Pantheon Resources completes drilling at Alkaid 2

Alaska North Slope-focussed oil and gas company Pantheon Resources announced the conclusion of drilling operations, and the start of preparations for stimulation and flow testing, at the Alkaid 2 well on Thursday.

The AIM-traded firm said drilling operations at the Alkaid 2 horizontal wellbore had now finished, reaching a total measured depth of 14,300 feet, including a lateral length of 5,300 feet.

A five-and-a-half inch liner had been run, set, cemented at the bottom and tested for integrity.

Pantheon said it was experiencing “significant” inflationary cost and supply chain pressures, meaning it was “extremely pleased” that drilling of the lateral section was accomplished smoothly and without incident.

As previously announced, future production wells would have a targeted lateral length of around 8,000 feet.

The board said that as Alkaid 2 was Pantheon's first horizontal well on the North Slope, and to minimise operational risk and still deliver the production data needed to optimise development of the resource, it adopted a “conservative approach” and used a shorter lateral.

Analysis of the logging while drilling and gas chromatograph readings indicated that the improved reservoir parameters encountered in the vertical pilot hole had continued or improved in the horizontal wellbore.

The company said the data further confirmed the accuracy of its geological models, and provided it with greater confidence to predict reservoir tops and bottoms.

Initial analysis indicated “significant improvements” in reservoir quality, which had the potential to lead to upgrades of the current resource estimates for all targeted horizons.

Analysis of the data received to date also highlighted the progression in the company's ability to accurately predict the presence of light oil bearing reservoirs using 3D seismic data, geological and geophysical capabilities, further enhancing confidence in future drilling and development planning, the board said.

The quality of data received from the well was “extremely high”, with Pantheon set to assess the flow test and other well data before making a final decision on the winter 2022-2023 operations programme.

Future operations at Alkaid 2 would involve demobilising the Nabors Rig 105 and moving in a smaller completion rig to undertake the extended completion operations of perforating and stimulating the horizontal section approximately every 165 feet, and would need around 30 separate perforation and stimulation stages.

After completion, long-term production testing would use a modular production kit capable of separating any oil, gas or water from the production stream before trucking that oil to a nearby production unit for sale.

Pantheon said it would use unconventional production techniques, applying that technology to the conventional sandstone reservoirs encountered across the entire project area.

“The first development well in any new area can sometimes yield unexpected surprises as we never really know what wellbore conditions to expect over such a long distance, and hence I am delighted we reached 5,300 feet without incident, an important milestone for me because it exceeded my personal goal of one mile,” said technical director Bob Rosenthal.

“This latest operation appears to reinforce the accuracy of our geological modelling, giving me great confidence in our modelling of the other, even larger, projects in our 100% owned portfolio.”

At 1113 BST, shares in Pantheon Resources were up 5.82% at 134.6p.

Reporting by Josh White at Sharecast.com.