(Sharecast News) - Alaska-focussed oil and gas company Pantheon Resources announced the successful acquisition of around 40,000 acres in the state's North Slope Areawide Lease sale on Thursday, with all submitted bids seeing success.
The AIM-traded firm said the new leases were "strategically positioned" in two areas contiguous or adjacent to its current acreage on its north western boundary, covering the extension of the Theta West project, and east, capturing the area adjacent to the junction of the Alkaid Unit and the Talitha Unit.
It said it had a competitive advantage in bidding for the acreage, given its sole use of the proprietary 3D seismic covering the leases, which was not currently accessible by any third parties.
The acreage additions were a "direct result" of detailed technical work completed by Pantheon's technical team and its consultants at eSeis, following the successful Theta West 1 discovery well drilled earlier in the year, the board said.
Pantheon said its winning bids averaged $28 per acre, significantly lower than the average of the winning bids recorded on other acreage in the sale.
When the leases are officially awarded by the State of Alaska, estimated to be in six-to-12 months, they would come with a 10-year initial term, an annual rental of $10 per acre, and a royalty rate of either 12.5% on four of the leases totalling 5,760 acres, or 16.67% on 13 leases totalling 34,240 acres.
The directors said the additions would allow Pantheon to continue to strategically high-grade its acreage based on its recent technical work.
At Alkaid 2, meanwhile, the well encountered a sand blockage during the early clean-up phase of flow testing.
The company said the sand was sent for analysis, and was confirmed to be sand introduced during the fracture stimulation operations, and not formation sand.
A coiled tubing unit was ordered to clean out the wellbore, and had now arrived on location after a 10-day delay.
Clean-out operations were continuing at Alkaid 2, with Pantheon reporting that during the wellbore cleanout operations, conservative pumping rates were required due the tight tolerances between the outside diameter of the coiled tubing unit and the inside diameter of the production tubing.
Once the clean out procedures were finalised, flow testing operations would resume, with the delay not impacting the potential of the Alkaid 2 well.
"Acquiring these leases was a highly successful outcome for Pantheon and importantly, the acreage is in very close proximity to the established export infrastructure," said technical director Bob Rosenthal.
"Our team has spent over a decade working in this area, enhanced recently with advanced geophysical evaluation and the analysis of the huge dataset gained in our successful drilling of the Theta West 1, Talitha A and Alkaid 2 wells this year.
"The new Theta West acreage is in the same trap as our existing resource and the new Alkaid acreage covers a mapped extension of the Shelf Margin Deltaic and Alkaid anomalies."
Rosenthal said the Theta West acreage was "structurally shallower" and updip from the Theta West 1 well, and should yield better reservoir properties.
"Accordingly, we expect to report a material upgrade to our Theta West project resource in due course.
"The acreage adjacent to the Alkaid and Talitha Units is strategic as it allows continued development opportunities along the Dalton Highway, along with the potential for a resource upgrade."
At 1256 GMT, shares in Pantheon Resources were down 0.4% at 87.65p.
Reporting by Josh White for Sharecast.com.
Pantheon Resources plc (PANR)