By Samuel Indyk
Investing.com – Shares in AIM-listed Pantheon Resources fell by as much as 50% in early trading on Monday after the company provided an update from drilling at its Talitha #A well.
The company said that testing of the deepest zone, the Kuparuk formation, flowed high quality light oil intermittently at rate of up to 100 barrels of oil per day, a disappointing rate, and encountered a number of operational issues. The Kuparuk horizon at this location was overpressured which the company said was “unlike any known Kuparuk well regionally”.
“A comprehensive analysis of the Kuparuk, supported by third party experts, has already commenced to gain a greater understanding of the atypical reservoir characteristics encountered. Based upon analysis to date, the Kuparuk very much remains a viable target on the Company's acreage,” the company said in a statement. “Early analysis suggests that the Kuparuk horizon at this location might respond better to different drilling fluids and techniques, however ultimate recoveries may be lower than originally estimated.”
Future activity
Pantheon Resources (LON:PANR) said it now intends to recommence its farmout strategy to attract a suitable partner to best exploit the Kuparuk across Pantheon’s acreage.
“The Kuparuk itself is not yet fully understood, but we believe still offers tremendous potential if drilled differently given its inherent geologic properties,” said Pantheon Resources Technical Director Bob Rosenthal. “This experience is normal in the industry in any first well drilled in a new area.”
The company also announced results from analysis of shallower zones in the Talitha #A well. The reservoir qualities were in line with expectations, the oil appears to be lighter than expected and an additional significant zone was discovered, increasing the total resource potential “significantly”.
“The Basin Floor Fan discovery at this downdip location sets up a significant and low risk opportunity and is sure to attract international partner attention,” said Pantheon Resources CEO Jay Cheatham. “We have learned that our acreage contains a vast hydrocarbon play, located along and close to the Dalton Highway and the Trans Alaska Pipeline. We have de-risked this play significantly which will lead to upgrades in due course.”
At 09:35BST, shares in Pantheon Resources were trading lower by 40% at 23.77p.