6th Nov 2015 08:24
LONDON (Alliance News) - Pantheon Resources PLC got a boost on Friday after finding a new oil and gas bearing zone on its acreage in the US that is separate from its existing targets.
Pantheon shares were up 12% to 81.40 pence per share on Friday morning.
The company has been drilling the VOS1 well on its acreage in Tyler County in the US with the aim of testing the Eagle Ford/Woodbine sandstone and the Austin Chalk.
However, on Friday, Pantheon said it has encountered another oil and gas bearing zone at 12,600 feet which is in addition to those primary and secondary targets, which has flowed natural gas and oil. Pantheon did not state how much oil and gas the new zone has produced.
"Whilst there has been a delay to drilling operations on this well, the second in our 2015 drilling programme, the unexpected presence of hydrocarbons from this new zone is highly encouraging, albeit testing will be required to establish if it is commercially viable," said Chief executive Jay Cheatham.
Importantly, Pantheon said the zone in question is known to be present in the a well south of the VOS1 well which has already proven to be a "substantial producer".
However, the company said warned that it is "premature" to ascertain the commercial viability of the zone without further testing.
The company has had to conduct well intervention operations in order to control the unexpected zone, but said this was "complicated" because a lower pressure zone at 10,500 feet, so above the target, prevented higher mud weights being used as a control measure.
Pantheon has therefore installed a cement plug over that lower pressure zone, allowing it to sidetrack the well from the original wellbore.
Pantheon said it will now continue to drill down to hit the Eagle Ford/Woodbine and Austin Chalk sandstones, which will take another two weeks.
"Following the successful sidetrack operation, the VOS1 well is presently drilling ahead and on a trouble free basis it is estimated to take approximately a further two weeks to reach target depth. If warranted, testing operations will occur thereafter," said the company.
By Joshua Warner; [email protected]; @JoshAlliance
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