Pantheon Resources plc Regulatory News (PANR)

29 Jun 2006 07:01

Pantheon Resources PLC29 June 2006 Pantheon Resources Plc 30 Farringdon Street London EC4A 4HJ Pantheon Resources Expands in South Texas • Pantheon expands its natural gas exploration activities in south Texas • Three prospects to be drilled commencing early July 2006, with another being evaluated • This will coincide with higher impact drilling at Padre Island scheduled to commence in early July • Estimated total maximum cost outlay for all four prospects of US$ 650,000 net to Pantheon • Low risk exploration complements the Padre Island drilling programme • Multiple targets per well improve chance of success • Further prospects identified on acreage offering significant upside potential • Consistent with Pantheon's stated strategy to focus on hydrocarbon exploration and production onshore or near shore in the Gulf of Mexico • Good potential for early, tax efficient cash flow generation. Payback per well projected at less than 12 months • Operator of venture, Everest Resource Company, is highly experienced in the region with proven track record Details of farm-in The board of Pantheon Resources plc ("Pantheon") announces that it hasfarmed-into a natural gas exploration venture in Wharton County, south Texas.This venture is operated by the Everest Resource Company ("Everest") which has along successful history operating in the Texas Gulf Coast area. The initial obligation covers three prospects which are ready to drill. Pantheonwill pay 25% of the drilling costs to earn an 18.75% working interest in Dakotaand Mohawk and at the third, Zebu, Pantheon will pay 12.5% to earn 9.375%interest. The terms of this farm-in are similar to those for the deep JV of thePadre Island Project Area ("PI Project Area"). A further farm-in prospect isbeing evaluated. The prospects are regarded as small with reserves estimates per well rangingfrom 0.5 to 4.0 billion cubic feet ("bcf"). The exploration risk is regarded aslow, ranging from 50% to 80%. This compares with 15% to 36% for the deep JV ofthe PI Project Area. Each well has multiple objectives. As not all objectiveshave been included in the evaluation, this provides additional upside potential.The prospects have been identified using high-quality 3D seismic. This projectprovides Pantheon with low risk/reward plays to balance the higher risk/rewardplays at the PI Project Area. Drilling programme due to commence in late June with first results expected inearly July. The wells are shallow (less than 5,000 feet) leading to shortdrilling times per well of less than one month. The expected total dry hole costoutlay is around US$400,000 and the successful completed total cost outlay isaround US$650,000 for four wells. In the event of success, there is easy accessto infrastructure. Success with any of these exploration wells will lead to numerous additionaldrilling opportunities within surrounding acreage. There are another 13prospects that could be pursued in the event of success which would represent amaterial reserve addition to Pantheon. These are also regarded as low risk withgood early cash flow generation potential. These would not be subject to thefarm-in terms and hence have a higher value. Pantheon has an aggressive exploration drilling campaign. It combines a goodmixture of low risk/return projects from this project combined with the higherrisk/reward projects at Padre Island Background to Everest Everest has a long history of generating high quality oil & gas prospects in theonshore trends of coastal Texas where Pantheon intends to build its business.Its expertise is working up prospects and drilling the Wilcox, Frio, and Yeguatrends along the Gulf Coast of Texas where infrastructure is already in placeand reserves are quickly brought into production. It has a history of successesin all these trends and it intends to build upon that success. The Everest Companies were founded in Corpus Christi in 1969 by E. A. Durham,II. Mr. Durham and a small group of private investors built their energyexploration and production business as a series of limited partnerships in whichMr. Durham and/or one of his closely held corporations or partnerships served asthe general partner. 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