extremely high diesel prices (although these have since eased), service provider and material costs.

Pantheon continued advancing its high-impact projects on the Alaska North Slope from the exploration phase to appraisal and development planning. The long term production test at Alkaid #2 was an important milestone in our passage to becoming an oil development and production company. Over that period, Pantheon produced and sold oil from its successful production test at Alkaid #2.

Pantheon’s operational ambitions over 2023 and beyond are to test the Shelf Margin Deltaic (“SMD”) which we believe has the potential to contain 2.6 billion barrels of OIP and a P50 Contingent Resource (recoverable) of 404 million barrels oil (“mmbo”) in the Alaskan late spring/summer, prior to shifting our efforts into evaluating our 1.7 billion barrel discovered resource at Theta West as well as assessing the various discovered horizons at Talitha. Completion of these activities will require additional capital and in this regard Pantheon has prioritised the opening its data room in the near term to commence the process of finding a suitable farmout partner, or to otherwise raise capital to fund operations. Activities at Theta West and Talitha will include additional drilling and testing to increase our contingent resources with an aim to ultimately transition these resources to reserves allowing investors and the industry to recognize a higher valuation for the discoveries which have now been ranked amongst the largest in the world by several global research organizations. This is a credit to our team which have done a tremendous job in discovering this large resource and now working hard to unlock its value and deliver a commercial outcome for our shareholders.

Opening of Data Room

Pantheon has engaged SLB (nee Schlumberger) to manage and operate Pantheon’s data room which is expected to open in the near term. In December 2022, SLB completed phase 1 of the project which included preparation of dynamic and static models over Pantheon’s projects which they estimate to contain over 17 billion barrels of oil in place and which will form an important component of the data room. The purpose of the data room is to attract a potential farm in partner into one or more of Pantheon’s projects, all of which Pantheon has a 100% working interest in. Pantheon is seeking a ‘pay to earn’ type arrangement (which may or may not include an additional up-front cash payment) where any potential farminee would fund a mutually agreed drilling/activity programme in exchange for a working interest in either a specific asset (for example, Alkaid) or across the entire portfolio. Pantheon recognizes the benefit in actively exploiting its portfolio which, in a success case, has the potential to create very significant value for shareholders given the large size of its projects. Historically at an industry level, Pantheon has maintained a low profile to protect its competitive advantage (Pantheon has sole access to c.1000 square miles of high quality 3D seismic) while prosecuting its acreage strategy. Pantheon has now successfully executed its acreage strategy and as such intends to increase the profile of the Company within both industry and in the investment community.

Alkaid #2 Drilling, Completion and Flow Testing

After more than a decade of exploration and appraisal on the North Slope of Alaska, Pantheon/Great Bear drilled and completed a pilot production test at its Alkaid oil accumulation. The Alkaid location was selected for this first test because of the positive test result from the nearby Alkaid #1 in 2019 coupled with the low cost location from which to drill and run a long term production test, being immediately adjacent to the highway. The Alkaid ZOI, being the deeper horizon and having flowed previously in the Alkaid #1 well, was the logical primary objective because we would subsequently be able to come up the hole to test the independent and five times larger SMD resource in the same wellbore where we expect to encounter high quality reservoir. A successful long term production test at Alkaid had the objective of proving the production capability and characteristics for the reservoir to allow for field development planning and as a tool for potential future debt financing. The Alkaid #2 well bore reached a measured depth of 14,300′ including a 5,300′ horizontal section which was all oil bearing. This lateral was successfully fracture stimulated with 30 frac stages, including the placement of +/- 8 million pounds of sand proppant. Production testing operations at Alkaid #2 commenced in October. Initially, frac sand production was higher than expected which necessitated a cleanout. Due to the lack of availability of a workover rig, a thru tubing coiled tubing cleanout procedure was undertaken which successfully cleared all but c.1000ft of the wellbore blockage. The Company used this hiatus to transition from temporary flow back facilities into its larger permanent facilities.

After returning to production in December, Pantheon reported production at a rate of over 500 barrels per day (bpd) of hydrocarbon liquids including oil, condensate and natural gas liquids (NGLs), as well as c2.5 mmcfpd natural gas, from approximately 4,000 ft of clean lateral wellbore. At this time, much discussion centred around the value of liquids produced at Alkaid #2. When separated and sold, condensate and NGLs are estimated to achieve 80% – 90%, or potentially higher, of ANS crude oil price (ANS crude typically trades at a premium to WTI oil). All liquids produced on the North Slope are blended and sent through the Trans Alaska Pipeline System (TAPS) to Valdez and on to market as ANS crude. The crude oil produced and sold during this time period averaged c.$87/Bbl.

In order to maximise data, Alkaid #2 was then shut in awaiting the arrival of the Nordic Calista #2 workover rig to pull the tubing and then clean out the remaining 1000 ft of blocked wellbore with a larger coiled tubing unit (CTU). During this shut in period extensive analysis was carried out to understand the much higher than anticipated gas production. Pantheon along with SLB (previously known as Schlumberger) now believe Alkaid #2 was drilled near a small gas cap which was not clearly visible from available seismic resolution and fracked into that gas cap. Gas production is now estimated as a combination of free gas from the gas cap along with gas from solution. The nearby Alkaid #1 well, tested in 2019 had a producing gas oil ratio (GOR) many times less than that of Alkaid #2 despite being in the same reservoir, suggesting an anomalous result. Pantheon will drill future development wells deeper to avoid the gas cap which should result in a lower GOR consistent with what we saw at Alkaid #1.

Post the cleanout of the sand blockage in the final 1,000ft (c.20%) of the wellbore, Alkaid #2 returned to production with flow rates only marginally higher than pre-cleanout, suggesting that despite the sand blockage, the final 1,000ft was likely connected and already contributing to the main wellbore through the fractures communicating with each other. The well soon returned to production along the pre cleanout decline profile. The initial 30 day Production (IP30) production rate is calculated at c.505 barrels per day (BPD) of marketable liquid hydrocarbons consisting of c.180 BOPD oil, c.325 BPD of condensate and NGLs, along with c.2,300 mcfpd natural gas after shrinkage. Encouragingly, the quantum of liquid and gas production flowing without artificial lift from Alkaid #2 demonstrates the good deliverability of the reservoir, which is a significant de-risking event for Alkaid development. The well has now flowed for c.90 days including the initial start up, and the reservoir engineering team has determined we have collected sufficient data to determine decline rates, a primary objective of the long term test. Given also the greater than forecast gas being produced, we have not sought an extension from the State of Alaska for a second 90 day flaring permit and have proactively shut in Alkaid#2.

In January, for illustrative purposes, Pantheon stress tested the Alkaid development model using an estimated development well drilling cost of $19.5 million, which for conservatism modelled in a 50% increase over the then Company estimate of $13 million. The Company has continued to analyse and review this figure and currently estimates development drilling costs in the region of +/- $13.5 million per well. Applying $13.5 million well cost, assuming a 10,000ft lateral and no improvement in individual well productivity, our modelled Alkaid development economics yield a c.20% IRR at an $80 ANS crude price. This indicates that without including the benefit of any expected improvement in hydrocarbon liquid flow from deeper and down dip completions, Alkaid is modelled as economic even as a stand-alone development. However, in practice, Alkaid is unlikely to ever be a stand-alone development because of the other oil accumulations, such as the SMD, in and around the Alkaid structure that were not included in the economics and will be evaluated as part of our future activities mentioned above. The ability to share infrastructure between projects significantly enhances modelled field economics.

Alkaid represents less than 4% of Pantheon’s resource base, is not representative of Pantheon’s other discoveries and is Pantheon’s first production test well in a new geological play type. As is typical for first time operations in new fields, there is a learning curve with any first well that will be optimized over subsequent wells to yield the best results.

Commissioning of Independent Expert Reports

Pantheon has commissioned Netherland Sewell & Associates (NSAI), a worldwide leader in petroleum property analysis and one of the most respected names in independent reserves reporting, to undertake two independent expert reports (Competent Persons Report) over each of the Company’s Theta West and Alkaid projects. Additionally, SLB (nee Schlumberger) is updating the dynamic reservoir models across Pantheon’s portfolio to incorporate into the NSAI report. The SLB and NSAI work will run in parallel to the farmout process providing investors and financiers an independent assessment of the resources.

Strengthening Board and Technical Team

Pantheon announced the appointment of David Hobbs as an independent non-executive Director.

David is an outstanding addition to our team, bringing great experience and technical knowledge to Pantheon. David graduated as a Petroleum Engineer from Imperial College in 1984, initially working at British Gas as a drilling engineer before moving into commercial and business development roles at Monument Oil & Gas and Hardy Oil and Gas, two UK listed international independent E&P companies. He joined Cambridge Energy Research Associates (CERA), now part of S&P Global, ending up as Chief Energy Strategist, advising Government officials, senior executives and Boards of Directors across the energy sector. He also spent six years as part of the leadership team establishing the King Abdullah Petroleum Studies and Research Center (KAPSARC) in Riyadh, Saudi Arabia. David is an adjunct professor at the University of Calgary.

Pantheon has also enhanced its technical and operational team with the addition of Tony Beilman. Tony has over 40 years’ experience in the industry starting his career at Phillips Petroleum. Tony specializes in drilling and completions especially in horizontal well bores, with an emphasis on fracture stimulation. Tony also co-founded a drilling and production company and his wealth of experience is undoubtedly going to improve Pantheon’s operational execution.

We enthusiastically welcome both David and Tony to the team.

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