The latest from Pantheon’s Alkaid well
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Overnight we saw news from Pantheon Resources, which the market clearly didn't like.
Pantheon released an update from its production test currently ongoing at its Alkaid-2 well. Off the back of that news, the company's share price went down ~40%.
Pantheon Resources has ground next door to our oil exploration Investment 88 Energy (ASX: 88E | OTC: EEENF).
88E is due to spud its own exploration well in the coming weeks in the area.
So what does Pantheon's news mean for 88E?
First, Pantheon's Alkaid-2 well targets a completely different reservoir formation to the six stacked targets 88E will be drilling into at the Hickory-1 well.
We think the most comparable Pantheon well for 88E is the Talitha-A well which was drilled in 2021 - most of the rally in Pantheon's share price came off the back of that well.
For some context, here is the location of the Talitha-A well compared to 88E's Hickory-1 well.
We also noted Pantheon's commentary from the announcement, where the company said, "data collected indicates the SMD has significantly better reservoir qualities than the Alkaid anomaly".
The SMD reservoir units make up three of the six stacked targets 88E will be drilling into with the Hickory-1 well - they are the primary targets for 88E.
Overall, while the news wasn't great for Pantheon, we think that the news overnight is completely independent of 88E's Hickory-1 well, given Pantheon was targeting different reservoir units on its recent well.