Shares in Pantheon Resources (LON:PANR) jumped 45% on Wednesday after it revealed a new well in Texas flowed in excess of 1,500 barrels oil equivalent per day in testing.
The company’s 50% owned VOBM-1 well, in Polk County, was drilled into the Eagle Ford shale play and cut 62 feet of net pay. The well flowed at a rate of 6.2mln cubic feet of gas and 504 barrels of oil per day.
Pantheon added that the successful result indicates upside to the prior resource estimates for the project, which stood at 1.4mln barrels of oil equivalent.
Jay Cheatham, Pantheon chief executive, described the result as a “truly transformational event”.
“The VOBM-1 well is expected to contribute valuable revenue and NPV to our company, particularly in the context of the exceptionally low operating costs expected for these wells,” he said in a statement.
“However for me, the single most important outcome is that today's result confirms our understanding of the geology and interpretation of the seismic and gives validation to the incredibly detailed geological study undertaken with our partners over the past few years."
The company will now gather well data over a longer period of sustained production in order to make new evaluations. To do that, the company is working to lay a pipeline to transport gas from the well site to a processing plant.
VOBM-1 is the first well in this operating area. The company is required to obtain a number of permits and permissions to begin sales. It is expected that the process should take around 100 days.
On AIM, Pantheon shares were up 18p, 45%, trading at 58p each.