Pantheon Resources plc Regulatory News (PANR)

19 Dec 2006 07:01

Pantheon Resources PLC19 December 2006 December 19, 2006 PANTHEON RESOURCES PLC Increasing Natural Gas Production at Project Wharton The Board of Pantheon ("Pantheon") is pleased to report that the company is nowproducing from two natural gas fields, Zebu and the recently discovered Mohawk.A third, Caddo, is scheduled to be commissioned early in the New Year. When combined together, these fields will make up an attractive and growingincome stream for Pantheon. This increasing natural gas production occurs at atime of improved US natural gas prices. It represents an important income streamfor a small company such as Pantheon and also offers attractive near termfinancial returns. This initial drilling campaign has delivered effectively a 75% success rate.This has provided sufficient confidence to boost exploration in the ProjectWharton area. Pantheon has now agreed to drill two additional exploration wells,Baptist and Kant, over coming months. A further three wells in and around therecent discoveries are currently scheduled for 2007. The current threediscoveries, combined with the increased exploration efforts, hopefully willyield higher natural gas production in 2007. These fields and prospects are all small and at shallow depths. In addition,easy access to infrastructure has enabled Pantheon to generate cash flow quicklyfrom its discoveries. Zebu (Pantheon 9.375%) Zebu #1 was discovered in August 2006 and commenced production on September 29,2006. The well is currently producing around 235 thousand cubic feet of naturalgas per day (mcfd). Zebu discovered natural gas in two Frio sands. It isproducing from the deeper zone at around 4,280 feet ("ft"). The primaryobjective, which encountered natural gas at around 3,750 ft, remains to becompleted for production. The Joint Venture intends to produce from thesecondary zone until depleted and then complete the primary zone higher up thewell bore. The success has led the Joint Venture to plan on drilling anotherZebu well in 2007. Mohawk (Pantheon 18.75%) Mohawk #1 was recently brought into production at 110 mcfd through a 4/64 inchchoke. It is expected that production will increase over the coming weeks as thechoke size is increased and other mechanical improvements are implemented.Mohawk #1 encountered natural gas in both its primary and secondary Frioobjectives. The success at Mohawk has led the Joint Venture to plan to drill another Mohawkwell in 2007. The Mohawk #2 will test a slightly smaller amplitude anomaly (30acres) at 4,075 ft that is very similar to, but fault separated from the Mohawk#1 anomaly. 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 gas in a shallow Frio formation at around 4,470 ft and wascompleted for production testing in November. The well was successfully testedat rates ranging from 120 mcfd to 385 mcfd on 4/64 and 7/64 inch choke sizesrespectively. The well produced at a stabilised rate of around 250 mcfd on a 6/64 inch choke. This well should be brought on-stream within the next few weeks. The Caddo #1 discovery is a particularly important. It is located in an area ofmutual interest that covers a large area where six other prospects exist. Thesetarget comparable Yegua and Frio anomalies, but Miocene objectives are alsopresent in all 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