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(Sharecast News) - Pantheon Resources announced the spudding of the Megrez-1 well on Alaska's North Slope on Monday, targeting the eastern topsets in the Ahpun field.
The AIM-traded firm said the site benefitted from close proximity to existing pipeline and transportation infrastructure, enhancing potential future development efficiencies.
It said the Megrez-1 well aimed to explore shallower, younger reservoir sections, which were expected to have superior reservoir characteristics compared to Pantheon's previous Alaskan wells.
The company had identified three topset horizons within Megrez-1, estimated to contain a total 2U prospective resource of 609 million barrels of ANS crude oil, condensate, and NGLs, along with 3.3 trillion cubic feet of natural gas.
Drilling operations were being conducted with the Nabors 105AC rig, a trusted asset from past campaigns, and the newly-constructed gravel pad near the Dalton Highway will support year-round drilling and development.
Pantheon said it was optimistic regarding recent supportive statements from the US president-elect and the governor of Alaska concerning the proposed Alaska natural gas pipeline, part of the Alaska LNG project's first phase, which aligned with the company's long-term development goals in the region.
Initial results from Megrez-1 were expected after drilling completion.
"A success at Megrez-1 will expand the understanding of Ahpun oil and gas accumulations and dramatically impact the economics of the Ahpun full field development," said executive chairman David Hobbs.
"There are few, if any, onshore wells targeting what we estimate to be more than one billion barrels of oil equivalent of 2U prospective resource anywhere in the world during this year.
"We believe the target reservoir sections should exhibit at least an order of magnitude better permeability than Ahpun's western topsets which were logged and cored in the Pipeline State-1 well on Pantheon's acreage."
Hobbs said that in a success case, the 609 million barrels of ANS crude immediately adjacent to the Trans-Alaska Pipeline would yield a very high net present value per barrel, adding that the 3.3 trillion cubic feet would "significantly enhance" Pantheon's gas resource base into its proposed gas project with Alaska Gasline Development Corporation.
"While the outcome of the Megrez-1 well will not impact our already certified 1.6 billion barrels of contingent resources, success here would be material to our Ahpun development plans for both ANS crude and gas."
At 1352 GMT, shares in Pantheon Resources were up 20.49% at 27.29p.
Reporting by Josh White for Sharecast.com.
