Pantheon Resources plc Provides Resource Upgrade - Alkaid Prospect
Jun 6 19
Pantheon Resources plc provides resource upgrade - Alkaid Prospect. Alkaid well was confirmed as an oil discovery in the primary target, the Brookian ("zone of interest" or "ZOI") at c.8,100ft depth, flowing 80-100 bopd of high quality, light oil from a 6 foot perforated interval (within a 240 foot interval of net pay) during testing. This result is considered of great importance because the Brookian ZOI is the same formation that is at the heart of the major Alaskan discoveries over recent times. Pantheon has a large family of other Brookian prospects on its acreage. Notably, the result has confirmed the efficacy of Pantheon's 'High Tech Geophysics' analysis in modelling the Brookian, important because the application of High Tech Geophysics has been central to those recent major Brookian discoveries in Alaska. Alkaid was drilled as a vertical test well with the objective of verifying the presence of the oil reservoir and gathering data and was not drilled to maximise production from this wellbore. The well is on the edge of the reservoir and seismic clearly shows improved reservoir characteristics moving towards the heart of the reservoir. Future development wells will be drilled horizontally and fracked as is typical for the region, which should result in vastly improved flow rates than that of the test well. The major geological parameters assessed in Alkaid all exceeded pre-drill analyses. The Alkaid and Phecda projects have been remapped, which included a merging of additional 3D seismic shot subsequent to drilling. Remapping has concluded that both Alkaid and Phecda are now part of the same structural accumulation. Accordingly, Phecda has been upgraded from exploration to appraisal status with a resultant reduction in risk. Oil in place ("OIP") - the Alkaid and Phecda combined OIP has been upgraded by the Company by approximately 50%, increasing from 595 million barrels of oil ("mmbo") to 900 mmbo. Recovery factor ("RF") - the RF for Alkaid and Phecda has increased from 10% pre-drill to a range of 10-15%. It is noted that secondary recovery techniques such as water flooding have been successfully applied to other Brookian accumulations in Alaska bringing recovery factors as high as 40%. For conservatism, it is too early for Pantheon to model such secondary recoveries into its base case given such techniques have not been applied at Alkaid. However, if such techniques were successfully applied during development then potential exists for a significant improvement to the 10-15% modelled recovery factor. P50 Technically Recoverable Resource - combined from Alkaid and Phecda has been increased by the Company from 59 mmbo to 90-135 mmbo. Future development wells will be drilled horizontally and fracked. The Board believe that, in a success case, a modelled P50 well is estimated to have an EUR (Estimated Ultimate Recovery) in the range of 1.5 - 2.5mmbo and an estimated potential maximum flow rate per well exceeding 1,500 barrels of oil per day. Development of the Alkaid/Phecda project benefits tremendously, both financially and operationally, from its location immediately adjacent to and underneath the Dalton Highway and the Trans-Alaska Pipeline System ("TAPS"). The Company's preliminary modelling suggests potential for up to c.50 development wells across the project in a phased development plan, with first production targeted for 2021 utilizing mobile Early Production Units ("EPU's"). Because of its favorable location, it is believed Alkaid/Phecda should have year round operations and not be subject to the typical seasonal activity restrictions. The data room for Alkaid/Phecda is nearly complete and work is underway to commence formal farmout discussions. Over US$80m has been invested in seismic with over $200m total sunk cost into the Alaskan project. Management believe this important discovery offers both scale and near-term development potential to any potential farminee. Pantheon is seeking potential farminees to contribute a material up-front cash contribution towards sunk cost for entry into the project, together with an element of 'carry' whereby that farminee would fund part of Pantheon's development costs. The Alkaid/Phecda development opportunity is compelling and the Company has already been proactively approached by parties making enquiry about possible opportunities. The Alkaid results have also increased confidence in the Brookian section at Talitha. The efficacy of the High Tech Geophysics in its rendering of the Brookian sequence at Alkaid gives the Company confidence in correlating the High Tech Geophysics in the Brookian section at Talitha. Whilst Pantheon is yet to drill a well at Talitha, the presence of the Pipeline State #1 well on the Talitha acreage is of great importance. That well was drilled in 1988, at a time when drilling capabilities were not advanced as on June 6, 2019 and when the oil price was c.$10 barrel. The well encountered hydrocarbons, but was targeting a thick, clean sand and instead encountered an interbedded, laminate type sand and thus was plugged and abandoned. With today's advanced horizontal drilling and fracking techniques, this type of geology can be, and is, effectively and efficiently drilled and produced. Owing to the favourable location and the quality of data received, the Company believes the Alkaid/Phecda project could generate NPV's per barrel of oil superior to other Alaskan discoveries made over recent years. The Company's preliminary modelled NPV10 per barrel of oil in the ground range is estimated at $7 - $12. Alaska North Slope oil trades at a premium to WTI (West Texas Intermediate) and in the current environment would estimate a net back of c.$55 per barrel of oil, after all transportation and pipeline charges.
Pantheon Resources Plc - Special Call
Jun 5 19
To provide a more comprehensive overview of interpretation of Alkaid, and of other operations
Pantheon Resources plc Announces Update in Relation to the Testing of the Alkaid Well Located on the Alaska North Slope
May 20 19
Pantheon Resources plc advised the following update in relation to the testing of the Alkaid well located on the Alaska North Slope: Alkaid Discovery Well, Alaska North Slope, Pantheon 100% Working Interest. Subsequent to the announcement of Alkaid as a discovery well following the successful production testing operations in the primary zone of interest (the "ZOI" or "Brookian formation"), the wellbore has been successfully suspended and freeze protected for future production purposes. Data analysis is ongoing. Interpretation to date suggests that the reservoir quality encountered in the ZOI is greatly superior to pre-drill estimates which should have positive implications for possible reserve and production potential at the Alkaid prospect. The result has increased its confidence in the adjoining Phecda structure, as well as in the Talitha prospect. The Brookian ZOI is estimated to have 400 ft of gross pay and 240 ft of net pay, of which a 6 ft interval was perforated and stimulated, flowing over 100 bopd of light oil. Future development wells will be drilled horizontally and multi stage fracked, as is typical for the region and would be expected to result in significantly higher flow rates than that of a vertical test well. The company has engaged a third party expert consultancy to conduct petrophysical analysis. The results are due over the forthcoming week and will provide key input into future development planning. The process for permitting a pad adjacent to the haul road and pipeline for long term production testing and delineation of the Alkaid discovery is underway. The immediate proximity of Alkaid to such infrastructure is of tremendous benefit to Pantheon, both operationally and financially.