Pantheon Resources PLC Corporate Update (7044U)
16 July 2018 - 4:00PM
UK Regulatory
TIDMPANR
RNS Number : 7044U
Pantheon Resources PLC
16 July 2018
16 July, 2018
Pantheon Resources plc
Corporate update
Pantheon Resources plc ("Pantheon" or "the Company"), the
AIM-quoted oil and gas exploration company with a 50% - 75% working
interest in several conventional project areas in Tyler and Polk
Counties, onshore East Texas provides the following corporate
update.
Strategic review
Following the recent death of Bobby Gray, the principal of
Vision Resources ("Vision"), Pantheon has commenced a strategic
review of its Tyler & Polk County project.
Pantheon has commenced discussions (and indeed had already
commenced discussions prior to Bobby's death) for the potential
acquisition of some or all of Vision's working interest positions
in the jointly leased Tyler and Polk County project (the
"Project"), to increase Pantheon's working interests up to 100% and
to assume operatorship and control of the Project. Pantheon
believes this to be an obvious and prudent step which would afford
Pantheon increased freedom and flexibility to conduct corporate and
operational activities.
Discussions are ongoing, however terms have not yet been
finalised. Pantheon's objective is for the acquisition to be on
accretive terms for its shareholders. The purchase consideration is
anticipated to be non-cash, subject to credits for any
prepayments/advances made to Vision by Pantheon, and will be
correlated to the future success of the Project. Consideration may
take the form of any or a combination of equity, premium priced
warrants, a success based royalty or other non-equity
consideration. Whilst Pantheon is confident of a successful outcome
to these discussions, there can be no guarantee that an agreement
will be concluded. Further announcements will be made in due course
in accordance with regulatory requirements.
In addition and as previously stated, Pantheon believes a farm
out to be the preferred method to finance forward drilling
operations and confirms that it is presently in discussions with a
number of parties in regards to a possible farm-out of a working
interest in the project. Discussions with a USA based industry
party are already at an advanced stage. Having both ownership and
operatorship (subject to a successful transaction with Vision)
would provide greater flexibility in terms of commercial
negotiations with potential new partners.
Pantheon has undertaken a review of the acreage position as part
of this strategic review, and the acreage position currently stands
at 17,145 net mineral acres(1) under lease. This compares to the
20,576 net mineral acres leased in October 2014, to which the
project's Prospective P50 Resource estimate of 301mmboe relates.
Accordingly, to the extent that the leased position remains below
20,576 net mineral acres, the Prospective P50 Resource estimate of
301mmboe will have reduced and will require revision after a
decision has been made on which of the acreage to renew, due to
certain of the lapsed acreage covering non-core areas which the
Company may choose not to renew. Naturally, any purchase
consideration paid to Vision for an acquisition of their interests
will reflect the current acreage position.
At the time of Bobby Gray's death Vision was in live discussions
for the possible renewal of a significant portion of those lapsed
leases which covered core areas. Pantheon will take its time to
carefully consider and prioritise which of these leases should be
renewed to optimise the portfolio. If the board identifies key
leases which warrant immediate renewal it will of course act to
secure those lease(s) accordingly. Once leasing decisions have been
finalised, the Company will provide an updated Prospective P50
Resource estimate at the appropriate time.
The Company also confirms that progress has been made for the
hookup to first production of the VOS#1 well. The Company has now
agreed terms with the gas processing company, subject to contracts,
for the distribution and processing of natural gas in Tyler County.
The Company has formally contracted surveyors, who have already
commenced fieldwork, for the routing and construction of the
pipeline from VOS#1 well to the main trunkline.
The Company confirms that as of 13 July 2018, cash and
prepayments amounted to c.US$4.5m.
Jay Cheatham, CEO, said:
"The strategic decision to seek to acquire Vision's working
interests in our Tyler & Polk county project is something that
we have wanted to do for a long time and makes absolute sense if
successfully completed, delivering Pantheon both control and
flexibility in extracting the value from our project.
"Lease management is an ongoing process and is subject to
inherent fluctuations as companies attempt to secure optimum terms
and to continually high grade their lease positions. In Pantheon's
case, our project is represented by approximately 5,000 underlying
leases which involves regular negotiation and management.
"The decision to seek to farm out part of our project also makes
sense, and aims to deliver increased drilling activity funded by an
industry partner."
Footnotes:
(1) Includes 721.4 net mineral acres over which a free 12 month
extension had been negotiated and agreed, but had not been executed
at the time of Bobby Gray's death.
-Ends -
Further information:
+44 20 7484
Pantheon Resources plc 5361
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
James Styles
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.
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.
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END
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