Billion $ capped neighbour spuds production well

Over the weekend we noticed that London-listed Pantheon Resources’ (capped at $1.26 billion), started drilling its first horizontal production well right next door to our oil and gas exploration Investment 88 Energy (ASX: 88E).

Drilling commenced on the 7th of July at Pantheon’s first horizontal well on the Alaskan North Slope.

Pantheon in its press release mentioned that the ultimate objective for this well would be “to gain robust production test data to accurately assess the ultimate potential of the reservoir”.

Pantheon estimate that the Alkaid prospect has ~900 million barrels of oil in place and have previously estimated a US$595M NPV across the prospect at an oil price of US$55/barrel, this compares to the current oil price which sits at around US$105 per barrel.

If Pantheon can make a discovery anywhere near these estimates then we suspect interest in the area will start to come into our portfolio company 88E.

88E recently acquired got access to 3D seismic data which covers the reservoir units that Pantheon Resources’ (capped at $1.26 billion) is drill testing.

These reservoir units are interpreted to extend from Pantheon’s acreage onto 88E’s, so any good news from 88E’s neighbour will be great news for 88E.

88E have also confirmed that the datasets would provide key data for potential farm-out partners as part of their due diligence programs leading up to the drilling of a new exploration well currently being planned to spud in 2023.

In the meantime we will be closely watching for some news from Pantheon with the drilling of its horizontal well.

To see our deep dive into all of the exploration work Pantheon have been doing next door to 88E check out our last note here: 88E - What to watch out for in the next 12 months