Pantheon Resources Plc

Pantheon Resources Plc, through its subsidiaries, engages in the exploration and production of oil and gas in the United States. Its primary assets are the Greater Alkaid project that covers 22,804 acres located in Alaska; and the Talitha project covering an area of approximately 44,463 acres. The company was incorporated in 2005 and is headquartered in London, the United Kingdom.

Operations

Idea

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Projects

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Greater Alkaid

In 2015, the Alkaid #1 well was drilled close to both the Dalton Highway and the Trans Alaska Pipeline System (TAPS) – the main transportation route and significant export pipeline on the Alaska North Slope, respectively. The drilling was halted before reaching its target depth due to environmental concerns: the nearby Sag River flooding led to the closing of the Dalton Highway. While Alkaid was meticulously documented, no production tests were carried out then. The well had shown promising signs, having encountered a 400-foot gross pay without an oil-water contact. Pantheon began activities again in 2019, successfully testing the Primary Zone of Interest. The recent oil discovery at Talitha #A enhanced the potential for oil in the Greater Alkaid structure.

Alkaid #1 Pay Intervals

Comprehensive data from Alkaid well revealed a 400-foot gross pay, with 240 feet of net oil pay. Expert consultations confirmed the potential of this project. Notably, only a small fraction of the well’s capacity was accessed during the tests. Pantheon projects that optimally designed horizontal development wells could significantly increase oil production. Advanced seismic imaging indicates even better reservoir potentials in the core. The company envisions using an early production unit (EPU) to facilitate early cash flow and obtain valuable data. A full-fledged Central Processing Unit (CPU) is in the pipeline for optimal resource utilization. Pantheon is keen to use unconventional oil production technologies, which has become standard across the Alaska North Slope.

In 2020, an independent report on the Greater Alkaid oil accumulation cited 76.5 million barrels of recoverable reserves, valuing the project at $595m (considering a $55/Bbl oil price). The company plans to commission a pilot test producer in 2022, which could provide immediate cash flow. Alkaid’s strategic location offers year-round activity advantages.

Alkaid #1 Highlights

Pantheon secured a unit over Alkaid and outlined its proposed activities in a First Plan of Exploration (POE) in November 2020. The plan includes reprocessing 3D seismic data and studying potential 'hot-tap' integrations into the TAPS. Though there are no fixed drilling commitments, the POE proposes drilling two wells near the Dalton Highway for year-round operations. Depending on the Alkaid #2 well results, the Alkaid #3 well will follow.

GBP, a significant exploration leaseholder, controls over 250,000 acres, positioned south of North America's major oil fields, Prudhoe Bay and Kuparuk. The region, blanketed by 3D seismic data, hosts several discoveries and promising exploration prospects. Pantheon holds complete interest in all its ventures.

Talitha

The Talitha #A well, drilled in 2021, appraised an oil accumulation initially discovered by the Pipeline State #1 well in 1988. While the original well in 1988 showed significant oil potential, it was halted due to economic reasons and lack of advanced technology. However, high-resolution 3D seismic data acquired in 2013 reignited interest in the area. The Talitha #A well confirmed oil presence across several zones, and recent tests in 2022 further validated the well's promising prospects.

Key Findings

• The Talitha #A well, located eight miles west of the Dalton Highway and TAPS, identified movable light oil across multiple horizons, with over a billion barrels of recoverable oil potential.
• Its proximity to existing infrastructure offers economic advantages, potentially allowing for faster production ramp-up with minimized capital expenditure.
• The well reached a depth of c. 10,456 ft, revealing five potentially productive zones. Challenges arose during testing due to operational issues and inclement weather, but significant findings were still achieved.

Specific Zones and Results

1. Basin Floor Fan (BFF): Tests indicated quality oil with sustained production rates. Future developments would potentially be at structurally higher positions for better results.
2. Slope Fan System (SFS): Testing showed producible oil, with implications for resource and oil recovery estimates. The success here suggests potential for other areas of the North Slope.
3. Shelf Margin Deltaic (SMD): Testing faced challenges from blockages and weather, but earlier data and the success of the deeper zones have kept the company's optimism intact for the potential of this zone.
4. Kuparuk: As the deepest oil formation, the Kuparuk provided significant findings. It's a regional producer with an adjacent giant oilfield, the Kuparuk Field. The Talitha #A well showed promising signs, although testing encountered issues.

Conclusion

The data from Talitha #A has increased confidence in the commercial viability of these zones. Pantheon remains encouraged by the analysis and sees potential for further exploration and drilling. The discovery augments the prospectivity of adjacent potential oil-bearing structures, which will be explored in future programs.

Theta West

Pantheon has concluded drilling at Theta West#1, confirming a discovery of light sweet crude oil. This discovery is now set for extensive production testing. Theta West stands as Pantheon’s most significant appraisal project. The company projects its potential to rival the immense hydrocarbon pore volume plays outside the renowned Prudhoe Bay Oilfield in the ANS. This geological configuration, given its success and volume, can be likened to the deepwater offshore regions in the Gulf of Mexico, West Africa, and recent discoveries off Guyana's coast. In essence, Theta West is a giant Basin Floor Fan with the potential to hold multibillion barrels of oil.

Years ago, Pantheon identified this vast geological opportunity and utilized its unique 3D seismic and analytical methodologies to secure a strong position in the Theta West play. This was strategically done before drilling Talitha #A in 2021. The Talitha #A drilling confirmed the presence of oil in the Theta West structure. A follow-up drilling at Theta West #1 took place 10.5 miles from Talitha, in a geologically superior position. To date, three wells — Pipeline State #1, Talitha #1, and Theta West #1 — have successfully tapped into the Basin Floor Fan (BFF) complex.

The latest Theta West #1 drilling reached a depth of 8,450 feet, navigating through the Upper and Lower Basin Floor Fan target layers of Brookian age. The drilling revealed approximately 1,160 gross feet of oil reservoir across these horizons. Preliminary data indicates this reservoir's quality surpasses that of the downdip Talitha #A, with high-quality oil found throughout.

Key depths recorded are:

• UBFF: 6,800 - 7,000 ft
• LBFF: 7,450 - 8,410 ft

These depths exceed previous estimates, and due to external factors such as extreme cold, the company had to rely on Logging While Drilling (LWD) operations. However, this yielded invaluable data, hinting at hydrocarbon presence higher up from the Talitha #A well.

AHS/Baker Hughes, the company's partners, have verified the presence of light oil in the UBFF and LBFF's top section, aligning with the LWD data. The full analysis of LBFF's lower section is still underway. Initial estimates pegged Theta West #A's potential at 12.1 billion barrels of oil, with a most likely recoverable amount of 1.41 billion barrels on Pantheon's land. This figure will be re-evaluated after thorough testing and analysis.

Historically, the Theta West BFF was also successfully drilled in the 1988 Pipeline State #1 well. More insights were obtained from the Talitha #A well, where the LBFF's substantial thickness was established. Subsequent testing yielded high-quality oil averaging 73 barrels per day over three days.

The recent Theta West #1 drilling confirmed expectations of a thicker reservoir at the crest, with increased porosity and permeability. The site’s shallower depth offers a cost-effective drilling prospect for such a vast resource. The entire Theta West project spans an impressive 100,000 acres under Pantheon's control, representing a significant opportunity for the company. Pantheon management considers Theta West as a potentially world-class project in a prime location.

In broader geological terms, the Theta West BFF is a segment of the Brookian deepwater fan systems. This includes the Slope Fan system and is situated between the Shelf Margin Deltaic and the Kuparuk Formation in terms of depth. Both the Talitha #A and Pipeline State #1 wells confirmed these regions as oil-bearing. Initially thought to be distinct fan systems, recent analysis suggests they might be part of an expansive continuous section, possibly forming a “super trap.”

Strategy

Pantheon focuses on onshore hydrocarbon exploration and production on Alaska's North Slope, a region where their expertise and competitive edge shine. Operating as a lean entity with stringent cost controls, Pantheon is dedicated to optimizing returns for its shareholders. They achieve this by targeting exploration and appraisal activities in areas with proven potential.

Located in the USA, onshore Alaska benefits from a robust free-market framework where both the rule of law and free enterprise principles are deeply rooted. Pantheon's strategic positioning, directly beneath and adjacent to the established yet underutilized Trans Alaska Pipeline System (TAPS) and related transport infrastructures, grants them significant advantages. It enables the company to expedite and economically channel any oil discoveries to the market compared to other North Slope ventures.

Although Pantheon is a smaller exploration and appraisal entity, its arsenal is fortified with over a decade of proprietary geological insights. This wealth of knowledge stems from a substantial investment exceeding US$200 million in their Alaskan properties. Pantheon's leadership is confident that their precise, cost-effective approach, encapsulated in their "prove up and sell" ethos, offers investors a rare chance to engage in impactful, risk-adjusted drilling ventures with substantial promise. Their assets boast over 1,000 square miles of proprietary 3D seismic data and a significant landholding across four projects. The company eagerly anticipates the State of Alaska's awarding of two production units in late 2020 for the Greater Alkaid and Talitha projects, spanning nearly 70,000 acres combined. This is set to be a pivotal turning point for Pantheon.

In the coming year, Pantheon's drilling endeavors will target vast prospects that hold significant economic potential relative to their current market valuation. Any successful discoveries of hydrocarbons from these efforts have the power to revolutionize the company's magnitude and influence. Ultimately, Pantheon's long-term game plan revolves around monetizing these assets, be it through a sale or other viable avenues, when the timing aligns perfectly.

Team

Phillip Gobe, Non-Executive Chairman

Phillip Gobe

• Experience: Over four decades in the oil and gas sector, both domestically and internationally.
• Current & Past Roles: Chairman and former CEO of ProPetro; Senior roles in Energy Partners Ltd, Nuevo Energy Co., Vastar Resources, and Atlantic Richfield Company. He notably managed operations at Prudhoe Bay, the USA's largest oilfield.
• Specialties: Drilling, HR, health and safety, and has overseen lucrative corporate exits.
• Board Affiliations: Non-executive director at Pioneer Natural Resources, former director of Scientific Drilling International Inc.
• Pantheon Committees: Chairs Remuneration and Nominations, Audit, and Conflicts Committees. Member of the Anti-Corruption and Bribery Committee.

Jay Cheatham, Chief Executive Officer

• Experience: Over five decades encompassing all aspects of the petroleum business.
• Prominent Roles: Senior Vice President and District Manager for ARCO's eastern District; President of ARCO International; President and CEO of Rolls-Royce Power Ventures.
• Specialties: Operational expertise with significant financial acumen; formerly served as CFO for ARCO's Oil & Gas, and CEO of Petrogen Fund.
• Pantheon Committees: Member of the Remuneration and Nominations, Audit, Conflicts, and Anti-Corruption and Bribery Committees.

Justin Hondris, Director of Finance and Corporate Development

• Experience: Over 15 years in public company management, specifically in the upstream oil and gas sector.
• Background: Corporate finance, private equity, and capital markets in the UK and internationally; previous private equity involvement.
• Responsibilities: Manages Pantheon's financial, legal, administrative, and corporate development functions.
• Pantheon Committees: Chairs the Anti-Corruption and Bribery Committee. Member of the Remuneration and Nominations and Conflicts Committees.

Robert (Bob) Rosenthal, Technical Director

• Experience: Over 40 years globally as an Exploration Geologist and Geophysicist.
• Key Roles: Senior exploration roles at Exxon and BP, gaining expertise in the geology of North Slope of Alaska and Texas.
• Current Engagement: Since 1999, he has operated a successful consulting business, leading exploration initiatives for various private and public entities.

Jeremy Brest, Non-Executive Director

Jeremy Brest

• Experience: Over 25 years in investment banking and financial advisory.
• Current & Past Roles: Founder of Framework Capital Solutions, a boutique advisory firm; Former head of structuring for Indonesia at Credit Suisse and a derivatives trader at Goldman Sachs.
• Pantheon Committees: Member of the Audit, Remuneration and Nominations, Conflicts, and Anti-Corruption and Bribery Committees.

Market

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Financials

Most recent

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Full-year results

Profit and loss

Profit and loss

Year	2020 (restated)	2021	2022
Currency	$	$	$
Continuing operations
Administration expenses	(3,667,635)	(5,034,361)	(7,430,653)
Impairment of exploration & evaluation assets	(130,112)	-	-
Share Based payments expense	-	(3,211,038)	(8,256,575)
Operating loss	(3,797,747)	(8,245,400)	(15,687,228)
Convertible Bond - Interest Expense	-	-	(4,640,537)
Convertible Bond - Revaluation of Derivative Liability	-	-	4,310,773
Interest receivable	23,759	4,234	42,674
Loss before taxation	(3,773,988)	(8,241,165)	(15,974,318)
Taxation	965,681	1,573,094	2,022,334
Loss for the year from Continuing Operations after Taxation	(2,808,307)	(6,668,071)	(13,951,984)
Loss for the year from discontinued operations	(14,170,288)	(54,415)	-
Loss for the year	(16,978,595)	(6,722,487)	(13,951,984)
Other comprehensive income for the year Exchange differences from translating foreign operations	(47,800)	1,503,199	(741,484)
Total comprehensive loss for the year	(17,026,395)	(5,219,288)	(14,693,468)
Loss per share from continuing operations:
Basic and diluted loss per share	(0.56)¢	(1.17)¢	(1.93)¢
Loss per share from discontinued operations:
Basic and diluted loss per share	(2.83)¢	(0.01)¢

Balance sheet

Balance sheet

	2020	2021	2022
Currency	$	$	$
Assets
Non-current assets
Exploration & evaluation assets	156,097,609	188,954,719	237,722,294
Property, plant and equipment	658,898	30,308	91,691
Total non-current assets	156,756,507	188,985,027	237,813,985
Current assets
Trade and other receivables	74,167	109,876	2,498,447
Cash and cash equivalents	4,802,965	5,663,477	57,784,121
Total current assets	4,877,132	5,773,353	60,282,568
Total assets	161,633,639	194,758,380	298,096,553
Liabilities
Current liabilities
Convertible Bond – Debt	-	-	10,001,704
Trade and other payables	388,092	1,107,090	6,377,986
Provisions	1,335,863	1,250,000	5,285,440
Lease Liabilities	46,311	32,788	60,297
Other Liabilities	-	-	1,964,441
Deferred tax liability	5,293,296	3,705,737	1,683,403
Total current liabilities	7,063,562	6,095,615	25,373,271
Non-current liabilities
Lease Liabilities	27,914	-	30,004
Convertible Bond – Debt	-	-	20,474,664
Convertible Bond – Derivative	-	-	12,816,226
Total non-current liabilities	27,914	-	33,320,894
Total liabilities	7,091,476	6,095,615	58,694,166
Net assets	154,542,163	188,662,765	239,402,388
Equity
Capital and reserves
Share capital	8,568,721	9,739,203	10,720,459
Share premium	173,687,092	208,683,936	264,879,196
Retained losses	(29,608,911)	(36,331,398)	(48,466,591)
Currency reserve	(268,637)	1,234,562	493,078
Share based payment reserve	2,163,898	5,336,462	11,776,246
Shareholders’ equity	154,542,163	188,662,765	239,402,388

Cash flow

Cash flow

Year	2020	2021	2022
Currency	$	$	$
Net outflow from operating activities	(5,707,802)	(3,098,495)	(941,506)
Cash flows from investing activities
Interest received	25,881	4,295	42,674
Funds used for drilling, exploration and leases	(1,591,591)	(24,973,399)	(45,267,175)
Advance for Performance Bond		-	(2,400,000)
Property, plant and equipment		-	(3,368)
Disposal	(1,134)	-	-
Net cash outflow from investing activities	(1,566,844)	(24,969,105)	(47,627,869)
Cash flows from financing activities
Proceeds from share issues	10,816,383	30,181,084	46,739,796
Issue costs paid in cash	(571,364)	(1,197,275)	(994,694)
Proceeds from Convertible Bond	-	-	55,000,000
Repayment of borrowing and leasing liabilities	(21,394)	(55,698)	(55,083)
Net cash inflow from financing activities	10,223,625	28,928,111	100,690,020
Increase in cash & cash equivalents	2,948,979	860,511	52,120,645
Cash and cash equivalents at the beginning of the year	1,853,986	4,802,965	5,663,476
Cash and cash equivalents at the end of the year	4,802,965	5,663,476	57,784,121

Risks

As with any investment, investing in Pantheon Resources Plc carries a level of risk. Overall, based on the Pantheon Resources Plc's adjusted beta (i.e. ccc), the degree of risk associated with an investment in Pantheon Resources Plc is 'ccc'.

Here, to estimate the adjusted beta, we used the iShares MSCI World ETF to represent the market portfolio; and in terms of the time period and frequency of observations, we used five years of monthly data (i.e. 60 observations in total), which is supported by a study and is the most common choice. The beta value in a future period has been found to be on average closer to the mean value of 1.0, and because valuation is forward-looking, it is logical to adjust the raw beta so it more/most accurately predicts a future beta. In addition, here, we have assumed that for an investment to be considered 'medium' risk, it must have a beta value of between 0.5 and 1.5. Further information about the beta ratings can be found in the appendix section of this report.

The key risks can be found below. For us, currently, the biggest risk to the valuation of the company relates to the lease obligations.

1. Lease Obligations: The group leases properties for oil and gas exploration, requiring annual payments. Any default can lead to lease termination, which would adversely impact business and financial operations. Pantheon has actively participated in annual lease sales and secured 40,000 leases in November 2022. These leases have a 10-year life and favorable terms.
2. Lease Renewal: Leases may be terminated if the group fails to meet specific obligations, like timely exploration. Not renewing these leases can significantly harm the business. However, the group has obtained unitization for certain projects to possibly extend their initial lease term.
3. Licensing and Permissions: The group needs various approvals for developing their leases. Failure to obtain these permissions can hamper the group's ability to operate. To counter this, the group employs personnel experienced in navigating regulatory requirements.
4. Political and Regulatory Changes: Changes in the political environment, particularly in the Northern Slope Borough, Alaska, and the U.S., can adversely affect operations. New regulations or stricter enforcement of current ones can pose challenges. However, Pantheon's projects are on state lands, thus less affected by federal policy changes.
5. Legal Proceedings: The group might face legal challenges that can be costly and can damage its reputation. They engage with legal counsel proactively to mitigate potential risks.
6. Relationships with Stakeholders: The oil and gas sector often faces scrutiny. Failure to manage relationships with communities and environmental groups might adversely affect the group’s reputation and operations. The group endeavors to conduct operations responsibly and legally.
7. Regulatory Changes: Amendments to existing laws regarding oil and gas exploration could adversely affect the group's business. They continuously monitor potential regulatory shifts and maintain relationships with regulatory agencies.
8. Supply Chain Disruptions: Global events, like the Covid-19 pandemic and the Russia/Ukraine conflict, have affected the supply chain and caused inflation. The group plans its operations meticulously and orders equipment in advance to minimize disruptions.

Appendix

Relative valuation

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Significant holdings

Significant holdings as of 15th June 2023

	Number of Ordinary Shares	% of Share Capital
Vidacos Nominees Limited	100,084,318	11.34
Interactive Brokers LLC	80,121,067	9.08
Lynchwood Nominees Limited	67,134,041	7.60
Vidacos Nominees Limited	38,521,840	4.36
Vidacos Nominees Limited	34,549,659	3.91
Barnard Nominees Limited	29,352,283	3.32
Barnard Nominees Limited	27,714,204	3.14

Capital structure

The Company has 907,206,399 ordinary fully paid shares in issue.

The number of ordinary shares not in public hands amounts to 6,956,691 equivalent to 0.9% of the issued allotted and fully paid ordinary shares.

This is correct as of 21 June 2023.

Share options

Share options

Exercise price (£)	Number of share options exercisable into ordinary shares on issue	Expiry Date	Share options as a % of issued shares
0.30	4,825,000	30 September 2024	0.62%
0.27	7,000,000	6 July 2030	0.90%
0.33	12,430,000	27 January 2031	1.60%
0.671	21,705,000	18 January 2027	2.80%

Share warrants

Share warrants

Exercise price (£)	Number of share warrants exercisable into non-voting shares	Expiry date	Share options as a % of issued shares
0.30	4,803,921	30 September 2024	1.29%

Glossary

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Glossary

Term	Definition
/Net pay	The net thickness of an oil reservoir which is capable of producing hydrocarbons.
AMI	Area of mutual interest.
Anticline	A structure in the subsurface in which rock layers have been folded to produce an arch or dome.
Appraisal well	A well drilled to evaluate the extent of a discovery made by a previous well drilled on the same trap.
Barrel (BBL)	A unit of measurement commonly used in quoting liquid hydrocarbon volumes. 1 barrel _ 42 U.S. gallons 35 imperial gallons (approx) 159 liters (approx)
Basin	A depression in the earth's surface containing relatively thick deposits of sedimentary rocks.
BCF	Billion cubic feet, or 28.317 cubic meters. A unit commonly used in quoting volumes of natural gas.
BCFG	Billion cubic feet of gas.
Behind pipe	A productive reservoir which is isolated from the well bore by the casing.
BHL	Bottom hole location.
BO	Barrel of oil.
BOE	Barrel of oil equivalent. Used when converting oil and gas into an equivalent unit of volume. Typically, a figure of 6000 CFG per BBLO is used.
BOPD	Barrels of oil per day, a unit commonly used to describe daily rates of liquids production from a flowing well.
BTU	British Thermal Unit. A unit index of energy content in gas.
Casing	Steel pipe which lines the well bore from surface. The casing isolates subsurface fluids from the well bore and prevents rock material from sloughing off the sides of the well bore.
CFG	Cubic feet of gas
Charge risk	A general term for risk that a source rock exists, that it has been is or still is generating hydrocarbons, that a trap was in place before generation , and that a conduit exists between the source rock and the reservoir.
Clastic	A modifier describing rocks that were deposited by the mechanical action of water, i.e., being carried in suspension and then dropped when the energy in the flow becomes too weak to support the material. Typically, sandstone and shale.
Closure	On an isolated structural high, the area enclosed by the lowest closing contour.
Condensate	A hydrocarbon phase which separates out from natural gas and condenses into liquids when the hydrocarbons are produced.
Cretaceous	Late Mesozoic time; roughly 140 to 65 million years ago.
Darcy	1000 millidarcies (see definition for mD below).
Deposition	The process of depositing unconsolidated sediments, usually in a basin.
DHC	Dry hole cost. The cost of an unsuccessful well.
Dip	The angle that a rock surface forms with respect to the horizontal. Can be referenced as degrees, in the case of depth, or, in the case of seismic reflection data, in time (e.g. milliseconds per km ).
Dipmeter	A tool used in logging a well which measures the dip of rock surfaces in the borehole of the well.
DMO	Dip Moveout . A correction applied to seismic trace processing to account for dip. (See dip above).
DOGGR	California Department of Conservation/Division of Oil, Gas, and Geothermal Resources
Dry hole	A well in which no commercial hydrocarbons were discovered.
Exploration well	A well drilled into a previously undrilled or noncommercial trap to test for the presence of a new hydrocarbon accumulation.
Facies	An association of rock types which share a common trait. In the case of sedimentary rocks, usually used with reference to the environment in which the sediments were deposited (for example, deltaic).
Fault	Any brittle failure of rock layers along which rocks are displaced on one side relative to the other.
Fault trap	A structural trap where at least one of the components of closure is formed by offset of rock layers across a fault.
Fold	Deformation of a rock surface.
Formation	A formal term used to reference a genetically related rock unit (e.g. the Monterey Formation).
Four way dip	A simple structure in which rock surfaces dip in all four directions, thus creating structural closure. Often forms a hydrocarbon trap.
Geology	The study of the earth and the processes affecting its crust.
Geophysics	The study of rock properties and stratigraphy through the use of analytical methods involving various types of data collection and interpretation.
GIP	Gas in place. The volume of natural gas stored in a subsurface accumulation . Differs from recoverable reserves in that some of this gas will not be recovered to the surface due to properties of the rock and/or gas, and in situ pressure.
GOR	Gas-oil ratio: the volume of dissolved gas per barrel of oil.
Horizon	A term describing a layer of rock, most typically associated with a seismic reflection.
Hydrocarbons	A compound of the elements hydrogen and carbon, in either liquid or gaseous form. Natural gas and petroleum are mixtures of hydrocarbons.
Lithology	The physical, sedimentary, or mineralogical characteristics of a rock.
Marine	Used as a modifier of sedimentary rock to denote deposition in the ocean.
Mature	Used in association with source rock. A description applied to organic rich rock which is capable, because of sufficient temperature and burial depth, of generating hydrocarbons.
mD	Millidarcy , a unit of measurement used to describe permeability, i.e., the tendency for liquids to flow through a rock unit. A high permeability indicates a good reservoir.
Migration	The movement of hydrocarbons from the source rock to the reservoir.
MMBLS	Million barrels.
MMBO	Million barrels of oil.
MMBTU	Million British Thermal Units.
MMCFD	Million cubic feet of gas per day. A measure of gas flow rates from a producing well.
Monte Carlo	A methodology for estimating a given quantity based on the statistical distribution of input values on which the quantity depends. Typically, the output quantity is calculated several thousand times (each calculation is called a trial), for each trial using input parameter values extracted randomly according to their statistical distributions. The result is a statistical distribution of output values.
MSCF	Thousand standard cubic feet at atmospheric conditions.
N/G	Net to gross ratio. The percentage of a gross thickness of reservoir with sufficient permeability such that it is capable of flowing hydrocarbons.
Oil	Liquid hydrocarbons, generally more viscous and darker in color than condensates.
oil field	A subsurface accumulation of hydrocarbons.
oil window	The depth interval in which source rock can actively generate mobile oil.
OIP	Oil in place. The volume of oil held in a reservoir in the subsurface . Not all of this oil can be recovered.
OWC	Oil-water contact, which marks the base of an oil accumulation.
P10	In a Monte Carlo simulation, a measure of the high end expectation of a particular parameter's occurrence. For example, a P10 net pay of 150 ft means that there is a 10 per cent. probability that at least 150 ft of net pay will be encountered in a given trial in the simulation.
P50	In a Monte Carlo simulation, the median value of a particular parameter's occurrence. For example, a P50 net pay of 50 ft means that half of the trials in the simulation encountered a value less than 50 ft.
P90	In a Monte Carlo simulation, a measure of the low end expectation of a particular parameter's occurrence. For example, a P90 net pay of 25 ft means that there is a 90 per cent. probability that at least 25 ft of net pay will be encountered in a given trial in the simulation.
Permeability	A measure of the ability of liquids to flow through a porous solid. (See mD ).
Petroleum	(See Hydrocarbons).
PINS	Padre Island National Seashore.
Pipeline	A pipe through which any hydrocarbon or its products is delivered to an end user.
Porosity	The percentage of open pore space in a rock.
POS	Probability of success (technical, as opposed to commercial).
Potentially Recoverable Hydrocarbons	The volume of hydrocarbons that are estimated to be producible from a given trap. Used in the context of a prospect or an undeveloped hydrocarbon accumulation.
Prospect	An undrilled or poorly understood, and therefore hypothetical, hydrocarbon trap.
PSDM	Pre-stack depth migration. A seismic processing technique which utilizes rock velocity models to iteratively arrive at a depth converted seismic data volume.
PSTM	Pre-stack time migration. A seismic processing technique which approximates PSDM but does not build a depth model. The seismic data volume is in two way travel time.
Reflector	An event observed on a seismic section that usually corresponds to a buried rock surface.
Reserves	The volume of oil or gas that can be recovered from the subsurface. Generally used in the context of commerciality.
Reservoir	A porous rock unit in which hydrocarbons occur in an oil field.
Risk	A measure of uncertainty relating to the likelihood of finding hydrocarbons, or, the likelihood that any or all of the individual geological elements required for the accumulation of hydrocarbons is met.
Sandstone	A sedimentary rock composed primarily of sand sized grains, usually quartz. A common hydrocarbon reservoir rock.
SCF	Standard cubic feet. See MSCF
Seal	An impermeable rock unit that prevents hydrocarbons from escaping from the reservoir.
Sediment	Generally, water borne debris that settles out of suspension.
Sediment rock	A type of rock formed by aggregation of sediments.
Seismic reflection	An event observed on seismic data that corresponds to a given rock layer in the subsurface.
Seismic survey	A tool employing an energy source, such as dynamite, and recording devices used to measure the travel time from a rock layer to the surface. The primary tool used to detect hydrocarbon traps.
Shale	A very fine grained rock often thinly layered. An important seal rock.
Show	An indication while drilling that hydrocarbons are present in the well.
Silt/siltstone	A rock whose grain size is intermediate between sand and shale.
Source/source rock	An organic rich rock (typically shale) capable of generating hydrocarbons under certain conditions of temperature and pressure.
STB	Stock tank barrel, the volume of a barrel of oil at the earth's surface as opposed to the corresponding volume in the subsurface.
Stratigraphy	The study of the vertical and horizontal distribution of stratified rocks, with respect to their age, lateral equivalence, and environment of deposition.
Structural trap	Generally, a hydrocarbon trap formed by dipping rock layers and/or faults.
Structure	A geological feature usually higher in elevation than the surrounding rock, formed by local deformation of the rock layers.
TCF	Trillion cubic feet of gas.
Tertiary	A period of geological time from approximately 2 to 65 million years ago. Subdivided into the Pliocene, Miocene, Oligocene, Eocene, and Paleocene.
Total depth (TD)	The final depth reached when drilling a well.
Trap	A structure capable of retaining hydrocarbons.
Trend	A particular direction in which similar geological features are repeated.
TVD	True vertical depth. The vertical depth below a given datum.
Unconformity	A break in the succession of sedimentary deposition, commonly associated with erosion of underlying rock units. Often marked by rock surfaces which are non-parallel above and below the unconformity.
Unrisked	Associated with an estimate of possible hydrocarbons for which a discount attributable to risk has not been applied.
Updip	Toward a higher elevation on a rock surface.
Uplift	Elevation by means of geological activity of one surface or area relative to another.
Well log	A device which records rock physical parameters in the well bore during or after drilling, or, the data obtained by these devices.