Pantheon Resources plc Regulatory News (PANR)

23 Aug 2006 07:01

Pantheon Resources PLC23 August 2006 August 23 2006 PANTHEON RESOURCES PLC Successful Production Test Confirms Zebu Discovery as Commercial The Board of Pantheon is pleased to confirm the company's first commercialnatural gas field after successful production tests were conducted on the Zebu #1 well. A series of production tests were carried out on a zone from 4,279 to4,290 feet using various choke sizes. A stabilised flow rate of 430 thousandcubic feet a day (mcfd) was attained on a 8/64' choke with no fluids and at 1360psi of pressure. The well is capable of flowing natural gas at significantlyhigher rates. Production will be restrained, however, in order optimally toproduce the natural gas from this particular reservoir sequence. Zebu #1 discovered gas in two geologic sections as reported on 10 August 2006.The production tests were carried out in the deeper Frio section which wasconsidered the secondary target. The primary target, located at around 3,750feet, has not been tested. The Joint Venture intends to produce natural gas fromthe secondary Frio zone until this has been depleted. It will then test andcomplete the primary target situated higher in the well bore. It is envisaged that commercial production from Zebu #1 will commence within twoweeks. Pantheon has a 9.375% interest in the Zebu #1 exploration well. The cash flow that will be derived from Zebu, hopefully combined with otherdiscoveries in this project area, should provide an earnings base for Pantheon.The company's profile will start to change from a pure explorer. Pantheon's Chairman, Sue Graham said: "To have a commercial discovery from thefirst well since incorporation is a great result. The Board is particularlyhappy that its first new venture since the IPO in April this year has deliveredsuccess. The discovery of natural gas in both the primary and secondaryformations is excellent and provides confidence for other exploration venturesin the general vicinity. There are follow-up drilling opportunities and theBoard and its technical advisers will now commence looking at theseopportunities." Zebu #1 was the first well to be drilled on Project Wharton, a farm-in concludedwith Everest Resource Company ("Everest") in June 2006 which initially coveredthree prospects. Apart from Zebu, Pantheon is paying 25% of the drilling coststo earn an 18.75% working interest in two other prospects; Dakota and Mohawk.Pantheon has recently concluded a farm-in agreement with Everest covering theCaddo prospect on similar terms to those of Dakota and Mohawk. This had beenunder evaluation as part of the original farm-in. Pantheon has several more wells planned in the Project Wharton area. The secondwell is scheduled to commence drilling in early September 2006 on either theDakota or Mohawk prospect. Success with any of these exploration wells 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