AGM Statement

RNS Number : 7132X

Pantheon Resources PLC

10 December 2010

 



Press release

Date:  10 December 2010

 

AGM Statement

At the Annual General Meeting of Pantheon Resources plc ("Pantheon" or the "Company"), to be held at 10:00 a.m. today at the offices of Sprecher Grier Halberstam LLP, One America Square, Crosswall, London EC3N 2SG, Sue Graham, non-executive Chairman of the Company, will make the following statement:

In April 2011 Pantheon will mark the fifth anniversary of its admission to AIM. The intervening months from today's AGM should witness the drilling of the crucial second well in the Tyler County programme; Kara Farms #1H ("KF#1H").  This well represents the prospect for an entire transformation of the Company. It also epitomises the shift in corporate strategy and direction since the appointment of Jay Cheatham as Chief Executive Officer in January 2008. It marked his decision to refocus the strategy towards projects with large development possibilities and away from higher risk single-well prospects. The Board of Directors believes that the Tyler County project offers enormous potential for both the Company and its shareholders.

The KF#1H well is envisioned to spud by the end of January 2011 according to the operator, Vision Gas Resources LLC ("Vision"). The delays that have beset the start of drilling have been discussed at length in previous communications. Central has been the surge in horizontal drilling in the Barnett, Haynesville and Marcellus gas shale plays as well as the Eagleford oil shale play. Over the past year the total horizontal rig utilisation has risen from 547 to 966. This has led to a concomitant shortage of suitable rigs and a resulting sharp escalation in rates. Against this unfavourable macro environment, the Joint Venture ("JV") was also handicapped in its negotiations with rig owners by its requirement for a single rig slot as compared with other companies facing multi-well programmes.

This situation may now be at the point of turning. The horizontal rig count has been flat for the past two months. This is the case in both Texas and Louisiana which are likely to be the source of a rig for KFH#1. Lower gas prices are also set to impact adversely utilisation rates. As natural gas price hedges expire for the shale players, drilling is set to become uneconomic. These two factors may lead not only to an appropriate rig becoming available early but also at a lower cost.

The KF#1H well is significant in that it will be investigating two separate and totally independent plays; the main Austin Chalk target and a secondary one in the Woodbine. One of the main achievements made by the JV in the past year has been in its extensive geological analyses of the entire Tyler County acreage. The operator has expended much effort in advancing its knowledge of the seismic data it has obtained and correlating this with existing discoveries. As a result of this work the JV has gained further confidence in the project.

A new completion method has been developed for the KF#1H well. The aim is to prevent a repeat of the rubble problems encountered in the first well. The operator will use an innovative process incorporating a custom-built wire wrapped slotted liner. This is manufactured to the JV's exact specifications and is designed for the expected conditions in the KF#1H well. Using this process the small formation pebbles that choked the well bore in the first well should be blocked.

The JV has also been active in increasing and enhancing its acreage position in the Tyler County acreage.  The JV's acreage is now 31,000 acres versus 30,000 acres a year ago.

At the end of this year the Board of Pantheon awaits eagerly the drilling of its second well in its Tyler County venture. Success should lead to the commencement of a very active phase as the Company seeks to unlock the major value created and communicate this to investors. While markets remain challenging the management of Pantheon is committed to delivering returns to its shareholders. I thank shareholders for their patience and look forward to a more active 2011.

Annual Report and Accounts

The Annual Report and Accounts for the financial year ending 30 June 2010 have been posted to shareholders, copies of which are available on the Company's website at:

http://www.pantheonresources.com/investors/documents/PantheonResourcesplcFinancialStatementsJune2010.pdf

In accordance with the AIM Rules, the information in this announcement has been reviewed and signed off by Jay Cheatham, who has over 30 years' relevant experience within the sector.

Further information:

Pantheon Resources plc

Jay Cheatham, CEO Justin Hondris, Director, Finance and Corporate Development

[phone]

Oriel Securities Limited (Nominated Adviser)

Michael Shaw

[phone]

For further information on Pantheon Resources plc, see the website at: www.pantheonresources.com. 

Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement

 

END

 

 

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