Business
Farm-in agreement
Farm-in agreement.
About this update from Pantheon Resources Plc
[{"type":"text","content":"\n Pantheon Resources PLC\n29 June 2006\n\nPantheon Resources Plc\n\n 30 Farringdon Street\n\n London\n\n EC4A 4HJ\n\nPantheon Resources Expands in South Texas\n\n • Pantheon expands its natural gas exploration activities in south Texas\n\n • Three prospects to be drilled commencing early July 2006, with another\n being evaluated\n\n • This will coincide with higher impact drilling at Padre Island scheduled to\n commence in early July\n\n • Estimated total maximum cost outlay for all four prospects of US$ 650,000\n net to Pantheon\n\n • Low risk exploration complements the Padre Island drilling programme\n\n • Multiple targets per well improve chance of success\n\n • Further prospects identified on acreage offering significant upside\n potential\n\n • Consistent with Pantheon's stated strategy to focus on hydrocarbon\n exploration and production onshore or near shore in the Gulf of Mexico\n\n • Good potential for early, tax efficient cash flow generation. Payback per\n well projected at less than 12 months\n\n • Operator of venture, Everest Resource Company, is highly experienced in the\n region with proven track record\n\nDetails of farm-in\n\nThe board of Pantheon Resources plc ('Pantheon') announces that it has\nfarmed-into a natural gas exploration venture in Wharton County, south Texas.\nThis venture is operated by the Everest Resource Company ('Everest') which has a\nlong successful history operating in the Texas Gulf Coast area.\n\nThe initial obligation covers three prospects which are ready to drill. Pantheon\nwill pay 25% of the drilling costs to earn an 18.75% working interest in Dakota\nand Mohawk and at the third, Zebu, Pantheon will pay 12.5% to earn 9.375%\ninterest. The terms of this farm-in are similar to those for the deep JV of the\nPadre Island Project Area ('PI Project Area'). A further farm-in prospect is\nbeing evaluated.\n\nThe prospects are regarded as small with reserves estimates per well ranging\nfrom 0.5 to 4.0 billion cubic feet ('bcf'). The exploration risk is regarded as\nlow, ranging from 50% to 80%. This compares with 15% to 36% for the deep JV of\nthe PI Project Area. Each well has multiple objectives. As not all objectives\nhave been included in the evaluation, this provides additional upside potential.\nThe prospects have been identified using high-quality 3D seismic. This...