Pantheon Resources PLC (AIM:PANR, OTC:PTHRF) said it has now spudded its Alkaid-2 well in Alaska with drilling reaching 300 feet on 6 July.
Alkaid-2 is Pantheon’s first horizontal well on the Alaska North Slope (ANS) and it is using Nabors 105AC, a larger rig than used in previous drilling, for the multiple functions planned.
Bob Rosenthal, Pantheon's technical director, said: "We have discovered a lot of oil on the ANS across our Theta West, Talitha and Greater Alkaid projects which are estimated by management to contain over 23bn barrels of Oil in Place and over 2.3bn barrels of recoverable resource in those horizons that have flowed oil, and Alkaid -2 could add to these estimates."
Objectives for the well are (over multiple formations) to test production from the oil formation encountered in Alkaid-1; to explore the deeper potential for oil in that zone, and to appraise an extension of oil discovered in the Shelf Margin Deltaic at Alkaid-1 and Talitha-1.
Alkaid-2 is adjacent to the Dalton Highway and Trans Alaska Pipeline System (TAPS), noted Pantheon, and approximately 4.5 miles from the Alkaid-1 discovery well drilled in 2015.
Pantheon added that while it believes the best way to exploit the anomaly is through +8,000 foot lateral sections, in this first well it will adopt a more conservative approach with a shorter lateral simply to minimise operational risk.
“A successful programme at Alkaid-2 would yield early cashflow which is of significant value at current oil prices,” it added.
The Alkaid-2 horizontal well will utilise unconventional oil production technologies applied to conventional oil reservoirs to maximize potential reserves and production, which it said has now become standard operating procedure across the entire ANS.
Jay Cheatham, Pantheon’s CEO, added: "As our first horizontal well, Alkaid-2 is an important operation for Pantheon.
“The long-term production test through the horizontal section will define the resource and aid the understanding and future development potential of Alkaid.
“But most importantly, if successful, it will begin generating revenue for the company.
“The Alkaid-2 well is the first production well in this new oil field using unconventional technology. As is typical in the industry, we will apply what we learn from this well to subsequent wells in order to optimise future drilling, testing and production.”
"Commercial success at any standalone project, along with our geographic location, onshore and adjacent to export infrastructure in a low sovereign risk jurisdiction, would be transformational for Pantheon."