29th Nov 2016 08:11
LONDON (Alliance News) - Pantheon Resources PLC on Tuesday said it is still flow testing the VOBM-3 well in Polk County and said it expects to generate its first revenue from gas processing activities next year, adding that drilling on the VOBM-4 well in Tyler County also remains on track.
"Today's announcement has been made earlier than would normally be the case, however with investor meetings scheduled it is necessary to issue a cleansing statement ensuring that information is available to all investors equally," said Chief Executive Jay Cheatham.
"Usually an announcement would only be made after testing is complete. An accurate assessment of the well can only be made once testing operations are complete," he added.
Pantheon shares were trading down 19% to 73.75 pence per share on Tuesday morning.
The company holds working interests varying between 50% to 58% in several projects spread across the Polk and Tyler counties, both of which lie in East Texas.
The VOBM-3 well on Polk is still being flow tested and the results are yet to be confirmed. The latest tests were conducted using a 10/64ths choke and achieved a natural gas flow rate rangingfrom 1.50 trillion to 3.50 trillion cubic feet per day and an oil flow rate ranging from 24 to 240 barrels each day.
Pantheon said the latest choke used has a surface area that is over 40% larger than the previous choke used on the well.
The company said fracking was conducted on the well in order to "emulate the possible benefits of horizontal drilling", and said about 60% of the fracture fluid has been recovered in other wells to date, suggesting this could be the reason why flow rates have varied across its projects.
"Given the variability in flow data, it is impossible at this early stage to make an accurate prediction of the well's ultimate potential, however based on the data received to date management believe that the well will be a commercial producer. We expect flow rates to stabilise going forward," said Pantheon.
Pantheon believes seismic data suggests VOBM-3 sits on the edge of the reservoir that feeds the VOBM-1 well that lies about 1.0 mile away.
"Whilst at an early stage, results to date support management plans for the contracting of the preferred gas processing option, which targets first production revenues in spring 2017. Further updates on this process will be made when appropriate," said the company.
"Flow testing will continue, and results will be announced once flow rates have stabilised and testing operations are completed," Pantheon added.
The VOBM-4 well being drilled on Tyler County is also progressing on schedule and on budget. The well has reached 12,000 feet vertical depth and Pantheon said an update concerning the well will be provided at its next annual general meeting.
By Joshua Warner; [email protected]; @JoshAlliance
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