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(Correcting the date of the winter season and that the state lease sale has now been formally granted to Pantheon.)
(Alliance News) - Pantheon Resources PLC on Friday said the independent expert report and resource statement on the Shelf Margin Deltaic horizon at the Talitha project in Alaska found a prospective resource of 302 million barrels of recoverable oil.
Shares in the oil and gas exploration and production firm, primarily focused on the Alaskan North Slope, were up 20% at 37.74 pence in London on Friday afternoon.
The report and resource statement were received from Lee Keeling & Associates Inc and is of the SMD horizon at Talitha, of which Pantheon has 89% ownership.
The SMD horizon is the shallowest of the three targeted horizons at Talitha - the other two being the Slope Fan System, and the Kuparuk. All three are independent of each other and were oil bearing in the nearby Pipeline State 1 discovery well drilled in 1988.
Pantheon Technical Director Bob Rosenthal said: "This is another extraordinary result for our company. The delineation of such a large prospective resource in the SMD, immediately updip from discovered oil is very exciting. [Lee Keeling & Associates] have detailed an expectation of a high quality reservoir with porosity over 15% and recovery factors of 30%.
"The certified resource estimate of the SMD announced today, combined with the yet to be determined resource potential of the Slope Fan System and the Kuparuk formation, yields a truly world class drilling opportunity that should rank Talitha amongst the most impactful oil wells planned anywhere in the world for 2021. Talitha will test these independent oil zones in a structurally higher location than the Pipeline State discovery well where we expect better reservoir quality."
The NPV10, net present value discounted at 10% per annum, for SMD is USD2.7 billion modelled on 91 producing wells using a long term Brent oil forward curve of between USD45.84 and USD54.89.
The NVP10 per barrel of oil is USD8.92 with an internal rate of return of 80%. The field peak maximum production rate is 90,000 barrels of oil per day with the average individual production well estimated ultimate recovery at 3.31 million barrels of oil per well for 91 wells.
Additionally, the report confirms Talitha is an appraisal project updip from discovered oil. Its location near the Dalton Highway & Trans-Alaska Pipeline will also allow for a phase development and helps to minimise upfront capital expenditure.
Pantheon is still engaging with multiple parties undertaking analysis of the farmout opportunity, a number of which were waiting for the independent expert report. Possible farmout parties range in size from smaller, specialist groups all the way up to national oil company while talks range over the entire Pantheon Alaskan portfolio to smaller single projects.
Pantheon still plans to drill in Alaska over the coming winter season ending 2021.
The state of Alaska has recently deemed Pantheon's applications for production units at Greater Alkaid and Talitha as complete and published them to solicit public comment. Furthermore, the 17 leases that make up the Theta West and Leonis project areas successfully bid on the December 2019 state lease sale have now been formally granted to Pantheon.
Chief Executive Jay Cheatham said: "This is a very significant resource estimate for us. Given Arco didn't flow test the Pipeline State 1 well, we never expected a contingent resource from LKA at this stage. However, it gives us great scope for these numbers to grow with a successful well result. Importantly, LKA confirmed Pipeline State was oil bearing and it's very exciting that we are drilling updip from that discovery well into a very large and anticipated better reservoir section. Arco drilled the well in 1988 when oil prices were very low, the Trans Alaska Pipeline was flowing at capacity and drilling technology was significantly less advanced than today.
"Once we drill and, if successful, test the Talitha A well, which LKA has confirmed is an 'appraisal well', I expect these prospective resources to graduate to contingent resources with the possibility of some portion becoming Reserves. Our modelling shows Talitha is economic at very low oil prices because of the size, reservoir qualities and proximity to the Dalton Highway and Trans Alaska Pipeline."
By Anna Farley; annafarley@alliancenews.com
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