TIDMPANR
RNS Number : 2531U
Pantheon Resources PLC
28 March 2019
28 March 2019
Pantheon Resources plc
Interim Results for the Six Months Ended 31 December 2018
Pantheon Resources plc ("Pantheon" or "the Company"), the
AIM-quoted oil and gas exploration company with working interests
in several conventional project areas in Tyler and Polk Counties,
onshore East Texas, as well as onshore North Slope of Alaska,
announces its interim results for the six months ended 31 December
2018.
HIGHLIGHTS
Acquisition and post year end operational
Completed the acquisition of Great Bear Petroleum Ventures I LLC
and Great Bear Petroleum Ventures II LLC (together, "Great Bear")
in January 2019. The transaction added over 250,000 leased acres
onshore North Slope of Alaska, covered by +1000 square miles of 3D
seismic, which had a pre-drill estimated P50 Technically
Recoverable Resource (Gross) of over 2 billion barrels oil.
Acquired a controlling 66.6% ownership of Vision Gas Limited and
Vision Resources LLC (together, "Vision") including its working
interest in the VOS#1 well and associated Tyler County acreage.
This transaction has allowed Pantheon to assume management control
of the Vision entities.
In January 2019 completed an equity fundraising raising US$20.9m
before expenses, issuing 108,335,266 shares at an issue price of
GBP0.1525.
Strengthened the existing Pantheon management team and Board.
Appointment of Bob Rosenthal as Technical Director and plans to
appoint Jeremy Brest and Carl Williams as Non Executive Directors.
Other additions include Michael Duncan, VP Operations, Pat Galvin,
Chief Commercial Officer Alaska, Josh McIntyre, CFO Alaska, and Dr.
Ed Duncan, a founder and previous CEO of Great Bear, as Consulting
Geologist.
Alkaid Well (Alaska): The primary target of the well, the
Brookian ZOI, confirmed as an oil discovery following a successful
flow test where results exceeded expectations. A 6 foot interval
(from a c.240 foot interval of net pay) was perforated and flow
tested at 80- 100 BOPD light oil (40 degree API). Such flow rates
are considered to be an excellent result and indicate the potential
for materially higher flow rates when wells are drilled in the
typical manner for Brookian wells in Alaska - horizontally,
fracture stimulated, and with larger intervals perforated.
Preparations to test the two secondary targets, the West Sak and
Ugnu have already commenced.
East Texas: Commenced a comprehensive technical review of East
Texas assets. This has included a re-engagement with the Bureau of
Economic Geology at the University of Texas at Austin. The Great
Bear team will also undertake a comprehensive review of the
drilling and completion history of our Polk and Tyler County wells
and will apply high tech geophysics to our East Texas portfolio, a
technique used to great success in Alaska.
Operational
Completed the gas pipeline from the VOS#1 well to the Enterprise
Gas Pipeline system in Tyler County.
Installed compression at the inlet to the Kinder Morgan Gas
Processing Facility in Polk County.
Combined production for Polk & Tyler Counties c.325
boepd.
Financial & Corporate
Revenues for the six months ended 31 December 2018 of $356,598
(2017: $514,303).
Loss for the period of $1.27m (2017: $2.57m).
Cash and Cash equivalents at year end $4.0m (2017: $7.6m).
Outlook
In Alaska, Pantheon has between 75% and 90% working interest
positions in the Great Bear prospects (except Winx at 10%). Such
dominant working interest positions provide the Group greater
freedom in farm-out or other partnering opportunities to subsidize
or fund future drilling. Together with Great Bear personnel,
Pantheon has a comprehensive network of oil and gas contacts which
will be accessed where relevant for farm out or other opportunities
in both Texas and Alaska.
Alkaid Well - Following the successful flow test in the primary
target, the Brookian ZOI, the next step is to flow test the
secondary targets, the West Sak and Ugnu prior to shutting down
operations later in April 2019.
Pantheon's strategy to delineate the perspectivity across its
enlarged acreage position and seek a full value exit for
shareholders remains unchanged.
Jay Cheatham, CEO, said:
"It's been an incredible period for Pantheon. The Great Bear
merger, although complex, has been a huge success. The additions to
our Board and Management team is showing results in both Alaska and
East Texas. The success at Alkaid in the Brookian ZOI illustrates
the quality of the technical work and of the Alaskan assets. Alkaid
is already a huge success. The Brookian was the original target.
The West Sak and Ugnu are bonus zones."
"I'm pleased with the work already underway in East Texas. Both
from an operational and geologic/geophysical perspective, advances
are evident."
"Finally I must add that the passing of our former Chairman ,
John Walmsley was a sad moment for me and for everyone who knew
him. The consummate gentleman, I'll miss him."
-S-
Further information:
Pantheon Resources plc +44 20 7484 5361
Jay Cheatham, CEO
Justin Hondris, Director, Finance and Corporate Development
Arden Partners plc (Nominated Adviser and broker) +44 20 7614 5900
Paul Shackleton
Daniel Gee-Summons
Notes to Editors
Pantheon Resources plc is an AIM listed Oil & Gas
exploration and production company with assets in East Texas and on
the North Slope of Alaska, onshore USA.
The Group's stated objective is to create material value for its
stakeholders through oil exploration, appraisal and development
activities in high impact, highly prospective assets, in the USA; a
highly established region for energy production with
infrastructure, skilled personnel and low sovereign risk. All
operations are onshore USA, with drilling costs an order of
magnitude below that of offshore wells.
In East Texas, Pantheon holds a 50% to 75% working interest (and
in present discussions to increase this to 100% working interest
for non-cash consideration) in several conventional prospects in
Tyler & Polk Counties, in an area of abundant regional
infrastructure, and in proximity to the prized Double A Wells
Field. P50 Technically Recoverable Resources are estimated at 157
million barrels of oil equivalent.
In Alaska, following its acquisition of the assets of Great Bear
Petroleum in January 2019, Pantheon holds working interests ranging
between 10% and 90% of prospects covered by over 1,000 square miles
of 3D seismic with P50 Technically Recoverable Resources estimated
at 2.1 billion barrels of oil 1.7 billion barrels of oil excluding
the Alkaid 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. 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.
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.
Cautionary Statement: The estimated quantities of petroleum that
may be potentially recovered by the application of a future
development project relate to undiscovered accumulations. These
estimates have both an associated risk of discovery and a risk of
development. Further exploration, appraisal and evaluation are
required to determine the existence of a significant quantity of
potentially movable hydrocarbons.
Pantheon RESOURCES plc
INTERIM REPORT (UNAUDITED)
FOR THE SIX MONTHSED 31 dECEMBER 2018
STATEMENT FOR THE SIX MONTHSED 31 DECEMBER 2018
The half year ended 31 December 2018 and the period beyond has
been one of immense change for our Company. Most significantly, we
completed the acquisition of Great Bear Petroleum Ventures I LLC
and Great Bear Petroleum Ventures II LLC (together, "Great Bear").
The transaction added to our portfolio over 250,000 leased acres
onshore North Slope of Alaska which had a pre-drill estimated P50
Technically Recoverable Resource (Gross) of over 2.0 billion
barrels oil. We also acquired a technical and operational team of
the highest calibre which will greatly benefit our East Texas
assets going forward.
At the same time, Pantheon also acquired a controlling 66.6%
ownership of Vision Gas Limited and Vision Resources LLC (together,
"Vision") including its working interest in the VOS#1 well and
associated Tyler County acreage. This transaction has allowed
Pantheon to assume management control of the Vision entities which
is strategically and operationally of great importance to the
future direction of the play, following the passing of Vision's
principal Bobby Gray in June 2018.
Pantheon's strategy to delineate its now enlarged acreage
position and to seek a full value exit for shareholders remains
unchanged and is a strategy shared by Great Bear management.
Pantheon now also has operating control of Vision and is working
towards potentially increasing its working interest in the East
Texas assets to 100%. In Alaska, Pantheon has between 75% and 90%
working interest positions in the prospects (except Winx at 10%).
Such dominant working interest positions provide the Group with
greater freedom to pursue farm-out or other partnering
opportunities to subsidize or fund future drilling. Together with
Great Bear personnel, Pantheon has a comprehensive network of oil
and gas contacts which will be accessed where relevant for farm out
or other opportunities in both Texas and Alaska.
In March 2019, Pantheon announced the successful flow test of
the Brookian zone of interest ("ZOI") in the Alkaid well. This
result is significant both economically, but also commercially
because it greatly enhances Pantheon's negotiating position for
possible farm out discussions. Further, the positive result has a
positive impact on the nearby Phecda prospect, where the seismic
signatures are similar, and confirms the efficacy of our high tech
geophysical analysis in modelling the sub surface geology in the
region.
Pantheon Great Bear Merger
Pantheon completed an opportunistic 51%/49% merger of Great Bear
in January 2019. This was accomplished by issuing 205 million
consideration shares, 9.6m share options (exercise price GBP0.30)
and a US$6.1m cash payment. At the same time the company raised c.
US$20.9m before costs through the issuance of 108 million new
ordinary shares at a price of GBP0.1525 per share. It was a very
complex transaction, involving multiple jurisdictions and multiple
interested parties, and took nearly 6 months to consummate in
extremely difficult market conditions. It is a credit to our
advisors and to our team that there were no leaks in what was such
a significant and successful transaction.
The Great Bear transaction resulted in the acquisition of a
majority interest in 250,000 acres of leasehold on the North Slope
of Alaska in close proximity to the Trans Alaska Pipeline System
(TAPS) and the Dalton Highway. Close proximity to infrastructure
offers us tremendous economic and logistical benefits, and in a
success case will greatly improve per barrel NPV's. Pantheon
benefits from over US$200 million sunk cost already invested into
the Alaskan assets to date, including over 1,000 square miles of 3D
seismic. A prospect resource summary from the time of the
transaction is provided below. It should be noted that Pantheon has
since moved to a 100% working interest in the Alkaid well.
Great Bear P50 Technically Recoverable Resource Table
P50 Technically Recoverable Resource
Estimated Oil in Reoverable Possible
Timing Place Oil Zones
mmbl mmbl GBP Interest
---------------------- -------------- ---------- ------------ ----------
2019 Alkaid Production Test Zone
ZOI 250 25 1 75%
West Sak 890 134 1 75%
Ugnu 2,600 390 1 75%
2019 Winx Exploration(1) Exploration 1,385 400 5 10%(1)
2020 Talitha Appraisal Appraisal 2,643 508 4 90%
2020/21 Theta Exploration Exploration 3790 600 2 90%
2021+ Megrez Exploration Exploration 660 99 1 90%
2021+ Phecda Project Exploration 345 34 1 75%
2021+ Tania & Alula Exploration TBD TBD 3 90%
Total
barrels
(bn) 12.5 2.1 18
---------- ------------ ----------
Note(1): The Winx-1 well was plugged and abandoned in March
2019. Accordingly the resource estimate for this Western Blocks
acreage which contains Winx is subject to downward revision.
The merger also brought several outstanding additions to
strengthen the existing Pantheon management team and Board. We have
already appointed Bob Rosenthal as Technical Director and plan to
appoint Jeremy Brest and Carl Williams as Non Executive Directors
over the coming weeks. Other additions include Michael Duncan, VP
Operations, Pat Galvin, Chief Commercial Officer Alaska, Josh
McIntyre, CFO Alaska and Dr. Ed Duncan, a founder and previous CEO
of Great Bear, has joined as consulting Geologist, further
strengthening the team. The Company is currently working with the
remuneration specialists at Deloitte to implement an employee share
option scheme to align the interests of all staff and to attract
and retain key personnel.
East Texas Update
Following the Great Bear merger, we have commenced a
comprehensive technical review of our East Texas assets. Included
in this has been a re-engagement with the Bureau of Economic
Geology at the University of Texas at Austin, the same group who
completed a comprehensive +3 year geological study on our play in
conjunction with the technical team at Vision. The Great Bear team
will also undertake a comprehensive review of the drilling and
completion history of our Polk and Tyler County wells and will
apply high tech geophysics to our East Texas portfolio, the same
technique used to great success in Alaska. The review has commenced
and is ongoing, although at present, the focus is on the current
testing operations in Alaska.
In Polk County we have installed compression facilities at the
inlet to the Kinder-Morgan gas processing facility. Although early
days, the VOBM#1 and VOBM#3 wells combined are producing c.1125
thousand cubic feet per day ("mcfpd") wet gas and 30-35 bopd
("barrels of oil per day"). This is a marked improvement versus
previous months of intermittent production and a welcome boost to
cash flow.
In Tyler County the VOS#1 well has been a disappointment.
Production is averaging c.650 mcfpd through the Enterprise
pipeline. The historical operational and wellbore problems with
VOS#1 have been well documented but we have not yet analysed the
VOS#1 for possible remedial work. This will be undertaken after
completion of our Alaskan operations.
Our belief in the potential of East Texas is undiminished, and
has not become a lower priority versus Alaska, which has seasonal
operational constraints. As previously reported, the P50
Technically Recoverable Resource (Gross) for the Tyler & Polk
County acreage reduced from 301million barrels of oil equivalent
("mmboe") to 157mmboe last year, which was simply a function of a
reduced acreage footprint and does not reflect a downgrade in
acreage under lease. The Company is not aware that any of the
dropped leases have been leased by third parties and might be
available should the Group wish to renew them some time in the
future.
We have great confidence that the East Texas Assets will
strongly benefit from the input of Pantheon's new and highly
regarded technical team who have already spent considerable time
reviewing the geological work on the prospects. We can bring East
Texas wells into production rapidly after well completions, which
is a major benefit.
A proposed sidetrack of the VOBM#1 well is intended to be the
next operational activity in East Texas. Timing of this well has
been pushed back to allow the technical team to undertake, after
completion of Alaskan operations, a detailed analysis to determine
whether it makes sense to drill a new well rather than to sidetrack
the existing wellbore, given the relatively modest cost
differential of $4m - $4.5m for a new well versus $2.8m for a
sidetrack. The VOBM#1 well flow tested at over 500 barrels of oil
per day ("bopd") and 6,000 thousand cubic feet per day ("mcfd")
before the well suffered collapsed casing and at those rates would
be highly cash generative at current prices.
Since attaining operational control of Vision, Pantheon has
parted ways with the previous operational team. The highly skilled
technical team from Great Bear has assumed operating control of
operations.
Alaska Update
Alkaid (100% Working Interest): Testing the Alkaid vertical test
well is underway. As reported, the lower Brookian Zone of Interest
was tested after a successful frac. The testing period was
truncated due to extreme weather events on the North Slope and a
need to test the upper West Sak and Ugnu zones prior to the
impending Spring thaw. A 6 foot interval (out of c.240 feet of net
pay) was perforated and flow tested at 80-100 bopd light (40 degree
API) oil. This test was an excellent result and indicates the
potential for materially higher flow rates when wells are drilled
in the typical manner for Brookian wells in Alaska - horizontally,
fracture stimulated and with larger intervals perforated. The
Brookian ZOI (zone of interest) was the primary target of this
well, hence the "ZOI" name, and even if the West Sak or Ugnu
secondary targets prove unsuccessful in flow testing, which for the
avoidance of doubt has not yet occurred, the Alkaid well is still
considered to be a great success.
Pantheon's working interest in the Alkaid well increased from
75% to 100%, however Haliburton does have a back in right which
would allow them to "back in" to a 25% working interest for an
approximate 400% of the applicable sunk cost.
The Alkaid result also has positive implications for Pantheon's
other Brookian prospects in the portfolio.
The process to begin testing the upper zones has now commenced
and the Company will report back at the conclusion of testing
operations. The Company will begin work on a development plan after
completion of testing.
Winx 1 Exploration Well 10% Working Interest: The Winx
1exploration well drilled by 88 Energy tested the Torok and
Nanashuk Topset formations on our Western Blocks. After reaching
target depth a comprehensive logging suite was acquired through the
potential targets. Petrophysical analysis of the data done by the
operator and JV partners indicated that only low saturation
hydrocarbons were present in the reservoirs and the partners
decided to plug and abandon the well without further testing. A
review of the all the data gathered during drilling and logging is
underway to assess the potential of these 4 blocks.
STATEMENT FOR THE SIX MONTHSED 31 DECEMBER 2018
Future Activities
In East Texas, a full technical review of the assets in
consultation with the Bureau of Economic Geology plus the
application. of high tech geophysics will be completed following
completion of Alaskan testing operations. The objective is to build
upon the geological successes of Vision and improve future
operational performance. We will then decide whether to sidetrack
the VOBM#1 well or drill a new well nearby. In parallel, the
Alaskan dataset will be worked up to prepare for possible farmout
discussions on parts of the Alaskan acreage and prepare for
drilling operations next season.
Financial & Corporate
The interim results show a loss for the period of $1.27m (2017:
$2.57m) included certain transaction costs related to the Great
bear acquisition. The 2017 period loss included an impairment
charge of $1.83m.
At 31 December 2018, cash and cash equivalents amounted to $4.0m
(2017: $7.6m). Trade and other receivables amounted to $2.0m (2017:
$0.5m).
At a General Meeting held on the 14th of January 2019,
shareholders ratified the acquisition of two wholly owned companies
from Great Bear Petroleum Operating LLC, Great Bear Petroleum
Ventures I LLC and Great Bear Petroleum Ventures II LLC (together
the "Great Bear Companies"). The Company also completed an equity
fundraising raising US$20.9m before expenses, issuing 108,335,266
shares at an issue price of GBP0.1525, in connection with the
acquisition of the Great Bear Companies. On the same day the
Company also acquired 66.6% (and management control) of Vision from
Kaiser Francis and others for a total consideration of 3.5m
ordinary fully paid shares.
As at 28 March, 2019 the company has on issue 557,001,521 shares
(which includes 102,471,055 non-voting shares which are convertible
into ordinary shares on a 1 for 1 basis, subject to certain
conditions) and 19,607,843 share options with a GBP0.30 exercise
price.
Other
Finally, is was with great sadness last week that the we
announced the passing of John Walmsley, our Non-executive Director
and former Chairman.
John served our company with distinction and honour for over 10
years. His wisdom, integrity, team spirit and sense of humour will
be dearly missed by all.
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIODED 31 DECEMBER 2018
6 months ended 6 months Year ended
31 December ended 31 30 June
2018 December 2018
2017
Notes (unaudited) (unaudited) (audited)
$ $ $
Continuing operations
Revenue 356,598 514,303 1,009,570
Production royalties (93,130) (122,885) (244,783)
Depletion of developed oil
& gas assets (39,980) (48,625) (88,293)
Cost of sales (397,744) (84,797) (562,986)
Gross (loss)/profit (174,256) 257,997 113,508
Administrative expenses (985,487) (966,781) (1,922,917)
Impairment of intangible assets 3 - (1,825,051) (6,805,537)
Depreciation of production
& pipe line facilities (116,053) (37,404) (145,516)
Operating loss (1,275,796) (2,571,239) (8,760,462)
Interest receivable 1,140 2,731 6,858
---------------- --------------- ---------------
Loss before taxation (1,274,656) (2,568,508) (8,873,604)
---------------- --------------- ---------------
Taxation - - -
---------------- --------------- ---------------
Loss for the period (1,274,656) (2,568,508) (8,753,604)
---------------- --------------- ---------------
Other comprehensive income
for the period:
Exchange differences from
translating foreign operations (10,234) (555,180) 277,183
Total comprehensive income
for the period (1,284,890) (3,123,687) (8,476,421)
---------------- --------------- ---------------
Attributable to:
Equity holders of the company (1,284,890) (3,123,687) (8,476,421)
Loss per ordinary share
Loss per ordinary share -
basic and diluted from continuing
operations 2
(0.54)c (1.10)c (3.72)c
---------------- --------------- ---------------
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE PERIODED 31 DECEMBER 2018
Share Share Retained Currency Equity Total
capital premium losses reserve reserve Equity
$ $ $ $ $ $
Group
At 30 June 2018 3,852,673 106,678,805 (48,137,398) (41,554) 902,854 63,255,380
Net loss for the
period - - (1,274,656) - - (1,274,656)
Other comprehensive
income:
Foreign currency
translation - - - (10,234) - (10,234)
------------- ------------- ---------------- ------------ ----------- --------------
Total comprehensive
income for the
period - - (1,274,656) (10,234) - (1,284,890)
------------- ------------- ---------------- ------------ ----------- --------------
Balance at 31 December
2018 3,852,673 106,678,805 (49,412,054) (51,788) 902,854 61,970,490
============= ============= ================ ============ =========== ==============
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE PERIODED 31 DECEMBER 2017
Share Share Retained Currency Equity Total
capital premium losses reserve reserve Equity
$ $ $ $ $ $
Group
At 30 June 2017 3,557,582 94,914,770 (39,383,794) (318,737) 902,854 59,672,675
Net loss for the
period - - (2,568,508) - - (2,568,508)
Other comprehensive
income:
Foreign currency
translation - - - (555,180) - (555,180)
------------- ------------- ---------------- ------------- ----------- ---------------
Total comprehensive
income for the
period - - (2,568,508) (555,180) - (3,123,687)
------------- ------------- ---------------- ------------- ----------- ---------------
Capital Raising
Issue of shares 293,461 11,917,829 - - - 12,211,290
Issue of shares
in lieu of fees 1,630 68,459 - - - 70,089
Issue costs - 407,523 - - - 407,523
Balance at 31 December
2017 3,852,673 107,308,581 (41,952,301) (873,916) 902,854 69,237,890
============= ============= ================ ============= =========== ===============
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 30 JUNE 2018
Share Share Retained Currency Equity Total
capital premium losses reserve reserve Equity
$ $ $ $ $ $
Group
At 30 June 2017 3,557,582 94,914,770 (39,383,794) (318,737) 902,854 59,672,675
Net loss for the
period - - (8,753,604) - - (8,753,604)
Other comprehensive
income:
Foreign currency
translation - - - 277,183 - 277,183
------------- --------------- ---------------- ------------ ----------- ---------------
Total comprehensive
income for the
period - - (8,753,604) 277,183 - (8,476,421)
------------- --------------- ---------------- ------------ ----------- ---------------
Capital Raising
Issue of shares 292,941 12,303,543 - - - 12,596,484
Issue of shares
in lieu of fees 2,150 90,271 - - - 92,421
Issue costs - (629,779) - - - (629,779)
Balance at 30 June
2018 3,852,673 106,678,805 (48,137,398) (41,554) 902,854 63,255,380
============= =============== ================ ============ =========== ===============
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2018
Notes 6 months ended 6 months ended Year ended
31 December 31 December 30 June
2018 2017 2018
(unaudited) (unaudited) (audited)
ASSETS $ $ $
Non-Current Assets
Exploration and evaluation
assets 3 37,306,625 54,019,102 43,498,422
Developed oil and gas assets 3 21,256,907 4,933,129 13,736,007
Property, plant & equipment 3 2,121,396 2,556,352 2,237,698
---------------- ---------------- --------------
60,684,928 61,508,584 59,472,127
---------------- ---------------- --------------
Current Assets
Trade and other receivables 1,920,505 515,445 700,939
Cash and cash equivalents 3,980,942 7,567,362 3,399,290
---------------- ---------------- --------------
5,901,447 8,082,808 4,100,229
---------------- ---------------- --------------
Total assets 66,586,375 69,591,391 63,572,356
---------------- ---------------- --------------
LIABILITIES
Current liabilities
Trade and other payables 4,615,885 353,501 316,976
Total liabilities 4,615,885 353,501 316,976
---------------- ---------------- --------------
Net assets 61,970,490 69,237,890 63,255,380
================ ================ ==============
EQUITY
Capital and reserves
Share capital 3,852,673 3,852,673 3,852,673
Share premium 106,678,805 107,308,581 106,678,805
Retained losses (49,412,054) (41,952,301) (48,137,398)
Currency reserve (51,788) (873,916) (41,554)
Equity reserve 902,854 902,854 902,854
Shareholders' equity 61,970,490 69,237,890 63,255,380
================ ================ ==============
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE PERIODED 31 DECEMBER 2018
6 months 6 months Year ended
ended 31 ended 31 30 June
December December 2018
2018 2017
(unaudited) (unaudited) (audited)
$ $ $
Net cash outflow from operating
activities (1,853,093) (1,632,713) (2,082,803)
------------- ------------- ----------------
Cash flows from investing activities
Interest received 1,140 2,731 6,858
Funds used for drilling, exploration
and leases (1,369,083) (6,102,396) (10,679,594)
Developed oil & gas assets - (248) (495,183)
Property, plant & equipment - (1,771,119) 208,682
Net cash outflow from investing
activities (1,367,943) (7,871,032) (10,959,237)
------------- ------------- ----------------
Cash flows from financing activities
Proceeds from share issue ratified 3,802,688
post period end - -
Proceeds from issue of shares - 13,096,425 12,596,484
Issue costs paid in cash - (407,523) (537,360)
------------- ----------------
Net cash inflow from financing
activities 3,802,688 12,688,902 12,059,124
------------- ------------- ----------------
Net increase/(decrease) in cash
and
cash equivalents 581,652 3,185,157 (982,916)
Cash and cash equivalents at the
beginning of the period 3,399,290 4,382,206 4,382,206
------------- ------------- ----------------
Cash and cash equivalents at the
end of the period 3,980,942 7,567,362 3,399,290
============= ============= ================
RECONCILIATION OF OPERATING LOSS TO NET CASH OUTFLOW FROM
OPERATING ACTIVITIES
6 months ended 6 months ended Year ended
31 December 31 December 30 June
2018 2017 2018
(unaudited) (unaudited) (audited)
$ $ $
Loss for the period (1,274,656) (2,568,508) (8,753,604)
Net interest received (1,140) (2,731) (6,858)
Unrealised (gains)/losses on assets held for sale - (132) -
Impairment of intangible assets - 1,825,051 6,805,537
Depreciation of office equipment 215 895 1,436
Depletion of developed oil & gas assets 39,980 48,625 88,293
Depreciation of production & pipeline facilities 116,053 37,404 145,516
Increase in trade and other receivables (1,219,566) (186,994) (372,620)
Increase/(decrease) in trade and other payables 496,223 (231,111) (267,636)
Effect of translation differences (fixed assets) 34 (32) (50)
Effect of translation differences (10,235) (555,180) 277,183
---------------- ---------------- -------------
Net cash outflow from operating activities (1,853,093) (1,632,713) (2,082,803)
================ ================ =============
NOTES TO THE FINANCIAL INFORMATION
FOR THE PERIODED 31 DECEMBER 2018
1. Accounting policies
A summary of the principal accounting policies, all of which
have been applied consistently throughout the period, is set out
below.
1.1. Basis of preparation
This financial information has been prepared on a going concern
basis using the historical cost convention and in accordance with
the International Financial Reporting Standards ("IFRSs"),
including IFRS 6 'Exploration for and Evaluation of Mineral
Resources', as adopted by the European Union ("EU") and in
accordance with the provisions of the Companies Act 2006.
This interim report has been prepared on a basis consistent with
the Group's expected accounting policies for the year ending 30
June 2019. These accounting policies are the same as those set out
in the Group's Annual Report and Financial Statements for the year
ended 30 June 2018, which are available from the registered office
or the company's website (www.pantheonresources.com).
The Group financial information is presented in US Dollars and
is unaudited. The interim financial information does not constitute
statutory accounts within the meaning of section 434 of the
Companies Act 2006. The comparative figures for the year ended 30
June 2018 have been taken from the Group's statutory accounts for
that financial year, which have been reported on by the Group's
auditors and delivered to the Registrar of Companies. The auditors'
report on those accounts was unqualified, however did contain an
emphasis of matter - going concern, to which the auditors drew
attention without qualifying their report and did not contain any
statement under section 498 (2) or 498 (3) of the Companies Act
2006.
1.2. Basis of consolidation
Subsidiaries are fully consolidated from the date on which
control is transferred to the Group. They are de-consolidated from
the date that control ceases. The purchase method of accounting is
used to account for the acquisition of subsidiaries by the Group.
The cost of an acquisition is measured as the fair value of the
assets given, equity instruments issued and liabilities incurred or
assumed at the date of exchange, plus costs directly attributable
to the acquisition. Identifiable assets acquired and liabilities
and contingent liabilities assumed in a business combination are
measured initially at their fair values at the acquisition date,
irrespective of the extent of any minority interest. The excess of
the cost of acquisition over the fair value of the Group's share of
the identifiable net assets acquired is recorded as goodwill.
Goodwill arising on acquisitions is capitalised and subject to
impairment review, both annually and when there are indications
that the carrying value may not be recoverable.
Inter-company transactions, balances and unrealised gains on
transactions between group companies are eliminated.
All the companies over which the Company has control apply,
where appropriate, the same accounting policies as the Company.
1.3. Foreign currency translation
(i) Functional and presentational currency
The financial statements are prepared in US Dollars ("$") which
is the functional currency of the Company and is the Group's
presentation currency.
(ii) Transactions and balances
Transactions in foreign currencies are translated into US
Dollars at the average exchange rate for the period. Monetary
assets and liabilities denominated in foreign currencies are
translated at the rate of exchange ruling at the balance sheet
date. The resulting exchange gain or loss is dealt with in the
income statement.
NOTES TO THE FINANCIAL INFORMATION
FOR THE PERIODED 31 DECEMBER 2018
1.3 Foreign currency translation continued
The assets, liabilities and the results of the foreign
subsidiary undertakings are translated into US dollars at the rates
of exchange ruling at the year end. Exchange differences resulting
from the retranslation of net investments in subsidiary
undertakings are treated as movements on reserves.
1.4. Cash and cash equivalents
The company considers all highly liquid investments, with a
maturity of 90 days or less to be cash equivalents, carried at the
lower of cost or market value.
1.5. Going concern
The financial statements have been prepared on the going concern
basis, which contemplates the continuity of normal business
activity and the realisation of assets and the settlement of
liabilities in the normal course of business.
Oil and Gas exploration and development is a capital intensive
business, requiring sufficient capital to prosecute a Company's
strategy. Despite the high quality of Pantheon's assets, as a
growth company it will require additional capital in the future. In
January 2019 the Company concluded a successful fund raising of
$20.9m (before expenses), through an equity offering. In March 2019
the Company announced the successful flow test and discovery of the
Brookian Zone of Interest in the Alkaid well. Pantheon has a 100%
working interest in this well which was estimated to contain a P50
Technically Recoverable Resource of 25 million barrels of oil. The
Directors believe this, and the Groups other assets, have
significant potential value and are confident it could farm down
prospect(s) or seek other forms of financing (including but not
limited to equity) if desired. Should Haliburton exercise their
back in right to acquire 25% working interest in Alkaid, Pantheon
would expect to receive a significant cash payment, equivalent to
400% of the prorated costs associated with present operations. The
Directors believe for the reasons above that the Group's use of a
going concern basis is appropriate. Accordingly, the Directors have
prepared the financial statements on that basis.
The Directors have reviewed the Group's overall position and
outlook and are of the opinion that the Group is sufficiently well
funded to be able to operate as a going concern for at least the
next twelve months from the date of approval of these financial
statements.
1.6. Deferred taxation
Deferred tax is provided in full, using the liability method, on
temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the financial statements.
Deferred tax is determined using tax rates (and laws) that have
been enacted or substantially enacted by the balance sheet date and
expected to apply when the related deferred tax is realised or the
deferred liability is settled.
Deferred tax assets are recognised to the extent that it is
probable that the future taxable profit will be available against
which the temporary differences can be utilized.
1.7. Exploration and evaluation costs and developed oil and gas properties
The Group follows the 'successful efforts' method of accounting
for exploration and evaluation costs. All costs associated with
oil, gas and mineral exploration and investments are classified
into and capitalised on a 'cash generating unit' ("CGU") basis, in
accordance with IAS 36. Costs incurred include appropriate
technical and administrative expenses but not general corporate
overheads.
NOTES TO THE FINANCIAL INFORMATION
FOR THE PERIODED 31 DECEMBER 2018
1.7 Exploration and evaluation costs and developed oil and gas properties continued
If an exploration project is successful, the related
expenditures will be transferred to Developed Oil and Gas
Properties and amortised over the estimated life of the commercial
reserves on a 'unit of production' basis.
The recoverability of all exploration and evaluation costs is
dependent upon the discovery of economically recoverable reserves,
the ability of the Group to obtain necessary financing to complete
the development of the reserves and future profitable production or
proceeds from the disposition thereof. The prospect acreage has
been classified into discrete "prospects" or CGU's. When production
commences the accumulated costs for the specific CGU is transferred
from intangible fixed assets to tangible fixed assets i.e.
'Developed Oil & Gas Properties' or 'Production Facilities and
Equipment', as appropriate. Amounts recorded for these assets
represent historical costs and are not intended to reflect present
or future values.
1.8. Impairment of exploration costs and developed oil and gas
properties, and depreciation of assets
In accordance with IFRS 6 'Exploration for and Evaluation of
Mineral Resources' (IFRS 6), exploration and evaluation assets are
reviewed for indicators of impairment. Should indicators of
impairment be identified an impairment test is performed.
In accordance with IAS 36, the Company is required to perform an
"impairment test" on assets when an assessment of specific facts
and circumstances indicate there may be an indication of
impairment, specifically to ensure that the assets are carried at
no more than their recoverable amount. Where an impairment test is
required, any impairment loss is measured, presented and disclosed
in accordance with IAS 36
In accordance with IAS 36 the Company has determined an
accounting policy for allocating exploration and evaluation assets
to specific 'cash-generating units' ("CGU").
Exploration and evaluation costs
In relation to the Tyler and Polk County projects, the carrying
value as at 31 December 2018 represents back costs and direct costs
paid in relation to the project, seismic, land and drilling costs
relating to the prospects as well as prepaid costs towards future
drilling.
Developed Oil and Gas Properties
Developed Oil and Gas Properties represent four wells (VOS#1,
VOBM#1, VOBM#2H & VOBM#3) located in Polk and Tyler Counties.
These costs were transferred from "Exploration and Evaluation
costs" to "Developed Oil & Gas properties" when the wells were
commissioned. The wells are depleted over the estimated life of the
commercial reserves based on the "Unit of production basis" based
upon a typeset P50 well estimated at 1.4Mmboe P50 prospective
resource (recoverable).
Other property, plant and equipment
Other property, plant and equipment are stated at historical
cost less depreciation. Depreciation is provided at rates
calculated to write off the costs less estimated residual value of
each asset over its estimated useful life as follows:
- Production facilities and equipment are depreciated by equal
instalments over their expected useful lives, ranging from 3 to 30
years.
- Office equipment is depreciated by equal annual instalments
over their expected useful lives, being three years.
NOTES TO THE FINANCIAL INFORMATION
FOR THE PERIODED 31 DECEMBER 2018
1.9. Revenue
Revenue, excluding production tax and similar taxes, represents
net amounts invoiced for the Group's share of oil and gas revenues
in the year.
Interest revenue is recognised on a proportional basis taking
into account the interest rates applicable to the financial
assets.
2. Loss per share
6 months
6 months ended 31 Year ended
ended 31 December December 30 June
2018 2017 2018
(unaudited) (unaudited) (audited)
Loss per ordinary share from continuing operations:
Basic (0.54)c (1.10)c (3.72)c
The calculation above for the basis loss per share has been
calculated by dividing the relevant loss for the period by the
weighted average number of ordinary shares in issue of 237,336,555
(December 2017: 233,606,706; June 2018: 237,336,555).
3. Non-current assets
Exploration and evaluation assets Exploration
Group & evaluation
assets
$
Cost:
At 30 June 2018 43,498,422
Additions 1,369,083
Transfer to developed oil and gas
assets (7,560,880)
Transfer to PP&E -
---------------
At 31 December 2018 37,306,625
---------------
Impairment:
At 30 June 2018 6,805,537
At 31 December 2018 -
---------------
Net book value:
At 31 December 2018 37,306,625
===============
At 30 June 2018 43,498,422
===============
NOTES TO THE FINANCIAL INFORMATION
FOR THE PERIODED 31 DECEMBER 2018
3. Non-current assets continued
Developed Oil and Gas Assets Developed
Group Oil & Gas
assets
$
Cost:
At 30 June 2018 13,736,007
Additions -
Transferred from exploration &
evaluation assets 7,560,880
Depletion of developed oil & gas
assets (39,980)
------------
At 31 December 2018 21,256,907
------------
Net book value:
At 31 December 2018 21,256,907
============
At 30 June 2018 13,736,007
============
Property Plant and Equipment Property,
Group Plant &
Equipment
$
Cost:
At 30 June 2018 2,237,698
Additions -
Depreciation office equipment (215)
Transferred from exploration and
evaluation assets
Depreciation of production & pipe -
line facilities (116,053)
Exchange difference (34)
------------
At 31 December 2018 2,121,396
------------
Net book value:
At 31 December 2018 2,121,396
============
At 30 June 2018 2,237,698
============
Exploration and Evaluation assets includes direct drilling,
technical and accumulated leasehold costs in relation to the
prospects. Once a well commences production, costs are reclassified
to "Developed Oil & Gas properties" and subject to relevant
depletion and amortisation charges as appropriate. In November,
direct costs associated with the VOS#1 well were reclassified to
Developed Oil and Gas properties.
NOTES TO THE FINANCIAL INFORMATION
FOR THE PERIODED 31 DECEMBER 2018
4. Approval by Directors
The interim report for the six months ended 31 December 2018 was
approved by the Directors on the 27th of March 2019.
5. Availability of Interim Report
The interim report will be made available shortly on the
Company's website (www.pantheonresources.com), with further copies
available on request from the Company's registered office.
6. Subsequent events
Completion of the acquisition of two wholly owned companies from
Great Bear Petroleum Operating LLC ("Great Bear")
At the EGM held on the 14(th) of January 2019 the shareholders
ratified the acquisition of two wholly owned companies from Great
Bear Petroleum Operating LLC, Great Bear Petroleum Ventures I LLC
and Great Bear Petroleum Ventures II LLC (together the "Great Bear
Companies"). The main assets of the Great Bear Companies are leases
with the rights to explore for hydrocarbons in Alaska. The Great
Bear Companies have over 250,000 leased acres onshore North Slope
of Alaska, which are well located to infrastructure, and whose
acreage has an estimated P50 Technically Recoverable Resource
(Gross) of 2.0 billion barrels oil. The estimated P50 Technically
Recoverable Resource (Gross) included 400 million barrels oil
attributable to the Winx Well. The acquisition of the assets of
Great Bear Petroleum completed on 17 January 2018 in accordance
with its terms.
Acquisition of controlling interest in Vision
Pantheon acquired 66.6 per cent ownership of Vision Gas Limited
and Vision Resources LLC (together, "Vision") including its working
interest in the VOS#1 well 33.3 per cent and associated Tyler
County acreage. Vision Gas Limited owns certain physical assets and
its intellectual property (comprising, inter alia, seismic, well
logs, and production histories). The acquisition allows Pantheon to
assume management control of the Vision entities. As consideration,
Pantheon issued 3.5million new fully paid ordinary shares.
Completion of Capital Raising
At the EGM held on the 14(th) of January 2019 the shareholders
ratified the Capital Raising of approximately US$20.9 million
(before expenses). 108,335,266 new Ordinary Shares were issued at
an issue price of 15.25 pence per share.
Appointment of Technical Director
Appointment of Mr Robert (Bob) Rosenthal as Technical Director
of Pantheon on 11(th) of March 2019. Mr. Rosenthal, 66, has over 40
years' experience in the oil and gas industry globally as an
Exploration Geologist and Geophysicist. He has held various senior
exploration positions and spent a large part of his career at Exxon
and at BP, where he gained key relevant regional experience in the
geology of North Slope of Alaska and of Texas. Since 1999, Mr
Rosenthal has run his own successful consulting business and has
led the exploration efforts of a number of private and public
companies.
NOTES TO THE FINANCIAL INFORMATION
FOR THE PERIODED 31 DECEMBER 2018
6. Subsequent events continued
Passing of John Walmsley
In March 2018 John Walmsley, Non-executive Director and former
Chairman sadly passed away.
Winx well - Western Blocks acreage - 10% working interest,
Alaskan North Slope
The Winx well hit target Depth of 6,800' on the 3rd March, with
all pre-drill targets successfully intersected. A comprehensive
wireline logging program was successfully completed, and a full
petrophysical analysis and review was commenced. Provisional
petrophysical analysis of the wireline logging program indicated
low oil saturations in the primary Nanushuk Topset objectives;
testing and fluid sampling indicated that reservoir quality and
fluid mobility at this location was insufficient to warrant
production testing.
Zones of interest in the Torok formation, secondary objectives,
were identified on wireline logs, which similarly exhibited low oil
saturations and did not flow hydrocarbons.
The estimated P50 Technically Recoverable Resource (Gross)
attributable to the Winx Well was 400 million barrels of oil and
this estimate will be subject to downward revision by the operator
in due course..
Alkaid well, Alaska North Slope, PANR 100% working interest
The first of the 3 targeted horizons, the Brookian ZOI,
confirmed as an oil discovery, following a successful flow test
where results exceeded expectations. A 6 foot interval (from a
c.240 foot interval of net pay) was perforated and flow tested at
80- 100 BOPD light oil (40 degree API). Such flow rates are
considered to be an excellent result and indicate the potential for
materially higher flow rates when wells are drilled in the typical
manner for Brookian wells in Alaska - horizontally, stimulated, and
with larger intervals perforated.
The Alkaid well was drilled as a vertical test well with the
primary objective to obtain sufficient data to make an assessment
as to the potential commerciality of the targeted horizons The plan
is to now isolate the Brookian ZOI zone, and to flow test the
shallower West Sak and Ugnu horizons prior to shutting down
operations later in April.
GLOSSARY
bbl barrel of oil mcfd thousand cubic feet per day
bopd barrels of oil per day Mmboe million barrels of oil
equivalent
boepd barrels of oil equivalent per day NPV net present
value
mcf thousand cubic feet $ United States dollar
bwpd barrels water per day
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR MMGZFZNKGLZZ
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