Member Info for Sailplane

Looks currently like a forecast of a good chance of rain for the Amazon River area – Iquitos to Manus – 24th 25th 26th and then the chance of rain in the Bretana area 27th 28th Aug.

https://www.weatheronline.co.uk/weather/maps/forecastmaps?LANG=en&UP=0&R=0&MORE=1&MAPS=nw&CONT=samk&LAND=PR&ZEIT=202308250600

Has PB ever talked of TXP trying out horizontal drilling at Roystone - Horizontal wells over a mile long are now quite commonplace. In July, ConocoPhillips Alaska broke the state record for longest rotary well — 32,468 feet !! Drilling to a depth of 14,370 feet then turning horizontally through the reservoir and drilling another 18,098 feet - that's six miles of drilling.

If TXP could keep the horizontal in the best horizon, it would no doubt produce multiple production rates compared to what one would get from a vertical well. After all, vertical contact with the reservoir may only be in the order of, let's say, less than 100 feet.

Maybe they just don't have the kit and expertise on the island? Or maybe at the current time, it's the extra expense?

https://www.conocophillips.com/spiritnow/story/longest-rotary-well-in-alaska-for-the-17th-time/#:~:text=In%20July%2C%20ConocoPhillips%20Alaska%20broke,completing%20six%20miles%20of%20drilling.

ADVFN pointer to an article about South Sudan, from last month, that I'd not seen:

I rather like the line:

"... South Sudan's authorities are reevaluating their strategy. Their long-term goal is to attract investors and raise oil production to 450,000 b/d, supporting the state's oil policy."

Let's hope such words bode well for Savannah's future in SS.

https://www.ecofinagency.com/public-management/1807-44739-south-sudan-operational-challenges-hamper-daily-output-increase-plans

Reguarding the interview -

For those who, like me, find the accent a little difficult to 'tune into' at times, remember that You Tube does have a transcribe facility.

Once you have the You Tube video ready to play, click on the 3 dots below the bottom right of the video's rectangle, then click on Show transcript.

The text of the interview will then be displayed alongside the video.

Https://www.youtube.com/watch?v=5xk2XCn_ynk&t=1s

… of the reservoirs, giving a good visual as to what Pantheon has discovered and drilled – this animation was made before the drilling of the Theta West & Alkaid 2 wells, but shows their proposed locations.

Animation starts about 58m 08s into the presentation.

https://www.youtube.com/watch?v=-2894QomlXQ#t=58m08s

The start of the 3D looking at the SMD and Alkaid starts about 1hr 04m 50s

https://www.youtube.com/watch?v=-2894QomlXQ#t=64m50s

88e reports today on their recent Hickory well which was drilled close up to the Pantheon Ahpun southern boundary.

Page 9 of the 88e presentation is their start of the Hickory well assessment.

They sound pleased with what they’ve found and compare to an analogue Codell field:

“The producing Codell1 field is a strong

developed analogue delivering robust

economics with lower permeability and

reservoir thickness”

https://clients3.weblink.com.au/pdf/88E/02691742.pdf

Less ambiguous if worded:

So, total NPV10% for cumulative revenue over first 5 years =~ $545.7million

Estimated Ultimate recovery 18mm barrels x $80 oil price = $1.44 billion revenue.

Taking these wells as appearing to produce ~ 50% of ultimate recovery over first 5 years – from the charts we’ve been shown –

Then looking just at that, would be NPV10% over 5 years for 50% of $1.44bil

and to my knowledge that =~ 0.758 x 1.44bil/2

So average NPV10% for revenue over first 5 years =~ $545.7million

And PANR are saying $150mil of this comes through after Capex and Opex deducted to give their NPV10 ($80/bbl constant real ANS Price): $150 million with 52% IRR.

So, looking at the costs they’ve given, for the wells, pads, chiller and ‘hot tap’, the figures appear to fit together.

Anyone like to improve on the logic, or the maths – please do.

IMHO DYOR

This I found an interesting interview, about:

The Energy Cliff that we’re apparently headed for.

Oil & Gas discoveries not keeping up with world demand and depletion.

How Energy supply links in to currency inflation.

How liquid fuels are going to continue to be needed to power the world’s shipping and for aircraft.

So, looks like we’re going to need oil & gas for quite some years to come.

And looks like Pantheon will find a market for its oil well past 2028.

A good start point: 12m 51secs in.

https://www.youtube.com/watch?v=CeRJQFs5BrM#t=12m51s

… 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.

Https://www.youtube.com/watch?v=HDLw3Pgqszk

... with a Very Big Rabbit being pulled from it.

Area, thickness, permiability & porosity, all look promising Big Rabbit parameters.

Let's hope so.

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.