Pantheon Resources plc, the AIM-quoted oil and gas exploration company with working interests in several conventional project areas in Tyler and Polk Counties, onshore East Texas, and onshore North Slope of Alaska, is pleased to provide the following update:
Partnership with eSeis, a leader in seismic petrophysics
Pantheon is pleased to announce that it has entered into a services agreement with eSeis Inc, a pioneering proponent of ‘High Tech Geophysics’ and ‘Seismic Petrophysics’ to lead Pantheon’s efforts in these areas. eSeis will be involved with processing, analysis and interpretation of geophysical data. Importantly, eSeis will partner with Pantheon leveraging their extensive industry contacts and their technical expertise and experience to manage the farmout process in Alaska. A key component to exploratory success on the Alaskan North Slope has been the use of high-tech geophysics and petrophysics analysis. eSeis’ role will involve data room management, introductions to potential partners and presenting the technical (geophysical) component in partner discussions. The company is aiming to formally open the data room in July with the firm objective of achieving drilling in the Alaskan winter 2019/2020.
eSeis will undertake the work for a heavily discounted rate (which management estimate to be a saving of $1.5 – $2m to the company) in exchange for a 1% overriding royalty interest. Such a performance-based remuneration structure achieves the dual objective of aligning eSeis’ interest with that of Pantheon shareholders and of preserving cash resources. It is important to note the Alaskan leases are state government leases which carry a significantly lower royalty burden than most leases in the Lower 48 States of the USA. This deal would increase the lease royalty rates to c.17.6% across the project area with e-Seis. By way of comparison, the royalty burden on Pantheon’s East Texas leases averages 25%.
Roger Young, the CTO and Founder of eSeis, developed his methodologies and technologies while working the North Slope of Alaska and other regions. This technology, along with the Union Texas Petroleum technical asset team, was instrumental in the discovery of the billion barrel play known as the Alpine field trend. This is the technology that eSeis and Pantheon will be working within its Alaska project.
Update on Farmout process – North Slope of Alaska
As stated above, the Company is working with eSeis to prepare its data room to formerly commence the farm-out process in order to achieve its objective of drilling during the Alaskan winter 2019/2020 drilling season. Pantheon will seek a material up-front cash contribution towards sunk cost
from any potential partner as well as ‘promoted’ drilling terms where the farm-in partner would fund some or all of a specified number of future wells in order to earn their working interest. Pantheon’s objective would see one well drilled at the Talitha project and a minimum of one well drilled at Alkaid/Phecda in the 2019/2020 drilling season.
As announced earlier this month, the confirmation of Alkaid as a discovery well in the Brookian formation has led the technical team at Pantheon to upgrade the P50 Technically Recoverable Resource at Alkaid and Phecda (now considered the same structural enclosure) to between 90-135 million barrels of oil (“mmbo”), given an estimate of oil in place (“OIP”) of 900 mmbo and with recovery factors estimated at 10-15% (with potential for further improvement in recovery factors should secondary recovery techniques be successfully applied). The project is ideally located in Alaska, immediately adjacent to the Trans Alaskan Pipeline and Dalton Highway which delivers advantages operationally, financially and has the potential to be brought into production more rapidly than other areas of Alaska – anticipated to be 2021. The early stage development plan foresees the possibility (but not the guarantee) of first production in 2020. The Talitha project is also favourably located near to the TAPS and Dalton Highway and has a P50 Technically Recoverable Resource of 508 mmbo.
Following the Alkaid discovery announcement dated 6 June, 2019 Pantheon confirms that it has received unsolicited communications from a number of industry parties expressing interest in the Alaskan project, which gives the Company genuine confidence that it will achieve a successful result in its impending farmout efforts.
Jay Cheatham, CEO, said:
“The eSeis contract is a fantastic outcome, and indeed endorsement, for Pantheon shareholders that opinion leaders in our industry see the value of our project. We consider eSeis to be amongst the very best in their field and their decision to link most of their remuneration to the success of our project is an incredible validation of the potential they see in our play in Alaska, and aligns their interests with that of Pantheon shareholders. They have an exceptional track record and we are honoured to have them as part of our team. They will be heavily involved in the farmout process, which we hope to commence in the short term given our objective to be drilling in Alaska this coming winter.”
“I am also pleased to report the permitting efforts for the Alkaid project are well underway and we look forward to updating shareholders in due course.”