Pantheon Resources PLC (AIM:PANR, OTCQX:PTHRF) told investors it has paused its plans at the Megrez-1 well, in Alaska, as an initial well test disappointed.
Another test, on a different zone, will go ahead before Pantheon makes a decision about the rest of the well programme.
The first test in Megrez, on the Lower Prince Creek formation (undertaken without stimulation), at first recovered some initial oil and gas before its flow was dominated by water.
Testing of the Upper Schrader Bluff Topset 1 zone showed high oil saturation, but not commercial oil flow.
A remaining test, on the Lower Sagavanirktok 3 horizon, will now be completed before further decisions are made.
Pantheon noted that testing of the Upper Prince Creek and remaining Lower Sagavanirktok horizons will be subject to the Lower Sag’ 3 test results.
“The results of testing so far have been undeniably disappointing,” Pantheon chair David Hobbs said in a statement.
Hobbs, meanwhile, emphasised that following the Megrez programme, the company’s focus is slated to focus on appraisal and development of its substantial resource base on Alaska’s North Slope – namely, the planning for the Ahpun commercial demonstration well, which forms part of a project that aims to supply Alaskan LNG.
“This will allow a relentless focus on the transition from exploration and appraisal to development and future production of our existing independently certified resource base,” he added.
Pantheon chief executive Max Easley, meanwhile, commented in more detail about today’s well data: "The initial flow test in the Lower Prince Creek formation has shown improved but similar reservoir characteristics as TS1.
“The data indicate material oil saturations and reservoir properties that would, under normal circumstances, support commercial production rates, but our challenge is one of engineering, to determine if/how we can engineer them to flow commercially.
"Both zones could become attractive candidates for future development once permanent facilities enable longer-term, cost-effective flowback and processing.”
Easley added that in the near term, Pantheon is eager to test the Sagavanirktok interval, which is described as “a much higher porosity and permeability reservoir”.