Receipt of Independent Resource Report – Talitha

25 September, 2020

Pantheon Resources plc

Receipt of Independent Resource Report - Talitha (Shelf Margin Deltaic)

Pantheon Resources plc ("Pantheon" or the "Company"), the AIM-quoted oil and gas exploration company with working interests of 89.2% - 100% in certain projects advantageously located adjacent to transportation infrastructure on the Alaskan North Slope is pleased to provide the following update:

Resource Confirmation at Talitha (Shelf Margin Deltaic Horizon)

Pantheon confirms receipt of an Independent Expert Report and Resource Statement from the International Petroleum Consultants Lee Keeling & Associates, Inc. ("LKA") on the Shelf Margin Deltaic ("SMD") horizon at its 89.2% owned Talitha Project. The SMD is the shallowest of 3 targeted horizons at Talitha: (i) the SMD, (ii) the Slope Fan System, and (iii) the Kuparuk, all of which are independent of one another and all of which were oil bearing in the nearby Pipeline State #1 discovery well drilled in 1988.

The directors are pleased to announce that LKA have confirmed a Prospective Resource of 302 Million Barrels of Recoverable Oil for the SMD horizon at Talitha.

Definitions referred to in this announcement for Prospective Resource and Prospective Resource have been prepared under the Society of Petroleum Engineers ("SPE") standards. 

Highlights:

⇨   302 Million Barrels of Oil ("MMBO") Prospective Resource (Recoverable)

⇨  $2.7 billion⁽¹⁾ NPV10 modelled on 91 producing wells, using a long term Brent oil forward curve ranging from $45.84 to $54.89

⇨   $8.92 NPV10 per barrel of oil⁽²⁾ and an Internal Rate of Return of 79.9%

⇨   Field peak maximum production rate⁽²⁾ of 90,000 Barrels of oil per day ("BOPD") facility limited

⇨   Average individual producing well EUR (estimated ultimate recovery) of 3.32 MMBO per well⁽²⁾ for 91 producing wells

⇨   The LKA report confirms that Talitha is an Appraisal project updip from discovered oil

⇨   Located near the Dalton Highway & Trans-Alaska Pipeline (TAPS) allowing a phased development and minimising upfront capex

Notes: (1) NPV's are calculated on a pre-tax basis after deduction of a modelled 13.5% royalty rate. (2) Production volumes & EUR's are quoted on gross production numbers (i.e. pre 13.5% royalty)

The LKA Prospective Resource estimate only covers 20,600 acres of the reservoir section updip from the oil pay at the Pipeline State #1 discovery well, and not the total resource across the entire structure or project area. The Production Unit at Talitha covers 44,373 acres. The project area was delineated using advanced seismic attribute analysis where LKA reported that "The seismic AVO attributes show likely stratigraphic trapped good reservoir for the Shelf Margin Deltaic to the up-dip direction from well Pipeline State #1".

Talitha - Resource Estimate Review (Kuparuk horizon)

Work is nearing completion for the determination of an internal resource estimate for the deeper and independent Kuparuk horizon, which is now forecast for completion during the first week of October. The additional time demands on our technical team in supporting LKA on the earlier than expected completion of the Talitha SMD Independent Resource Report, and the associated additional queries from potential farm in partners, contributed to this amendment to timing. The Company confirms that it will hold an investor Webinar following completion of the Kuparuk Resource announcement, details of which will be announced prior to the date.

Farmout update

Pantheon continues to engage with multiple parties who are presently undertaking analysis of the farmout opportunity, a number of which were awaiting the Independent Expert Report on the SMD. Such parties range from National Oil Company in size to smaller, more specialist groups, and accordingly farmout discussions have ranged over the entire Alaskan portfolio to smaller single projects. Pantheon's objective is to drill in Alaska this coming 2020/21 winter season.

Other

The State of Alaska has recently deemed the applications for Production Units at Greater Alkaid and Talitha as complete, and the State has published them to solicit public comment. The comment period ends 12 October for Alkaid and 19 October for Talitha.

Additionally, the 17 leases comprising the Theta West and Leonis project areas successfully bid on in the December 2019 State lease sale, have now formally been granted to Pantheon. In aggregate, the new leases officially comprise 27,669.5 acres.

Bob Rosenthal, Technical Director, commented: "This is another extraordinary result for our Company.  The delineation of such a large Prospective Resource in the SMD, immediately updip from discovered oil is very exciting. LKA have detailed an expectation of a high quality reservoir with porosity over 15% and recovery factors of 30%, The certified resource estimate of the SMD announced today, combined with the yet to be determined resource potential of the Slope Fan System and the Kuparuk formation, yields a truly world class drilling opportunity that should rank Talitha amongst the most impactful oil wells planned anywhere in the world for 2021. Talitha will test these independent oil zones in a structurally higher location than the Pipeline State discovery well where we expect better reservoir quality."

Jay Cheatham, CEO, commented: "This is another fantastic endorsement of the outstanding opportunity we have in Pantheon. It's also testament to the countless hours of tremendous work put in by our entire team who I cannot praise highly enough. This is a very significant resource estimate for us. Given Arco didn't flow test the Pipeline State #1 well , we never expected a Contingent Resource from LKA at this stage. However, it gives us great scope for these numbers to grow with a successful well result. Importantly, LKA confirmed Pipeline State was oil bearing and it's very exciting that we are drilling updip from that discovery well into a very large and anticipated better reservoir section. Arco drilled the well in 1988 when oil prices were very low, the Trans Alaska Pipeline was flowing at capacity and drilling technology was significantly less advanced than today. Once we drill and, if successful, test the Talitha A well, which LKA has confirmed is an 'appraisal well', I expect these Prospective Resources to graduate to Contingent Resources with the possibility of some portion becoming Reserves. Our modeling shows Talitha is economic at very low oil prices because of the size, reservoir qualities and proximity to the Dalton Highway and Trans Alaska Pipeline.This is important for a company like Pantheon as we can reduce upfront capital by utilising modular production units instead of large central processing facilities to expedite development and reduce risk. The State of Alaska deeming our Talitha Production Unit application complete is a significant endorsement of its  potential. The LKA development plan encompasses 20,600 acres updip from the Pipeline State well, less than half of the production unit, even though the Shelf Margin Deltaic sands are present in most of that acreage, yielding significant upside potential on these numbers."

"We've made some great accomplishments recently. LKA have essentially validated our geological and geophysical modelling, confirming the material geological potential of our Talitha (and Alkaid) units. We plan to continue high grading our acreage using our proprietary 3D seismic and well information, and aim to drill this winter subject to farmout completion. The LKA report has provided an independent assessment of the potential size and economic value of Talitha, which has taken many years to mature to this level. We look forward to testing this massive play in 2021."

-ENDS-

Cautionary Statement: The estimated quantities of hydrocarbons that may be potentially recovered by the application of a future development project relate to undiscovered accumulations. These estimates have both an associated risk of discovery, a risk of funding and a risk of development. Further exploration, appraisal and evaluation are required to determine the existence of a significant quantity of potentially movable hydrocarbons.

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 exploration and production focused on several large projects located on the North Slope of Alaska ("ANS"), onshore USA. A major differentiator to other ANS projects is its close proximity to transport and pipeline infrastructure. 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.

On the North Slope of Alaska, Pantheon holds working interests of 89.2% - 100% in projects  covered by c.1,000 square miles of proprietary 3D seismic. In January 2020 the Company received an Independent Expert Report certifying a Contingent Resource of 76.5MMBO (million barrels of oil) recoverable on its Greater Alkaid project. In March 2020 Pantheon estimated that the shallowest of the 3 horizons at its Talitha project was estimated to contain 1.8 billion barrels of oil in place and a P50 Technically Recoverable Resource of 483 MMBO. In East Texas, Pantheon has working interests in several conventional prospects in Tyler & Polk Counties, in an area of abundant regional infrastructure.

For further information on Pantheon Resources plc, see the website at: www.pantheonresources.com. The information contained within this RNS is considered to be inside information prior to its release. 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) is incorporated into, or forms part of, this announcement.

Glossary

Bbl = barrels
boe = barrels of oil equivalent
Bopd = barrels of oil per day
EUR = Economic Ultimate Recovery
MBL = thousand barrels of oil
MMBL = million barrels of oil
Mboe = thousand barrels of oil equivalent

MMboe = million barrels of oil equivalent