Pantheon Resources plc (AIM:PANR, OTCQX: PTHRF) ("Pantheon"), an oil and gas company developing the Kodiak and Ahpun oil fields in close proximity to pipeline and transportation infrastructure on Alaska's North Slope, announces further details of its planned flow testing programme for the Megrez-1 well.
Key Points
- Data from logs, cores, cuttings and seismic indicate seven discrete interpreted pay zones, with flow testing of the shallowest six to commence before the end of March 2025
- Analyses of analogous offsets indicate potential flow rates ranging from 200 barrels per day ("bpd") to 2,000 bpd for any specific zone, depending on the encountered reservoir quality and fluid properties
- Pantheon expects flow rates from the deepest horizon to be tested (Topset 1) at the lower-end of the range and flow rates in the shallower horizons at the top of the range
- Reliable estimates of in-place and recoverable contingent resources require successful flow tests to confirm fluid compositions and reservoir properties, including API oil gravity, gas-oil ratio and in situ saturations among others. Previous guidance still stands for the Upper Schrader Bluff and Prince Creek potential
- Flow data will be released at the conclusion of testing for each horizon
Planned Flow Test Programme
Integration of all the data gathered from the drilling of the Megrez-1 well is now sufficiently complete to return to well operations. This has allowed definition of completion and flow testing programmes over six horizons beginning with Topset 1 of the Upper Schrader Bluff and working up the well to the shallowest interpreted pay zone, the Lower Sagavanirktok zone 3.The Company has designed its flow test programme to prioritise data quality rather than seeking to maximise initial flow rates in order to accentuate the understanding of the reservoirs to optimise future appraisal and development. Being a test well drilled from the western side of the Dalton Highway, the Megrez-1 wellbore was directionally drilled on an approximately 45 degree angle, designed to pierce multiple horizons to maximise learnings. Future development of the deepest horizons, where the reservoir is of lesser quality, will most likely be through long laterals with multi-stage completions - as is industry standard and as is planned for Ahpun West and Kodiak. By contrast, successful flows from the shallower horizons where the reservoir quality is superior, would most likely lead to a development plan more akin to Willow or Pikka, but benefitting from the ability to share infrastructure already constructed for the planned Ahpun West development.
Detailed core analysis indicates average reservoir qualities in the deepest horizons more aligned with the Ahpun West topsets (1 milliDarcy or less) while the permeabilities improve significantly in the shallower Prince Creek and Lower Sagavanirktok formations, even exceeding a Darcy in the shallowest horizons.
Topset 3 is both the deepest horizon and also the smallest of the horizons volumetrically. Full cores were taken over this horizon and flow testing from a single stage treatment in this wellbore would provide little additional data at this location. A multi-stage completion of a long lateral well in that horizon during future appraisal or development drilling represents a more cost-effective means of acquiring useful data. Thus flow testing operations will occur over the shallower six horizons, commencing with Topset 1.
The full testing programme will take up to four months. The tests of the deeper horizons will utilise hydraulic stimulation and precise timing will depend on scheduling of pumping equipment among various operators on the North Slope. Tests in the shallower horizons are not expected to require the same degree of stimulation and are less susceptible to scheduling constraints. The benefit of operating from a gravel pad builds flexibility into the testing programme to avoid overpaying for services.
Aggregate flow from the testing of all zones is expected to be comparable to reported rates from other wells targeting the Brookian formations on the North Slope. Management has tabulated data on analogous offset wells on the North Slope of Alaska and posted it to the Pantheon websitehttps://pantheonresources.com/index.php/investors/q-and-a
David Hobbs, Chairman of Pantheon Resources, said: "These flow tests could be for transformative for the Company - both in terms of aggregate resources base and commercial production potential. Discovering such a large resource in such an ideal geographic location, adjoining existing certified resources at Aphun West right alongside the TAPS main oil line, and alongside the planned route of the proposed Alaska LNG gas pipeline is a great outcome."
Max Easley, Chief Executive Officer of Pantheon
Resources,added: "Successful flow tests in the deeper zones would demonstrate their suitability to incorporate additional future 10,000ft lateral completions of wells from the Megrez Pad into the overall Ahpun development plan, utilizing the same processing infrastructure to deliver higher economic returns. Anticipated results from the shallower horizons would, if successful, support a truly conventional development, analogous to the Pikka and Willow fields (i.e. utilising secondary and tertiary recovery techniques)."