Pantheon Expands Gulf Coast Activities with Louisiana Farm-in
Pantheon Resources plc has farmed into an oil and natural gas exploration venture in Iberville Parish, La., south of Baton Rouge. Dallas-based Petro-Hunt LLC, which has also farmed into the project with a 60% working interest, is the operator of the venture.
The farm-in covers two prospects; Nottway Dome and Point Clair. These have combined gross best-estimate potential reserves (previously described as "P50 potential reserves") of 45 to 50 million barrels of oil equivalent ("mmboe"). The project combines low-risk prospects at Point Clair with high-impact moderate-risk targets at Nottway Dome.
Pantheon is participating with a 7.5% working interest, carrying the farm-out companies for a 25% back-in after project payout ("BIAPPO"). All costs will be recovered by Pantheon prior to back-in by the farm-out partners, and no revenues will be received by these companies until Pantheon attains payout. In the event of Pantheon electing to drill a second or subsequent well, the same terms apply. If such drilling occurs prior to payout, then costs would accrue and the back-in deferred until all costs are recovered.
There is a four-well commitment on this project. However, Pantheon would be able to withdraw from the project at any time without penalty. In the event of a success with the first well and subsequent withdrawal from the project (i.e., without drilling the second well of the commitment), then Pantheon would have earned the acreage. This four-well program would combine higher-reward prospects with low-risk smaller prospects.
The first well to be drilled is scheduled to be a 15,000 feet test of Nottway Dome, a salt dome feature. This was identified by a new 3D seismic survey shot in 2005. The anticipated spud date is expected to be in approximately 90 days, taking two months to drill. This structure has a potential for 35 mmboe in the Oligocene section.
Nottway Dome is located four miles east of the White Castle Dome field, which has produced 95 mmbo and 125 bcf of natural gas. Although White Castle was discovered in 1929, there has been deeper exploration activity in 2006. One well was completed in an Oligocene section at 14,440 feet. It is flowing at 900 bopd and 2.5 mmcfd.
Nottway is located one mile west of the Laurel Ridge field. Laurel Ridge is another salt feature discovered in 1944. In 2006, two new discoveries were made in the Micocene and Oligocene. Similar zones are expected to be present in the untested Nottway Dome.
The Point Clair project is a Miocene development play. This was also identified as a result of the 2005 Nottway Dome 3D seismic survey. The targets lie within the existing unitized portion of the Docyville and Laurel Ridge fields. As such they may be considered low risk in multiple targets. There is the potential for 3.6 mmbo and 5.75 bcf natural gas in shallow, low risk close to PUD Miocene targets. There is also another 4 mmbo and 3 bcf natural gas potential from deeper Oligocene targets.
The cost of the first well is being finalized. However, it is estimated that the total expected total dry hole cost outlay is around US$500,000 and the successful completed total cost outlay is around US$700,000. Pantheon is paying back-costs of just under US$450,000.
Pantheon's Chairman, Sue Graham, said: "With the announcement of the Nottway Dome/Point Clair venture, Pantheon is demonstrating its commitment to build a company focussed on the Gulf of Mexico region. The addition of Nottway Dome/Point has a double benefit to the Company. First, it adds another high impact project to Pantheon's portfolio. Secondly, the new venture provides lower-risk targets with Point Clair."
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