Pantheon Resources plc ("Pantheon") was formed in 2005 as an independent UK based oil and gas exploration company focused on hydrocarbon producing basins onshore or near shore the Gulf of Mexico (GoM). On 5 April 2006, Pantheon was admitted to AIM, having successfully raised £10m from a mix of quality institutional and high net worth private investors at a price of £1.00 per ordinary share.
Pantheon's initial focus was on the deep geological plays under and around Padre Island (PI), South Texas. Pantheon entered into a farm-out agreement which provided the right to participate initially in six specific, defined exploration targets which were ready for drilling from a geological and geophysical perspective. These prospects were considered to be large, high quality natural gas plays in an under-explored deep section of the GoM.
In 2007, Pantheon expanded its exploration interests in the US Gulf of Mexico region. In May and July respectively the company farmed into two separate exploration ventures in South Louisiana. In November 2007, Pantheon raised £0.90 million through a private placement in order to fund drilling in South Louisiana.
In May 2008 Pantheon announced a farm into a large Austin Chalk/Woodbine play in East Texas. With this venture the Company shifted focus from high risk/high reward deep gas plays to a lower risk extension/development play. This venture is located in Tyler County, East Texas, north and east of Houston and comprises more than 25,000 acres in the Brookeland Field. The initial target is the Austin Chalk which is the main producing horizon in the Brookeland Field. The Pantheon acreage is just south of successful drilling by Anadarko Petroleum and Ergon Oil & Gas. Pantheon has a 25% interest in this venture.
In association with the Tyler County Austin Chalk Venture, Pantheon announced a fundraising effort for £4.54 million through placing approximately 22.7 million shares at £0.20 per share. These funds were allocated for Tyler County drilling and general working capital.
In December 2008 Pantheon secured an option for a two-thirds working interest over the Belle Grove acreage. This is located adjacent to and immediately west of Bullseye and is a tract covering 606 acres.
Pantheon drilled its first well, the Plum Deep well on Padre Island which was completed in January 2007. Core analysis of the deepest three zones confirmed that the sands in the deep section have very low permeability. This is due to the presence of calcite cement. For Plum Deep, this meant that the deep reservoirs sampled were non-prospective. The well was plugged and abandoned.
The second well, Wilson, also on Padre Island, was tested and a commercial discovery confirmed in June 2006. The well was brought on-stream in September 2007 at an initial flow rate of 2.5 million cubic feet a day ("mmcfd"). Output declined more rapidly than expected and the well was shut-in in September 2008. All capitalised costs incurred relating to this well were written-off by Pantheon.
In June 2006, Pantheon expanded its operations by farming-into a natural gas exploration venture in Wharton County, south Texas, located broadly between Houston and Corpus Christi. This venture is operated by Everest Resource Company ("Everest") which has a long and successful history in the Texas Gulf Coast Area. This farm-in was considered complementary in terms of risk to the high impact PI Project Area.
In March 2007, Pantheon was informed by the Operator of the PI Project Area of impending lease expiry over both the Murdoch and Kingsway prospects during 2007. Pantheon was also informed that drilling would not be initiated prior to the expiry dates leading to automatic lease expiry. As a result of the lease expiry, new data obtained from the Plum Deep well and changing commercial terms, Pantheon decided not to participate in any additional drilling on Padre Island.
In May 2007, Pantheon expanded its exploration interests in the US Gulf of Mexico region. The company farmed-into an oil and natural gas exploration venture in Iberville Parish, Louisiana, south of Baton Rouge. The South Louisiana venture covered two prospects operated by Petro Hunt LLC. Both of these prospects have been drilled. The first, Nottoway Dome, was abandoned for mechanical reasons after the drill pipe stuck in the hole twice. The second, Point Clair found non-commercial quantities of natural gas and was also P&A.
In July 2007, Pantheon announced a further farm-in in Louisiana. This oil and natural gas exploration venture is also located in Iberville Parish. The farm-in covers one prospect, Bullseye, with leases totalling 1,700 net acres. The Bullseye prospect is testing deeper untested fault blocks on the crest of the Laurel Ridge field. Laurel Ridge is a "turtle" (inverted basin) feature discovered in 1944. The intention was to test two deeper geopressured targets with one vertical well. Pantheon is participating with a 15% working interest before completion.
In September 2009 a significant discovery was announced with the Jumonville #1 well on the Bullseye prospect. This was brought in October 2008. The first delineation well on Bullseye, Acosta #1, penetrated both the Miogyp and Camerina zones but was too close to the old Acosta well bore in the permeable Miogyp to permit an adequate test. This well has been converted for use as a water disposal well.
The second delineation well, Jumonville #2, commenced drilling on 25 December 2008. The main target interval, the Miogyp sandstone was perforated and tested successfully. Commercial production commenced in June 2009. The permanent production facilities and infrastructure to support the increased production were already in place.
Three zones were tested in the Jumonville # 2 well, two with inconsistent results. A shallower zone, the Camerina, was not tested in this well. The Camerina provides potential for further upside across the Bullseye prospect.
The first well on this Tyler County project commenced on 12 November 2008 with the spudding of the Vision Rice University #1 ("VRU#1") well. On 8 September 2009 it was announced that the operator, Vision Resources LLC, had recommended that the well be plugged and abandoned solely for mechanical reasons. The difficulties encountered during drilling of this well were solely of a mechanical nature resulting from much higher than expected reservoir pressures and the unexpected presence of an "unconsolidated rubble zone". The presence of both of these features is considered positive for the overall project and should enhance the project's economics.
Despite the outcome of VRU#1, the overall prospectivity of the project remains undiminished. During the limited testing operations conducted, the VRU#1 well flowed natural gas, condensate and black oil. This has confirmed an extension of the adjacent Brookeland field. The data received from the VRU#1 well provides the Company with greater confidence in the project's potential. Reviewing the technical data obtained so far, Pantheon's technical consultant has upgraded reserve estimates per well.
The information gathered from the current well should facilitate the drilling of any future wells on the project. In particular, it should result in subsequent wells being drilled at a lower cost than originally expected, despite the mechanical problems contributing towards additional time and cost overruns in this well. The operator does not expect similar difficulties for the remainder of the programme. Future wells will be engineered to cope with the higher reservoir pressures and for the presence of a rubble zone. The joint venture will now review the data from the VRU#1 well before deciding upon the location and timing for the next well.
In late December 2008, Pantheon added the Belle Grove venture to its portfolio. Belle Grove is located in Iberville Parish, Louisiana. It comprises 606 acres and is located adjacent to and immediately west of Bullseye where Pantheon and partners have drilled the Jumonville #1 discovery well and the Jumonville #2 well. Belle Grove is an appraisal project for a deeper extension of the Laurel Ridge Field.
The same seismic image for the Camerina extends west into Belle Grove. The mean gross reserve potential is estimated at approximately five million barrels oil equivalent. The seismic shows the sand moving updip over the Belle Grove acreage with the high on this acreage. Pantheon has a 66.67% interest before vendor back-in. There is a two well commitment on the Belle Grove acreage. It should be noted that it is not Pantheon’s intention to act as operator, neither is any drilling currently planned.