Last checked at 15 Dec 2008 07:56
| Press release | 15 December 2008 |
Pantheon Resources plc - AGM Statement
At the Annual General Meeting of Pantheon Resources plc ("Pantheon" or the "Company"), to be held at 1.00 p.m. today at the offices of Sprecher Grier Halberstam LLP, 5th Floor, One America Square, Crosswall, London EC3N 2SG, Sue Graham, non-executive Chairman of the Company, will make the following statement:
"Pantheon's evolution continues on an assured and positive path. Net production is currently around 60 barrels of oil equivalent per day, generated primarily from the Jumonville #1 well. This is expected to increase into 2009. Confirmation of a major discovery at Bullseye has underpinned the Company's position whilst the first well is drilling on the Company's significant Tyler County, Austin Chalk venture. This leaves Pantheon facing an exciting future. Coupled with a strengthened management structure and focus, the Board expects these to contribute materially to further value creation for shareholders.
At the last Annual General Meeting in January 2008, I looked forward to the launch of a new strategic plan under Pantheon's then newly appointed Chief Executive Officer, Jay Cheatham. Within a short period, Jay had refreshed the corporate strategy, re-positioning the Company towards plays offering major development potential rather than concentrating on single-well prospects.
This reinvigorated plan rapidly yielded a definitive and strategically important move for Pantheon. Just five months into his tenure, Jay was able to announce the Company's entry into the Tyler County venture located in the Austin Chalk play in East Texas. Tyler County exemplifies the new corporate approach.
The Austin Chalk is a well-known geological play and Pantheon has farmed into an initial three-well programme. Essentially success on Pantheon's initial drilling programme would confirm the extension of an established major field within the Austin Chalk. It would also be the precursor of a major development programme comprising between 30 to 60 wells.
The first well, Vision Rice University #1, commenced drilling on 12 November 2008. It is now at 13,200 feet and logs have been run and casing is to be set. The next stage will be to progress to the horizontal drilling.
Alongside Jay's appointment, the announcement of a discovery on the Bullseye prospect in September 2008 marked both a material event and great success for Pantheon. This find has been delineated successfully at the Acosta #1 well where completion operations are now under way.
Output from the Miogyp zone at Acosta #1 is expected by year-end. This should augment existing volumes from the Jumonville #1 well. The latter well is producing at a gross rate of 420 barrels of oil per day and around 200 thousand cubic feet a day of natural gas, also from the Miogyp. It should be noted that Jumonville #1 output remains restricted.
The Camerina formation was a significant secondary target in the Acosta #1 well. A pay zone of more than 20 feet net was encountered in Acosta #1 but mechanical factors have prevented testing, as was the case at Jumonville #1. Despite these issues, the Camerina remains a potentially large resource base. Original pre-drill estimates for gross reserves for the Camerina were around four to six million barrels of oil equivalent. This has not altered. It remains the intention to test this zone in the future.
Belle Grove is located adjacent to and immediately west of Bullseye. The Camerina sands found in both Jumonville #1 and Acosta #1 extend west into the Belle Grove acreage. Pantheon announces today that it has secured an option for a two-thirds working interest over this acreage, a tract covering 606 acres. Similar gross reserve potential is estimated at Belle Grove as for the Camerina at Bullseye. It should be noted that it is not Pantheon's intention to act as operator, neither is any drilling currently planned.
Spudding of Jumonville #2, the second Bullseye delineation well, is expected by year-end. This will be the initial test of the deeper, structurally larger Cib Haz formation as well as acting as a delineation/production well for the shallower formations. Over the coming year, assessment of the potential at Bullseye should be undertaken which may lead to Pantheon being able to book its first reserves during 2009.
In the current environment of weak commodity prices, it is worth highlighting once more that Pantheon's operates in a safe geo-political region: the United States. The U.S. also has a benign fiscal regime for oil and gas companies. Discoveries may be brought rapidly on-stream as infrastructure is generally established, while onshore finds are usually cheaper to develop. All these factors have a positive effect on the economics of Pantheon's projects relative to projects in other parts of the world. The success at Bullseye is a clear example of these characteristics. Two wells are projected to be producing by year end, less than six months from discovery.
Pantheon's disappointments should be recorded. Drilling at both the Nottoway Dome and Point Clair prospects proved unsuccessful, although the former was for mechanical reasons. Pantheon decided not to participate in the deep Manzano prospect at Padre Island due to increased risk factors and changed commercial terms. Also the Company decided to write-down the value of the Wilson well to zero. Subsequent to this write down, the decision has been made to abandon Wilson.
The past year has proved to be trying for Pantheon and its shareholders. Much has been achieved without apparent recognition. This may be traced to the turmoil in financial markets coupled with the recent sharp retreat in commodity prices. The reality for Pantheon is that there has been a very marked improvement in its position and asset base.
Over the coming weeks and months further news should become available as Pantheon seeks to unlock its reserves and the high impact exploration upside within its asset base. I remain confident in the substantial value that has been created at Bullseye and that may still be generated from Pantheon's exploration programme. I have every reason to remain confident in all this potential ahead and continue to look forward to reporting to you of Pantheon's progress over the year ahead."
For further information on Pantheon Resources plc, please see the website
at www.pantheonresources.com.
The AGM presentation will be available on the website.
Further information:
Pantheon Resources plc
| Jay Cheatham, CEO | +44 20 7484 5359 |
Oriel Securities Limited (Nominated Adviser)
| Michael Shaw | +44 20 7710 7600 |