Pantheon Resources PLC Acquisition of Increased Working Interest (5320E)
19 July 2016 - 4:00PM
UK Regulatory
TIDMPANR
RNS Number : 5320E
Pantheon Resources PLC
19 July 2016
19 July 2016
Pantheon Resources plc
Acquisition of Increased Working Interest in Polk County
Prospects
Pantheon Resources plc ("Pantheon" or "the Company"), the
AIM-quoted oil and gas exploration company with a 50% working
interest in several projects in Tyler and Polk Counties, onshore
East Texas, is pleased to provide the following operational
update:
Acquisition of Additional Working Interest in Polk County, East
Texas
The board of Pantheon is pleased to announce the acquisition of
an additional 8% working interest in the "West Double A"* and "West
West Double A"** prospects (previously referred to respectively as
"New Prospect A" and "New Prospect D"), located in Polk County,
East Texas. Upon completion of the acquisition, Pantheon's working
interest in these two prospects, including the VOBM#1 discovery
well, will increase from 50% to 58%. Pantheon's working interest in
its Tyler County prospects remains unchanged at 50% and its working
interest in "New Prospect E" remains unchanged at 25%.
Purchase consideration for the 8% working interest comprises an
up front cash payment of US$6.5m, plus an additional 20% of the
drilling and completion costs of the VOBM#2H and VOBM#3H wells,
estimated to be between US$1.0m and US$1.25m per well. In relation
to the 8% working interest acquired, Pantheon will benefit from an
accelerated payback mechanism whereby it will receive a 2.5x uplift
on production revenues until such time as the acquisition cost has
been recouped, at which point revenues will revert back to an 8%
revenue interest.
The opportunity to acquire this additional working interest at a
favourable price has arisen as a result of an internal
reorganisation within the privately-owned Vision group. By mutual
agreement no third parties have been involved. The transaction
maintains the confidentiality of intellectual property within the
group, minimises mid-drilling disruption and reinforces the
excellent established relationship between Pantheon and Vision.
Jay Cheatham, CEO of Pantheon, said:
"This transaction is a fantastic opportunity for Pantheon to
increase our interest in these two outstanding prospects, where we
have already completed one successful discovery well and are close
to completing the second well. We can comfortably fund the
acquisition from existing cash resources and the price is an
attractive one, given the circumstances and our ability to move
quickly to complete. For commercial reasons Bobby Gray, Vision's
founder, and I are both committed to maintaining the two-party
structure wherever possible and this transaction accomplishes that
mission speedily and to our mutual advantage".
Further information:
+44 20 7484
Pantheon Resources plc 5359
Jay Cheatham, CEO
Justin Hondris, Director, Finance and Corporate
Development
Stifel Nicolaus Europe Limited (Nominated +44 20 7710
Adviser and broker) 7600
Callum Stewart
Ashton Clanfield
Nicholas Rhodes
+44 20 3727
FTI Consulting 1000
Ed Westropp
Shannon Brushe
James Styles
Further information:
* In respect of the West Double A prospect, BSMC also has an
option to participate in future wells drilled on the underlying
land, or lands pooled with that land for up to a 25% working
interest (proportionately reduced to the mineral interest of BSMC
in the relevant well or unit). In this case the option applies only
to Pantheon's newly acquired 8% working interest, not to its
existing 50% working interest. In order to exercise its option in
either case, BSMC must give notice within a prescribed notice
period before drilling commences and will be liable to its pro rata
proportion of all costs in relation to that well.
** In respect of the West West Double A prospect, on which no
wells have yet been drilled, Black Stone Minerals Company ("BSMC"),
which granted the leases, holds an option to participate in future
wells drilled on the underlying land, or lands pooled with that
land for up to a 25% working interest (proportionately reduced to
the mineral interest of BSMC in the relevant well or unit). If
exercised in full, this could potentially reduce Pantheon's working
interest by up to 25% in that prospect.
For further information on Pantheon Resources plc, see the
website at: www.pantheonresources.com
The information contained within this RNS is considered to be
inside information prior to its release.
In accordance with the AIM Rules - Note for Mining and Oil &
Gas Companies - June 2009, the information contained in this
announcement has been reviewed and signed off by Jay Cheatham, a
qualified Chemical & Petroleum Engineer, who has over 40 years'
relevant experience within the sector.
Neither the contents of the Company's website nor the contents
of any website accessible from hyperlinks on the Company's website
(or any other website) is incorporated into, or forms part of, this
announcement.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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