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 in the Gulf of Mexico. The Company was admitted to AIM on 5 April 2006.
Pantheon's early main activity centered on the deep geological plays under and around Padre Island, South Texas and a separate exploration project in South Louisiana. Pantheon has subsequently exited these ventures and now has a pure focus on the East Texas Joint Venture with its 50% partner Vision Resources, LLC.
Origins of the East Texas Joint Venture
In May 2008 Pantheon farmed in to a 25% working interest into a large Austin Chalk/Woodbine play in East Texas. With this venture the Company shifted its focus from mainly higher risk/high reward deep mainly natural gas plays to a lower risk extension/development play.
This venture is located in Tyler County, East Texas, north and east of Houston and comprised more than 25,000 acres in the Brookeland Field. The initial target was the Austin Chalk which is the main producing horizon in the Brookeland Field. The Pantheon acreage lies to the south of successful drilling by Anadarko Petroleum and Ergon Oil & Gas.
Drilling on the Tyler County project commenced in November 2008 with the spudding of the Vision Rice University #1 ("VRU#1") well. In September 2009 it was announced that the operator, Vision Resources LLC, had recommended that the well be plugged and abandoned 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 well was considered a commercial and mechanical failure, but a geological success, confirming the presence of natural gas in the Austin Chalk.
In 2010 the boom in shale production in the USA, coupled with strengthening oil prices contributed towards a macroeconomic backdrop of sharply falling gas prices and materially increased costs for the industry. Drill rig counts hit record highs, dragging all other associated costs higher. At this time the JV deemed it economically imprudent to take on any drilling risk by undertaking a follow up Austin Chalk well, given their rich natural gas content.
The Woodbine/Eagle Ford Sandstone play
Instead the JV decided to take the time to undertake a detailed regional geological study of the deeper and potentially more valuable Woodbine/Eagle Ford sandstone, which was proven to exist on the JV acreage by virtue of the LP2 well, which had successfully produced from this formation. The Woodbine/Eagle Ford sandstone is also the primary producing formation in the prodigious Double A Wells field in neighbouring Polk County, East Texas. (Pantheon has no interest in the LP2 well because it was drilled prior to Pantheon joining the JV).
As the geological study progressed the JV was fortunate to be able to secure the assistance of the independent Bureau of Economic Geology at the University of Texas, Austin to extend the regional scope of the study so as to better understand the geology and geophysics. The study took more than three years and included the analysis of more than 2,500 individual wells, 2,600 miles of 2D seismic and c.119 square miles of 3D seismic (covering the Double A Wells field and surrounding areas).
The findings of the study, which remain confidential to the participants, have enabled the JV to identify what it believes to be the key ingredients for successful identification and exploitation of the Woodbine/Eagle Ford sandstone. As a result the JV identified a number of prospects on both its existing acreage and in surrounding unleased areas that are believed to offer excellent potential for productive Woodbine/Eagle Ford sandstone exploration.
In September 2014 Pantheon announced a restructuring of the JV in order to lease these identified prospects. The transaction dissolved the existing JV and was restructured such that Pantheon taking direct interests in the prospects, doubling it's working interest in the existing prospects from 25% to 50% (and dropping non core acreage) and enabled it to acquire a 50% working interest in four other new project areas with promising Eagle Ford/Woodbine sandstone prospects. In July 2016 Pantheon announced that it had acquired an additional 8% in two of the prospective Polk County prospects, being Prospect A and Prospect D.
At the same time the company said that it intended to concentrate its activities on those areas that offered potential for both the Eagle Ford/Woodbine and the shallower Austin Chalk. Pantheon did also acquire a 25% working interest in a further prospect in Polk County which has potential for other horizons. Vision Resources LLC remains Pantheon's sole partner in all of these projects.
In 3Q 2014, P50 prospective recoverable resources were estimated by Art Berman, an independent petroleum geologist, at 301 millions of barrels of oil equivalent on a 100% basis for the entire project. Pantheon has a 50% to 58% working interest. Drilling on these prospects began in 2015 with a two well programme, the first in Polk County and the second in Tyler County which both successfully flow tested hydrocarbons and are believed to be commercial wells. In 2016 the VOBM#2 well was spudded in Polk County, offsetting the VOBM#1 discovery. This well will be followed by two more wells in succession.