Pantheon Resources has problem at Talitha #A well but potential is there
Article continues below
Topics: PANTHEON RESOURCES
Operations at the Talitha #A well have concluded with the well suspended for future testing operations. The well encountered five stacked, independent oil-bearing reservoir zones over a 3700 ft interval which management believes has validated its earlier assertion of over 1 billion barrels recoverable oil potential from this multi-billion barrel oil in place play at Talitha.
Testing of the deepest of these zones, the Kuparuk formation, which flowed high-quality light oil intermittently at rates up to 100 BOPD, a disappointing rate, encountered a number of operational issues.
The Kuparuk horizon at this location was overpressured which was both unexpected and unlike any known Kuparuk well regionally, which caused challenges in testing. The four normally pressured shallower zones, all of which encountered light oil and offer excellent potential based upon analysis to date, will be tested in a future program.
The Company collected an enormous amount of drilling, logging and testing data which will be evaluated. Additionally, Pantheon has engaged the experts at Baker Hughes and Advanced Hydrocarbon Stratigraphy ("AHS") to provide Volatile Analysis Service ("VAS"), a comprehensive, sophisticated and independent evaluation of hydrocarbon presence in the well bore, using mass spectrometry analysis of well cuttings.
Pantheon also used conventional data collection techniques including 'Logging While Drilling', mud logging, side wall cores and an entire suite of wireline logs. Baker Hughes AHS identified five independent highly prospective zones with high oil saturations and low or moderate water saturations. These correlate directly to Pantheon's five target zones.
Comprehensive analysis of the VAS and wireline data from these zones over the forthcoming months will enable the Company to fully optimize its testing program for next season, as well as enabling lengthier flow tests.
The Kuparuk proved more geologically complex than expected. The well encountered ± 60 ft of well-developed sand with high resistivity readings, indicating the presence of hydrocarbons, independently confirmed by VAS. Talitha #A demonstrated the key elements of a proven hydrocarbon system in the Kuparuk formation with the presence of movable high-quality (± 42° API) oil, however during testing the well-produced oil intermittently along with solution gas, with formation water fresher than anticipated. These flow rates were not consistent with our expectation based on Talitha logs compared to nearby Kuparuk field production.
A comprehensive analysis of the Kuparuk, supported by third party experts, has already commenced to gain a greater understanding of the atypical reservoir characteristics encountered. Based upon analysis to date, the Kuparuk very much remains a viable target on the Company's acreage. Early analysis suggests that the Kuparuk horizon at this location might respond better to different drilling fluids and techniques, however ultimate recoveries may be lower than originally estimated. This work is just starting, and a formal conclusion will be reported when completed.
The Talitha #A well location was selected as the optimal location for the shallower Shelf Margin Deltaic horizon, the primary target of the well. The Kuparuk at this location is some 800 ft downdip from its ideal 'updip' position and was a secondary target.
Bob Rosenthal, Technical Director, said: "Like all exploration wells on the Alaska North Slope, the primary objective of this well was to gain valuable data for assessment both technically and economically.
"At a geological level we have amassed an enormous volume of high-quality data, independently supported by the leading industry experts. The bottom line is that Talitha #A has confirmed five separate zones, all hydrocarbon bearing, and which collectively have significantly increased our estimate of oil in place on our 100% controlled acreage."
"A great frustration is that we simply ran out of time to test all the zones. When we plan to come back this coming winter, we will have the twin luxuries of a testing program incorporating the results of a thorough analysis of the dataset, and a much longer testing window.
"This can be accomplished with a small rig and at a much reduced cost. The Kuparuk itself is not yet fully understood, but we believe still offers tremendous potential if drilled differently given its inherent geologic properties. This experience is normal in the industry in any first well drilled in a new area. I would like to thank our exceptional technical team for their extraordinary efforts on this well over the past few months."
Jay Cheatham, CEO, said: "We are of course disappointed not to deliver the high tested flow rates we were hoping for from the Kuparuk. We will continue our analysis of this complex zone as we believe it still offers great potential for our Company.
"The shallower (Brookian) zones continue to grow and evolve as we receive new data. Baker Hughes AHS have independently confirmed our belief. We anticipate providing an upgrade to management's resource estimates once analysis is completed."
"While the testing of the Kuparuk has not gone to plan, we set an incredibly high bar to attempt to drill and test four independent zones in one North Slope winter drilling season. If we had the VAS data before drilling, we would likely have drilled and tested the Kuparuk formation differently. The Baker Hughes AHS analysis has concluded there are strong indicators of five oil pay zones across some 3700 ft.
"This technology is proven and successfully used in other parts of Alaska and North America.
"The Basin Floor Fan discovery at this downdip location sets up a significant and low risk opportunity and is sure to attract international partner attention.
"We have learned that our acreage contains a vast hydrocarbon play, located along and close to the Dalton Highway and the Trans Alaska Pipeline. We have de-risked this play significantly which will lead to upgrades in due course." ■