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 announce the conclusion of drilling operations, and the commencement of preparations for stimulation and flow testing at the Alkaid #2 well.
Alkaid #2 Well – Horizontal Lateral Target Depth Reached
Drilling operations at the Alkaid #2 horizontal well bore have now concluded, reaching a total measured depth of 14,300 feet (‘ft’) which includes a lateral length of 5,300 ft. A 5 ½ inch liner has been run, set, cemented at the bottom and tested for integrity. Pantheon, like all companies in the oil and gas industry, is experiencing significant inflationary cost and supply chain pressures at present, and hence is extremely pleased that drilling of the lateral section was accomplished smoothly and without incident.
As previously announced, future production wells will have a targeted lateral length of +/- 8,000 ft. However, as this is Pantheon’s first horizontal well on the North Slope, and to minimize operational risk and still deliver the production data needed to optimize development of the resource, the Company adopted a conservative approach and utilized a shorter lateral.
Analysis of the logging while drilling (LWD) and gas chromatograph readings indicate that the improved reservoir parameters encountered in the vertical pilot hole have continued or improved in the horizontal well bore. This data further confirms the accuracy of Pantheon’s geological models and provides the Company with greater confidence to predict reservoir tops and bottoms. As previously announced, initial analysis indicates significant improvements in reservoir quality which has the potential to lead to upgrades of the current resource estimates for all targeted horizons.
Analysis of data received to date also highlights the progression in the Company’s ability to accurately predict the presence of light oil bearing reservoirs using 3D seismic data, geological and geophysical capabilities, further enhancing confidence in future drilling and development planning. The quality of data received from the well has been extremely high and the Company will assess the flow test and other well data before making a final decision on the winter 2022/23 operations program.
Next Steps – Long Term Production Testing
Future operations at Alkaid #2 involve demobilizing the Nabors Rig 105 and moving in a smaller completion rig to undertake the extended completion operations of perforating and stimulating the horizontal section approximately every 165 ft and will necessitate +/- 30 separate perforation and stimulation stages.
After the completion, long term production testing will utilize a modular production kit capable of separating any oil, gas or water from the production stream before trucking this oil to a nearby production unit for sale. As mentioned previously, Pantheon will use unconventional production techniques, applying this technology to the conventional sandstone reservoirs encountered across the entire project area.
The Company is also pleased to announce that it is in the process of applying for the Company’s ordinary share capital to trade on the OTC Market’s OTCQX trading platform in the Unites States. The OTCQX is the top tier of the three marketplaces for the OTC trading of stocks and will allow U.S. investors greater ability to access the Company’s Ordinary Shares in U.S. dollars and during U.S. market hours. The Company is not seeking a fundraising in conjunction with this process.
Bob Rosenthal, Technical Director, said: “I am incredibly proud of the result so far and of the superb work of our team. The first development well in any new area can sometimes yield unexpected surprises as we never really know what wellbore conditions to expect over such a long distance, and hence I am delighted we reached 5,300 ft without incident, an important milestone for me because it exceeded my personal goal of one mile. This latest operation appears to reinforce the accuracy of our geological modelling, giving me great confidence in our modelling of the other, even larger, projects in our 100% owned portfolio.”
Jay Cheatham, CEO, commented: “We have achieved another important milestone in demonstrating our ability to successfully drill a long lateral well. Globally, conditions for drilling oil and gas wells are challenging at present, with strong oil prices driving record demand for drilling and support services, resulting in higher costs and supply chain issues across the industry; so today’s news is extra special for us.
“Each milestone that Pantheon achieves translates into a reduction in risk and increased confidence in the potential of the large resource discovered to date. As always, we must remind investors that despite the positive results so far, a definitive assessment of the commerciality of the well cannot be made until flow testing has occurred.
“Our successes over the past couple of years continues to attract interest from U.S. based investors. Upgrading to the OTCQX will be an important step in allowing greater flexibility in trading, particularly for U.S. investors.”
Pantheon Resources plc
Jay Cheatham, CEO
+44 20 7484 5361
Justin Hondris, Director, Finance and Corporate Development
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