Pantheon Resources announced the discovery of oil in 4 strata of its Alaskan Talitha A well this morning. See the RNS on the London Stock Exchange or Advfn.com.
Here is a copy of "Scot126"'s post on the adfn.com PANR thread this morning. The price now is 42.6p to sell, 43pence to buy i.e. +5.6 pence, + 15.1% today.
Dear All - please see below Canaccord's first pass reaction. Interestingly, Canaccord has an option to "request a meeting" for its institutional clients and that option has been switched on for this report. I think it is a consensus view that PANR has been under the radar for quite some time.....this may be about to change IMO. GLA
Canaccord Genuity
Pantheon Resources
Oil and Gas, Exploration and Production | Company Update
Talitha - finds oil throughout all four target zones
PANR-AIM | Price 37p | Market Cap £218.6M
SPECULATIVE BUY Unchanged
PRICE TARGET 89p Unchanged
Canaccord Genuity view
The Talitha #A well has found oil throughout each of the four expected reservoir zones. This is an excellent start, especially as the well was only optimally located for the uppermost Shelf Margin Deltaic zone. Yet the data obtained so far indicate that the two lowermost targets, the Basin Floor Fan and the Kuparuk, have delivered much better results than anticipated. While the drilling and logging data are very encouraging, the well is only half done. The results of the planned multi-zone testing will be critical in assessing the next phase of appraisal and potential commerciality.
Pantheon drilled the well on its 100% held Talitha production unit (currently 89.2% pending transfer of 10.8% from Otto Energy awaiting Alaska DNR approval) on the North Slope of Alaska reaching total depth (TD) at 10,452 feet. The well was drilled four miles from and up-dip of the 1988 discovery well, Pipeline State #1 (PS#1).
Talitha #A spudded on 13 January and drilling operations have been completed quickly, allowing ample time for four planned flow tests. Weather is the time limiting factor in this location and all operational activities must be completed before the thaw sets in, usually around the end of March. We expect the testing programme to be completed by mid-March. If the weather holds, and the well tests and further analysis of logging data and sidewall cores support it, there may be an opportunity to proceed with a horizontally drilled section in one zone together with more extensive testing.
Drilling results from each unit
Shelf Margin Deltaic (SMD): Found similar reservoir to PS#1 with around 155 feet gross oil reservoir.
A good result, which appears to support the independently determined c.300 mmbbls potential resources, though Pantheon had hoped to find thicker and better quality sands. As the shallowest zone this will be the fourth test.
Slope Fan (SF): Found interbedded oil bearing sands and shales as expected, but preliminary analysis indicates that the reservoir quality would not justify a flow test.
Basin Floor Fan (BFF): Multiple oil bearing reservoirs across a gross interval of 1,550 feet. The overall thickness and net-to-gross was better than expected. Furthermore, based on the seismic data, Pantheon believes the areal extent of this zone is large, at over 80,000 acres, extending up-dip into the Theta West project. Two intervals will be tested:
Upper section - 125 feet of high quality oil bearing reservoir; lower section - part of a 1,000 foot gross interval.
Kuparuk: Over 100 feet oil bearing reservoir, with the top 55 feet of good quality reservoir. This will be the first test zone.
Drilling conclusions, well test thoughts
The results of Talitha #A have overall met or exceeded Pantheon's expectations. Only the Slope Fan is deemed unworthy of testing at this location. The stand-out positives, in our view, are the successful results in both the BFF and Kuparuk despite the well being drilled in non-ideal locations for these zones.
While an excellent start, there is much more to be done to enable a better assessment of the commercial oil potential, and the well tests over the next month or so will be critical to that understanding.
Target price and rating
We leave our risked NPV10 based target price unchanged at 89p and maintain our SPECULATIVE BUY rating.
AI
