Key points:
- Pantheon Resources shares surged 13.9% on upbeat drilling results.
- The company discovered up to 950ft of oil at its Theta West #1 well.
- The oil reserves at its Alaska license area could exceed 1.2 billion barrels.
The Pantheon Resources Plc (LON: PANR) share price surged 13.9% after issuing an update regarding its drilling operations at the Theta West #1 location, where it tested the Lower Basin Floor Fan (LBFF).
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The mining company revealed that it encountered 950 feet of oil in the LBFF but only tested three small portions of the deposits and had to stop testing due to the onset of harsh winter weather that made it impossible to keep operating the well.
The company tested three intervals, each measuring 10ft in length and reported impressive results with the Theta West #1 well generating an average of 57 barrels of oil daily, having achieved a peak result of 100 bopd.
Investors cheered the announcement that proves the presence of significant oil reserves in the company’s Alaska North Slope license area, which is estimated to hold up to 1.2 billion barrels of recoverable oil reserves.
Pantheon told investors that the latest results indicate that the region could contain a higher volume of recoverable oil than its initial estimate of 1.2 billion barrels of oil. The company also owns 100% interest in all its license areas; hence, it is entitled to all the revenue generated from its wells once they start producing oil commercially.
The firm also reminded investors that the deposits were located in the onshore US, a region that is not prone to geopolitical turmoil, given the current global geopolitical climate.
Jay Cheatham, Pantheon’s CEO, said: “We are very excited by this result at Theta West. This well is a successful 10.5-mile step-out from the LBFF oil-bearing interval at Talitha. The test result confirms a vast oil resource and also confirms our geologic model. Its proximity to infrastructure gives Pantheon a strategic advantage over other greenfield projects.”
Adding:
“After confirming the oil resource over this large area, our focus will now shift to proving the deliverability of production wells which will commence with the spudding of Alkaid #2 horizontal well, estimated for July 2022. By utilizing a gravel pad immediately adjacent to the Dalton Highway, Pantheon will operate without being limited to winter operations. This allows for a horizontal well with appropriate stimulation, long-term flow testing and, if successful, oil sales. We are confident of deliverability and excited for the next step in our drilling programme.”
Pantheon Resources shares have risen 77.2% in 2022, driven by multiple positive announcements and rising crude oil prices. The company has a promising future, but I would wait for a pullback before jumping in. However, there are no guarantees that we will get a deep pullback anytime soon.
*This is not investment advice. Always do your due diligence before making investment decisions.
Pantheon Resources share price.
The Pantheon Resources’ share price surged 13.92% to trade at 140.8p, rising from Wednesday’s closing price of 123.6p.