(Sharecast News) - Alaska North Slope-focussed oil and gas company Pantheon Resources updated the market on the Alkaid #2 well on Friday, reporting that the pilot hole had reached a total vertical depth of 8,584 feet, with a measured depth of 8,950 feet.
The AIM-traded firm said it had encountered multiple oil-bearing reservoirs in all three targeted formations in the well - the Shelf Margin Deltaic, the Alkaid Anomaly, and the deeper, untested extension of the Alkaid Anomaly, dubbed 'Alkaid Deep'.
It said initial analysis indicated "significant" improvements in reservoir quality, which could potentially lead to a "material upgrade" of the current resource for all targeted horizons.
The analysis of the data received to date confirmed the company's ability to accurately predict the presence of light oil-bearing reservoirs using 3D seismic data, geological and geophysical capabilities, which the board said further enhanced its confidence in development planning and expected outcomes.
All reservoirs were encountered on prognosis at predicted depths, with reservoir quality exceeding pre-drill expectations.
Pantheon said Alkaid #2 confirmed more than 1,400 feet of gross continuous oil-bearing strata throughout the section drilled below the regional top seal at 7,165 feet, down to at least the 8,584 feet total vertical depth.
Under instruction from the Alaska Oil and Gas Conservation Commission, drilling was stopped at 8,584 feet, despite not having reached the bottom of the Alkaid Deep section, to allow a sufficient margin to avoid contact with the high-pressure HRZ zone and possible fault.
"Our analysis to date has been overwhelmingly positive - confirming the presence of the various horizons exactly in the locations we expected gives us great confidence in our subsurface modelling efficacy," said technical director Bob Rosenthal.
"The results of logging while drilling demonstrates the clear potential for a material upgrade of both the current Alkaid and SMD resources.
"Though we were unable to assess the maximum depth of Alkaid Deep due to the regulator's requirements, the entire section that we did log was oil saturated, which is extremely promising."
Rosenthal said Alkaid #2 marked Pantheon's "transitioning process" from explorer to producer, where it would begin to focus on optimising the development of its large resources.
"The potential development of two large and separate oil fields sitting on top of each other, the SMD and Alkaid Anomaly respectively, utilising the same production infrastructure on the Dalton Highway with near-term production opportunity, is rare and very exciting.
"We have discovered a huge amount of oil on the Alaska North Slope across our Theta West, Talitha and Greater Alkaid projects which are estimated by management to contain over 23 billion barrels of oil in place and over 2.3 billion barrels of recoverable resource in those horizons that have flowed oil, and Alkaid #2 could add to these estimates."
At 0958 BST, shares in Pantheon Resources were up 18.16% at 121p.
Reporting by Josh White at Sharecast.com.
Pantheon Res (PANR)