Assessment shows 300M-barrel Slope play, drilling to follow

A small U.K. explorer is sitting on more than 300 million barrels of recoverable oil alongside the Trans-Alaska Pipeline, according to an independent assessment of the prospect.

London-based Pantheon Resources’ Talitha project is being built off of new analyses of a well drilled in 1988 and modern data from a modern 3D seismic shoot of the broader area roughly 20 miles south of Prudhoe Bay.

The Pipeline State-1 well was drilled by ARCO just east of the Dalton Highway-TAPS corridor and though the 10,000-foot vertical Pipeline State-1 well has a roughly 2,200-foot oil-bearing column over four reservoirs, the technology and oil prices of the late 1980s it did not add up to a viable prospect at the time, according to Pantheon leaders.

Pantheon bought Anchorage-based Great Bear Petroleum and the roughly 200,000 acres of North Slope leases the company held in January 2019.

Pantheon is focusing its work first on the shallowest of the four reservoirs intersected by the Pipeline State well, the Shelf Margin Deltaic, which holds 302 million barrels of recoverable oil and 1.1 billion barrels in place based on a resource assessment by the Oklahoma-based consultancy Lee Keeling &Associates.

Pantheon expects to drill the Talitha-A well into the prospect itself starting early next year, and company leaders have stressed the work is appraising what is already known about the Pipeline State well and the surrounding area; it’s not greenfield exploration.

In addition to the potential Shelf Margin Deltaic resource, Pantheon estimates internally that the prolific Kuparuk formation also holds upwards of 340 million recoverable barrels.

Pantheon stands out because it is one of few companies working aggressively to delineate and develop an oil prospect on the North Slope or elsewhere in Alaska while the coronavirus pandemic continues to constrain oil demand and prices worldwide.

Company leaders have stressed the project’s location — adjacent to the Dalton Highway and pipeline — as a driver of its economics.

Pantheon estimates its projects have a break-even price of roughly $30 per barrel primarily because of their locations. The company also holds the 76 million-barrel Greater Alkaid prospect just to the north and bisected by the transportation corridor.

“Our modeling shows Talitha is economic at very low oil prices because of the size, reservoir qualities and proximity to the Dalton Highway and Trans-Alaska Pipeline,” CEO Jay Cheatham said. “This is important for a company like Pantheon as we can reduce upfront capital by utilizing modular production units instead of large central processing facilities to expedite development and reduce risk.”

Pantheon wholly owns the Greater Alkaid prospect and holds an 89 percent stake in Talitha.

While the company is likely to start with a phased development and a gradual ramp-up of production, the assessment envisions full build-out of Talitha as an 85,000 to 90,000 barrels per day project at peak production from 91 producing wells.

Pantheon filed an application with the state Division of Oil and Gas to establish the 44,000-acre Talitha Unit Sept. 4. The prospective Talitha Unit operator is listed as Great Bear Pantheon LLC.

10/28/2020 - 9:19am