Based on the flow rate given in the 9th March announcement on VOBM-1, it will take two years to claw back the cost of the well. But it isn't going to flow that long, and there are operating costs on top of that.
"SDX EnergyHeading home and have spotted the announcement from LSE:SDX:SDX which details a gas discovery at the SAH-2 well on the Sebou permit in Morocco. This makes a success rate of 5/7 and here the company found 5.2 million of net conventional ..."
The well is not producing as Pantheon expected, which they attrbute to operational problems. Their operator, Vision, are, admittedly, pretty useless, but the alternative is that the reservoir is simply not capable of sustained flow. Either way it is bad news.
It is not clear what they mean by "line freezing", but the message is the same as VOBM#1. Operational problems, which could also be attributed to poor quality reservoir.
They plan to test the upper Wilcox, and there is no operational information provided. Results expected later this month.
"Operations are ongoing and on schedule". Results expected later this month.
Tyler County Gas Processing Update
Pantheon & Vision are negotiating with two gas processing plants, even though they have no gas to put into them.
Jay Cheatham CEO did not say: I am considering every possibility except the most obvious ones - that we are dealing with a sub-economic, very-poor quality reservoir, that contains negligible oil, with operations being paid for by Pantheon and conducted by a below-standard operator.
Thanks Malcy - vivid memories of your tv interview with Jay Cheatham and your
confident assessment that the shares would hit £2 within months -- that was a
couple of years ago and now I'm down by nearly 60% on my investment.
I think as an oil guru you might have better use as a shoelace.
MD buying 90,000 shares, if thats not a strong belief that the company is heading for good times, I dont know what is. Why would he risk nearly £500,000 of his own money if he thought that company couldnt fulfill its forecast.
Heading north in my opinion. As always, Dior.
I for one am looking forward to his yearly update. It was early Feb last year , he had had a half decent return, mainly because of one share rising 500+%. This year has been a disaster I suspect barring a couple of winners. Out of 20 some must come good , but alot of miserable punters I suspect.
My opinion is that this guy is worth reading as a guide or indication of shares that are worth researching. I also read his daily blog to make sure I catch up with anything I've missed, cos I don't check at 7am each morning. Importantly, he also gets access to ask questions of leading personnel in these companies, to fill out the flesh from limited information in RNS's, which is something that it's hard for individual PI's to do.
Where to beware - his technical knowledge appears to be similar to the average punter on this board. For instance, in today's post he notes "at 3,000 million cubic feet per day it is still only at initial testing levels". Well, I'd settle for this rate, but unfortunately it's 3,000 thousand cubic feet a day. A slip of the pen maybe, but it does seem to happen often whenever he ventures into territory near technical explanations that aren't a direct lift from RNS text. I just assume he's a City boff rather than an engineer, and some of his contextual ideas on stocks are helpful.
The sport stuff is tiresome...
HTH - I don't hold many Pantheon shares so I'll just continue the long wait for them to come good
"All sorts of influences on oil and gas prices yesterday. All started well and WTI reached $60.74 and Brent $67.29 before excitement was cooled off. The early buzz was primarily geopolitical, with sights of rioting in cities across Iran making ..."
Malcy covers a lot of shares this means he really can't be classed as a tipster, IMHO, he's more of a pundit and a source of information which comes with a view.
Once you hold 20+ shares the law of averages suggests there is little benefit in holding individual shares over funds. In effect you have created your own funds.
I believe I am right in saying that there are over 4 x as many investable funds of various types for punters to invest in than shares in the market all of them making a living from slicing off profit for the service they provide. Some make you money, some lose you money. Because Malcy covers so many, he must come up with a few winners and he will also cover losers.
Malcy doesn't charge a fees and provides information which is pretty much a regurgitation of information in the public domain. This is freely available to anyone. He does have his annual list of 'hot shares' again given away free.
The advice I would give myself if I were to be interested in his forecasts was buy an equal share in all of them at the beginning of the year and hope that you make a positive average return over the 12 months but that is in effect creating a little fund and that is not why PI's buy individual shares, they do so to try and beat average investment returns. But, so often people just pick a couple he covers, that they like, based on his comments and hope they back the right horse. The result is either disaster or self satisfied success for outperforming the market. This one didn't work out for you, or me, but it might yet!
I hold a few of these and I face the choice of averaging down or selling. I'm not sure which at the moment but one thing is certain I'm not just going to sit and hold.
All I can say is the news doesn't indicate this sort of drop. So what don't we know? That's the question? Is it an opportunity or a trap? I'm not sure.
I suspect this is only the first wheel to fall off.
Pantheon fail to distinguish between reservoir rocks and non-reservoir rocks. Just because a lithology has some shows when you drill through it, doesn't mean it will flow. The Eagle Ford/Woodbine is not a good reservoir in this part of Texas and their talk of identifying mini-basins on poor quality seismic is geological rubbish. The Double A wells field is an exception, but even there, the operator (a far better company than Panthoen & its operator) had no ability to predict whether the reservoir would be good, bad or indffifferent.
I suspect the Wilcox results will be the same - poor quality reservoir that won't flow (which they will likely blame on operational problems).
Increasing their working interest was sign of desperation.
By the way, Jay Cheatham's quote in today's release that "we have discovered commercial hydrocarbons in all six of our wells" is simply untrue. He needs to remove the word "commercial".
This share has probably already hit it's highs for the year.
I would hazard a guess that Jay will publish the flow test results for VOBM\2H tomorrow along with the gas processing results for the first month of operation.
Good news will create a good mood among investors for Fridays AGM, especially if the SP increase that we have seen since Friday consolidates and maybe lifts a little more!!
From RNS - Whilst results from logging are highly encouraging, the significance of these results cannot be definitively assessed until flow testing operations have been undertaken. A lower cost workover rig will now be used to complete the well and to undertake flow testing. An update will be given at the conclusion of testing
Anyone with an oil background care to estimate how ling the flow testing will take ?
Am I being too optimistic to hope for flow test results before Christmas eve ?
I am sure you agree a successful flow test would make this years Christmas extra sweet !!
VOBM#4 well, Tyler County, 75% working interest
The Company is pleased to report that Schlumberger has now completed logging operations on the VOBM#4 sidetrack well in Tyler County, which was drilled to a depth of 12,050 feet targeting the Wilcox formation. Electric logs have indicated the presence of hydrocarbons in a potentially significant reservoir in the targeted Wilcox formation, confirming natural gas shows encountered during drilling.
This was just posted by Happyholder on LSE.
Good to look back at the original drill results and take a view on the log analysis results to come from Sclumberger.
"A side-track of the VOBM#4 well in Tyler County is the prudent next step. During drilling, the Wilcox flowed hydrocarbons into the well bore continuously all the way to total depth despite very high mud weight. This is a very promising sign. The multiple cement squeeze jobs performed to repair the liner hanger seal leak appear to have compromised the formation in the immediate area of the wellbore. However, based on log analysis and drilling data we are confident the sidetrack could be a superb Wilcox well with great additional potential on our existing acreage"
Lets hope that this statement is supported by Schlumberger's report and we do have very positive news for the AGM and Christmas.
on anything other than the individual VOBM#4 well and that it is too early to determine the possible commerciality of the Wilcox or Navarro zones) the P50 Prospective Resource attributable to Pantheon increases from 150.5 mmboe to approximately 158 mmboe. At a 60p share price and USD/GBP exchange rate of 1.32, Pantheon is currently valued at approximately $1.18 per boe P50 Prospective Resource - in an area of abundant infrastructure, low sovereign risk, and estimated operating costs of less than $5 per boe.>>> That suggests that Pantheon could be massively undervalued, and that the shares could be worth many times the current price, all being well. All has not been well in the past 18 months, but it looks much better now.>>> This has always been a parcel of assets being dressed up for sale. Now that there is genuine cash flow and the prospect of more arriving if the board can start selling gas from Tyler County before 2018 is out, prospects look much brighter. There ought to be cash enough to finance extra wells which generate extra income, and then outline significantly enhanced assets.>>> The calculations in the paragraph above outlining 158mmboe and a potential current valuation at $1.18 per barrel of oil equivalent could be extremely conservative. They come before any value has been added from the Wilcox and Navarro discoveries, and before Pantheons stake in them has risen to 75%. We are talking potential values, but the real substance is steadily being put in place behind that potential, with a management team which has stumbled on operations, but has so far notched up five exploration wins out of five (or maybe seven wins out of five).>>> Oil at little over $1 a barrel, and more to come? Sounds like a good gamble at 52p.
There is another kicker, too. Pantheon will have a 75% interest in this VOBM#4 well, not just 50% or 58%.>>> The biggest kicker of all, however, could relate to the wells which are to come in 2018 now that the company is starting to see cash flow from the gas it is selling from Polk County. The most important plus could come with the return of drilling to the centre basin in Tyler County, near the existing VOBM#4 well.>>> Cheatham spoke in the recently published annual report of the tremendous potential in Tyler County. It is illustrated dramatically if you go back in time to talk about the Tyler central basin and the possible resource there, with this extract from Pantheon What You Need to Know from September 9, 2016. Cheatham suggests a little simple mathematics here. The new well will step out about four to five miles from the first Tyler County well, which is 4.5 to five miles from LP2, a highly successful well which has generated over $30m revenue and was drilled near the edge of the basin in 2004 prior to Pantheon's involvement. (see a Pantheon presentation at hXXp://www.pantheonresources.com/index.php/investors/presentations/505-agm-presentation-2015-1/file).>>> So from LP2 to the proposed centre basin test well is about ten miles. If the new well is to be somewhere near the centre, that suggests the basin could be about twenty miles long. The width varies, but it could be two miles or more, so we appear to have a potential reservoir which covers about fifty square miles.>>> No wonder Cheatham says the potential reservoir is 'enormous', and that positive results will be 'extremely important' for Pantheon. Be careful. This is unknown territory. Well, it might be unknown to most of us, but the boys who understand these things think they have indications enough to encourage them to be positive. But even they cannot be sure. The drill bit determines it. (Quotation ends)>>> It did not work out first time around. This time? We shall see. The Pantheon boys are being more cagey now, but there is no reason to doubt their earlier assessment of what might be. And fifty square miles for the reservoir?>>> Cheatham has said he will discuss at the annual meeting on December 15 how he sees the plan for new wells unfolding in the New Year.>>> The 2017 annual report says In October 2014 it was estimated that Pantheon's acreage (on a gross basis) had the potential to contain a P50 Prospective Resource of 301mmboe (50% Pantheon = 150.5 mmboe) from the Eagle Ford sandstone and Austin Chalk formations. Including the additional 8% working interest acquired in Polk County, but, for conservatism, excluding any additional interest in Tyler County (on the basis that we have not yet exercised the option to move to 75% on anything other than the individual VOBM#4 well and that it is too early to determine the possible commerciality of the
Just read this off another site:
Those of you that do not subscribe to MichaelWalters.com I would encourage you to do so. Not only is his assessment of PANR spot on the money (see below), but he is more generally a respected analyst / financial broadcaster. Use this link to subscribe: hXXp://www.michaelwalters.com/subscribe.phtml "6/12/2017 Deja Vu Santa Jay>>> Oh dear. Have we been running on the spot at Pantheon Resources (PANR) for twelve long months? It seems so. Exactly a year ago we were talking about the potential goodies to come and looking forward to chief executive Jay Cheatham sleighing in to London to spread Christmas cheer at the annual meeting, and usher in a year when Pantheon would be on the bounce.>>> Alas, it never quite worked out that way. But this year oh this year, folks, it could be glad tidings of great joy and all that stuff. Buy Pantheon at 52p (51.25p to 52.25p at the close), and rejoice. If the drill bit bites, we are on the way to happier times in 2018. Best, though, if you fancy a gamble in Pantheon to buy pretty promptly.>>>; Santa Cheatham will be in town next week, touring the institutions with a road show bringing them up to speed on Pantheon. He arrives just before the annual meeting, and there cannot in theory be anything new to say. But it is safe to assume that, reinforced by a series of encouraging updates, he will have a bullish message to give, scattering goodies simply by bringing established opportunities more sharply into focus.>>> There is ample room for it because the basics at Pantheon have rather been pushed aside by a series of operational setbacks, whether it be as the result of less than brilliant management or a consequence of errors by the various contractors who appear to have lost focus as the oil boom turned sour. Since Pantheon is an oil and gas exploration play at this stage it is always possible, of course, that fates might intervene and the logging and analysis of the sidetrack drilled at VOBM#4 in Tyler County could disappoint and spoil the plot.>>> The mood, though, seems happy. We could see news next week that the logging, which establishes the state of the soil and rock as the drill passes through it, poses no new problems. Then contractor Schlumberger will be busy on the analysis which establishes whether they go on to a fully fledged well. That ought to be done in time for Christmas, and there are high hopes that it will proceed to a proper well in the Wilcox formation.>>> Results>>> That would confirm a substantial bonus. Wilcox was never originally meant to be for Pantheon. The company was not shooting for a resource in the Wilcox or the Navarro formations. But the Wilcox has been prolific in adjoining areas, and could just be very big news for Pantheon. In the annual report, Cheatham spoke of potentially large Wilcox accumulation and additional potential from the Navarro formation.
This mornings RNS regarding Schlumberger is good news for the Core Analysis. Having prestigious industry professionals like Schlumberger involved in Pantheon is a step forward for us and I welcome the move. I should imagine though that the core analysis won't be ready for some days yet though.
Analysis of well logs for the initial drilling of VOBM4, back in June and July this year concluded that hydrocarbons were encountered during drilling. It will be no surprise therefore that the new drill logs also show hydrocarbons.
The sidetrack will confirm that the Wicox is productive on our acreage. That is the big win with this drill and I am hoping that the current drill logs confirm the Wilcox hydrocarbons.
If we can follow up with a successful Flow Test the results will be very valuable to PANR and will send the SP into orbit IMHO.
Results will be announced soon and I am hoping later this week.
Remember the potential of the VOBM#4 well remains excellent. When VOBM4 was drilled they encountered 2 new potentially productive zones: (1) Wilcox and (2) Navarro. Logs and gas production while drilling indicated that it could be an upper tier Wilcox producer.
I am expecting good results and the SP will rocket.
What amazes me is that this share is not being bought in anticipation.
With the results so close, it must be a really bullish position.
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