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Vol. 26, No.46 Week of November 14, 2021
Providing coverage of Alaska and northern Canada's oil and gas industry

Billions of Barrels

GBP updip appraisal well expected to sweeten EURs for NS Theta West play

Steve Sutherlin

Petroleum News

Great Bear Pantheon is talking billions of barrels.

Its Theta West 1 well - to be drilled on the North Slope this winter season - is incredibly significant for the Pantheon Resources PLC subsidiary, and for Alaska if the company’s expectations for the well are met.

The Theta West ice pad will be 10 miles west of the Talitha pad where GBP’s Talitha A exploration well struck light oil last winter.

“We think we are a big part of the future,” Pantheon Resources CEO Jay Cheatham told Petroleum News in a Nov. 5 interview.

GBP also plans to reenter the Talitha well this winter to resume testing of zones it ran out of time for as the winter exploration season ended in the spring of 2021, he said.

The company expects to see the same zones and more in the Theta West well, and the expected recoverable resource amounts are gargantuan for the $770 million market cap Pantheon.

“At least a billion” barrels, Bob Rosenthal, Pantheon technical director said. “We think we’ve got one of the largest discoveries made in the world in the last year.”

GBP considers Theta West 1 to be an appraisal well of last winter’s discovery at Talitha, he said.

“This discovery would be significant anywhere in the world, whether in 5,000 feet of water, or Alaska or Texas; it would have a massive, major impact,” Rosenthal said. “It’s proximity next to infrastructure just magnifies that impact.”

The Talitha well lies just to the west of the Dalton Highway haul road and the trans-Alaska pipeline system, about 20 miles south of the Prudhoe Bay oil field. The road and the pipeline pass through the company’s acreage.

“Our discoveries, as we’ve repeatedly said, extend underneath the pipeline,” Rosenthal said.

Theta West updip from Talitha

While the Theta West prospect is conventional, the route to the drilling of the Theta West well is unconventional. Theta West 1 is updip from the Talitha discovery well.

“Its updip by a couple of thousand feet, maybe 2,500 feet,” Cheatham said. “Normally of course you drill on the crest of the structure and then you’d start doing your appraisal well downdip; well, we drilled the downdip portion and we’re going to do our appraisal well in the updip.”

GBP is committed to extensive testing in the downdip Talitha well.

“I happen to think that that was a very gutsy move on our part because if we hadn’t found hydrocarbons there, if we hadn’t found reservoir at that location it would have been hard to go raise the capital to drill the optimum location or close to the optimum location, which would have been updip, where we’re going to appraise it,” Rosenthal said. “But we did, and so when we drill Theta West and appraise it up there, we’re going to have two wells already, one in the crestal position, and one - which is Talitha - in the way downdip position to say we’ve got hydrocarbons over a huge distance.”

The company was surprised to find a 3,700-foot oil column there in the Talitha A well; it had expected to see 2m000 feet, Cheatham said.

In the Talitha well, in the Lower Basin Floor Fan the company encountered 600 feet of about 60% net-to-gross, according to Rosenthal, adding, “We hit another succession in what we call the Upper Basin Floor fan that sits right above the hue shale.”

GBP expects even better results in the Theta West well.

“We believe the fan will be double the thickness, maybe more, and of better quality, closer to the source,” Cheatham said, adding that the crest is at about 7,500 feet.

“To get through it - it’s such a thick section, we’ll probably TD at about 9,500 feet,” Rosenthal said. “It’s going to be significantly shallower than what we drilled at Talitha, 2,000 feet or so shallower, significantly less depth of burial so less degradation of the reservoir.”

“What we have are these fan successions just stacked one right on top of the other, like five or six of them, and when we drill Theta West, we expect to have more of them,” he said. “There’s a geologic reason why these things are stacked right where they are, we’re seeing these big, stacked successions of these individual fan complexes one right on top of another and its about 50-60% net to gross.”

Fast track to development

The Theta West well, close to the crestal position, and Talitha well downdip will provide a clearer picture of the geology, Rosenthal said.

“With that, and our third data set, and the seismic petrophysics that we’ve been doing, I think we’ll have a case to take to the state to let us start building out a development plan,” he said. “This is an appraisal well; we drill it, and we test it. I think we can take it to the state and ask them to help us get this on production.”

GBP is not looking to build a massive central production facility at Theta West; it will build out in increments.

The development will require hundreds of wells, Cheatham said.

“We plan to use these mobile arctic production systems that come in about 5,000-6,000 barrel a day increments - think of it as skid mounted units, we could plug them in as we’re developing,” he said. “We don’t have to do all this front-end engineering and design to completely optimize your production to squeeze the last dollar of present value out of it.”

The design will minimize the need for pipelines throughout the development.

“These are production units where you treat your oil on site,” Cheatham said. “That also is what allow us to not have so much piping when we’re going to reinject our effluent back into the reservoir.”

GBP will use horizontal wells from a single pad, for efficiency of land use, and better recoveries, he said.

“We’re going to do horizontal wells and multi-stage frack into all of these reservoirs,” Rosenthal said.

“We will need water for the fracks, and we have looked at water resources and we think there’s plenty of water resources nearby,” Cheatham said.

“We believe that once we got the go ahead from the state, in a couple of years we could be on production, and peak … from a fairly conservative model we’re speaking around 90,000 barrels per day for Theta West,” he said.

The company has additional development in mind.

“That’s just one out of two or three, we’ve got a couple other developments we could do too,” Rosenthal said. “The Alkaid development along the Dalton Highway that we mentioned earlier, could be super early production, and then our shelf margin deltaic in both of our units, our Talitha unit and our Alkaid unit - and part of that is developable from the highway.”

“We believe we can be a big player pretty quickly for the state of Alaska,” he said. “We’re so pleased that we are 100% on state land.”

Respect for the environment

GBP plans to develop as it has explored, with a minimal effect on the environment.

“Since we are a greenfield project, we are going to endeavor to - after we’re in a development phase - capture all of our emissions and reinject, so we will burn the associated gas to generate electricity; we’ll use all-electric frac pumps, all-electric rigs, etcetera, and capture the CO2 and reinject it back into the reservoir, that’s our plan,” Cheatham said.

Reinjection of the carbon dioxide is likely to enhance oil recovery.

“It should help, a little pressure maintenance can’t hurt,” he said.

“We haven’t modeled it, but of course if you look at Prudhoe Bay, they’re getting those great recoveries in part because they have not only water injection but also the gas pressure maintenance - the reinjection of the gas,” Cheatham said. “CO2 is used certainly in reservoirs in west Texas as early as the 1950s.”

Any unburned natural gas would also be reinjected.

“We would not have any emissions,” he said.

Rosenthal, one of the founders of Great Bear, which merged with Pantheon in 2019, said the company historically had an environmental focus.

“You might remember several years ago we did a massive thing called a Lidar study up on the Slope,” he said.

The company used airborne laser analysis for water resources, to look at all the lakes in the area - noting lake depths, which lakes had fish, and which did not.

“One of the primary reasons we did that one is that we can do a big area, but the other is that you minimize your impact,” Rosenthal said. “The only other way to do that is to send out crews and measure it, so you’re going out on the tundra.”

Great Bear showed that the method worked well, leading it to do additional airborne Lidar studies.

“When the Sag River flooded, I believe the state went to that Lidar study - which we gave them - and used that to understand what the original river channel looked like so they could use that in terms of rectifying the problem.”

Farm in partner in discussions

GBP has made no secret of its search for a farm in partner to share the cost of development.

“What we can say is we’re quite advanced on discussions with bringing in a farm in partner; we’re confident that that will happen,” Cheatham said. “We’re planning on drilling this winter; we’re looking for a partner to come in and partner for the whole thing, that’s what our discussions are right now.”

The company has a backup plan.

“We have to have either a farm in partner or some other method of financing,” Cheatham said. “We do not have enough capital to drill the Theta West well, so we’ve been going down multiple parallel paths for the last several months, and we’re quite confident.”

Pantheon is listed on the AIM portion of the London Stock Exchange, but it is small and nimble.

“Our Anchorage staff is three, and we have a couple of consultants,” Cheatham said.

Cheatham said the stacked pay found in the Talitha A well is important.

“Starting at the bottom is the Kuparuk, then the two basin floor fans, then we got a couple of intervals we call the slope fan system that we think are highly prospective, and then the Shelf Margin Deltaic,” he said. “Our imaging of the Shelf Margin Deltaic changed dramatically after we drilled the Talitha well and got this great data.”

There is enormous resource density in the company’s acreage, Cheatham said.

“To date, we have 16 or 17 billion barrels of oil in place without counting all of the reservoirs,” he said. “We think close to 2 billion barrels recoverable.”

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