Pantheon Resources to Begin Padre Island Drilling Program

Pantheon Resources says that Golden Gate Petroleum, as operator of the Padre Island Project Area, reports that Parker Drilling's rig number 122 has been released from its previous job and is expected to arrive on site late June 2006. The rig will be on contract to Golden Gate for twelve months with options to extend for up to a further two years by six month intervals.

Once on location, the rig will commence an active drilling program on the Padre Island Joint Venture ("PIJV"). Pantheon expects to be involved in the drilling of four exploration wells over an 18 month period. The exact timing and order of the drilling program remain dependent on the receipt of final location approvals from the relevant authorities.

Pantheon is participating initially in six prospects as a result of a farm-out agreement with Golden Gate concluded in April 2006. The prospect inventory comprises primarily large, high-quality natural gas plays in an under-explored deep section of the Gulf of Mexico. As a result of this agreement Pantheon will earn a 25% working interest in each prospect by paying 33.333% of the costs associated with drilling each prospect up until the point of casing. The prospects covered by this farm-in are:

  • Plum Deep, from 9,500 to 15,000 feet;
  • Manzano Deep, from 10,500 to 16,500 feet;
  • Murdock, all depths from surface;
  • Lemonseed, all depths below 9,100 feet;
  • Wilson, all depths from surface; and
  • Kingsway, all depths from surface.

These prospects are all covered by 3D seismic. In the view of the Board of Pantheon, the deep JV of the PI Project Area is a moderate risk (POS 15% to 36%), high reward exploration venture. It offers the potential, if successful, of major value accretion to the Company and its shareholders.