Pantheon Resources issues the following update on Tyler County, East Texas:

Pantheon has been informed by the operator, Vision Resources LLC (Vision), that drilling of the Vision William Baggett #1 ("VWB#1") well is now estimated to commence in July 2010. Vision has assessed that deferral of drilling operations may lead to improved total economics for the VWB#1 well. This is based on its analysis that rig demand should weaken leading to lower rig rates and drilling costs. This decision also reflects the potential for an upward natural gas price movement later in the year and thus higher unit revenues.

Geologically the Joint Venture's (˝JV˝) confidence both in the VWB#1 well and the overall Tyler County project remains undiminished. The VWB#1 well is designed to test two separate and independent formations, including the Austin Chalk as the main target. Either of these targets would justify drilling a well on its own merits. The ability, therefore, to test both with a single well at a modest incremental cost is compelling both from a geological and economic standpoint. Further studies conducted in recent months reinforce the JV's optimism for the well.

Vision has retained the JV's "first refusal˝ rights on two specialist rigs capable of drilling the VWB#1 well to the stringent standards specified in the well engineering plan. This well design was revised post the completion of the Vision Rice University #1 well. These rights confer on the JV the necessary flexibility to optimise its drilling programme. This is especially beneficial during a period of shifting market circumstances. The options on either rig do remain subject to the operations of other companies.

The JV continues to be active in building its acreage portfolio in the region which remains an on-going process. This has led to the addition of material acreage which it considers of strategic importance. This further emphasises the JV's positive view of its position.

Tags: Pantheon Resources