Pantheon Resources plc Regulatory News (PANR)

13 Feb 2007 09:51

Pantheon Resources PLC13 February 2007 February 13, 2007 PANTHEON RESOURCES PLC Third Field Onstream At Project Wharton The Board of Pantheon ("Pantheon") is pleased to report the start-up ofproduction at its third natural gas field in its Project Wharton venture. TheCaddo field came onstream on February 8, 2007 at an initial rate of 400 thousandcubic feet of natural gas per day (mcfd). Pantheon has an 18.75% workinginterest ("WI") in Caddo. Output from Caddo will augment existing production from Pantheon's two othernatural gas fields, Zebu (9.375% WI) and Mohawk (18.75% WI). Pantheon'sproduction on a WI basis has more than tripled since Zebu was brought onstreamin late September 2006. From a monthly average of 33.5mcfd to Pantheon inOctober 2006, current combined output is estimated at around the 110 to 120 mcfdlevel. These fields make up an attractive and growing income stream for Pantheon. Thisincreasing natural gas production occurs at a time of improved US natural gasprices. It represents an important income stream for a small company such asPantheon and also offers attractive near term financial returns. These fieldsand prospects are all small and at shallow depths. In addition, easy access toinfrastructure has enabled Pantheon to generate cash flow quickly from itsdiscoveries. Pantheon plans to drill another exploration well, Baptist, in first quarter2007. A further three wells in and around the company's discoveries arecurrently scheduled for 2007. As these are not subject to the farm-in terms,they would have a higher value to Pantheon, if successful. Since its initial farm-into three projects in June 2006, Pantheon has farmedinto three more prospects and drilled five wells on Project Wharton. The currentinterests and status of all prospects in which Pantheon has an interest areshown in table 1 Table 1: Project Wharton and Pantheon's Interests Prospect Pantheon Working Interest Status Zebu #1 9.375% ProducingCaddo #1 18.75% ProducingDakota #1 18.75% P&A non-commercial showsMohawk #1 18.75% ProducingBaptist #1 11.50% Drilling scheduled for 1Q 2007Kant #1 18.75% P&A non-commercial showsSource: Everest Resource Company Project Wharton provides Pantheon with low risk plays to balance the higher risk/reward plays at the PI Project Area. Overall exploration risk for the ProjectWharton prospects is regarded as low, ranging from 50% to 80%. This compareswith 15% to 36% for the deep JV of the PI Project Area. Zebu (Pantheon 9.375%) Zebu #1 was discovered in August 2006 and commenced production on September 29,2006. The well is currently producing around 215 to 220 mcfd. Zebu discoverednatural gas in two Frio sands. It is producing from the deeper zone at around4,280 feet ("ft"). The primary objective, which encountered natural gas ataround 3,750 ft, remains to be completed for production. The Joint Ventureintends to produce from the secondary zone until depleted and then complete theprimary zone higher up the well bore. The success has led the Joint Venture toplan on drilling another Zebu well in 2007. Mohawk (Pantheon 18.75%) Mohawk #1 was discovered in October 2006 and brought onstream on December 1,2006. It has been producing within a consistent 110 to 120 mcfd range sincestart-up. Mohawk #1 encountered natural gas in both its primary and secondaryFrio objectives. The success at Mohawk has led the Joint Venture to plan to drill another Mohawkwell. The Mohawk #2 will test a slightly smaller amplitude anomaly (30 acres) at4,075 ft that is very similar to, but fault separated from the Mohawk #1anomaly. As this is not subject to the farm-in terms, it would have a highervalue to Pantheon, if successful. Caddo (Pantheon 18.75%) Caddo #1 encountered natural gas in a shallow Frio formation at around 4,470 ftand was completed for production testing in November, 2006. The Caddo #1discovery is particularly important. It is located in an area of mutual interestthat covers a large area where six other prospects exist. These targetcomparable Yegua and Frio anomalies, but Miocene objectives are also present inall of them In accordance with the AIM Rules, the information in this report has beenreviewed and signed off by Mr Robert Rosenthal, (BSc Geology, MSc Geology),Technical Director at Pantheon Resources Plc, who has over 30 years relevantexperience within the sector.Contacts: Pantheon Resources Plc Sue Graham, Chairman +44 20 7379 0118 Oriel Securities Limited Scott Richardson Brown +44 20 7710 7600 This information is provided by RNS The company news service from the London Stock Exchange