17 May 2021

Pantheon Resources plc

("Pantheon" or the "Company")

Resource Upgrade - Basin Floor Fan

Pantheon Resources, the AIM-quoted oil and gas exploration Company with a 100% working interest in projects spanning c.160,000 acres, covered by 1,000 square miles of 3D seismic, conveniently located adjacent to transportation and pipeline infrastructure on the Alaska North Slope, is pleased to provide the following resource upgrade on its Basin Floor Fan Complex, which spans both the Theta West project and Talitha Unit.

Highlights

·    Company P50 estimate of 12.1 billion barrels ("BBL") of oil in place ("OIP") and of 1.41 billion barrels of  Recoverable oil in the Basin Floor Fan Complex, consisting of 11.0  billion barrels OIP and 1.20  billion barrels recoverable  in the Lower Basin Floor Fan and 1.10  billion barrels OIP and 0.21 billion barrels  recoverable in the Upper Basin Floor Fan

·    Given discoveries in the Basin Floor Fan Complex, most recently at Talitha #A and previously at Pipeline State #1, the Company believes the above estimates could be categorized as Contingent Resources

·    The Basin Floor Fan Complex is now referred to as the Theta West Project and includes the Talitha Unit

·    Theta West contains two separate reservoirs, the Upper Basin Floor Fan ("UBFF") and the Lower Basin Floor Fan ("LBFF")

·    VAS analysis confirmed the 600 ft of oil bearing  interval in the  LBFF Complex with +35 API oil at Talitha #A

·    Pantheon expects a thicker reservoir section in the LBFF, with better porosity and permeability at the updip Theta West location

·    Theta West, due to similar reservoir characteristics, is interpreted as a direct analogue to the producing Tarn oilfield deposition where recoveries are estimated to exceed 40%. Whilst Theta West appears larger in potential size, its depositional setting is deeper and therefore recoveries are not expected to be as high as 40%

Background to the Resource Estimate

The Company has now completed its analysis of the Basin Floor Fan Complex encountered in the Talitha #A well and confirms its interpretation that the Basin Floor Fan Complex encountered at Talitha is mapped to extend 10 miles into the shallower (updip) Theta West Project area. Given the Basin Floor Fan's crossover into these two different project areas, and to avoid potential confusion, all future references to the Basin Floor Fan resource (both in the Talitha Unit and in the Theta West project area) will hereafter be singularly classified by reference to the 'Theta West' project (not Talitha). The Theta West project has been at the forefront of Pantheon's leasing strategy over the past two years where the Company strategically secured a major acreage position which has captured the majority of the Basin Floor Fan play.

Resource Estimate - Basin Floor Fan

The Company estimates the Basin Floor Fan (Theta West), where Pantheon has a 100% working interest, to contain 12.1 billion barrels of oil in place and a P50 Recoverable Resource of 1.41 BBL (based upon a modelled 11% recovery factor in the LBFF and a 20% recovery factor in the UBFF) as a most likely case under primary recovery. The UBFF depth of burial was much shallower than the LBFF, and thus a higher recovery factor has been modelled. The Theta West Basin Floor Fan also extends east of Talitha and was penetrated in the Pipeline State #1 well, substantially downdip from Talitha A, where it was also confirmed to be oil bearing. As a result of these two discoveries in the Basin Floor Fan, the Company believe the above estimate can be categorized as a Contingent Resource.

The Talitha #A well targeted four independent horizons; (i) the Shelf Margin Deltaic ("SMD"), (ii) the Slope Fan System, (iii) the Basin Floor Fan ("BFF" - hereafter classified under the Theta West project area), and (iv) the Kuparuk. A fifth prospective zone was also encountered during drilling. All of these formations were penetrated by the Talitha #A wellbore, and all were confirmed as oil bearing and will be the focus of flow testing operations in this coming winter's drilling season.

The Talitha #A well which had intermittent flow of oil, gas, and water to surface from the Kuparuk horizon during testing of that zone, penetrated the Basin Floor Fan in a structurally down dip location, approximately 1500 ft down dip and 10 miles from the crest of the structure to the northwest. Theta West contains two separate reservoirs, which collectively comprise today's resource assessment:

(i)            the Upper Basin Floor Fan, and

(ii)           the Lower Basin Floor Fan

The LBFF is approximately 600 ft thick at Talith #A with approximately 50% net to gross sand ratio over approximately 100,000 acres. The Company's modelling suggests, based on 3D seismic, that the formation doubles in thickness at its (updip) crest, some 1500 ft shallower than at Talitha #A. The UBFF is oil bearing in the Talitha #A location. The Company's analysis indicates the reservoir should be between 100 to 200 feet thick at the crestal location. The UBFF covers approximately 28,000 acres. Accordingly, Pantheon's modelling predicts thicker reservoir sections with superior porosity and permeability at the updip portion of Theta West. Drilling this updip (shallower) crestal location should also lead to reduced drilling costs. Data obtained during drilling of Talitha #A is of an exceptionally high quality and has allowed Pantheon's geologic, geophysical, and engineering teams to have confidence in its analysis. This analysis has been supported by the independent Volatiles Analysis Service ("VAS") completed by the experts at Advanced Hydrocarbon Stratigraphy ("AHS") / Baker Hughes. The VAS confirmed the presence of continuous stacked oil-bearing reservoir zones over a 3700 ft interval with +35 API oil at Talitha #A.  A copy of their report is available on the Pantheon website under the 'Shareholder Documents' section.  

Analysis continues on the SMD, SFS and Kuparuk zones encountered at Talitha #A. The Company will announce key conclusions from those horizons when work is completed.

Pantheon's Alaskan projects benefits from their close proximity to both the Trans Alaska Pipeline System ("TAPS") and the Dalton Highway, the single land supply and oil export route on the North Slope, both of which run through Pantheon leasehold (100% owned by the State of Alaska). This proximity offers tremendous advantages to Pantheon over other North Slope projects, allowing for easier access, materially minimizing both development costs and environmental considerations, as well as offering the opportunity for more rapid development time horizons.

Bob Rosenthal, Technical Director of Pantheon Resources, commented, "The Theta West project has become a giant play for us and we believe represents one of the biggest plays in Alaska. Basin Floor Fans are typically huge traps, explored offshore in deep water basins. Our Theta West Basin Floor Fan is a similar trap, with the benefit of being located onshore USA, adjacent to the underutilized TAPS pipeline infrastructure."

"The technical and engineering work to assimilate the high-quality data obtained from Talitha #A and rework our geologic models has been impressive. Despite the very large resource estimates provided today, we have been conservative in determining this resource number. We modelled a ± 11% recovery factor for the LBFF and a ± 20% recovery factor for the UBFF. By comparison, the ultimate recoveries for the analogous and nearby Tarn field are estimated at >40%. The key to higher recoveries in the LBFF lies in the application of engineering techniques to exploit a 600 ft to 1200 ft thick reservoir in the most efficient manner. We believe the size and location of Theta West, combined with a comparatively low-cost drilling operation, should attract strong farm-in interest." 

Jay Cheatham, CEO of Pantheon Resources, commented, "We set out to prove that the Talitha and Theta West projects had the potential to contain over one billion barrels of oil recoverable from four distinct zones. Our drilling and testing operations have generated extremely high quality data which has led us to interpret that just one of our five prospective zones has the potential to achieve that target of greater than one billion barrels of recoverable oil, even despite using conservative recovery factors. I have often said good, big oil fields get bigger over time. As a reminder, the original estimate for oil in place at Prudhoe Bay was 10 billion barrels of oil, with three billion barrels recoverable. Current estimates predict that Prudhoe Bay will actually recover more than 15 billion barrels, or more than the original OIP estimate."

"Theta West has the potential to grow both in size and through higher recoveries. It is also worth remembering that Talitha discovered oil in the Kuparuk, Shelf Margin Deltaic and Slope Fan System. We will soon turn our attention to updating our resource estimates for those formations. We believe the Talitha #A well, which was proven as oil bearing across all our main targets, was an outstanding exploratory success for our Company. It has allowed us to upgrade our entire portfolio and has given us numerous high impact projects to pursue which have all been significantly de-risked."

-Ends-

Cautionary Statement: The estimated quantities of petroleum that may be potentially recovered by the application of a future development project relate to undiscovered accumulations. These estimates have both an associated risk of discovery and a risk of development. Further exploration, appraisal and evaluation are required to determine the existence of a significant quantity of potentially movable hydrocarbons.

Further information:

In accordance with the AIM Rules - Note for Mining and Oil & Gas Companies - June 2009, the information contained in this announcement has been reviewed and signed off by Bob Rosenthal, a qualified Petroleum Geologist  who has over 40 years' relevant experience within the sector.

The Resource estimates has been reported in accordance with SPE standards.

The information contained within this RNS is considered to be inside information prior to its release. Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement. 

Glossary

Notes to Editors

Pantheon Resources plc is an AIM listed Oil & Gas exploration and production focused on several large projects located on the North Slope of Alaska ("ANS"), onshore USA. A major differentiator to other ANS projects is its proximity to transport and pipeline infrastructure. The Group's stated objective is to create material value for its stakeholders through oil exploration, appraisal and development activities in high impact, highly prospective conventional assets in the USA; a highly established region for energy production with infrastructure, skilled personnel and low sovereign risk. All operations are onshore USA, with drilling costs materially below that of offshore wells.

On the North Slope of Alaska, Pantheon holds working interests of 100% in projects spanning c.160,000 acres and covered by c.1,000 square miles of proprietary 3D seismic. The Company has received Independent Expert Reports certifying a Contingent Resource of 76.5 MMBO (million barrels of oil) recoverable on its Greater Alkaid project and, prior to drilling it's Talitha #A well, a 302 MMBO Prospective Resource at its Talitha project.