Rig for Megrez-1 Well and Award of New Leases

Pantheon Resources PLC

12 August 2024

 

12 August 2024

Pantheon Resources plc

Pantheon Secures Rig for Megrez-1 Well and Award of New Leases

Pantheon Resources plc (AIM: PANR) ("Pantheon" or "the Company"), owner of 100% working interest in the Kodiak and Ahpun oil fields, containing independently evaluated recoverable contingent  resources of c. 1.6 billion barrels ("Bbbl") of ANS crude and 6.7 trillion cubic feet ("Tcf") of natural gas in close proximity to pipeline and transportation infrastructure on Alaska's North Slope, is pleased to announce that it has executed a rig contract to secure the use of the Nabors 105AC rig to drill the Megrez-1 well in Q4 2024.

Pantheon also announces that the leases which it successfully bid for in December 2023 have been awarded and are expected to be issued within the coming weeks.

Execution of Drill Rig Contract

Pantheon has formally contracted to use the Nabors 105AC drill rig, a rig the Company is familiar with having used it in previous drilling campaigns, to drill the Megrez-1 exploration well which will target the Ahpun East topset play. Siteworks for construction of a gravel pad along the west side of the Dalton Highway are expected to commence in September and upon completion of these siteworks the drill rig will be mobilised.

The Megrez-1 well is estimated to have a 69% geological chance of success and will target the topset sands in Ahpun East project area which the Company estimates to contain a 2U Prospective Resources of 609 million barrels of marketable liquids and 3.3 Tcf of natural gas. The Ahpun East topsets are significantly shallower than the Ahpun western topsets drilled previously.

Formal Award of Leases

The Company has also paid the remaining portion of the fees for the 46 new oil and gas leases acquired in the State of Alaska's 2023W Areawide oil and gas lease sale held in December 2023 as announced on 14 December 2023. Based on the official title work done by the State prior to awarding the leases, the 46 new leases consist of an aggregate of 65,691.5 acres, 30 of which are located on the western boundary of the Kodiak Field and 16 of which cover the Ahpun East topset play. The State of Alaska will execute and issue the leases in the next few weeks.

Jay Cheatham, Pantheon's Chief Executive, commented: "With a management best estimate for the eastern topsets in Ahpun at over 1 billion barrels of oil equivalent 2U Prospective Resource to be tested by the Megrez-1 well, located immediately adjacent to pipeline and road infrastructure and in reservoirs expected to be orders of magnitudes better than western topsets, we believe this to be one of the most impactful onshore exploration well being drilled anywhere in the world during 2024. Success here would further advance our Ahpun development models and plans."

Further information, please contact:

Pantheon Resources plc               [phone]

David Hobbs, Executive Chairman

Jay Cheatham, Chief Executive Officer  

Justin Hondris, Director, Finance and Corporate Development   

Canaccord Genuity plc (Nominated Adviser and broker)               [phone]

Henry Fitzgerald-O'Connor

James Asensio

Charlie Hammond

BlytheRay           [phone]

Tim Blythe

Megan Ray

Matthew Bowld

Notes to Editors

Pantheon Resources plc is an AIM listed Oil & Gas company focused on developing its 100% owned Ahpun and Kodiak fields located on State of Alaska land on the North Slope, onshore USA. Independently certified best estimate contingent recoverable resources attributable to these projects currently total c. 1.6 billion barrels of ANS crude and 6.7 Tcf of associated natural gas. The Company owns 100% working interest in c. 259,000 acres with the award of the additional 66,240 acres.

Pantheon's stated objective is to demonstrate sustainable market recognition of a value of $5-$10/bbl of recoverable resources by end 2028. This is based on bringing the Ahpun field forward to FID and producing into the TAPS main oil line (ANS crude) by the end of 2028. The Gas Sales Precedent Agreement signed with AGDC provides the potential for Pantheon's natural gas to be produced into the planned 807 mile pipeline from the North Slope to Southcentral Alaska during 2029. Once the Company achieves financial self-sufficiency, it will apply the resultant cashflows to support the FID on the Kodiak field planned, subject to regulatory approvals, targeted by the end of 2028 or early 2029.

A major differentiator to other ANS projects is the close proximity to existing roads and pipelines which offers a significant competitive advantage to Pantheon, allowing for materially lower infrastructure costs and the ability to support the development with a significantly lower pre-cashflow funding requirement than is typical in Alaska. Furthermore, the low CO2 content of the associated gas allows export into the planned natural gas pipeline from the North Slope to Southcentral Alaska without significant pre-treatment.

The Company's project portfolio has been endorsed by world renowned experts. Netherland, Sewell & Associates estimate a 2C contingent recoverable resource in the Kodiak project that total 1,208 mmbbl of ANS crude and 5,396 bcf of natural gas. Cawley Gillespie & Associates estimate 2C contingent recoverable resources for Ahpun's western topset horizons at 282 mmbbl of ANS crude and 803 bcf of natural gas. Lee Keeling & Associates estimated possible reserves and 2C contingent recoverable resources totalling 79 mmbbl of ANS crude and 424 bcf. 

Glossary

2U: The unrisked best estimate qualifying as Prospective Resources

ANS: Alaska North Slope

Bbls: Barrels

Bbbl: Billion barrels

Bcf: Billion cubic feet

Mmbbl: Million barrels

NGLs: Natural gas liquids (NGL) are components of natural gas that are separated from the gas state in the form of liquids.

Overriding Royalty Interest (ORRI): A royalty granted to a third party other than the royalty payable to the State of Alaska.

Prospective Resources: Prospective Resources are those quantities of petroleum which are estimated, on a given date, to be potentially recoverable from undiscovered accumulations.

Tcf: Trillion cubic feet

Working Interest: The legal ownership of the leases awarded by the State of Alaska. Pantheon's Net Revenue Interest (NRI) in the leases is less than 100% by virtue of royalties payable to the State and any ORRI. In the case of the Kodiak project, the State royalties vary between 12.5% and 16.67%. Management estimates that the average NRI is approximately 85%.

 

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