18th March 2024
Pantheon
Resources plc
Interim Results (unaudited)
for the six months ended 31 December 2023
Pantheon Resources plc (AIM: PANR)
("Pantheon" or "the Company"), 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:
o Successfully executed new frac
design with - improved frac efficiency
o Confirmed the producibility of
and fluid composition in the topset horizon
o 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."
Further information, please contact:
Pantheon Resources plc
|
+44 20 7484 5361
|
David Hobbs, Executive
Chairman
Jay Cheatham,
Chief Executive Officer
|
|
Justin Hondris, Director, Finance
and Corporate Development
|
|
|
|
|
|
Canaccord Genuity
plc (Nominated Adviser and broker)
|
+44 20 7523 8000
|
Henry Fitzgerald-O'Connor
James Asensio
Ana Ercegovic
|
|
|
|
BlytheRay
|
+44 20 7138 3204
|
Tim Blythe
Megan Ray
Matthew Bowld
|
|
Notes to Editors
Pantheon Resources plc is an
AIM listed Oil & Gas company focused on developing the Ahpun
and Kodiak fields located on state land on the Alaska
North Slope ("ANS"), onshore USA, where it has a 100% working
interest in c. 193,000 acres. In December 2023, Pantheon was the
successful bidder for an additional 66,240 acres with very
significant resource potential, contiguous to the Ahpun and Kodiak
projects. Following the issue of the new leases, which are expected
to be formally awarded in summer 2024 upon payment of the balance
of the application monies, the Company will
have a 100% working interest in c. 259,000
acres. Certified contingent resources attributable to these
projects exceeds 1 billion barrels of marketable liquids, located
adjacent to Alaska's Trans Alaska Pipeline System
("TAPS").
Pantheon's stated objective is to
demonstrate sustainable market recognition of a value
of $5-$10/bbl of recoverable resources by end 2028. This is
based on targeting Final Investment Decision ("FID") on the Ahpun
field by the end of 2025, subject to regulatory approvals, building
production to at least 20,000 barrels per day of marketable liquids
into the TAPS main oil line, and applying the resultant cashflows
to support the FID on the Kodiak field by the end of
2028.
A major differentiator to other ANS
projects is the close proximity to existing roads and pipelines
which offers a significant competitive advantage to Pantheon,
allowing for materially lower infrastructure costs and the ability
to support the development with a significantly lower pre-cashflow
funding requirement than is typical in Alaska.
The Company's project portfolio has
been endorsed by world renowned experts. Netherland, Sewell
& Associates ("NSAI") estimate a 2C contingent recoverable
resource in the Kodiak project that total 962.5 million
barrels of marketable liquids and 4,465 billion cubic feet of
natural gas. NSAI is currently working on updated estimates for the
Kodiak Field to incorporate the additional acreage and for the
Ahpun Field.
COMPANY STATEMENT
FOR
THE PERIOD ENDED 31 DECEMBER 2023
___________________________________________________________________________________
Company Statement
Pantheon's strategic goal remains to
bring the Ahpun field onstream as quickly as possible on the way to
delivering sustainable market recognition of
$5-$10 per barrel of 1C/1P recoverable resources to our
shareholders by developing our world class assets - Ahpun (Final
Investment Decision "FID" targeted for 2025) and Kodiak (FID
targeted for 2028) - and with minimum shareholder dilution. The
focus is on ways to do it quicker, cheaper and/or deliver a higher
value outcome.
Highlights
During the final six months calendar
year 2023 and the subsequent period in 2024, Pantheon achieved
significant progress in delivering this goal:
· Netherland Sewell
and Associates ("NSAI") issued its Independent Expert Report
("IER") on the Kodiak field in August 2023, with an aggregate best
estimate recoverable contingent resources of 963 million barrels
("mmbbls") of marketable liquids and 4,465 billion cubic feet of
gas ("bcf").
· The Company
re-entered, fracked and tested the topset sands (previously
referred to as the 'SMD') in the vertical portion of the Alkaid-2
well (above the deeper Alkaid ZOI horizon which was separately
tested in late 2022/early 2023). Following incorporation of 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.
· The data gathered
from the recompletion suggests that the operation achieved a frac
efficiency estimated at 50% (vs c.20% in the lateral that was
tested in the deeper ZOI horizon in the same wellbore in late 2022
and early 2023). Furthermore, the pressure transient analysis of
the data from the downhole gauges supports a greatly improved
estimate of matrix permeability in this interval, even despite it
being located on the feather edge of the Ahpun topset reservoir, of
0.02-0.12 milliDarcies.
· Based on these
results, engineering and environmental consultants were contracted
to help progress the Company to first production at Ahpun, by
commencing the process to secure a hot tap into the TAPS main oil
line.
· Addition of two
non-executive Directors to the Board-Allegra Hosford Scheirer and
Linda Havard.
o Allegra is a
physical science Research Scientist with the Basin
and Petroleum System Modelling Group at Stanford and has a PhD from
MIT.
o Linda has more than 35 years of experience as a financial and operating
executive in public companies and professional
services firms, including 15 years in the oil and gas industry.
Linda has an MBA from UCLA.
· In December 2023,
Pantheon successfully bid for 66,240 acres covering the full extent
(including all of the areas interpreted as containing higher
quality oil reservoirs) of both Ahpun and Kodiak, materially
increasing the contained resource potential across both
projects.
· Opening of Houston
office and are proceeding with the work necessary for a US stock
market listing in 2025, including the appointment of Tony Larkin to
manage the project and promotion of Josh McIntyre to the role of
Group Financial Controller.
· In addition to the
$22 million of funding in May 2023 to ensure continued operation
through to the end of 30 June 2024, Pantheon funded the September
and December 2023 quarterly convertible loan repayments through
placements of shares to long term supportive holders, including
IPGL Limited, which now has an interest over more than 7% of the
shares in issue. The March 2024 quarterly repayment was made with
shares to enhance liquidity, given the acquisition of key leases in
December 2023.
Ongoing activity in 2024
Following the success of the Ahpun
topset horizon test in late 2023 and given the quality of core data
in the Pipeline State #1 well, the Company has redirected SLB's
modelling of the Ahpun field development to prioritise development
wells in the Ahpun field topset sands. This work is
underway.
Until that work is completed,
Pantheon continues development planning based on 2 mmbbl EUR
(estimated ultimate recovery) per well and an IP30 flow rate of
4,000 bpd of marketable liquids with first year average production
of 2,000 bpd. This is based on the modelled
development well design of 10,000 feet lateral length, the improved
frac design, and recognising the improved reservoir and fluid
characteristics in the Ahpun topset reservoirs. Projections for
estimated cumulative cashflows and funding requirements (estimated
at $120 million to first production) reinforce the robustness of
the Ahpun development strategy and the ability to deploy cashflows
from the initial wells to fund the expansion to a multi-rig
programme and to fund the Kodiak Field development after its FID
(targeted by the end of 2028).
NSAI is continuing to update its
analysis on Kodiak to include the new leases, with an update
expected around the end of March 2024.Its initial assessment of
Ahpun is expected around the end of June 2024.
The Company continues to work on
financing initiatives with a goal to minimise shareholders' equity
dilution while ensuring the financial strength to build the
professional organisation necessary to deliver projects of the
size, scale and complexity of Ahpun and Kodiak. Pantheon
continually updates its development plans and forecasts with new
data from both internal analysis and that of SLB and other
consultants, while seeking to minimise the footprint, of both
surface facilities and total resource development, such that
development consents will minimise delays to key approvals. It is a
tremendous advantage that Pantheon's assets are located exclusively
on State of Alaska land and adjacent to pipeline and road
transportation infrastructure, but this does not eliminate the need
to work with the Army Corps of Engineers for permits covering
wetland fill and the Federal Government for common carrier pipeline
access. Pantheon has retained experienced engineering, regulatory
and environmental experts to ensure that our plan meets all
requirements and best practices, including the intention to be a
zero emissions operator by 2030.
NSAI Initial Kodiak
Report
Pantheon received an IER prepared
by NSAI on the Lower Basin Floor Fan reservoir of the
Company's Kodiak project in Q3 2023.
A summary of the resource estimate is outlined
below.
Gross 100% Working Interest
Contingent Resources
Resource Category
|
Oil
(mmbbls)
|
NGLs
(mmbbls)
|
Residual
Gas
(bcf)
|
|
Total
Marketable Liquids*
(mmbbls)
|
Low Estimate (1C)
|
145.4
|
292.4
|
2,151.7
|
|
437.8
|
Best Estimate (2C)
|
314.6
|
647.9
|
4,465.2
|
|
962.5
|
High Estimate (3C)
|
647.8
|
1,366.4
|
8,822.7
|
|
2,014.2
|
*
Pantheon addition of oil & NGL columns
Successful Bidder
at State of Alaska's North Slope
Areawide Lease Sale in December 2023
On 13 December 2023, Pantheon was
named as the successful bidder on 66,240 acres, covering
substantially all of the anticipated remaining conventional
reservoir potential in the Kodiak Field, where the Company expects
reservoir quality to improve as they become shallower to the north
and west of the existing leases. In addition, the leases covering
the potential eastern extent of the Ahpun Field (including what is
prognosed to be higher quality, shallower reservoirs) covers the
resources that are assessed as economically developable using
current technologies. The new acreage
contains material resource potential, and classification of the
potentially recoverable resources will be
determined in the coming months in consultation with NSAI and
SLB.
1 Estimated based on 16.67% State
royalty for Western Kodiak Leases and 12.5% State royalty for the
Eastern Ahpun Leases. All subject to 1 % Overriding Royalty
Interest ("ORRI") in favour of eSeis.
2 Company estimates of TRR are
based on 8% recovery factor ("RF") in tight formations and up to
20% in formations exceeding the conventional threshold. No
resources are attributed to natural gas because there is currently
no market on the North Slope and any gas not used for fuel is modelled to be reinjected
into the reservoir.
NGL and Condensates stripped from the
production stream are not explicitly recognised within these
figures pending GeoMark reservoir fluid composition analysis. Until
GeoMark's analysis is received, the basis of estimation is
consistent with the SLB reservoir modelling report released on
8th December, 2022.
3 COS is the Geological Chance of
Success - the probability that hydrocarbons will be encountered and
capable of flowing to surface. The target formations in the western
leases covering the extension of the Kodiak field are the same horizons
encountered in the Pipeline State, Talitha-A and Theta West-1
wells, resulting in a high COS. The eastern Ahpun leases exhibit
the seismic characteristics indicating hydrocarbon pay but cannot
be confirmed until penetrated by a well.
4 The Kodiak volumes have been estimated
deterministically and the Ahpun volumes have been estimated
probabilistically. The totals do not represent the statistical
addition of these estimates.
Pantheon's lease acquisition
strategy is now complete. These latest awards protect the
development schedules for Ahpun and Kodiak to the extent possible
by ensuring the full fields can be included in requests for
development consents from the State of Alaska. The immediate focus
remains on the development of Ahpun with FID planned by the end of
2025 and appraisal of the full potential of Kodiak to support its
FID in 2028.
Financing
The Company intends to provide an
update on its overall financing initiatives over the coming weeks.
As previously disclosed, Pantheon is in discussions with vendors,
offtakers and other parties about the potential to provide non
equity finance the Company in order to progress its project
development at minimal equity dilution to shareholders. As
previously discussed, Pantheon estimates $120 million is required
to get to first production, comprised of three wells conservatively
at $20 million each, $20 million to upgrade facilities, $20 million
for a hot-tap into TAPS and $20 million for three years G&A.
Whilst some of these components will change higher or lower, for
example G&A as the Company builds its team and incurs costs
associated with a US listing, at a combined level the Company
remains comfortable that $120 million remains a conservative and
achievable estimate.
Heading into Q2 of 2024, Pantheon is
proceeding with determination, doing the small but necessary steps
to advance its exciting projects towards its stated objectives of
FID, project development and value recognition. Management believe
the project resource potential to be of a size and scale that is
material by any global standard and are extremely pleased to have
been able to strategically retain a 100% working interest in all of
it. Management fully recognise that financing the development of
such large developments is a key hurdle and are working diligently
on that objective, recognising that once achieved, the pathway to
commercialisation becomes clearer for all to see, and would be
expected to see significant value recognition accrete to
shareholders thereafter. The Board is determined in its efforts to
achieve these goals.
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE
INCOME
FOR
THE PERIOD ENDED 31 DECEMBER 2023
___________________________________________________________________________________
|
Notes
|
6 months
ended 31 December 2023 (unaudited)
|
6 months
ended 31 December 2022 (unaudited)
|
Year ended
30 June 2023
(audited)
|
|
|
$
|
$
|
$
|
Continuing operations
|
|
|
|
|
Revenue
|
|
13,393
|
455,309
|
803,689
|
Production royalties
|
|
-
|
(57,101)
|
-
|
Facilities commissioning and
operations
|
|
-
|
(837,503)
|
-
|
Cost of sales
|
|
(7,152)
|
(183,296)
|
(673,290)
|
Gross profit / (loss)
|
|
6,241
|
(622,590)
|
130,399
|
|
|
|
|
|
Administration
expenses
|
|
(4,035,322)
|
(3,699,831)
|
(3,870,673)
|
Share Based payment
expense
|
|
-
|
(2,935,897)
|
(3,146,170)
|
Operating loss
|
|
(4,029,081)
|
(7,258,318)
|
(6,886,444)
|
|
|
|
|
|
Convertible Bond - Interest
expense
|
|
(2,589,141)
|
(3,151,102)
|
(6,111,118)
|
Convertible Bond - Revaluation of
derivative
|
|
(1,206,610)
|
7,937,855
|
11,321,514
|
Other Income
|
|
-
|
-
|
30,000
|
Interest receivable
|
|
414,446
|
152,492
|
338,205
|
Loss
before taxation
|
|
(7,410,387)
|
(2,319,073)
|
(1,307,843)
|
|
|
|
|
|
Taxation
|
|
1,726,267
|
743,097
|
(138,844)
|
Loss for the
period
|
|
(5,684,120)
|
(1,575,796)
|
(1,446,687)
|
|
|
|
|
|
Other comprehensive income for the period
|
|
|
|
|
Exchange differences from translating
foreign operations
|
|
(219,659)
|
(97,473)
|
(3,185,937)
|
Total comprehensive loss for
the period
|
|
(5,903,779)
|
(1,673,449)
|
(4,632,624)
|
Loss
per share from continuing operations:
|
|
|
|
|
Basic and
diluted Loss per share
|
2
|
(0.66)¢
|
(0.21)¢
|
(0.18)¢
|
|
|
|
|
|
CONDENSED CONSOLIDATED
STATEMENT OF CHANGES IN EQUITY
FOR
THE PERIOD ENDED 31 DECEMBER 2023
_______________________________________________________________________________________
|
Share
|
Share
|
Retained
|
Currency
|
Share
|
Total
|
|
capital
|
premium
|
losses
|
reserve
|
based
payment
|
equity
|
|
$
|
$
|
$
|
$
|
$
|
$
|
Group
|
|
|
|
|
|
|
At 1 July
2023
|
12,464,677
|
297,830,078
|
(49,444,331)
|
(2,692,860)
|
14,271,042
|
272,428,607
|
|
|
|
|
|
|
|
Loss for
the period
|
-
|
-
|
(5,684,120)
|
-
|
-
|
(5,684,120)
|
Other
comprehensive income: Foreign currency translation
|
-
|
-
|
-
|
(219,659)
|
-
|
(219,659)
|
Total comprehensive income
for the period
|
-
|
-
|
(5,684,120)
|
(219,659)
|
-
|
(5,903,779)
|
Issue of
shares
|
148,722
|
2,644,275
|
-
|
-
|
-
|
2,792,997
|
Balance at 31 December
2023
|
12,613,399
|
300,474,353
|
(55,128,450)
|
(2,912,519)
|
14,271,042
|
269,317,825
|
|
Share
|
Share
|
Retained
|
Currency
|
Share
|
Total
|
|
capital
|
premium
|
losses
|
reserve
|
based
payment
|
equity
|
|
$
|
$
|
$
|
$
|
$
|
$
|
Group
|
|
|
|
|
|
|
At 1 July
2022
|
10,720,459
|
264,879,196
|
(48,466,591)
|
493,078
|
11,776,246
|
239,402,388
|
|
|
|
|
|
|
|
Loss for
the period
|
-
|
-
|
(1,575,976)
|
-
|
-
|
(1,575,976)
|
Other
comprehensive income: Foreign currency translation
|
-
|
-
|
-
|
(97,473)
|
-
|
(97,473)
|
Total comprehensive income
for the period
|
-
|
-
|
(1,575,976)
|
(97,473)
|
-
|
(1,673,449)
|
Exercise of Share
Options
|
|
|
|
|
|
|
Issue of
shares
|
54,759
|
1,701,259
|
-
|
-
|
-
|
1,756,018
|
Transfer
of previously expensed share based payment on exercise of
options
|
-
|
-
|
395,238
|
-
|
(395,238)
|
-
|
Convertible Bond -
Amortisation and Redemption
|
|
|
|
|
|
|
Issue of
shares
|
73,543
|
5,683,957
|
-
|
-
|
-
|
5,757,500
|
Shares Issued in Lieu of
Payment
|
|
|
|
|
|
|
Share
based payments expense
|
-
|
-
|
-
|
-
|
2,935,897
|
2,935,897
|
Balance at 31 December
2022
|
10,848,761
|
272,264,411
|
(49,647,328)
|
395,605
|
14,316,906
|
248,178,354
|
|
Share
|
Share
|
Retained
|
Currency
|
Share
|
Total
|
|
Capital
|
premium
|
losses
|
reserve
|
based payment
reserve
|
equity
|
|
$
|
$
|
$
|
$
|
$
|
$
|
Group
|
|
|
|
|
|
|
At 1 July 2022
|
10,720,459
|
264,879,196
|
(48,466,590)
|
493,078
|
11,776,246
|
239,402,388
|
|
|
|
|
|
|
|
Loss for
the year
|
-
|
-
|
(1,446,687)
|
-
|
-
|
(1,446,687)
|
Other
comprehensive income: Foreign currency translation
|
-
|
-
|
-
|
(3,185,937)
|
-
|
(3,185,937)
|
Total comprehensive income
for the year
|
-
|
-
|
(1,446,687)
|
(3,185,937)
|
-
|
(4,632,624)
|
Transactions with
owners
|
|
|
|
|
|
|
Capital
Raising
|
|
|
|
|
|
|
Issue of
shares
|
1,301,769
|
20,828,305
|
-
|
-
|
-
|
22,130,074
|
Issue
costs
|
-
|
(469,920)
|
-
|
-
|
-
|
(469,920)
|
Issue
costs paid in cash
|
-
|
(501,683)
|
-
|
-
|
-
|
(501,683)
|
Exercise of Share Options and
RSU's
|
|
|
|
|
|
|
Issue of
shares
|
58,445
|
1,880,003
|
-
|
-
|
-
|
1,938,448
|
Convertible Bond -
Amortisation and Redemption
|
|
|
|
|
|
|
Issue of
shares
|
384,005
|
11,032,995
|
-
|
-
|
-
|
11,417,000
|
Other -
Reversal of over accrual relating to previous capital
raise
|
-
|
181,185
|
-
|
-
|
-
|
181,185
|
Total transactions with
owners
|
1,744,219
|
32,950,885
|
-
|
-
|
-
|
34,695,104
|
Transfer
of previously expensed share based payment on exercise of
options
|
-
|
-
|
468,946
|
-
|
(468,946)
|
-
|
Share
based payments expense
|
-
|
-
|
-
|
-
|
2,963,741
|
2,963,741
|
Balance at 30 June
2023
|
12,464,677
|
297,830,078
|
(49,444,331)
|
(2,692,860)
|
14,271,042
|
272,428,607
|
CONDENSED CONSOLIDATED
STATEMENT OF FINANCIAL POSITION
AS
AT 31 DECEMBER 2023
_______________________________________________________________________________________
|
Notes
|
6 months
ended
31
December
2023
(unaudited)
|
6 months
ended
31
December
2022
(unaudited)
|
Year
ended
30
June
2023
(audited)
|
ASSETS
|
|
$
|
$
|
$
|
Non-Current Assets
|
|
|
|
|
Exploration
and evaluation assets
|
3
|
292,192,198
|
274,321,398
|
286,668,349
|
Property,
plant & equipment
|
3
|
8,219
|
66,199
|
38,570
|
|
|
292,200,417
|
274,387,597
|
286,706,919
|
Current Assets
|
|
|
|
|
Trade and other
receivables
|
|
793,965
|
2,823,089
|
2,559,522
|
Cash and cash equivalents
|
|
207,124
|
16,335,676
|
20,661,012
|
Fixed term cash deposit &
Certificate of deposit
|
|
9,008,937
|
-
|
-
|
|
|
10,010,026
|
19,158,765
|
23,220,534
|
Total assets
|
|
302,210,443
|
293,546,363
|
309,927,453
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
Current liabilities
|
|
|
|
|
Convertible Bond - Debt
|
5
|
9,582,349
|
9,929,027
|
9,755,688
|
Trade and
other payables
|
|
1,757,257
|
6,336,999
|
2,840,610
|
Provisions
|
|
6,018,291
|
5,282,866
60
|
6,017,238
|
Lease Liabilities
|
|
5,341
|
60,007
|
36,435
|
|
|
17,363,238
|
21,608,899
|
18,649,971
|
|
|
|
|
|
Non-current liabilities
|
|
|
|
|
Lease Liabilities
Trade and other payables
|
|
-
13
|
2,956
|
-
|
Convertible Bond - Debt
|
5
|
13,819,208
|
19,228,219
|
16,619,062
|
Convertible Bond -
Derivative
|
5
|
1,614,192
|
3,587,629
|
407,566
|
Deferred tax liability
|
|
95,980
|
940,306
|
1,822,247
|
|
|
15,529,380
|
23,759,110
|
18,848,875
|
Total liabilities
|
|
32,892,618
|
45,368,009
|
37,498,847
|
Net
assets
|
|
269,317,825
|
248,178,354
|
272,428,607
|
|
|
|
|
|
|
|
|
|
|
EQUITY
|
|
|
|
|
Capital and reserves
|
|
|
|
|
Share capital
|
|
12,613,399
|
10,848,761
|
12,464,677
|
Share premium
|
|
300,474,353
|
272,264,411
|
297,830,078
|
Retained losses
|
|
(55,128,450)
|
(49,647,328)
|
(49,444,331)
|
Currency reserve
|
|
(2,912,519)
|
395,605
|
(2,692,860)
|
Share based payment
reserve
|
|
14,271,042
|
14,316,906
|
14,271,042
|
Shareholders' equity
|
|
269,317,825
|
248,178,354
|
272,428,607
|
|
|
|
|
|
CONDENSED CONSOLIDATED STATEMENT OF CASH
FLOWS
FOR
THE PERIOD ENDED 31 DECEMBER 2023
_______________________________________________________________________________________
|
|
6 months
ended
31
December
2023
(unaudited)
|
6 months
ended
31
December
2022
(unaudited)
|
Year
ended
30
June
2023
(audited)
|
|
|
$
|
$
|
$
|
|
|
|
|
|
Net
outflow from operating activities
|
|
(3,534,998)
|
(6,722,549)
|
(11,395.855)
|
|
|
|
|
|
Cash
flows from investing activities
|
|
|
|
|
Interest received
|
|
414,446
|
152,492
|
338,205
|
Financial Investments - Fixed term
cash deposit & Certificate of deposit
|
|
(9,008,937)
|
-
|
-
|
Funds used for drilling, exploration
and leases
|
|
(5,523,850)
|
(36,601,678)
|
(48,246,055)
|
Advance for performance
bond
|
|
-
|
-
|
(2,400,000)
|
Property, plant and
equipment
|
|
-
|
(3,033)
|
(3,251)
|
Net
cash outflow from investing activities
|
|
(14,118,341)
|
(36,452,218)
|
(47,911,101)
|
|
|
|
|
|
|
|
|
Cash
flows from financing activities
|
|
|
|
|
Proceeds from share issues
|
|
2,792,997
|
1,756,018
|
22,746,441
|
Issue costs paid in cash
|
|
-
|
-
|
(501,683)
|
Repayment of borrowing - unsecured
convertible bond
|
|
(5,561,500)
|
-
|
-
|
Repayment of borrowing - leasing
liabilities
|
|
(32,046)
|
(29,696)
|
(60,913)
|
Net
cash inflow from financing activities
|
|
(2,800,549)
|
1,726,323
|
22,183,845
|
|
|
|
|
|
|
|
|
(Decrease) / Increase in cash & cash
equivalents
|
|
(20,453,888)
|
(41,448,445)
|
(37,123,110)
|
|
|
|
|
|
Cash and cash equivalents at the
beginning of the period
|
|
20,661,012
|
57,784,121
|
57,784,121
|
Cash
and cash equivalents at the end of the
period(1)
|
|
207,124(1)
|
16,335,677
|
20,661,012
|
(1) Closing cash
balance excludes US$7,000,000 fixed term deposit (included above in
Financial Investments - Fixed Term cash deposit and Certificate of
deposit) which matured 8th January
2024.
RECONCILIATION OF OPERATING LOSS TO NET CASH OUTFLOW FROM
OPERATING ACTIVITIES
FOR
THE PERIOD ENDED 31 DECEMBER 2023
_______________________________________________________________________________________
|
6 months
ended
31
December
2023
(unaudited)
|
6 months
ended
31
December
2022
(unaudited)
|
Year
ended
30
June
2023
(audited)
|
|
$
|
$
|
$
|
|
|
|
|
Loss for the period
|
(5,684,120)
|
(1,575,976)
|
(1,446,687)
|
Net interest received
|
(414,446)
|
(152,492)
|
(338,205)
|
Share Based Payments non-cash
expense
|
-
|
2,935,897
|
3,146,170
|
Depreciation of office
equipment
|
1,100
|
245
|
1,869
|
Depreciation of right of use
assets
|
28,802
|
27,154
|
55,700
|
Interest Expense
|
2,589,141
|
3,151,102
|
6,111,118
|
Convertible Bond - Revaluation of
derivative liability
|
1,206,610
|
(7,937,855)
|
(11,321,514)
|
Other provisions - irrecoverable
VAT
|
-
|
-
|
7,302
|
Decrease in other
liabilities
|
-
|
(1,964,731)
|
-
|
Decrease / (Increase) in trade and
other receivables
|
1,765,558
|
(324,642)
|
(61,076)
|
Decrease in trade and other
payables
|
(1,083,353)
|
(40,987)
|
(4,648,183)
|
Effect of translation
differences
|
(218,023)
|
(97,165)
|
(3,041,194)
|
Taxation
|
(1,726,267)
|
(743,097)
|
138,844
|
Net
cash outflow from operating activities
|
(3,534,998)
|
(6,722,549)
|
(11,395,855)
|
NOTES TO THE FINANCIAL INFORMATION
FOR
THE PERIOD ENDED 31 DECEMBER 2023
_______________________________________________________________________________________
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
The financial statements have been prepared on
a going concern basis using the historical cost convention and in
accordance with the UK Adopted International Accounting Standards
("IAS's") 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 2024. 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 2023, 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 2023 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.
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.
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 for the Group and the
Company are presented in US Dollars ("$") and this is the Group's
Presentation currency. The Functional currency of all entities
within the Group, excluding the Parent Company, is $USD. The
Functional currency of the Parent Company is £GBP.
(ii)
Transactions and balances
Transactions in foreign currencies are
translated into US dollars at the spot rate. 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.
The assets, liabilities of the Parent Company
are translated into US dollars at the rates of exchange ruling at
the year end. The results of the Parent Company are translated into
US dollars at the average rates of exchange during the year.
Exchange differences resulting from the retranslation of currencies
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
In June 2023 Pantheon communicated
to shareholders via RNS and accompanying webinar, its aggressive
strategy to target sustainable market value recognition
of $5 - $10 per barrel of 1P/1C recoverable
resource by the end of 2028, FID (Final Investment Decision) on the
Ahpun project by the end of 2025, and FID on the Kodiak project by the
end of 2028. Executing such a strategy requires significant
additional capital, most of which the Company seeks to access
through non equity sources. This
process is presently underway. In November 2023 the Company
published a stock exchange announcement, supported by a webinar,
which provided detail of the estimated $120 million capital
required to achieve first production at Ahpun and the Company's
strategy to secure such funding. This sum included the drilling of
3 new wells, a hot-tap into the TAPS pipeline, upgrading production
facilities and several years of G&A. In
accessing additional capital, Pantheon's stated goal is to achieve
this in the least dilutive manner for shareholders, minimising the
use of equity capital by prioritising three main
alternate funding sources: (i) vendor financing (ii) offtaker
financing and (iii) reserve based lending. Pantheon
is presently in discussions with multiple parties,
including vendors and potential offtakers with respect to these
potential non-equity financing
alternatives.
As reported to shareholders, the
Group will need to secure additional funding for general working
capital, capital commitments, to cover future liabilities as they
fall due and to continue to progress its key projects as planned.
The Group seeks to secure such funding by Q2 or Q3 2024, in the
least dilutive manner for shareholders, ideally through one of the
non equity funding sourced discussed above. The auditors made
reference to this material uncertainty within their audit report
within the 30 June 2023 annual financial statements.
In Q3 2023, Netherland Sewell &
Associates estimated a 2C Contingent Resource for Pantheon's Kodiak
project totalling 962.5 million barrels of marketable liquids. The
directors believe the enormous size of the resource already appraised on
Pantheon's acreage provides the potential for 1,000 - 2,000 wells.
Whilst in absolute terms this would entail cumulative
investment estimated in the billions
of dollars over the lifetime of the project, Pantheon estimates
c.$300 million on the Ahpun
development (plus potentially $50
million of Kodiak appraisal costs) as the maximum cumulative cash
requirement. Once in full development,
it is believed that production revenues have the potential to self
finance a great majority of the future development costs as is
often the case in such developments. Recent modelling by SLB
predicts potential for significant improvement in well performance
over its original estimates.
The Group has no contractual
obligation to drill any future wells and the only obligation is to
suspend the Talitha-A test well, the estimated cost of which
($0.7m) has already been provided for in the financial accounts.
Given the quality of the assets, the directors are confident in
their ability to raise capital as and when required. Accordingly,
the financial statements have been prepared on a going concern
basis.
1.6. Revenue
During the year ended 30 June 2023 oil sales
commenced as a result of long term production testing at the
Alkaid-2 well. These sales were considered to be non-recurring
because it only occurred during the testing phase and production
and thus production revenues stopped once flow testing operations
ended. During the period to 31 December, 2023. A modest revenue was
recorded during the short testing period for the short flow test of
the shallower SMD horizon. Once in production, revenue from
contracts with customers will be recognised in accordance with
IFRS15 Revenue from Contacts with Customers, at an amount that
reflects the consideration to which the Group expects to be
entitled in exchange for those goods.
Contract balances
A contract asset is the right to consideration
in exchange for goods transferred to the customer. If the Group
performs by transferring goods to a customer before the customer
pays consideration or before payment is due, a contract asset is
recognised for the earned consideration that is conditional. The
Group does not have any contract assets as performance and a right
to consideration occurs within a short period of time and all
rights to consideration are unconditional.
Interest revenue is recognised on a
proportional basis taking into account the interest rates
applicable to the financial assets.
1.7. 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.
1.8. Exploration and evaluation costs and
developed oil and gas properties
The Group follows the 'successful
efforts' method of accounting for exploration and evaluation costs.
At the point of production, 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. 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. All balance sheet carrying values are reviewed
for indicators of impairment at least twice yearly. The prospect
acreage is 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.
1.9 Impairment of exploration costs
and developed oil and gas properties, depreciation of assets,
plug & abandonment and goodwill
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 Group 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.
Exploration and evaluation costs
All exploration and evaluation assets relate to
the Group's Alaskan operations. The Alaskan leasehold assets were
fair valued as at the date of acquisition of Great Bear and the
carrying value at 31 December 2023 represents the cost of
acquisition (plus the fair value adjustment, in accordance with
IFRS) and any capitalised costs incurred subsequent to the
acquisition.
Decommissioning Charges
Decommissioning costs will be incurred by the
Group at the end of the operating life of some of the Group's
facilities and properties. The Group assesses its decommissioning
provision at each reporting date. The ultimate decommissioning
costs are uncertain and cost estimates can vary in response to many
factors, including changes to relevant legal requirements, the
emergence of new restoration techniques or experience at other
production sites. The expected timing, extent and amount of
expenditure may also change - for example, in response to changes
in reserves or changes in laws and regulations or their
interpretation. Therefore, significant estimates and assumptions
are made in determining the provision for decommissioning. As a
result, there could be significant adjustments to the provisions
established which would affect future financial results. The
provision at reporting date represents management's best estimate
of the present value of the future decommissioning costs
required.
For all wells the Group has adopted a
Decommissioning Policy in which all decommissioning costs are
recognise immediately when a well is either completed, abandoned,
suspended or a decision taken that the well will likely be plugged
and abandoned in due course. For completed or suspended wells, the
decommissioning charge is recorded against the capitalised amount
and subsequently depleted over the useful life of well using unit
of production method.
1.10
Financial instruments
Recognition and derecognition
Financial assets and financial
liabilities are recognised when the Group becomes a party to the
contractual provisions of the financial
instrument.
Financial assets, if/where
applicable, are derecognised when the contractual rights to the
cash flows from the financial asset expire, or when the financial
asset and substantially all the risks and rewards are
transferred.
A financial liability is
derecognised when it is extinguished, discharged, cancelled or
expires.
Classification and measurement of financial
liabilities
The Group's financial liabilities
include borrowings (convertible bond debt), trade and other
payables and embedded derivative financial
instruments.
Financial liabilities are initially
measured at fair value, and, where applicable, adjusted for
transaction costs unless the Group designated a financial liability
at fair value through profit or loss.
Subsequently, financial liabilities
are measured at amortised cost using the effective interest method
except for derivatives and financial liabilities designated which
are carried subsequently at fair value with gains or losses
recognised in profit or loss.
All interest-related charges and, if
applicable, changes in an instrument's fair value that are reported
in profit or loss are included within finance costs or fair value
gains/(losses) on derivative financial
instruments.
Embedded derivative financial instruments
A borrowing arrangement structured
as a convertible bond repayable in stock over 20 quarterly
instalments, in addition to the right of the lender to voluntarily
convert part or all of the outstanding principal prior to the
maturity date of the bond, has embedded in it a derivative. This is
considered to be a separable embedded derivative of a loan
instrument.
At the date of issue, the fair value
of the embedded derivative is estimated by considering the
derivative as a series of individual components with modelling of
the fixed and floating legs to determine a repayment schedule and
derive a net present value for the forward contract embedded
derivative.
This amount is recognised separately
as a financial liability or financial asset and measured at fair
value through the income statement. The residual amount of the loan
is then recorded as a liability on an amortised cost basis using
the effective interest method until extinguished upon conversion or
at the instrument's maturity date.
IFRS 9 Expected Credit Loss Model
IFRS 9 requires that credit losses on
financial assets are measured and recognised using the "expected
credit loss" (ECL) approach. Other than cash, the only other
financial assets held is a $0.4m in drilling deposits lodged with
the state of Alaska. These drilling deposits are to cover future
obligations to the state of Alaska for Great Bear Pantheon to
perform dismantle, removal and restoration activities at Alkaid
#2. Funds held by the state of Alaska are considered to have
virtually no risk of credit loss.
2.
Loss per share
|
6
months
ended 31
December
2023
|
6
months
ended
31
December
2022
|
Year
ended
30
June
2023
|
|
(unaudited)
|
(unaudited)
|
(audited)
|
Loss per share from
continuing operations:
|
|
|
|
Basic and diluted loss per
share
|
(0.66)c
|
(0.21)c
|
(0.18)c
|
The calculation above for the loss
per share has been calculated by dividing the loss for the period
by the weighted average number of ordinary shares in issue of
859,268,187 (December 2022: 764,186,409; June 2023: 791,082,592).
As the Group recorded a loss for the period, the diluted loss per
share has been made to equal the basic loss per share.
3. Non-current
assets
Exploration and evaluation assets
Group
|
|
|
Exploration & evaluation
assets
|
At 30 June 2022
|
|
|
237,852,406
|
Additions
|
|
|
36,599,104
|
At 31 December 2022
|
|
|
274,451,510
|
Additions
|
|
|
11,646,951
|
Additions to Asset Retirement
Obligations
|
|
|
700,000
|
At 30 June 2023
|
|
|
286,798,461
|
Additions
|
|
|
5,523,849
|
At 31 December 2023
|
|
|
292,322,310
|
|
|
|
|
Impairment:
|
|
|
|
At 30 June 2022
|
|
|
130,112
|
At 31 December 2022
|
|
|
130,112
|
At 30 June 2023
|
|
|
130,112
|
At 31 December 2023
|
|
|
130,112
|
|
|
|
|
Net
book value:
|
|
|
|
At 31 December 2023
|
|
|
292,192,198
|
At 30 June 2023
|
|
|
286,668,349
|
In January 2019, the Group acquired
100% of the share capital of Great Bear
Petroleum Ventures I LLC and Great Bear Petroleum Ventures II LLC
companies (collectively, "Great Bear"). The principal assets of
Great Bear are leases with the rights to explore for hydrocarbons
in the State of Alaska. At the period end the exploration and
evaluation assets all relate to the Alaskan operation; Alaskan
assets $292.2m (December 2022:
$274.3m).
Exploration and evaluation assets
are constantly reviewed for indicators of impairment. If an
indicator of impairment is found an impairment test is required,
where the carrying value of the asset is compared with its
recoverable amount. The recoverable amount is the higher of the
assets fair value less costs to sell and value in use. The
directors are satisfied that no impairments are required for the
current period end.
Property, plant and
equipment
Group
|
Office
Equipment
|
Right of Use
Assets
|
Total
|
|
$
|
$
|
$
|
Cost
|
|
|
|
At 30 June 2022
|
19,467
|
215,862
|
235,329
|
Additions
|
3,053
|
-
|
3,053
|
Exchange difference
|
-
|
(13,371)
|
(13,371)
|
At 31 December 2022
|
22,520
|
202,491
|
225,011
|
Additions
|
0
|
0
|
0
|
Exchange difference
|
335
|
10,156
|
10,491
|
At 30 June 2023
|
22,855
|
212,647
|
235,502
|
Additions
|
0
|
0
|
0
|
Exchange difference
|
(6)
|
(239)
|
(245)
|
At 31 December 2023
|
22,849
|
212,408
|
235,502
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
|
At 30 June 2022
|
16,403
|
127,235
|
143,638
|
Depreciation for the
period
|
245
|
27,154
|
27,399
|
Exchange difference
|
20
|
(12,245)
|
(12,225)
|
At 31 December 2022
|
16,668
|
142,144
|
158,812
|
Depreciation for the
period
|
1,624
|
28,546
|
30,170
|
Exchange difference
|
117
|
7,832
|
7,949
|
At 30 June 2023
|
18,409
|
178,522
|
196,931
|
Depreciation for the
period
|
1,100
|
28,802
|
29,902
|
Exchange difference
|
5
|
200
|
205
|
At 31 December 2023
|
19,514
|
207,524
|
227,038
|
Net
book value
|
|
|
|
At 31 December 2023
|
3,335
|
4,884
|
8,219
|
At 30 June 2023
|
4,446
|
34,125
|
38,570
|
4. Share
Capital
During the period in September 2023, the
Company issued 11,905,370 new ordinary shares via a private
placement.
As at 31 December, 2023 the company
had on issue 919,111,769 shares.
As at 31 December, 2023 the Company
also has the following options and warrants:
· 4,825,000 share
options and 4,802,922 warrants; all with a £0.30 exercise price and
all expiring September 2024. The warrants are identical to the
share options except are convertible into non-voting shares on a
1:1 basis.
· 7,000,000 share
options with an exercise price of £0.27, expiring July
2030.
· 12,430,000 share
options with an exercise price of £0.33, expiring January
2031.
· 21,380,000 share
options with an exercise price of £0.67, expiring January
2027.
5. Unsecured Convertible
Bond
In December 2021, the Company issued
$55 million worth of senior unsecured convertible bonds to a
fund advised by Heights Capital Ireland LLC, a global equity and
equity-linked focused investor. After settlement of the
13th December 2023 convertible bond repayment, the
remaining notional principal outstanding is
$29.4million.
The Convertible Bonds have a
maturity of 5 years, a coupon of 4.0% per annum and are repayable
in 20 quarterly repayments ("amortisations") of principal and
interest over the 5 year term of the convertible bond, with the
last repayment due in December 2026. Such quarterly amortisations
are repayable at the Company's option, in either cash at face
value, or in ordinary shares ("stock") at the lower of the
conversion price (presently USD$0.9096 per share) or a 10% discount
to the arithmetic average of the daily volume weighted average
prices ("VWAP") in the 10 or 3 day trading period prior to pricing
date. Additionally, the bondholder has the option to partially
convert the convertible bond at their discretion. A full summary of
the terms of Convertible Bonds is detailed in the Company's RNS
dated 7 December,
2021.
The bond agreement contains embedded
derivatives in conjunction with an ordinary bond. As a result, and
in accordance with the accounting standards, the convertible bonds
are shown in the Consolidated Statement of Financial Position, in
two separate components, namely Convertible Bond - Debt and
Convertible Bond - Derivative. At the time of recognition (Dec
2021) the $55m bonds were split, $39,175,363 for the Debt Component
and $15,824,637 for the Derivative Component.
In order to value the derivative
component, Pantheon engaged a third party expert valuation
specialist group to perform the valuations, who determined that the
valuation of the instrument required a Monte-Carlo simulation of
share price outcomes over the 5 year life to determine the ultimate
value of the conversion option. This produced a calculated
Effective Interest Rate ("EIR") of 20.41%. These amounts will be
revalued every balance date with the differences being accounted
for in the consolidated statement of comprehensive income.For the
period end date of 31 December 2023, the third party expert
valuation group performed their Monte-Carlo simulation and
valuation calculations to determine the new value for the equity
component to be $1,614,192. The resulting movement of was posted to
the consolidated statement of comprehensive income to the account
"Revaluation of derivative liability".
As at 31 December 2023 eight
quarterly repayments (amortisations) have been made. For the first
six repayments ordinary shares were issued in full settlement of
the principal and interest amortisations. The two amortization
repayments during the period were paid in cash, however that same
amount of cash was raised via private placements with IPGL Limited,
an existing supportive long-term shareholder. Hence, the funds
raised were directly allocated to these two payments, resulting in
a cash-neutral position for the Company.
At 31 December 2023 the Unsecured
Convertible Bond is shown in the Consolidated Statement of
Financial Position in the following categories;
Convertible Bond - Debt Component
(Current Liability)
|
$9,582,349
|
Convertible Bond - Debt Component
(Non-current Liability)
|
$13,819,208
|
Convertible Bond - Derivative
Component (Non-current Liability)
|
$1,614,192
|
Total
|
$25,015,749
|
6. Approval by
Directors
The interim report for the six
months ended 31 December 2023 was approved by the Directors on the
17th March 2024.
7. 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.
8. Contingent
liability
Pursuant to IAS 37, a contingent
liability is either: (1) a possible obligation arising from past
events whose existence will be confirmed only by the occurrence or
non-occurrence of some uncertain future event not wholly within the
entity's control, or (2) a present obligation that arises from a
past event but is not recognized because either: (i) it is not
probable that an outflow of resources embodying economic benefits
will be required to settle the obligation, or (ii) the amount of
the obligation cannot be measured with sufficient
reliability.
Kinder Morgan Treating L.P. ("Kinder
Morgan") initiated a dispute over an East Texas gas treating
agreement between Kinder Morgan and Vision Operating Company, LLC
("VOC"). VOC ceased making payments to the service provider in July
2019. The service provider subsequently issued a demand to VOC and,
in February 2021, served Pantheon Resources plc with a petition,
seeking to recover not less than $3.35m in respect of this VOC
contract. Pantheon held ownership of less than 0.1% of VOC via a
66.6% interest in Vision Resources LLC. Both Vision Resources LLC
and VOC filed for Chapter 7 Bankruptcy in the United States
Bankruptcy Court for the Southern District of Texas Houston
Division in April 2020.
No Pantheon entity is a signatory to
the gas treating agreement and none are named in the agreement.
Pantheon has taken legal advice on the matter and believes it has
no liability to the service provider. Accordingly, Pantheon does
not consider a provision should be included with the final
statements and will contest any claim made.
In, July 2021, the court dismissed
Kinder Morgan's claims against Pantheon Resources plc. Kinder
Morgan has also asserted the same claims against two subsidiaries,
Pantheon Oil & Gas, LP and Pantheon East Texas, LLC. Pantheon
Oil & Gas, LP and Pantheon East Texas, LLC are contesting these
claims.
9. Subsequent
events
Updated project modelling
The Company has a long term contract
with SLB to dynamically model the entire project area including
Ahpun and Kodiak. This project is expected to continue for
the foreseeable future. The Company will report on any significant
results as they become available.
Appointment of Independent non executive
director
On 1 January 2024, Pantheon
appointed Linda Havard as an Independent Non-Executive Director.
Linda has more than 35 years' experience as a financial and
operating executive in public oil and gas and entertainment
companies as well as professional services firms. She most recently
served as Chief Financial Officer of Gensler, the world's largest
architecture and design firm. Previously, she served for six years
as Chief Financial Officer at the global law firm of Orrick,
Herrington & Sutcliffe, 13 years as Executive Vice President
and Chief Financial Officer of Playboy Enterprises and 15 years at
ARCO (now BP Amoco), where she headed Corporate Planning and
Investor Relations, among other senior positions.
Linda holds an MBA in Finance from
the University of California at Los Angeles and a PhD (honoris
causa) in Business from the Chicago School of Professional
Psychology. She is a member of the Atlanta Federal Reserve Board
CFO Panel, the International Women's Forum, and the Governing Body
of the CFO Executive Summit.
Linda is Chair of the Finance, Audit
and Risk Committee
Other key appointments
Pantheon has appointed Tony Larkin,
to project manage the Company's US stock market listing process.
Tony is a qualified Chartered Accountant with over 25 years
investment banking experience.
Commissioning of Independent Expert Reports on the Kodiak
project
Pantheon has formally appointed
Netherland Sewell & Associates, an independent and highly
reputable resource reporting firm, for the preparation of an
updated Independent Experts Reports over its Kodiak project,
estimated to be completed at or near end March 2024.
Completion of equity fundraising - private
placement
In November 2023 Pantheon announced
the intention to issue 16,286,343 New Ordinary Shares at a price of
£0.208 per share, to raise a total of approximately US$4.15m. The
placement was on deferred settlement terms which completed in
January 2024. The placement was to two long term supportive
shareholders. Related to this fundraising, David Hobbs, Chairman,
acquired $250,000 of shares indirectly by acquiring New Ordinary
Shares with an aggregate value of $250,000 at the Placement Price from one
of the subscribers, immediately following closing of the
Placement.
Payment of quarterly amortization of
convertible loan
In March 2024, Pantheon announced
that it elected to pay (i) the quarterly principal repayment
of US$2.45 million and (ii) the interest payment
of US$0.294 million (collectively, the "Quarterly
Repayment") in respect of its senior unsecured convertible
bonds due 2026 (the "Convertible Bonds"), through the issuance
of 8,820,315
new shares.
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
|
IP30
|
|