Pantheon Resources plc Regulatory News (PANR)

3 Oct 2006 07:00

Pantheon Resources PLC03 October 2006 PANTHEON RESOURCES PLC First Well Spuds on Project Wharton Targeting Zebu Prospect • Pantheon's first well on Project Wharton spudded on July 31 • Targeting the small Zebu prospect with potential reserves in a 0.5 to 1.6 billion cubic feet range • Well projected to take less than one month to drill on trouble-free basis • Good potential for early, tax efficient cash flow generation. Payback per well projected at less than 12 months • Low risk exploration complements the Padre Island drilling programme • Pantheon has now embarked on an aggressive exploration campaign with drilling of Zebu and Plum Deep underway The Board of Pantheon Resources plc ("Pantheon") announces that it has beeninformed by the operator, Everest Resource Company ("Everest"), that the Zebu #1well spudded on July 31 2006. This well is located in Colorado County southTexas. The Zebu #1 well is targeting a seismic anomaly at 3,575 feet. This primaryobjective has a conservative reserve potential of 0.5 billion cubic feet ("bcf")and a high-side potential of 1.6 bcf. Zebu #1 also has additional potential tofind thinner Frio and Miocene reservoirs that do not produce seismic anomalies.As the planned well depth is less than 5,000 feet, drilling time is scheduled tobe less than one month. The Zebu prospect is on trend with prolific shallow producers. Shallow Frio andMiocene reservoirs in the immediate vicinity have produced as much as 7.9 bcfwith peak rates averaging 600 thousand cubic feet a day ("mcfd"). Everest hasdrilled 14 exploratory wells in this area of Colorado County targeting Frioseismic anomalies. The Frio success rate has been 78.6% (11 out of 14). TheZebu #1 well is targeting a trough anomaly like the successful wells. Zebu #1 is the first well to be drilled on Project Wharton, a farm-in concludedwith Everest in June 2006. The initial obligation covers three prospects whichare ready to drill. Pantheon is paying 12.5% to earn 9.375% interest in Zebu andwill pay 25% of the drilling costs to earn an 18.75% working interest in theremaining two; Dakota and Mohawk. A further farm-in prospect is being evaluated.The expected total dry hole cost outlay is around US$400,000 and the successfulcompleted total cost outlay is around US$650,000 for four wells. In the event ofsuccess, there is easy access to infrastructure. This project provides Pantheon with low risk/reward plays to balance the higherrisk/reward plays at the PI Project Area. Overall exploration risk for theProject Wharton prospects is regarded as low, ranging from 50% to 80%. Thiscompares with 15% to 36% for the deep JV of the PI Project Area. Each well has multiple objectives, not all of which were included in theoriginal evaluation. These provide additional upside potential. There isadditional reserve potential in both Frio and Miocene targets on the Zebuleasehold. A second anomaly is present at a slightly deeper objective, (4,280feet) which might be tested with a second well. The reserve range is estimatedat 0.4 to 1.28 bcf. Success with any of these exploration wells comprising Project Wharton will leadto numerous additional drilling opportunities within surrounding acreage. Thereare another 13 prospects that could be pursued in the event of success whichwould represent a material reserve addition to Pantheon. These are also regardedas low risk with good early cash flow generation potential. These would not besubject to the farm-in terms and hence have a higher value. 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 PlcSue Graham, Chairman +44 20 7379 0118 Oriel Securities LimitedScott Richardson Brown +44 20 7710 7600 This information is provided by RNS The company news service from the London Stock Exchange