Pantheon Resources PLC says Alaska well shows ‘promising indications’ of reservoir performance

Pantheon Resources PLC (AIM:PANR, OTC:PTHRF) told investors that the Alkaid-2 well in Alaska has shown promising indications of reservoir performance as it remains in the early stage of cleanup, ahead of production testing.

Oil was produced from the well with a strong backflow of frac fluid – measured in thousands of barrels of fluid per day – including frac sand which was described by Pantheon as higher than expected but not uncommon.

So far, the company has recovered approximately 10% of the fracturing fluid that has been injected into the well, and in the recovered fluid, it has seen an oil reduction of between 8% and 12%.

“Often the first real indications of oil come much later,” chief executive Jay Cheatham said in a statement. “While frac sand production is impractical, as is the wait time to obtain a coiled tubing unit, it is not an uncommon occurrence in multi-stage fracture stimulation completions in reservoirs. conventional and will be processed once the unit arrives.”

Cheatham added: “It is encouraging that the reservoir response to the stimulation procedure was very good, as we experienced strong initial fluid flows measured in the thousands of barrels per day.

“These are conventional reservoirs that have superior reservoir qualities compared to shales, and given that this is our first well completion applying stimulation techniques in these reservoirs, it requires some patience as we better understand the characteristics of our reservoirs on the North Slope.”

The well is now closed as planned, as part of a transition process from temporary flowback facilities to larger permanent facilities, and a coiled tubing unit will be used to clean out the wellbore. Other preparations for production testing will also be undertaken, including pressure build-up methods.

Pantheon noted that generally “better indications” of actual performance can be determined after more than 40% of the fracturing fluid has been recovered. He expects to reach that point “over the next few weeks.”

Michael Duncan, Vice President of Operations and Engineering at Pantheon, meanwhile called the early results so far “very encouraging” and highlighted the operational progress.

“Before going into initial production, it’s common to clean out a wellbore,” he said. “We use a planned outage for the connection of our permanent installations in order to carry out a pressure build-up of the well as well as the cleaning of the borehole.

“The operating season has been good so far and we look forward to having a fully operational system soon. Frac sand production is a nuisance that cost us time during the early stages of flowback, but is not believed to alter the well potential.”

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