25 October 2022

Pantheon Resources plc

Operational Update, Alkaid #2 Well

Pantheon Resources plc ("Pantheon" or "the Company"), the AIM listed oil and gas company with a 100% working interest in all of its oil projects spanning c. 153,000 acres adjacent and near to transportation and pipeline infrastructure on the Alaska North Slope ("ANS"), is pleased to provide the following operational update:

Alkaid #2 - Operational Update

Production testing operations at Alkaid #2 have commenced with the well in the clean-up phase and showing positive early indications of oil production from the reservoir. During this clean-up phase, in addition to the fluid production, the strong flow back has yielded frac sand production higher than expected, which is not uncommon in similar completion procedures.

The Alkaid #2 well is being shut in as part of the planned procedure to transition from temporary flow back facilities to larger permanent facilities, and a coiled tubing unit will be used to clean out the wellbore. Additionally, Pantheon will undertake a pressure build-up operation by placing a pressure "bomb" in the production packer and allowing formation pressure to increase for several days. This will allow for analysis of multiple reservoir parameters and is a standard reservoir engineering analytical tool.

The operations to date have recovered approximately 10% of the frac fluid used, with oil cuts averaging from 8% to 12%. Typically, a better indication of ultimate production performance can be ascertained after recovering over 40% of the frac fluid, which the Company expects to achieve over the coming weeks.

Alkaid #2 has produced initial fluid flow with rates in the thousands of barrels per day, including a strong sand production response which the Company will address to ensure sand is not restricting the wellbore. Pantheon is awaiting delivery of a coiled tubing unit to clean out the well bore prior to recommencement of flow test operations.

Jay Cheatham, CEO, said: "We have seen promising indications of reservoir performance, with oil cuts showing early in the flow back process. Often, the first real indications of oil occur much later. Whilst the production of frac sand is inconvenient, as is the waiting time for obtaining a coiled tubing unit, it is not an uncommon occurrence in multistage fracture stimulation completions in conventional reservoirs and will be dealt with once the unit arrives. We hope to complete our clean-up programme at Alkaid #2 over the next several weeks and we will announce the results of flow testing once complete.

"It is encouraging that the reservoir response to the stimulation procedure has been very good, as we have experienced strong initial fluid flows measured in the thousands of barrels per day. Remember, these are conventional reservoirs that have superior reservoir qualities compared to shales, and given it is our first well completion applying stimulation techniques in these reservoirs it requires a little patience as we better understand our reservoir characteristics on the North Slope.

"Whilst the early data is very encouraging, I reiterate my previous statements that we cannot make a definitive assessment of the ultimate commerciality of the well until flow testing operations have concluded. However, we remain optimistic."

Michael Duncan, VP Operations & Engineering, said: "As our first horizontal well on the North Slope, we are quickly learning how this formation produces and responds to various flow parameters. We are very early in flowback and cleanup with only 10% of frac fluid recovered, yet significantly, we have already seen oil production which is greatly encouraging.

"Prior to entering initial production, it is common practice to clean out a wellbore. We are using a planned outage for tie-in of our permanent facilities to perform a well pressure build up as well as the wellbore clean out. It has been a good operating season thus far, and we eagerly anticipate having a fully operational system soon. The production of frac sand is a nuisance which has cost us some time during the early stages of flowback, however is not believed to change the potential of the well."

Glossary

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Further information:

In accordance with the AIM Rules - Note for Mining and Oil & Gas Companies - June 2009, the information contained in this announcement has been reviewed and signed off by Jay Cheatham, a qualified Chemical & Petroleum Engineer, who has over 40 years' relevant experience within the sector. 

Notes to Editors

Pantheon Resources plc is an AIM listed Oil & Gas company focused on several large projects located on the North Slope of Alaska ("ANS"), onshore USA where it has a 100% working interest in 153,000 highly prospective acres with potential for multi billion barrels of oil recoverable. A major differentiator to other ANS projects is its close proximity to transport and pipeline infrastructure which offers a significant competitive advantage to Pantheon, allowing for materially lower capital costs and much quicker development times. The Group's stated objective is to create material value for its stakeholders through oil exploration, appraisal and development activities in high impact, highly prospective conventional assets, in the USA; a highly established region for energy production with infrastructure, skilled personnel and low sovereign risk. All operations are onshore USA, with drilling costs materially below that of offshore wells.

Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) incorporated into, or forms part of, this announcement. The information contained within this announcement is considered to be inside information prior to its release.