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Serious question, Blingybird. Did you actually bother to watch the webinar?

Second serious question. I see you from time to time posting on the 88E bulletin board. Do you read the content of that forum as religiously as you appear to do this forum? If, as I suspect, you do keep up with the 88E forum, you will know that I'm on record contending <10% of any resource at Talitha/Alkaid/Theta West will "stray" southwards into 88E's acreage. Actually, I suspect it'll be closer to 5% by value than 10%. You'll also know that I calculate Yukon is worth $0 and Peregrine/Umiat is worth no more than $30m.

So tell your wife here's where I'm at. Project Icewine is being valued, in a round about way at >£300m by the market right now. Let's say Project Icewine contains 10% of the oil by value of the combined Alkaid/Talitha/Theta West/Icewine formations. So we have the weird and mathematical stupefying scenario where you can buy 10% of an asset for £300m and 90% of that same asset for £600m.

But you show me one member of the 88E forum apart from Equagold who is honest enough to admit the above is true.

The good news, Blingbird, is you don't have to believe me. Just ask Erik Opstad what Yukon's NPV is right now? Ask Erik why 88E values 50% of Peregrine at $14m? Ask Erik why 88E paid only $1m for Umiat? Ask Erik and Dave Wall why they sold all/majority of their 88E shares.

Maybe after that, someone like you, Blingbird, can explain to me why in the wide, wide world of sport 99% of 88E shareholders could not give a flying **** about the facts of the 88E investment case? Thereis no way on God's green earth 88E should be valued anywhere close to £360m. The only, repeat only, reason it's above £100m in mkt cap is due to the cultish and ill-educated US punter cult surrounding its US OTC quote and the unscrupulous bandits in the UK and Oz who are, this very moment, just about to take advantage of those US punters for a second year in a row.

PANR is the real deal. Our SN is, for now, a gigantic game of pass the parcel. Happy to be fact-checked on any one of my facts/assessments/contentions, but no-one ever does because a) those who know I'm right don't want to advertise same and b) those who don't have the knowledge or interest in the facts of both investment cases have zero interest in establishing the clear blue sky in the relative merits of the two investment cases.

The probability the market will keep up this mathematical fallacy into perpetuity? Nil.

Fri 01:13
Hi maestro1 - that was a silly post, wasn't it?

One of the main reasons management hosted the recent webinar was to prevent silly posts like the one you posted on Friday @ 01:13. Have you listened to the webinar in its entirety? If so, you would have noted management were at pains not to give any firm guidance on the timing of the planned work programme for this season. Certainly they laid out the order to the various tasks but there was no guidance that X task will be completed by Y date.

Management also explicitly stated that news would be released to the market as and when it became available. There was no RNS at 7am on Friday. The reason why there was no RNS on Friday at 7am is because there was no news available to be published. It really is as simple as that. This is not a management team which lies or gilds the lily IMHO. They stated explicitly there was no point whatsoever in holding on to good or bad news in some sort of tactical play.

Thus, we'll hear from them when we hear from them. End of.

Ok, let's now look at your specific scenario. Let's examine the possibilities of the flow test of the BFF Lower at Talitha, shall we? Again, I must ask if you listened to the recent webinar dated 24/1/22? If so, you'd have heard management explaining how they will gauge the success/failure of the BFF Lower flow test at Talitha. They're looking for data on the movability of the oil and the quality of the oil (API degree). It's clear management is *expecting* the oil to be movable and for the crude to have an API range of 35-42 approx => light, sweet crude. Happy to stipulate that if the oil was not movable and if it wasn't a good quality light oil then that would go against management expectations and could fairly be labelled a disappointment.

Management also explained that it was their intention to apply the data recovered by the flow test of the BFF Lower at Talitha when drilling at Theta West, and more pertinently when designing the testing programme for the BFF Lower at that prime location.

I hope readers are aware the BFF horizon at Talitha is not optimally located? It's approximately 10 miles away from the 'sweet spot' of the BFF reservoir. In effect, the BFF at Talitha is like testing an area represented by the doubles beds of a dartboard in the outer ring of the board. However, the BFF at Theta West is the bullseye location. It's the bullseye for a couple of geological reasons: the shape and timing of the deposition; the fact it is more shallow by 1500ft or so means the reservoir characteristics ought to be better in terms of permeability and porosity; the length of the BFF Lower oil column at TW is over double its length at Talitha; and it's updip.

So, no question the BFF Lower flow test will be illuminating and it'll likely inform management's strategy when flow testing at TW, but it won't be definitive either way, positive or negative. Glad that's clear.

Part 4

To farm out or not to farm out?: We believe that Pantheon Resources shareholders will retain the most value by not farming out during the appraisal and early commercialisation stages of its projects. Effectively, we endorse the company’s strategy to have diluted equity value modestly at the corporate level in order to retain a 100% operating interest in the entirety of its landholdings. At some point, we believe, there will be a tipping point where shareholder value will be maximised by securing a farmout/sale at the asset level.

Upheaval in energy sector: We believe the energy sector is in a state of upheaval as awareness spreads that alternatives to oil (and natural gas and coal) are simply not up to the job. The rising price of oil due to strong demand growth, limited potential supply growth and shrinking spare supply capacity, creates a supportive backdrop for Pantheon Resources, in our opinion.

Keep an eye on the elephants: We have characterised Pantheon Resources’ assets as a herd of elephants. In our opinion, Theta West, SMD-B and Alkaid Deep are the resources to watch with the most interest over the 2022 testing program. Combined, they amount to a best estimate success-case recoverable resource estimate of 1.9 billion barrels of oil (please see the valuation table provided in Table 1).

Limited projects: We believe that globally there is a limited number of greenfield projects capable of providing structurally significant energy supplies - Pantheon Resources’ elephantine assets have, we believe, considerable strategic value.
Theta West: Theta West is a monster elephant, a positive outcome in respect of this resource has potential to materially change the US energy landscape, in our opinion.

ESG: Pantheon Resources intends to reinject all the emissions from its operational activities – making it a net zero operator. The drilling and surface footprint to develop Pantheon’s resources will be extremely limited due to the ability of the company to drill many long-lateral extended reach wells from each drilling pad. In pragmatic terms, we believe that Pantheon Resources’ projects will have an extremely limited impact on Alaska’s wildlife. / ends

Part 3

Catalyst #3 – Drilling & testing the Alkaid #2 Well: We expect the first significant outcome from the Alkaid #2 well will relate to establishing the bottom of the Alkaid Deep (Brookian ZOI) structure, which will, in our opinion, almost certainly result in a resource upgrade from the current 2C recoverable resource estimate of 76.5 million barrels of oil (as estimated by Lee Keeling and Associates). This is because the current resource estimate for that structure includes only the height of the resource column as logged by the Alkaid #1 well; however, the drilling of that well was interrupted by a freak flood event at the Sag River right as the well was drilling through premium reservoir: Drilling deeper will almost surely indicate the scale of the Alkaid Deep resource is bigger than currently modelled. The well will also provide data to evaluate the Shelf Margin Deltaic B structure also labelled the Upper Alkaid structure. After drilling a vertical pilot well, Alkaid #2 will be drilled as a horizontal well and completed with 30—40 fracture stages (one stage per 250 feet). Pantheon Resources guided that it is modelling initial production rates of circa 100-150 b/d per 1000 feet of horizontal lateral. The Alkaid #2 well is expected to be placed on a long-term (permanent) production test that will also provide commercial revenues to Pantheon Resources. Suffice is to say, Alkaid #2 is a high-impact well for Pantheon Resources.

Points for perspective

ConocoPhillips: We were interested to hear ConocoPhillips underline its commitment to growing production in Alaska during its 3Q 2021 results call, particularly given that its giant Willow project is seemingly having permitting difficulties due to its location in the National Petroleum Reserve-Alaska. In comparison, Pantheon Resources’ landholdings are entirely on Alaskan state lands where the Federal Government does not have permitting jurisdiction. We expect Pantheon Resources’ projects to be supported by the State of Alaska.

Location, location, location: There is no other oil & gas resource project under appraisal in Alaska that is remotely as advantaged as those of Pantheon Resources in terms of being adjacent to the Trans Alaskan Pipeline System and the Dalton Highway. The advantages of Pantheon Resources’ location include: i) ease of access for drilling ii) lower costs iii) reduced permitting obstacles and iv) faster timelines. We believe, Pantheon Resources’ assets are in a class apart due to their location relative to Alaska’s most important logistical infrastructure.

Catalyst #1 – Testing at Talitha #A: Flow testsfollowing frack completions are planned from bottom to top of the well (excluding the Kupurak formation, which will require a specific fit-for-purpose well). The schematic in Figure 1 indicates which zones are planned to be tested at the Talitha #A well during the 2022 testing program. In general terms, the primary objective for each of the tests is to establish that oil is sufficiently mobile to flow from the reservoir into the wellbore with sufficient pressure to push the oil up the production tubing. An assortment of detailed analysis will be driven by the results of the primary test objective. Why is oil mobility so important? If Pantheon Resources can establish oil mobility from a single frack made from a vertical well, it is very likely that, once optimised, a horizontal well with 30—40 isolated frack stages will produce meaningful oil volumes. For reference, the company intends to commercialise its conventional resource base exclusively with long horizontal wells. Specifically for the SMD flow test, Pantheon Resources, has suggested that a 50-80 b/d rate would be a highly successful result (based on the prior Alkaid#1 production test).
Part 2

Catalyst #2 – Drilling & testing Theta West #1: For the Theta West structures the Theta West#1 well represents a colossal step out well – it is located 10.5 miles to the northwest of the Talitha #A well, which penetrated the Theta West structures, amongst other resources. The Theta West #1 well is expected to confirm the volumetric and petrophysical parameters of the proven Theta West structures, which, in turn is expected to increase confidence in the 1.4 billion barrel success-case recoverable resource estimate for Theta West (of which 85% relates to the structure labelled the Lower Basin Floor Fan with the remainder relating to the structure labelled the Upper Basin Floor Fan). Pantheon Resources intends to undertake flow testing following fracture completions at the Theta West #1 well. The Theta West #1 well is expected to penetrate circa 1,300 feet of oil bearing Theta West reservoir and it is expected to the penetrate the top of the reservoir some 1,500 feet higher than the structure was penetrated by the Talitha #A well. This is critical because the Theta West is expected to have better, more productive characteristics at the (structurally higher) Theta West#1 location than at the Talitha #A location. The scale of Theta West relative to Prudhoe Bay (the largest conventional oilfield in the USA; 14+ billion barrels of recoverable oil) as well as the Talitha #A well and the Theta West #1 well locations can be seen in Table 2 – Theta West is a giant even by elephantine standards.

Dear All - Please find below the written content of the latest note from WH Ireland, dated 3/2/22.

There was a factual error running through it, nothing to do with numbers, just an error in naming the two horizons within the Alkaid Unit. I corrected it. I simply corrected the labelling and did not touch the numbers nor the meaning of any sentence. The analyst's new fair value price is 183.9p and his unrisked valuation is 890.8p.

Following on from the debate of earlier today......it is the market's abject failure to come anywhere near to pricing reasonably the upside risk and then attaching management's assessment of CoS (development) v's peers and historical norms which is a classic example imperfect markets theory. Let's be clear here, we're looking at a 10x upside with a "60 to 70% chance of [development] success" in Bob Rosenthal's view. That's mispricing the upside risk, no question in my mind. [scot126 - personal opinion is upside risk is greater than 890p per share, FWIW]

Pantheon Resources

WHI Valuation Update and Overview of Near-term Outlook

Based on i) Pantheon Resources’ $96m capital raise consisting of a $41m equity raise at 65p and $51m of convertible bonds with a conversion price of 78p and ii) the rising price of crude oil, we are increasing our fair value estimate for Pantheon Resources to 184p from 172p. For reference, we have increased our Brent oil price estimate to $87/b, up from $80/b, which we inflate at 1% per annum starting in 2023. Pantheon Resources’ near-term drilling and testing operations, represent, in our opinion, the most exciting operations of their kind globally in 2022 – based on the elephantine scale of its resource base. Focusing only on the core resources that Pantheon Resources will be testing over the course of 2022, the company stands to significantly derisk 1.9 billion barrels of recoverable oil (2C estimates of Pantheon Resources). In our opinion, three major nearterm catalysts make the outlook for Pantheon Resources akin to a wild ride on the back of an enormous elephant running up a steep hill – Buckle up!

Part 1

(continued from below)

I am delighted to be corrected but the pipeline infrastructure to the west of Deadhorse out to Kuparuk, Alpine, Willow, Pikka, Horseshoe, etc is all privately owned. The majors which together own and operate that pipeline are under no commercial imperative to throw 88E a bone. Not one poster here has made a single argument why the CEO of Conoco wouldn't wait for a decade until dusting off any plans to acquire Peregrine/Umiat. Does anyone here seriously think 88E will still be around in 2032? Why wouldn’t Conoco wait patiently until the leases are handed back to the Feds?

I’d urge you all to challenge your own understanding. Why hasn’t Conoco already bought Umiat in the last 20 or 30 years? Umiat’s 100mmbo reserves was purchased by 88E for $1m. That equates to US 1 cent per barrel of oil in the ground. I flat out reject any assertion which sees a single intelligent observer arguing the Oil Search/Armstrong $3.10 per contingent barrel in the ground has any bearing on 88E’s Peregrine/Umiat model.

I invite you to imagine this scenario. Merlin-2 is a massive success. It ends up proving 650mmbo of recoverable resources. It’s located slightly closer to Willow than Umiat. Let’s double the NPV per barrel to 2 cents, hell let’s make it 10c per barrel in the ground. That’s an NPV for Peregrine of $65m. Not the billions the US punters like to tweet about on their way “to the moon” [rocket emoji, natch].

Ecuagold – h/t, you’re by some margin the plainest talker on this forum. I also recognise the description that the majority of posters on this forum are traders and not overly interested in the fundamentals. Noted. But here’s the thing, the 88E “trade” is far, far, far inferior to that of the NN’s.

Here’s why.

If you don’t like my assessment of the NPV of Peregrine/Umiat and Yukon ($30m and $0 respectively), let’s stipulate Telemachus is correct about the Nanushuk at Merlin-2 and it’s a huge success *geologically*. Let’s say a barrel of oil located at Peregrine is worth 10x that of a barrel of oil just a few miles south at Umiat (Dave Wall’s own valuation of Umiat, remember), so $65m. Let’s round it up so Peregrine/Umiat/Yukon has an NPV of $100m, ok? 88E mkt cap at the UK close is c.$420m.

So Project Icewine is worth $320m today, right now. Fine, let’s stipulate Icewine is genuinely worth $320m. FWIW I reckon it’ll be worth lots more than $320m one day in the future. Following this scenario, a *trader* is buying 10% of a newly found massive oilfield at Icewine/Talitha for $320m. But that same trader can buy ***90%*** of that same massive new oilfield for $850m today. Ecuagold, show me a successful trader who doesn’t think one of the trades described is far superior to the other?

15:34
Hi Rabito79 - as I hope readers of all forums concerning the Alaska North Slope realise, Telemachus is a world class (and knowing his CV, I do mean world class) expert in his field. I wholeheartedly recommend every 88E shareholder read the post to which you refer.

Here's my nudge to UK and Aussie 88E shareholders. By all means, take a deep breath and smile at Telemachus' considered opinion of the Nanushuk geology and Merlin-2's potential. That's good, and it must be reassuring to read his opinion. Happy to stipulate complete success geologically at Merlin-2 but I beseech you not to ignore the rest of Telemachus’ post.

Telemachus is, far more adroitly than I ever could, also sending out a massive warning to 88E shareholders IMHO. Admittedly he doesn't do this directly but uses the relative positives and negatives associated with the NN's project v's ***all*** other new projects on the Slope to exhibit the criteria for success. Look at the sheer size of investment and time required to bring projects like Willow and Horseshoe/Pikka on stream? Remember these projects are owned by Conoco, Repsol and Santos. They're all in the top 10 of non-NOC oil producers globally and have pretty good access to capital.

A massive proportion of the 88E US OTC punter base actually believes crude oil will be produced and sold by 88E in 2022 for goodness sake. Read what Telemachus posted. Read especially about Willow. Look at the investment and time required to get Willow to first production. Even if the crude at Peregrine is the lightest and sweetest in the whole of Christendom, in order to sell it you've got to be able to get the bl00dy stuff to market.

Examine the two options open to 88E or the imaginary acquiror of Peregrine/Umiat. A 97 mile custom-made pipeline running eastwards to TAPS. At $10m per mile, that's coming out of 88E's end. The more likely logistics option is the construction of a pipeline 20 miles northwards to Willow. No question, the cost of such a pipeline to Willow's infrastructure would be far less ***but*** is there only one buyer of the asset?

The owner of Peregrine/Umiat is totally screwed IMO. It’s about as isolated an asset as you could wish for. C’mon, most of you simply must have realised there’s a really, really important reason Umiat hasn’t produced a single barrel of commercial oil since it was discovered in the 1940s. Haven’t you? Please tell me you’ve at least wondered why Umiat has never been developed?

The owner of Peregrine/Umiat will have zero bargaining power, repeat zero. They will be a price taker because future success of Peregrine/Umiat will stand or fall on Conoco giving permission to 88E/future owner of the asset to tie in their 20 mile pipeline to Conoco's Willow infrastructure. And even if that's agreed, what tariff will Conoco charge 88E/future owner to transport the Peregrine/Umiat crude to TAPS?

Wot no fundamental investors on this entire thread?

The key quotation from the NN's webinar on Monday which, IMHO, serves to prove the market is massively mis-pricing the upside risk in Alaska this season.

"...we were working on a structure where the party [scot126 - reference to the favoured farm in candidate] would earn a very small percentage Working Interest and they would have the opportunity to, by spending significantly larger investments, to gross that up over three stages to what would have been a 10 digit investment in our company for quite a modest percentage." - Justin Hondris (FD)

Please find below a table of different scenarios to give us a rough guide of the potential implications of this new information. For the purposes of the exercise, I have been conservative by only using $1bn as the "10 digit investment " and I'm varying the figure for "quite a modest percentage."

Scenario 1: "quite a modest percentage" was 40%. In which case the implied valuation of the asset is $2.5bn

Scenario 2: "quite a modest percentage" was 35%. In which case the implied valuation of the asset is $2.85bn

Scenario 3: "quite a modest percentage" was 33%. In which case the implied valuation of the asset is $3bn

Scenario 4: "quite a modest percentage" was 30%. In which case the implied valuation of the asset is $3.3bn

Scenario 5: "quite a modest percentage" was 25%. In which case the implied valuation of the asset is $4bn

Scenario 6: "quite a modest percentage" was 20%. In which case the implied valuation of the asset is $5bn

It is the above table of scenarios which demonstrates the mathematical ***upside risk*** to the NN investment case. IMO, there is no way on earth terms of this magnitude or contracts being drawn up in preparation of same would even be considered if technical due diligence hadn't been examined to the nth degree.

And remember, Bob Rosenthal has been quoted as saying the NN has surpassed the data threshold required to achieve 100% geological CoS. He considers the development CoS to be "between 60 and 70%".

So what? A couple of points.

a) described above is a farm out negotiation which envisaged >$1bn being invested in the NN's asset. This compares to APDC selling 50% of Project Peregrine back to 88E for $14m. These are both facts. For the self-styled EEENF army on Twitter who believe ***erroneously*** Merlin-2 is the most impactful drill in Alaska this season as opposed to Theta West and Talitha, the differential in scale proven by the investment terms within the farm out discussions ought to lead to a profound review of the EEENF army's beliefs.

b) IMO Yukon and Peregrine/Umiat are worth $30m in total right now. Leaves 88E's Project Icewine valued at £300m for 10% of the total asset value being discussed above v's the NN's share being worth $800m today.

It's way past time to do the math on this shared asset, folks. NB 88E and the NN share an asset, a huge asset IMHO. But look at the maps on

Dear All - Telemachus gave express permission to copy'n'paste the content below. We are profoundly lucky to have him involved and contributing to the collective knowledge.

"Following on from the webinar - loads of great information. The attached model allows people to build their own estimates of what these assets may be worth and certainly repays the effort of working out how to drive it.

hTTps://dog.dnr.alaska.gov/Documents/Commercial/North_Slope_Oil_Cash_Flow_Model.xlsx

The key information from my perspective is that the webinar gave us great guidance on what flow rates will be economically viable based on $12-15 million per well. Once Pantheon has logistics optimized (particularly local sand supply), this is a reasonable estimate. Furthermore, the cost of processing facilities for the “Near Dalton Highway” resources need not be more than $200 million - much of which could be converted to leased facilities (remember the MAPS units described in an earlier webinar). On the basis of 25 frac stages in a long reach lateral, initial flow rates of 1,500 bopd (annualized to 1,200 bopd) will be required and, in my assessment, are achievable. The guidance on the vertical flow test in the SMD-B falls into this range when extrapolated to a horizontal production well. The Alkaid result from 2019 also falls into this range.

Some have expressed disappointment that no similar guidance was given for the BFF or the SFS zones. I have previously said that any kind of stabilized flow from the BFF would be a great result. Similarly the SFS - although I am secretly hoping for 100 bopd here. The investment thesis will be enhanced by any demonstration of moveable oil in these sub-optimally located penetrations. (NB the BFF in Theta West will need to flow at more than 100 bopd in the vertical well test for the BFF project to stand up economically)

The one I am most excited by in terms of the Talitha testing program is the SMD-B. I expect we will see stabilized flow in excess of 100 bopd and this would translate to production well outcomes in the required range. In summary, aggregate flows of 200 bopd from the testing program (ie adding all zones together) bodes well for the summer Alkaid lateral. It will underpin expectations of 1,200 - 1,500 bopd from Alkaid #2 and the conversion of contingent resources into reserves during 2022. It would certainly support a NPV to Pantheon of some $4 billion and a potential disposal in the $2.5-$3 billion range. However, we would be looking for a good deal more than this when including a successful Theta West test outcome!" - Telemachus (26/1/22)

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