$panr $pthrf
This Petroleum News article stirred up the Panr shareholders (and shorters) today
petroleumnews.com/pntruncate/637…
There was the thesis that PANR operations might get delayed due to the fact that there is a hearing on flaring gas for longer periods on 27th October
A

1/9
I recommend to read the whole article at least twice
First of all Michael Duncan said they might test the reservoir for 9 months
Panr currently holds an approval by the DOG to run 7,5 months of testing
So they requested to extend this period to 9 monhts
2/9
I dont see a reason to believe that voids their existing permit and if it did they had to issue an RNS about it immediately
But now to the interesting part
What could this imply?
3/9
They can use 150 mcf of the estimated 150-500 mcf nat gas to power generators and for gas lift
They said thats the amount of gas to be expected at 500-1000 bopd production
So if they request permission to flare gas over 9 months this means there is a possibility that oil flow
4/9
after 9 mos exceeds 500 bopd because only in that case they need to flare gas
Their initial modeling assumed 8000ft of lateral
@нотαru bopd initial flow
But they did just 5300 ft of lateral to play it safe
In super basic calc thats 66% of length and 800 bopd of initial flow
5/9
So according to the decline curve we would expect 900 bopd after 9 mos for 10.000ft lateral or 480 bopd for the 5.300ft (simple calc)
This matches quite well with their request!
now some more info possibly related to this
6/9
The company announced already that the reservoir quality exceeded the estimates significantly
Their assumptions made in the may presentation are likely too low
Which *COULD* result in higher flows
So imho these are the reasons why i believe they applied for an extended time
7/9
of flaring
Which is good news for shareholders as longer period of flaring means higher oil flows for longer because they can consume all gas below 500 bopd oil flow
What would be the worst case ?
Lets say they dont get the permit ?
This would mean they have to compress
8/9
and transport the NG and sell it at current sky high prices or inject more of it into the well
As stated in this PN article they are able to do so
I am sure Panrs partner Alaska CNG would be happy to help getting rid of the excess gas, if needed
END
petroleumnews.com/pntruncate/740… Disclaimer:
I am a shareholder and bought more today
Market reaction seems to be irrational to me and technically we are at a strong support line
No financial advice.