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(Sharecast News) - Pantheon Resources announced on Tuesday that it has started drilling the Dubhe-1 well at its Ahpun oil field on Alaska's North Slope, targeting the SMD-B topset horizon within a previously discovered resource area adjacent to existing pipeline and road infrastructure.
The AIM-traded firm said the well was designed to appraise the SMD-B horizon as its primary target and would also test three additional exploration zones - Prince Creek, SMD-C, and the Slope Fan System - which currently have no resource estimates but offer potential upside.
An independent report by Cawley Gillespie & Associates in June last year estimated the SMD-B horizon to contain 282 million barrels of 2C contingent oil and condensate resources, alongside 804 billion cubic feet of gas.
At an ANS crude price of $80 per barrel, the report valued the contingent resources at $1.74bn on a 10% discounted basis.
"Assuming initial appraisal success at Dubhe-1, it will then allow us to move forward into a test phase with the ultimate goal of accurately demonstrating a production type curve which would in turn underpin the planned Ahpun full field development," said chief executive Max Easley.
He added that the well would also support gas supply volumes for the proposed Alaska LNG pipeline, and noted that Dubhe-1 carried a significantly lower risk profile than the Megrez-1 exploration well drilled earlier.
The well was being drilled using the Nabors 105AC rig, previously used by Pantheon, from a gravel pad completed in June near the Dalton Highway.
Pantheon said the pad would be available year-round for future drilling and development activities.
Initial results from the well would be released on completion of drilling operations.
At 1301 BST, shares in Pantheon Resources were up 0.23% at 23.55p.
Reporting by Josh White for Sharecast.com.
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