It has been a long time coming but PANR has finally been informed by the Operator, Vision Gas, of the intention to drill the Tyler County, Texas, KF1H well in Q4/2012 targeting the Austin Chalk formation and the deeper Woodbine section 500ft below. Separating the two plays is the Eagle Ford shale. The Austin Chalk is a gas play whereas the Woodbine sands is known to be condensate-rich. Working interest is 25%.
The first attempt hit mechanical problems after encountering high pressure from an unexpected rubble zone. The existence of this zone is good news as it is known from other wells in the area to exhibit very high porosity and permeability. So much so that the jv's technical expert has upgraded the expected reserves by 60%.
Interestingly, the well confirmed the extension of the Brookeland gas field, to the North, into the JV's Tyler County acreage. Andarko/Ergon have drilled 45 wells there, 44 of which were commercial. COS is 50% for the deeper Woodbine play.
The following presentation is somewhat out of date but gives an overview of what has been achieved in the surrounding area.
Low Risk: Vision acreage is surrounded by production & vertical wells drilled to the Woodbine or Buda
PANR has already paid it's share of the cost of this well, had £2.4m in the bank at the end of 2011 and currently has a market cap at 11.5p of under £12m.
102m shares in issue - tightly held and not easy to buy in quantity.
Some very impressive numbers being bandied about - potential NPV10(per well, mean case) of $200m for a horizontal well, 17 possible wells on the acreage...