19th Jul 2006 07:01
Pantheon Resources PLC19 July 2006 Pantheon Resources Plc Padre Island - Rig On Location Ahead of Planned Drilling Programme CommencingEnd July • Drilling rig on location at Padre Island • First well to be drilled, Kindee ST 212 #1 on Plum Deep structure, projected to commence on or about 25 July • Start of active drilling programme on Padre Island for Pantheon with four wells scheduled to be drilled over 18 month period • Three have potential for major reserve additions and early cash flow to Pantheon • Will co-incide with low risk exploration programme in south Texas which complements the moderate risk Padre Island drilling programme Pantheon Resources Plc ("Pantheon") announces that it has been informed by theOperator of the Padre Island Project Area, ("PI Project Area"), Golden GatePetroleum Ltd ("Golden Gate") that Parker Drilling's rig number 122 is now onlocation on Padre Island. Spudding of the Kindee ST 212 #1 well on the PlumDeep structure is scheduled on or around 25 July. The rig will be on contract toGolden Gate for twelve months with options to extend for up to a further twoyears by six month intervals. This well will initiate an active drilling programme on the Padre Island JointVenture ("PIJV"). Pantheon expects to be involved in the drilling of fourexploration wells over an 18 month period (see table 1). The exact timing andorder of the drilling programme remain dependent on the receipt of finallocation approvals from the relevant authorities. Table 1: Pantheon - Projected Drilling Programme Prospect/ Target/Type Estimated Start Pantheon Golden IBWell Date Resources Gate Daiwa Plum Deep* Deep/ July 2006 25% 37.5% 37.5% explorationWilson* Shallow/ September 2006 25% 37.5% 37.5% explorationManzano* Deep/ October 2006 25% 37.5% 37.5% explorationMurdok Deep/ First quarter 2007 25% 37.5% 37.5%South* exploration *Operated by Golden Gate The Plum Deep well is considered a key exploration well with gross best estimatepotential resources (previously described as "P50 potential reserves") estimatedto be in a 161-293 bcf range. This represents potential material upside forPantheon's shareholders in the event of success. Drilling costs are estimated tobe around US$10.3 million. Plum Deep lies within the same fault trap as Plum Shallow but is targetingdeeper reservoirs at 9,500 to 15,000 feet. Plum Shallow was confirmed as adiscovery in early 2006 and is currently flowing natural gas at a rate of 1.9mmcfd. The discovery of hydrocarbons in the shallow section providesencouragement for Plum Deep as it confirms that it underlies a natural gasaccumulation. Plum Deep is expected to be the first of three exploration wells targeted at thedeep section over the next 18 months. Extensive evaluation has confirmed sixmature high quality exploration targets of which Plum Deep, Manzano and Murdockhave been identified as the three largest prospects. Each of the latter offersthe potential for significant additional reserves and early cash flow toPantheon. The fourth prospect to be drilled in which Pantheon has an interest isWilson, which is small, see table 2. Table 2 - Drilling ProgrammeProspect P50 Potential BCF Current Planned Start Budgeted DrillingName (gross)* Date Costs Plum Deep 161-293 July 2006 US$ 10.3 millionWilson 5-10 Second half 2006 US$5.4 millionManzano 178-337 Second half 2006 US$9.1 millionMurdock 94-232 First half 2007 US$9.7 millionSouthLemonseed 87-123 tba n.a.Kingsway 16-20 tba n.a. \* This range is based on various studies conducted on the acreage includingGolden Gate and Pantheon's Independent Technical Adviser All the currently defined prospects are planned to be drilled from onshorelocations, with the probable exception of Kingsway. This offers the advantage ofsubstantially reduced costs (both for exploration and development) compared withthe offshore. It also reduces substantially the lead times to production in theevent of successful exploration. Pantheon is participating initially in six prospects as a result of a farm-outagreement with Golden Gate concluded in April 2006. The prospect inventorycomprises primarily large, high-quality natural gas plays in an under-exploreddeep section of the Gulf of Mexico. As a result of this agreement Pantheon willearn a 25% working interest in each prospect by paying 33.333% of the costsassociated with drilling each prospect up until the point of casing. Theprospects covered by this farm-in are: Plum Deep, from 9,500 to 15,000 feet; Manzano Deep, from 10,500 to 16,500 feet; Murdock, all depths from surface; Lemonseed, all depths below 9,100 feet; Wilson, all depths from surface; and Kingsway, all depths from surface. These prospects are all covered by 3D seismic. In the view of the Board ofPantheon, the deep JV of the PI Project Area is a moderate risk (POS 15% to36%), high reward exploration venture. It offers the potential, if successful,of major value accretion to the Company and its shareholders. In accordance with the AIM Rules, the information in this report has beenreviewed and signed off by Mr Robert Rosenthal, (BSc Geology, MScGeology), Technical Director at Pantheon Resources Plc, who has over 30 yearsrelevant experience within the sector. 19 July 2006 Contacts: Pantheon Resources PlcSue Graham, Chairman +44 20 7379 0118 Oriel Securities LimitedScott Richardson Brown +44 20 7710 7600 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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