--UPDATE, ADDS SHARE PRICE AND ANALYST COMMENT--
Pantheon Resources (LON:PANR) must be one of the only US-focused oil juniors enjoying life at the moment.
Its latest well, VOS#1, in Tyler County, East Texas, has uncovered three potential oil and/or gas bearing zones.
The most exciting is the potentially ‘significant’ reservoir in the Eagle Ford/Woodbine sandstone.
Pantheon and its partners won’t know exactly what they have on their hands until VOS#1 is flow tested. It will be completed as a vertical well using a lower-cost work-over rig.
In October Pantheon’s 50% owned VOBM-1 well, in nearby Polk County, was drilled into the Eagle Ford and cut 62 feet of net pay. The well flowed at over 1,500 barrels of oil equivalent a day, sending the share price into orbit.
In the year to date the stock has soared almost 500% on the back of some stellar drilling results – this against a backdrop of depressed crude prices that has wiped 15% off the value of the sector here in the UK in that time.
Pantheon was up a further 10% in early trade at 95.4p, valuing the business at £188mln.
Chief executive Jay Cheatham summed it up when he said: "These are very exciting times for Pantheon, with potential from three zones in the VOS#1 well in Tyler County, which follow on from recent successful flow test results from our VOBM#1 well in nearby Polk County.
But he cautioned: “Whilst encouraged by the log data so far, we stress that until such time as flow testing has been completed on VOS#1, it is not possible to quantify the significance of this well for our company."
Brendan Long, analyst at stockbroker WH Ireland, described it as an “extraordinarily successful” result, and repeated a ‘buy’ recommendation.
“We note that newsflow on the well at this stage, could not be more positive, even if inconclusive,” he said in a note.
“Still we will follow the prudent approach taken by Pantheon and will leave our price target at 91p/share.”
Long did, however, say that he wouldn’t be surprised if the equity market soon began pricing in a higher chance of success than his current target assumes.
Indeed, on AIM after this morning’s statement Pantheon shares rose 11.5p, 13.3%, to trade at 98p each.