Spudding of VOBM#2H well, Polk County, onshore East Texas

Pantheon is pleased to announce that the Nabors F12 drill rig has spudded the VOBM#2H well on the JV’s Polk County acreage. The VOBM#2H well is the first well of the JV’s 2016 multi-well drilling programme, which follows the two successful discovery wells, VOBM#1 and VOS#1, drilled by the JV last year. VOBM#2H will be a horizontal development well, stepping out from the VOBM#1 discovery well and targeting the Eagleford sandstone at a depth of approximately 13,500 feet and at a lateral length of approximately 3,500ft.

Drilling operations are expected to take approximately 55-60 days on a trouble free basis and results from the well will be announced when drilling and, if appropriate, testing operations are complete.

Update on VOS#1 well, Tyler County, onshore East Texas

Operations are underway for the planned fracture stimulation procedure at VOS#1. Results from the procedure will be announced when completed, which is anticipated to be by the end of May 2016.

Update on VOBM#1 well, Polk County, onshore East Texas

As previously guided the operator is finalising negotiations for the processing and transportation of natural gas from the field. However, given current market dynamics, both Pantheon and the operator believe superior economics can be achieved by undertaking the gas processing component themselves. Given the lack of horizontal wells drilled in the region, it has been decided that the most prudent approach, particularly in a low gas price environment, is to first evaluate the results of the upcoming VOBM#2H well, prior to bringing VOBM#1 onstream, in order to better determine the optimum processing facility requirements for the field.

Jay Cheatham, CEO of Pantheon, stated,

"I am very pleased to announce the spudding of the first well in our fully funded 2016 drilling programme. The development well at VOBM#2H is significant in that it will be the first horizontal well on our Polk County acreage following the successful VOBM#1 vertical well.

"I am also pleased to note that fracture stimulation operations are due to commence at the VOS#1 well in Tyler County; given the extensive hydrocarbon bearing sandstone section discovered here, and commercial flow rate already achieved from this well; the results from this operation will be key to increasing the sustainable flow rates and de-risking the extensive aerial extent of the discovered resource."