May 25 — The leaders of a small British explorer insist they have struck an oil accumulation measured in the billions of barrels that is also conveniently located alongside the Dalton Highway.

Pantheon Resources intersected two reservoirs near the bottom of its Talitha-A exploration well that, combined, likely hold roughly 1.4 billion barrels of recoverable light oil and more than 12 billion barrels of oil in place, according to Technical Director Bob Rosenthal.

The promising results from the Talitha well drilled and tested last winter transforms the prospect called “Theta West” within the company into an oil project, Rosenthal said.

Pantheon did the drilling approximately 10 miles from what would normally be the best location for a well targeting the Brookian Upper and Lower Basin Floor Fan formations that contain the discovery because the primary target for Talitha-A was a shallower zone known as the Shelf Margin Deltaic that the company was unable to test before spring put an end to the North Slope exploration season.

“We actually drilled this well 1,500 feet down-dip from the crest and we are actually 10 miles down-dip from its location, so this trap is huge,” Rosenthal described in an interview.

“We’ve drilled a huge step-out appraisal well before we drilled the crest location.”

Pantheon merged with Anchorage independent explorer Great Bear Petroleum in early 2019 and the blended operating company Great Bear Pantheon is conducting the fieldwork.

Rosenthal was a founding member of Great Bear, which previously explored the area about 20 miles south of Prudhoe Bay along the Dalton for years, first focusing on shale oil prospects and then shifting its focus to conventional plays after the oil market reset of 2015-16.

Pantheon leaders are particularly confident in their assertions about the first test results from Talitha-A because the company is also working off of data from the nearby Pipeline State-1 well drilled in 1988 by Arco that — combined with modern 3-D seismic data — has helped give them a better sense of what the rocks in the area hold.

In that sense, Talitha-A is not a true wildcat exploration well.

The Basin Floor Fan complex was also identified in data from the Pipeline State well, according to Rosenthal. He said previously that even though the 10,000-foot vertical Pipeline State-1 well has a roughly 2,200-foot oil-bearing column over four reservoirs, with the technology and oil prices of the late 1980s it did not add up to a viable prospect at the time.

Rosenthal said before the initial well tests that Talitha A was similarly expected to have an oil-bearing zone of roughly 2,000 feet in the wellbore of about 10,200 feet but that has since grown to approximately 3,700 feet of oil-bearing rocks, according to a company statement.

CEO Jay Cheatham also said prior to drilling that he thought Theta West could hold up to 500 million barrels of recoverable oil.

“We know where we have oil 10 miles down-dip from the crest (of the trap). We know that there is oil up-dip from there because, of course, oil migrates up,” Cheatham said.

Industry sources who have followed the Great Bear-Pantheon work generally said it is very probable the company hit a significant oil column but the porosity and permeability of the rock formations — and the ability to easily get the oil out of them — will most likely determine the ultimate size and success of the project.

Rosenthal said the company hopes to drill another well into the crest of the Basin Floor Fan trap located northwest of Talitha-A, where the rocks should have better characteristics.

“We expect to have thicker reservoir and because it’s shallower, better reservoir,” he said of the crest location.

Pantheon also still needs to test the Shelf Margin Deltaic that was the primary Talitha target. Cheatham said there are additional plans in the works to drill a second well at the company’s Alkaid prospect just to the north to prove up what Great Bear found when it drilled Alkaid-1 in 2015.

Cheatham acknowledged that the work the company hopes to do next winter is not yet funded; however, Rosenthal noted in a conference call that the early-stage economics of the project, which benefits greatly from its location adjacent to the Haul Road, helped convince investors to fund the Talitha work last year when work was otherwise being curtailed across the Slope due to the pandemic-induced oil market collapse.

At the time, the company was running economic development models with oil in the $40 to $45 per barrel range, according to Rosenthal.

“Oil prices are back up in the $60s,” he said. “Covid is hopefully going to be in our rearview mirror and we’ve gone out and actually drilled the well and found a world-class resource.”

Elwood Brehmer can be reached at elwood.brehmer@alaskajournal.com.