Pantheon Resources plc Regulatory News (PANR)

24 January, 2023

 Pantheon Resources plc

Alkaid #2 webinar and update

Pantheon Resources plc ("Pantheon" or "the Company"), the AIM-quoted oil and gas company with a 100% working interest in all of its oil projects spanning c. 153,000 acres adjacent and near to transportation and pipeline infrastructure on the Alaska North Slope, confirms that as previously announced, a webinar presentation and Q&A will be held at 5.30pm GMT today and is open to all shareholders and other interested parties. Registration details are provided at the bottom of this RNS.

A copy of the PowerPoint presentation to be delivered during the Webinar will be uploaded to the Company's website at https://www.pantheonresources.com/ shortly beforehand. Additionally, a recording of the Webinar will also be uploaded to the Company website once available.

About the Webinar

In this Webinar the management team will provide further detail on the interim results and subsequent analysis and interpretation of the Alkaid #2 well, together with a detailed Q&A session. The presentation includes certain updated information including:

1. Rig mobilization for cleanout of blockage at Alkaid #2

Pantheon confirms that the Nordic Calista #2 rig is scheduled to mobilize to the Alkaid #2 location tomorrow. Once on location it will set up prior to pulling the tubing and packer from the wellbore and commencing the cleanout of the sand blockage. Operations for the cleanout are estimated to take approximately 10 days and the rig will remain on location all this time in case required further.

2. Alkaid #2 analysis and update

Subsequent to the Company's last update on Alkaid #2, detailed analysis has been undertaken to better understand the higher than expected gas production. Pantheon has undertaken extensive analysis with SLB (previously known as Schlumberger) and other consultants and have collectively concluded that the frack has possibly intercepted a gas cap at the extreme updip portion of the Alkaid anomaly. The possible gas cap is not significant, estimated to represent approximately 2% of the gross rock volume of the Alkaid resource, yet would explain the gas production volumes. Analysis suggests this possible gas cap could be avoided in future wells by positioning the lateral sections a little deeper in the reservoir. Analysis has also confirmed that the entirety of the lateral section of the wellbore is in the oil zone.

3. Modelling of potential commerciality of Alkaid

In order to demonstrate potential project economics, Pantheon has developed a conceptual development model for the Alkaid anomaly (not including the shallower Shelf Margin Deltaic ("SMD") formation which is also oil bearing) based upon the actual flow rates (137.5 barrels per 1000 ft of unblocked wellbore - and for conservatism ignoring potential improvements to flow rate that may arise as the well cleans up beyond its present 40%) and actual hydrocarbon mix (oil, NGLs & condensate) detailed in its announcement of 30 December, 2022. At current pricing, this production stream would generate approximately $40,000 per day in gross revenue once facilities are installed to separate and capture the NGLs and condensate.

The modelling(1) which was undertaken for illustrative purposes only, supports that the Alkaid project can be commercial at current production rates and hydrocarbon composition. A sensitivity table is provided below showing NPV's and IRR's at various pricing scenarios. Alkaid is highly leveraged to improvements in flow rates and product pricing.

Please see footnote (i) below for key assumptions and basis of preparation

4. Pricing of the liquid production stream at Alkaid #2

A detailed analysis of the valuation of the components of the liquid hydrocarbon stream at Alkaid#2 has been undertaken and it is estimated that the current production mix of oil/condensate and NGL's would achieve +80%-90% of the Alaska North Slope Crude price ("ANS crude"). ANS crude usually trades at a premium to WTI. Some of the more valuable NGL's known to be present but which were not measurable at this point have been excluded from this calculation for conservatism, but would be extracted in a development scenario, providing additional upside. Additionally, should the ratio of oil continue to improve as the Alkaid#2 well cleans up beyond the present 40%, then this would provide additional upside to the modelled numbers above.

Registration Details

Those wishing to participate can register for the Webinar via the link below:

https://www.bigmarker.com/share-talk/Pantheon-Resources-Update-on-Interim-Results-of-Alkaid-2-Horizontal-Well

Attendees should use the latest version of Chrome, Safari or Firefox for the best experience.

Alternatively, investors can download the IOS application for Big Marker, or dial in via telephone. Dial in details are outlined below:

Dial: USA (312) 248-9348Dial: UK (0)1793 250421Attendee Dial-in ID Number: 254429Attendee Dial-in Passcode: 6708

Jay Cheatham, CEO, said: "We do not believe our Alkaid#2 result has been fully understood by the market and we have worked hard to compile as much information as possible to present to the investment community in this webinar. The production test is still ongoing and far from complete as less than 40% of the estimated frac fluid has been recovered and hence there is still scope for further production improvement. Despite this, we can demonstrate that even at current rates/hydrocarbon mix our modelling points to this as a commercial oil development. As is always the case, we remind shareholders that a definitive assessment on commerciality cannot be made until flow testing operations are completed, however our entire technical team including our consultants are optimistic and confident we will ultimately have a commercial discovery at Alkaid, the smallest project in our overall portfolio."

Bob Rosenthal, Technical Director, said: "We have a fantastic team presenting to shareholders later today. We have a lot to cover and a huge Q&A session as we attempt to clarify some of the misconceptions permeating in the investment community, so we will take our time to be as comprehensive and transparent as possible. There is much misinformation in the market about this well and what it means, and I am confident that shareholders will be comforted by what they hear. It is clear we have confirmed a huge hydrocarbon system at Alkaid; our job now is to optimize drilling and completions to maximise the potential commerciality of Alkaid as well as continue to assess the potential of our other major discoveries which include our large basin floor fan discovery at Theta West. Our operations at Alkaid are important in establishing a production and development base on the North Slope of Alaska which will aid the operations across all our portfolio."

Footnotes:

(1) Conceptual development model, for illustrative purposes only for the Alkaid anomaly project only (i.e.. excluding SMD) to demonstrate potential project economics. Management estimate. Based upon Alkaid #2 update at the 40% cleanup stage of testing as reported on 30.12.2022 ie 137.5 bbls of liquid hydrocarbons (a combination of oil, NGL's, condensate) per 1000ft of unblocked wellbore at the starting (and maximum) flow rate and declining from there. Assumptions: 56 development wells drilled, draining 68 million barrels of liquid hydrocarbons (vs current P50 estimate of 76.5 mmbo). Modelled drilling and completion cost per well increased by 50% to $19.5m. Hydrocarbon prices based upon the calculated value today of the liquid hydrocarbon mix encountered at Alkaid#2 held flat. Post production taxes and royalties, pre federal income tax.

It is not intended to represent the Company's estimate of full field economics; rather it models the actual flow rates and product mix reported on 30.12.2022. Should flow rates or the ratio of oil to other hydrocarbons improve, then we would expect the projections to improve materially. Ultimate commerciality can only be assessed upon the conclusion of flow testing operations.

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Further information, please contact:

Glossary

In accordance with the AIM Rules - Note for Mining and Oil & Gas Companies - June 2009, the information contained in this announcement has been reviewed and signed off by Robert Rosenthal, a qualified Petroleum Geologist, who has over 40 years' relevant experience within the sector.

The information contained within this Announcement is deemed by Pantheon Resources PLC to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 as it forms part of UK law by virtue of the European Union (Withdrawal) Act 2018 ("MAR").

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Notes to Editors

Pantheon Resources plc is an AIM listed Oil & Gas company focused on several large projects located on the North Slope of Alaska ("ANS"), onshore USA where it has a 100% working interest in 153,000 highly prospective acres with potential for multi billion barrels of oil recoverable. A major differentiator to other ANS projects is its close proximity to transport and pipeline infrastructure which offers a significant competitive advantage to Pantheon, allowing for materially lower capital costs and much quicker development times. The Group's stated objective is to create material value for its stakeholders through oil exploration, appraisal and development activities in high impact, highly prospective conventional assets, in the USA; a highly established region for energy production with infrastructure, skilled personnel and low sovereign risk. All operations are onshore USA, with drilling costs materially below that of offshore wells.