Pantheon secures rig; Alkaid 2 on schedule

Patrick Galvin, chief commercial officer and general counsel for Great Bear Pantheon, told Petroleum News May 17 that the company has “a contract in place” for Nabors Rig 105AC to be used for Alkaid 2 well that will be spud in July. “It is the same rig we used in 2012 to drill the Alcor 1 and Merak 1 wells,” he said. When asked whether the company also planned to use the rig for the Alkaid 3 well, Galvin said that has not yet been determined. Alkaid 2 will be a step out from the Alkaid 1 discovery well, which was drilled a few years ago as a vertical test well and in 2019 flow tested 108 barrels of oil per day through a 6-foot perforated interval. Alkaid 2 will be drilled horizontally to maximize flow rates and is expected to substantially exceed those seen at Alkaid 1, Pantheon Resources has said. Pantheon is an AIM listed oil and gas company with 100% working interest in all of its oil projects spanning 153,000 acres adjacent and near to transportation and pipeline infrastructure on Alaska North Slope. Its acreage is operated by affiliate Great Bear Pantheon. Alkaid 2 objectivesGreat Bear Pantheon told Alaska’s Division of Oil and Gas in April that the Alkaid 2 well has three objectives, from shallowest to deepest: 1. To appraise the shallower Shelf Margin Deltaic, or SMD, horizon, which management believes contains a contingent resource of 2.6 billion barrels of oil in place and 404 million barrels of recoverable resource. 2. To commence a long-term production test of the primary objective Alkaid horizon, which the independent expert engineering firm Lee Keeling & Associates estimates to contain 76.5 million barrels of oil contingent resources (recoverable). 3. To evaluate the extent of the oil column within the Alkaid horizon immediately below the total depth at Alkaid 1. A slide in a Pantheon Resources mid-May investor presentation listed two objectives for the Alkaid 2 well, also saying the well would be “on production October 2022:” 1. “SMD appraisal - Oil in place 2.6 billion bbl & 404 million bbl recoverable (company estimate).” 2 “Alkaid production test - 76.5 MMBO contingent resources (recoverable).” Alkaid 1 backgroundThe Alkaid 1 exploration well was drilled during the 2014-2015 winter exploration season by original owner and operator Great Bear Petroleum. Drilling did not reach target depth and the well was terminated within the oil zone due to flooding of the Dalton Highway from the Sag River, which led to an eventual suspension of activities at Alkaid 1. Great Bear Petroleum continued to acquire 3D survey data sets in the area throughout 2015 and 2016. In 2019, Alkaid 1 was re-entered, and flow tested with the results previously mentioned. And Pantheon Resources essentially bought 100% working interest in most of Great Bear Petroleum’s acreage. Based on seismic and other analytical analysis, Pantheon believes the Alkaid horizon’s oil zone is substantially thicker than reported to date, offering the potential for additional resource growth. In addition to securing the rig contract, Great Bear Pantheon has received its plan of operations approval from the Alaska Department of Natural Resource’ Division of Oil and Gas on the Alkaid projects (previously reported in Petroleum News). Along with permits from the U.S. Army Corps of Engineers and the North Slope Borough, all necessary permits and authorizations to begin construction of the Alkaid 2 gravel pad and driveway (ingress and egress) have been secured, Pantheon said in mid-May. Great Bear Pantheon expects to finish gravel mining and conditioning in early June, then build the Alkaid 2 gravel driveway and drill pad by July 1. The company will finish building the Alcor staging pad (which sits directly across the Dalton Highway from the Alkaid 2 ingress road), using rig mats by July 1, move the drill rig to Alkaid 2, rig up and spud by July 15. $1M facility unique to SlopeIf everything goes well with Alkaid 2, Great Bear Pantheon will commence a long-term production test, processing the crude through a $1 million, 2,000 barrel per day processing facility. A Pantheon executive said there will be a three-phase flow from the wellhead (oil, gas, water). A production separator will send oil to conditioning tanks; from there oil will be transported by truck for sale on the North Slope. A water injection pump will reinject produced water, eliminating the need to tanker water offsite for disposal. Natural gas from the well will be used to provide power and for use in a gas lift system, eliminating the need for nitrogen for lift. The extended well-test facility is unique to the North Slope because of its location on the Dalton Highway. The facility merges Canadian and U.S./Alaska methods and is fully electric and fit for remote standalone operations, Pantheon said. The facility and the ability to truck oil for sale eliminate the real cost of entry to production on the North Slope, allowing Pantheon to begin production with a single well, rather than having to build a pipeline and drill enough wells to support it. The processing facility includes an electric process heater, a production separator, oil conditioning tanks, a water injection pump, a gas microturbine generator and a lift gas compressor. Jay Cheatham, CEO of Pantheon Resources, said in mid-May prior to an investor presentation: “We are on track to spud in July, allowing Pantheon to commence a long-term production test and, importantly, begin generating revenue for the company, as well as conducting potentially impactful appraisals of the Shelf Margin Deltaic and the deeper portion of the Alkaid horizon.” Bob Rosenthal, technical director, also said prior to the presentation: “Following the reported flow rates in certain horizons tested in the vertical Theta West and Talitha test wells, we are pleased to share with investors our approach to modelling possible horizontal outcomes. This analysis is extremely important given our 100% working interest Theta West, Talitha and Greater Alkaid projects are estimated by management to contain over 23 billion barrels of oil in place and over 2.3 billion barrels of recoverable resource in those horizons that flowed oil.” Did you find this article interesting? 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“It is the same rig we used in 2012 to drill the Alcor 1 and Merak 1 wells,” he said.

When asked whether the company also planned to use the rig for the Alkaid 3 well, Galvin said that has not yet been determined.

Alkaid 2 will be a step out from the Alkaid 1 discovery well, which was drilled a few years ago as a vertical test well and in 2019 flow tested 108 barrels of oil per day through a 6-foot perforated interval.

Alkaid 2 will be drilled horizontally to maximize flow rates and is expected to substantially exceed those seen at Alkaid 1, Pantheon Resources has said.

Pantheon is an AIM listed oil and gas company with 100% working interest in all of its oil projects spanning 153,000 acres adjacent and near to transportation and pipeline infrastructure on Alaska North Slope. Its acreage is operated by affiliate Great Bear Pantheon.

1. To appraise the shallower Shelf Margin Deltaic, or SMD, horizon, which management believes contains a contingent resource of 2.6 billion barrels of oil in place and 404 million barrels of recoverable resource.

2. To commence a long-term production test of the primary objective Alkaid horizon, which the independent expert engineering firm Lee Keeling & Associates estimates to contain 76.5 million barrels of oil contingent resources (recoverable).

3. To evaluate the extent of the oil column within the Alkaid horizon immediately below the total depth at Alkaid 1.

A slide in a Pantheon Resources mid-May investor presentation listed two objectives for the Alkaid 2 well, also saying the well would be “on production October 2022:”

1. “SMD appraisal - Oil in place 2.6 billion bbl & 404 million bbl recoverable (company estimate).”

2 “Alkaid production test - 76.5 MMBO contingent resources (recoverable).”

Great Bear Petroleum continued to acquire 3D survey data sets in the area throughout 2015 and 2016.

In 2019, Alkaid 1 was re-entered, and flow tested with the results previously mentioned. And Pantheon Resources essentially bought 100% working interest in most of Great Bear Petroleum’s acreage.

Based on seismic and other analytical analysis, Pantheon believes the Alkaid horizon’s oil zone is substantially thicker than reported to date, offering the potential for additional resource growth.

In addition to securing the rig contract, Great Bear Pantheon has received its plan of operations approval from the Alaska Department of Natural Resource’ Division of Oil and Gas on the Alkaid projects (previously reported in Petroleum News).

Along with permits from the U.S. Army Corps of Engineers and the North Slope Borough, all necessary permits and authorizations to begin construction of the Alkaid 2 gravel pad and driveway (ingress and egress) have been secured, Pantheon said in mid-May.

Great Bear Pantheon expects to finish gravel mining and conditioning in early June, then build the Alkaid 2 gravel driveway and drill pad by July 1. The company will finish building the Alcor staging pad (which sits directly across the Dalton Highway from the Alkaid 2 ingress road), using rig mats by July 1, move the drill rig to Alkaid 2, rig up and spud by July 15.

$1M facility unique to Slope

A Pantheon executive said there will be a three-phase flow from the wellhead (oil, gas, water). A production separator will send oil to conditioning tanks; from there oil will be transported by truck for sale on the North Slope.

A water injection pump will reinject produced water, eliminating the need to tanker water offsite for disposal. Natural gas from the well will be used to provide power and for use in a gas lift system, eliminating the need for nitrogen for lift.

The extended well-test facility is unique to the North Slope because of its location on the Dalton Highway. The facility merges Canadian and U.S./Alaska methods and is fully electric and fit for remote standalone operations, Pantheon said.

The facility and the ability to truck oil for sale eliminate the real cost of entry to production on the North Slope, allowing Pantheon to begin production with a single well, rather than having to build a pipeline and drill enough wells to support it.

The processing facility includes an electric process heater, a production separator, oil conditioning tanks, a water injection pump, a gas microturbine generator and a lift gas compressor.

Jay Cheatham, CEO of Pantheon Resources, said in mid-May prior to an investor presentation: “We are on track to spud in July, allowing Pantheon to commence a long-term production test and, importantly, begin generating revenue for the company, as well as conducting potentially impactful appraisals of the Shelf Margin Deltaic and the deeper portion of the Alkaid horizon.”

Bob Rosenthal, technical director, also said prior to the presentation: “Following the reported flow rates in certain horizons tested in the vertical Theta West and Talitha test wells, we are pleased to share with investors our approach to modelling possible horizontal outcomes. This analysis is extremely important given our 100% working interest Theta West, Talitha and Greater Alkaid projects are estimated by management to contain over 23 billion barrels of oil in place and over 2.3 billion barrels of recoverable resource in those horizons that flowed oil.”

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