The next focusIR Investor Webinar takes places on 14th May with guest speakers from Blue Whale Growth Fund, Taseko Mines, Kavango Resources and CQS Natural Resources fund. Please register here.
… I thought, could have been explained a bit better.
Still – what I took from it - we now know they tried too hard on this first horizontal well, with too many perforations – giving, I suppose, a horizontal casing which was too leaky when the fracking pressure was applied. So, the fracks didn’t go deep enough into the surrounding rock – result, about a quarter the hydrocarbon flow that was potentially possible from this length of well. And future wells would be 2x as long, so with a change of fracking technique and a longer well – future Alkaid wells looking to be good.
IMHO DYOR
The webinar may be able to indicate how drilling a lower horizontal in Alkaid should give pressure support within the rock pores, so keeping any dissolved gas from ‘fizzing out’ - at least until the oil is in the rising well bore. Maybe they will be able to tell that this will give the oil better relative permeability -so better flow- through the pores of the reservoir without being obstructed by the gas.
Maybe they’ll be able to give more detailed parameters on what the logging of the SMD showed during the drilling of the Alkaid#2 vertical well.
The 29Jly22 RNS was very positive but lacking in detail:
"Shelf Margin Deltaic
Analysis confirms:
-- The northern extension of the Shelf Margin Deltaic ("SMD") horizon from Talitha in the south to northeast, across the Dalton Highway east of Alkaid #2.
-- Net 272 ft oil bearing reservoir encountered which was thicker and of better reservoir quality than pre-drill estimates.
Alkaid Anomaly
Analysis confirms:
-- Net 155 ft oil bearing reservoir encountered which confirms that the zone extends over the four mile distance between the Alkaid #1 and Alkaid #2 wells.
-- Exceeded pre-drill expectation of reservoir thickness and quality.
-- Detailed analysis of cuttings and sidewall cores is currently underway to help optimise the completion of the well and long term testing operations.
Alkaid Deep [the deeper, untested extension of the Alkaid Anomaly ]
-- Drilled 300 ft deeper than Alkaid #1, all of which was oil bearing reservoir. Pantheon estimates the potential for an additional +/- 200 ft of oil bearing section below total depth ("TD") [as drilling was stopped at 8,584 ft, despite not having reached the bottom of the Alkaid Deep section.]
-- Reservoir quality encountered was better than prognosis.
-- FMI analysis is currently underway which, once complete, will determine the net reservoir thickness."
On this RNS: Bob Rosenthal, Technical Director, commented , "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.
"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 giving which is extremely promising.”
As the vertical Alkaid#2 well was drilled, through the SMD reservoir, what parameters were acquired for the SMD?
At the last webinar, David Hobbs deferred answering this until the webinar due this week, which will provide
a live presentation relating to the Alkaid-2 well results and Ahpun development on 19th July 2023 at 5:00pm BST.
The RNS 29jly22 gives positive vibs but no details on the SMD except Net 272 ft oil bearing reservoir encountered:
RNS 29jly22:
“Alkaid #2 Well - Target Vertical Depth Reached
-- The Alkaid #2 pilot hole has now reached a total vertical depth of 8,584 feet ('ft'), with a measured depth of 8,950 ft, having encountered multiple oil bearing reservoirs in all three targeted formations in the well: (i) the Shelf Margin Deltaic, (ii) the Alkaid Anomaly, and (iii) the deeper, untested extension of the Alkaid Anomaly ("Alkaid Deep").
-- Initial analysis indicates significant improvements in reservoir quality which could potentially lead to a material upgrade of the current resource for all targeted horizons.”
“Shelf Margin Deltaic
Analysis confirms:
-- The northern extension of the Shelf Margin Deltaic ("SMD") horizon from Talitha in the south to northeast, across the Dalton Highway east of Alkaid #2.
-- Net 272 ft oil bearing reservoir encountered which was thicker and of better reservoir quality than pre-drill estimates.”
“About Alkaid#2
Jay Cheatham, CEO of Pantheon Resources, commented, "I am delighted that the results so far have exceeded our pre-drill expectations….
Bob Rosenthal, Technical Director, commented , "Our analysis to date has been overwhelmingly positive….”
Should be an interesting webinar.
Another Important Point, David Hobbs Makes:
From 9mins 39secs into:
https://www.youtube.com/watch?v=_jtRDChFar8#t=9m39s
"We'll get to a point at which the market will begin to recognise the future value today and investors wont have to wait 5 years for a return - they've only got to wait until we've demonstrated that the future value has become inevitable..."
" If we incorporate that doubling of performance, along with a doubling of the length of the lateral, then 2,000 barrels per day, initially - although we're only planning on 1,500 - and an ultimate recovery of 1.2million barrels per well, is actually wildly economic."
From the very recent interview with David Hobbs:
https://www.youtube.com/watch?v=_jtRDChFar8#t=5m14s
David discussing how applying the latest generation of fracking fluids and techniques could improve the expected flow rates, which Alkaid could yield: a 2 to 4 times improvement over that obtained from last year's Alkaid#2 test well.
Plus, with the doubling of the length of the lateral for future wells, an additional expected 2 fold increase per well.
Based on the info from slide #16 in the 28jun23 webinar, the Basement Floor Fan reservoir is expected to be better porosity and better permeability in the newly acquired ‘chimney’ acreage than at the Theta west well, with improvements in porosity of 85% and permeability of 5000% compared to at the Talitha well !
So, looks to be plenty of room for upside, from the new acreage, to boost the management’s PANR total figure of 2.3billion barrels recoverable.
(16may2022 RNS: "Theta West, Talitha and Greater Alkaid projects 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 flowed oil." )
Will we hear 3 billion barrels recoverable at $5 / bbl?
If so, for 1 billion shares, I make that to be $15/share ~ £11.70/share
Compared to the current ~12p sp that's some 97.5 x
Now that would be nice !!
Come on Jay - Dave - engine on - brakes off.
… that in the coming weeks and months, the additional actions necessary to meet investor’s concerns and demonstrate that management understand the challenges and have a plan to implement a successful strategy, will become clear.
Perhaps there’s no more tangible demonstration of that confidence than that my not insubstantial holding is now public and restricted through director dealings.
If I had any doubts about the outlook for shareholders I would hardly have accepted the board’s invitation to join the team and place myself under those restrictions.”
David Hobbs at 09min: 22secs, March 2023 webinar.
Using rounded figures of ~1billion shares and ~2.3billion barrels oil recoverable
the resulting ~2.3 barrels of recoverable oil per share is currently being valued, by the market at ~15p, so that’s just ~6.52p per barrel.
As most of us know by now, in the often quoted Oil Search, North Slope deal of 2017, the payment of some $3.1/barrel of recoverable oil was made.
And using this as a reference [and at US$1=£0.8 so the $3.1/bbl = £2.48/bbl] then our Pantheon oil, valued by a ~15p share price at just ~6.52p/bbl, is undervalued by ~ 248p/6.52p
That’s the market undervaluing by ~38 times.
And 38 x 15p would give a £5.70 PANR share price - that gets it to equate to the Oil Search deal price/bbl of $3.1.
Of course, if you look at past PANR presentations, they show that PANR expect the Net Present Value of our oil to now be somewhat higher than just $3.1/bbl. [eg. NPV10 at $70 oil: SMD= $8.49 & Alkaid Deep= $10.88 - though you could halve these values to get closer to what a buyer might be willing to pay - they're not going to pay the full shop window price because they too need to have their profit - and some degree of safety margin]. But even a sale at just $4per recoverable barrel, at an sp of 15p works out at 320p/6.52p = undervalued by 49 times.
Also, Pantheon's ~2.3billion barrels recoverable doesn’t take into account the recently acquired extra PANR acreage – so room for more upside there.
Nor does the ~2.3bil bbls recoverable take into account any upside from secondary recovery techniques, which could also lift this 2.3bil recoverable figure significantly.
And doesn't take into account the oil in the Kuparuk reservoir, nor the upgrades due from the core samples and test results of the Alkaid#2 vertical well - they're still yet to come.
A ~15p 'gift horse'?
Maybe.
But still definitely DYOR
- and best check that my calculator's been getting it right, too.
From the .gov.uk website
https://www.gov.uk/tax-on-dividends#:~:text=You%20only%20pay%20tax%20on,from%20shares%20in%20an%20ISA%20.
You may get a dividend payment if you own shares in a company.
You can earn some dividend income each year without paying tax.
You do not pay tax on any dividend income that falls within your Personal Allowance (the amount of income you can earn each year without paying tax).
You also get a dividend allowance each year. You only pay tax on any dividend income above the dividend allowance.
You do not pay tax on dividends from shares in an ISA.
Dividend allowance
Tax year Dividend allowance
6 April 2023 to 5 April 2024 £1,000
What does this mean in the 16th May 23 RNS:
The dividend is an eligible dividend for the purposes of the Income Tax Act (Canada). Shareholders outside of Canada should contact their respective brokers or registar agents for the appropriate tax election forms regarding this dividend.
Can we fill in a form in the UK and get the tax back?
... capital raise to work...."
"In late summer or early fall Pantheon will reenter the Alkaid #2 well..."
"We plan to put geophones out when we frack... "
"The goal for future fracking is..."
The text in this photo a bit small, so needs enlarging a little.
https://twitter.com/GoyalPradeepCA/status/1669670507090792449/photo/1
By Telemachus2021
Some interesting thoughts - and educational for some – and, of course, one might now consider such, in the light of our newly appointed chairman.
Subjects include:
Commerciality?
Appraisal?
Development concept?
Financing and Pre-Development Activities?
Asset Sale?
Development Schedule?
“ In remote oil basins, just as in real estate, it is “Location, Location, Location!” “
https://www.reddit.com/r/3CPG_PetroleumGeology/comments/n79da3/you_just_made_a_big_discovery_now_what/
Another slightly historic Telemachus 2021 piece that I'd not previously seen, set at the time of the drilling of the Theata West Well - and though some of the figures 'have moved on' [like we do now have over 800million shares], there are some figures here that might act as pointers to some recent investors of Pantheon - for them to do some further research and 'number crunching'.
- The Theta West Well was drilled in Jan - Feb 2022, with testing following on in March.
https://www.reddit.com/r/PantheonResourcesPANR/comments/st1aew/theta_west_updip_appraisal_of_talitha_basin_floor/
Some interesting info in this informative piece by Telemachus2021
"The following should help to understand where the uncertainties lie in Pantheon’s resource base and why 100 Mbbl of Contingent Resources could have less volumetric risk than 100 Mbbl of Proved Reserves…"
"Many people read Contingent Resources as being “uncommercial” but this is not what the term means."
"Since LKA has only classified a 76.5 Mbbl of the total Alkaid discovery (estimated to be potentially 300 Mbbl+ when including volumes under closure but down dip of the current “Lowest Known Oil”) as Contingent Resources there is appreciable upside above their current level."
https://www.reddit.com/r/PantheonResourcesPANR/comments/neal2f/how_do_contingent_resources_relate_to_proved/
A slightly off topic article, by Rowan Atkinson, that may be of weekend interest to some:
https://www.theguardian.com/commentisfree/2023/jun/03/electric-vehicles-early-adopter-petrol-car-ev-environment-rowan-atkinson
Spotted it - Switch to the US pthrf weekly chart and then you can see, Friday opened 0.5 cents up on the Thursday closed. So, yes - that's nice:
Friday, in the US, was indeed up 16.92%.
... and, I guess, no need to have changed my calculator battery after all.
Yet the US chart looks to start Friday at 20cents and closes at 22.8cents - a rise of 2.8c for the day.
Which I calculate out as a % rise of 2.8/0.2 = 14%.
So where 's their 16.92% rise figure come from?
... or do the batteries in my calculator want changing?
US closed at 22.8cents
I make that 18.24p [at US$ x 0.8 : £ ]
https://www.marketwatch.com/investing/stock/pthrf
.... while we await SLBs dynamic modelling and the NSAIs reports - the June/July webinar and the Shelf Margin Deltaic testing -
some memorable comments from an enlightening Technical Presentation, back in Aug 2021, that some may not have seen.
At 21:18, Michael Smith – inventor of Volatiles Analysis (VAS)
“Every cutting we analysed contained oil for 3,700 feet – this is a quite unusual occurrence and really speaks to the great strength of the petroleum system here where this well is drilled. This is really a world class petroleum system.”
At 38:35, Dr Ed Duncan, Geoscience consultant to Pantheon
“What we found is truly amazing – the Theta West Fan – while we thought it was going to be good – it’s spectacular.”
At 1:41:42, Roger Young of eSeis
“I’ve never seen anything like it. To be able to say the words – Half a Mile of Oil – that’s ridiculous, but it’s true. It’s awesome. I’ve never seen anything like it. It’s very, very exciting stuff.”
And the geology that gave rise to those exciting words - it is still down there - on the Pantheon leases.
Presentation is on the PANR website and at
https://www.youtube.com/watch?v=hbnmarRCUcY&t=1s
As always DYOR.