Pantheon Resources tumbles on Texan wells update

Shares in Pantheon Resources fell back to around 12-month lows as the AIM-listed explorer's prudently worded update dashed some investors' hopes of a bigger potential resource.

Chief executive Jay Cheatham, is meeting with investors to discuss updates on two wells, among Pantheon's several conventional projects located in Tyler Polk Counties, onshore East Texas.

Flow testing operations on VOBM#3 well are ongoing, the company said, with data received so far "not yet conclusive but indicative of a well continuing to clean up".

“Given the variability in flow data, it is impossible at this early stage to make an accurate prediction of the well's ultimate potential, however based on the data received to date management believe that the well will be a commercial producer.”

Results to date support the management’s plans for contracting the preferred gas processing option, which aim to obtain first production revenues in spring 2017.

As for the VOB#4 well, drilling continues at approximately 12,000 feet vertical depth, on schedule and on budget.

Chief executive Jay Cheatham said: "Analog wells in the Double A Wells field, with similar flowing tubing pressures during testing have been good wells. It is well documented that individual well performance of Double A Wells field wells showed variance, dependent upon their respective location within the reservoir, with better quality sands typically located closer to the centre of the basin.

"This is consistent with the experience of our drilling and analysis to date. Based on the early results to date, our assessment of the potential of our acreage is undiminished."

Analyst Zac Phillips noted the company's update represented "a significant change from the previous tone and tenor of the announcements that it has made", especially at the time of the US$30m fundraising in March.

The share price fell 19.63% to 73.14p at 1034 GMT on Tuesday, not comparing well to the 115p placing price from earlier in the year.