Pantheon Resources plc (PANR) ("Pantheon"), the oil and gas company with a 100% working interest in the Kodiak and Ahpun projects, collectively spanning 193,000 contiguous acres in close proximity to pipeline and transportation infrastructure on Alaska's North Slope, announces its interim results for the six months ended 31 December 2023 (the "Period"), together with operational highlights for the half year and the period beyond.
Highlights
Operational and Corporate
- Received an Independent Expert Report on the Kodiak project by Netherland, Sewell & Associates, Inc. ("NSAI"), estimating an aggregate 2C Contingent Recoverable Resource of 963 million barrels ("mmbbls") of marketable liquids
- Re-entered, fracked and tested the topset sands (previously referred to as 'the SMD') in the vertical portion of the Alkaid-2 well. Following incorporation of pressure-volume-temperature ("PVT") analysis results from GeoMark, the flow rate was calculated to be 50-140 barrels per day ("bpd") of marketable liquids, substantially exceeding pre-test estimates. Additionally:
- Successfully executed new frac design with - improved frac efficiency
- Confirmed the producibility of and fluid composition in the topset horizon
- Confirmed materially superior reservoir quality compared to deeper Alkaid ZOI horizon
- Contracted engineering and environmental consultants to support the Company to secure a hot-tap into the TAPS pipeline, as a precursor to project development
- Submitted winning bids for an additional 66,240 acres of leases at the December 2023 annual lease sales, strategically securing what Pantheon believes to be some of the highest quality areas of the Kodiak and Ahpun Fields at the shallowest depths. This is expected to result in a material upgrade to NSAI's independent resource estimates for Kodiak
- Appointed two new, independent non-executive directors; (i) Allegra Hosford Scheirer who has deep geological experience, including in Alaska, and (ii) Linda Havard who has several decades experience in financial/CFO roles, including 15 years in the oil and gas industry
- Established a Houston office and commenced work towards a US stock market listing in 2025
- Satisfied the September and December 2023 quarterly convertible bond repayments in cash, funded through private placements of shares to long term supportive holders and exercise the Company's right to make the March 2024 payment with shares to enhance liquidity
Financial
- After tax loss for the period $5.7 million (2022: $1.6 million). Impacted by $3.8 million charge from mark to market revaluation of derivative component and interest expenses attributable to the Convertible Bond
- G&A higher at $4.0 million (2022: $3.7 million), reflecting the growth in the organisation as it progresses towards FID and project development
- Cash on hand 31 December 2023: $0.2 million (2022: $16.3 million). Additionally, fixed term cash deposits on hand of $7.0 million (matured 8 January 2024)
- Cash on hand 15 March 2024: $8.7 million
The Company is planning to host an Investor Meet Company webinar in early April 2024 to provide a Company update, including the status of development planning. Details will be released as soon as the date is finalised.
David Hobbs, Executive Chairman of Pantheon Resources, commented:
"Pantheon has made great progress during the six months to 31 December 2023 and so far this year on a number of levels. Our testing of the shallower topsets in the Alkaid-2 wellbore was a great success, exceeding our expectations and validating the effectiveness of the revised frac design. Such engineering improvements are extremely positive for Ahpun development economics, helping to steer our focus towards the Ahpun topsets to benefit from the material improvement in reservoir quality and the superior GOR (gas oil ratio) compared to the deeper ZOI horizon tested previously.
"We were the successful bidder for an additional 66,240 acres of leases at the State of Alaska's December 2023 lease sale. These new leases, immediately to the east of Ahpun and updip to the west and north west of Kodiak include some of the highest quality areas of the two fields, at the shallowest depths. It was crucial that we secured the best acreage in our fields to leverage the great strategic advantage of having proprietary use of the 3D seismic before it starts to become public, commencing in 2024.
"We will remain disciplined in our approach, focused on what moves us towards achieving Pantheon's strategic goal of delivering sustainable market recognition of $5-$10 per barrel of 1C/1P recoverable resources with minimum dilution of shareholder value.
"The Independent Expert Report from NSAI received in Q3 2023 estimated nearly one billion barrels of marketable liquids on our 100% owned Kodiak project, prior to the award of the additional acreage. It was a key step on the path to delivering our strategic goal, having such a well respected reserves auditor validate Pantheon's confidence in its geological model and assessment of the scale of the recoverable resource. It opened up avenues for engagement with potential vendors, offtakers and other industry participants.
"We expect more resource upgrades to come, with NSAI currently updating its resource estimates for Kodiak to include the new acreage. We hope to receive this updated report at or near the end of Q1 2024. NSAI is also working on a resource estimate at Ahpun, targeted for completion at or near the end of Q2 2024. As we confirmed on 5th March 2024, the Company is engaged in discussions with key stakeholders in Alaska to provide natural gas to Southcentral Alaska on terms that allow all parties to achieve their objectives, maintaining energy security over the coming decades.
"We would like to thank our shareholders for their support as we progress closer towards the development of our world class assets, targeting Final Investment Decision ("FID") for Ahpun by the end of 2025, subject to regulatory approvals, and for Kodiak in 2028. We're working relentlessly to optimise a funding platform for the Ahpun development and we look forward to providing the promised preliminary update over the coming weeks, with a goal of finalising our strategy by the end of Q2 2024."