1st Jun 2015 09:11
LONDON (Alliance News) - Pantheon Resources PLC Monday said that its joint venture in Texas is being hit by exceptional adverse weather in the area, and will only be in a position to start drilling as soon as weather allows, although it said it is well positioned after the slide in oil prices as it has cut drilling costs.
The oil and gas company's Chief Executive Jay Cheatham will be making a series of presentations to investment analysts, media and institutional investors during the course of the week and will be referencing this weather problems in those presentations while highlighting the "significant upside potential" from the two wells set to be drilled in East Texas.
Pantheon Resources has a 50% working interest in several projects within Tyler and Polk Counties, East Texas.
Texas and Oklahoma have been battered by heavy rains, causing flooding and fatalities, although the latest weather forecasts predict a week-long period of clear weather.
The company said it has also updated its estimates of indicative potential net present values per successful Eagleford/Woodbine well on a 100% basis, at a range of commodity price and probability assumptions.
They are as follows:
Modelled Per Well Potential NPV10 (US$ million)
| Low Case | Mid Case | High Case |
| $45bbl Oil/$2.50 mcfg | $60bbl Oil/$3.00 mcfg | $75bbl Oil/$4.00 mcfg |
P50 Well | $12.7m | $17.1m | $23.7m |
PMean Well | $30.1m | $39.2m | $52.0m |
Cheatham will also try and reassure markets about the economics of its projects in light of the sharp decline in oil prices in the second half of 2014.
Pantheon said the joint venture has benefited from estimated cost savings of up to 30% in direct drilling costs from previously disclosed levels and estimates that a typical well cost at current levels will be in the range of USD4.5 million to USD5.0 million. Management also believes that a P50 well in a success case could achieve operating costs as low as USD1 per barrel of oil and could be economic at below USD30 per barrel of West Texas Intermediate.
"If the wells prove to be successful, our modelling suggests that these prospects have the potential to be very low cost and extremely profitable to all stakeholders," Cheatham said.
Pantheon Resources shares were up 0.3% at 19.80 pence in London Monday morning.
By Steve McGrath; [email protected]; @stevemcgrath1
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