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(Sharecast News) - Alaska North Slope-focussed oil and gas company Pantheon Resources updated the market on work at Theta West on Thursday, reporting that testing of the Lower Basin Floor Fan (LBFF) had started. with the well flowing "high quality oil" to the surface.
The AIM-traded firm said that would support, and likely exceed, its pre-drill resource estimates of 1.2 billion barrels of recoverable oil.
As with previous testing on the North Slope, the primary objectives of the LBFF test was to confirm oil quality, to confirm oil movability, and to confirm reservoir deliverability.
All of the objectives were achieved in the initial testing operation, and the company said it had now suspended testing of the formation due to the onset of a severe storm in the area, which led to the shutting in of the Theta West 1 well.
The firm said the well flowed high quality, light 35.5 to 38.5 degree API gravity oil at rates that averaged more than 57 barrels of oil per day, with peak rates exceeding 100 barrels per day over two-and-a-half days.
Over the final day prior to shut-in, the well was averaging about 59 barrels per day.
Pantheon said the rate met its pre-drill expectations, and confirmed the presence, quality, and mobility of light sweet crude oil.
Testing operations were still suspended due to "extreme weather", with a possibility that testing could resume if the conditions improved before the end of the Arctic operating season.
Theta West 1 encountered 950 feet of oil in the LBFF, of which only three small sections of the "large zone" were tested.
The three 10-foot perforations were conducted at depths of 8,065 to 8,075 feet, 7,745 to 7,755 feet, and 7,595 to 7,605 feet, which were all successfully stimulated and commingled into one test across the zones.
Around 40% of the testing fluid was recovered before testing was suspended, with Pantheon saying the ultimate flow potential would be better assessed after recovering a greater portion of fluid, which was not possible due to the halting of operations.
It said that importantly, however, the results confirmed the extension of the oil accumulation over a 10.5 mile distance from Talitha A to Theta West.
The Theta West LBFF was now proven as an extensive oil reservoir that Pantheon could image and map with high confidence on its proprietary 3D seismic data, the board said, although ultimate commerciality would require long-term production testing.
"We are very excited by this result at Theta West - this well is a successful 10.5 mile step-out from the LBFF oil bearing interval at Talitha," said chief executive officer Jay Cheatham.
"The test result confirms a vast oil resource and also confirms our geologic model.
"Its proximity to infrastructure gives Pantheon a strategic advantage over other greenfield projects."
Cheatham said that, after confirming the oil resource over the area, the firm's focus would now shift to proving the deliverability of production wells, which would start with the spudding of the Alkaid 2 horizontal well, estimated for July.
"By utilising a gravel pad immediately adjacent to the Dalton Highway, Pantheon will operate without being limited to winter operations.
"This allows for a horizontal well with appropriate stimulation, long-term flow testing and, if successful, oil sales.
"We are confident of deliverability and excited for the next step in our drilling programme."
At 1221 GMT, shares in Pantheon Resources were up 11.45% at 138.2p.
