Pantheon Resources PLC
29 June 2006
Pantheon Resources Plc
30 Farringdon Street
London
EC4A 4HJ
Pantheon Resources Expands in South Texas
• Pantheon expands its natural gas exploration activities in south Texas
• Three prospects to be drilled commencing early July 2006, with another
being evaluated
• This will coincide with higher impact drilling at Padre Island scheduled to
commence in early July
• Estimated total maximum cost outlay for all four prospects of US$ 650,000
net to Pantheon
• Low risk exploration complements the Padre Island drilling programme
• Multiple targets per well improve chance of success
• Further prospects identified on acreage offering significant upside
potential
• Consistent with Pantheon's stated strategy to focus on hydrocarbon
exploration and production onshore or near shore in the Gulf of Mexico
• Good potential for early, tax efficient cash flow generation. Payback per
well projected at less than 12 months
• Operator of venture, Everest Resource Company, is highly experienced in the
region with proven track record
Details of farm-in
The board of Pantheon Resources plc ('Pantheon') announces that it has
farmed-into a natural gas exploration venture in Wharton County, south Texas.
This venture is operated by the Everest Resource Company ('Everest') which has a
long successful history operating in the Texas Gulf Coast area.
The initial obligation covers three prospects which are ready to drill. Pantheon
will pay 25% of the drilling costs to earn an 18.75% working interest in Dakota
and Mohawk and at the third, Zebu, Pantheon will pay 12.5% to earn 9.375%
interest. The terms of this farm-in are similar to those for the deep JV of the
Padre Island Project Area ('PI Project Area'). A further farm-in prospect is
being evaluated.
The prospects are regarded as small with reserves estimates per well ranging
from 0.5 to 4.0 billion cubic feet ('bcf'). The exploration risk is regarded as
low, ranging from 50% to 80%. This compares with 15% to 36% for the deep JV of
the PI Project Area. Each well has multiple objectives. As not all objectives
have been included in the evaluation, this provides additional upside potential.
The prospects have been identified using high-quality 3D seismic. This project
provides Pantheon with low risk/reward plays to balance the higher risk/reward
plays at the PI Project Area.
Drilling programme due to commence in late June with first results expected in
early July. The wells are shallow (less than 5,000 feet) leading to short
drilling times per well of less than one month. The expected total dry hole cost
outlay is around US$400,000 and the successful completed total cost outlay is
around US$650,000 for four wells. In the event of success, there is easy access
to infrastructure.
Success with any of these exploration wells will lead to numerous additional
drilling opportunities within surrounding acreage. There are another 13
prospects that could be pursued in the event of success which would represent a
material reserve addition to Pantheon. These are also regarded as low risk with
good early cash flow generation potential. These would not be subject to the
farm-in terms and hence have a higher value.
Pantheon has an aggressive exploration drilling campaign. It combines a good
mixture of low risk/return projects from this project combined with the higher
risk/reward projects at Padre Island
Background to Everest
Everest has a long history of generating high quality oil & gas prospects in the
onshore trends of coastal Texas where Pantheon intends to build its business.
Its expertise is working up prospects and drilling the Wilcox, Frio, and Yegua
trends along the Gulf Coast of Texas where infrastructure is already in place
and reserves are quickly brought into production. It has a history of successes
in all these trends and it intends to build upon that success.
The Everest Companies were founded in Corpus Christi in 1969 by E. A. Durham,
II. Mr. Durham and a small group of private investors built their energy
exploration and production business as a series of limited partnerships in which
Mr. Durham and/or one of his closely held corporations or partnerships served as
the general partner.
In accordance with the AIM Rules, the information in this report has been
reviewed and signed off by Mr Robert Rosenthal, (BSc Geology, MSc Geology),
Technical Director at Pantheon Resources Plc, who has over 30 years relevant
experience within the sector.
Contacts:
Pantheon Resources Plc
Sue Graham, Chairman +44 20 7379 0118
Oriel Securities Limited
Scott Richardson Brown +44 20 7710 7600
This information is provided by RNS
The company news service from the London Stock Exchange
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