WH Ireland’s oil and gas analyst Brendan Long has today highlighted what he sees major upside for Pantheon Resources PLC (AIM:PANR, OTC:PTHRF), after the explorer this morning updated on progress with the Alkaid #2 horizontal well in Alaska.
Pantheon told investors that it has now completed a programme of well stimulation and a workover rig now en route to prepare the well for a pivotal flow test.
The Alkaid #2 horizontal well exceeds 5,000 feet through the well’s target formation, with 30 stimulation treatments successfully executed over the horizontal well.
Test oil production is now likely to start later in October, Pantheon said in a statement.
In the meantime, the company has also applied to the Alaska Oil and Gas Conservation Commission (AOGCC) to carry out a long-term pilot production test. A hearing will take place in late October. If allowed, the long-term pilot will allow gas flaring at the Alkaid #2 well beyond the initial flow testing.
Chief executive Jay Cheatham highlighted that the completion of the stimulation programme is one of two very important milestones for Pantheon this year, and, marks “a significant step toward potential commercialization”.
In a note, WH Ireland analyst Brendan Long said: “It is always satisfying to see an appraisal well successfully cased and completed and this step greatly reduces the operational risks in respect of the well, in our opinion.
“We remind investors that our pre-drill fair value estimate for Pantheon was 208p.
“We look forward to the forthcoming well results and continue to endorse the company’s appraisal work believing the company’s assets to have exceptional potential.”
Pantheon shares are up around 14.5% over 2022 to date, priced today at 92.65p which values the company at around £742.6mln – earlier this year, in April, the price peaked at around 149p.