Cannacord note - for info2 Mar 2021 16:25
Pantheon (PANR, Spec Buy, TP: 89p, MC: c.£220m)
Talitha testing delay. Extreme cold, leading to some equipment failures, combined with difficult open hole conditions in the Kuparuk formation, have resulted in a c.2 week delay to the overall testing programme. The weather window is likely to be extended as it has been extremely cold, this would allow full planned testing of the vertical well provided operations go smoothly:
Original plan: Open hole test the Kuparuk formation, then test three shallower cased zones in the vertical well.
In addition, the combination of the rapid drilling progress and the extra cold weather raised the possibility of drilling a horizontal section through one reservoir and to test that.
Current plan: Drill short sidetrack into the Kuparuk (650 feet, 2 to 3 days) only about 25-50 feet from the current wellbore. Case the Kuparuk formation and carry out a cased hole test. Normally cased hole tests deliver more representative flow rate results compared to an open hole, so apart from the delays there are advantages to this procedure.
Forward plan post Kuparuk test: Likely to evolve bearing in mind weather conditions. Pantheon believes the unusually cold winter in Alaska may mean that the weather window could extend to ***mid April***. Even with that potentially extended operational window, we think that carrying out all four planned vertical well tests and drilling/testing of a horizontal section would be unlikely.
On that basis we anticipate a decision about the number of vertical tests (we expect all four could be completed) and/or the horizontal drilling option (including that may mean fewer vertical well tests) will have to be taken during the next week or so.
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