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Pantheon Resources Plc

Page Discussion

Pantheon Resources Plc, through its subsidiaries, engages in the exploration and production of oil and gas in the United States. Its primary assets are the Greater Alkaid project that covers 22,804 acres located in Alaska; and the Talitha project covering an area of approximately 44,463 acres. The company was incorporated in 2005 and is headquartered in London, the United Kingdom.

Assuming that Pantheon Resources increases its share of the global oil and gas exploration and production market by cccx to ccc% (from less than ccc%) and other assumptions, the expected return of an investment in the company over the next five years is ccc%, which equates to an annual return of ccc%. In other words, an £1,000 investment in the company is expected to return £ccc in five years time.

The degree of risk associated with an investment in Pantheon Resources is 'medium', with the shares having an adjusted beta that is 45% below the market (0.55 vs. 1).[1]

Accordingly, if your desired annual rate of return is ccc% or less over the next five years and/or one of your goals is to xxx (i.e. you share in the mission of Pantheon Resources), and you are both willing and able to accept the possibility of losing your entire investment amount, then an investment in the company is considered to be a 'suitable' one.

OperationsEdit

IdeaEdit

Founded in 2005, Pantheon Resources plc began as a UK-based exploration company targeting onshore USA basins, especially East Texas. However, in 2019, recognising the vast potential of the Alaska North Slope, Pantheon strategically acquired Great Bear Petroleum's assets. This move prompted a shift from East Texas to concentrate solely on Alaska, given its proximity to key Alaskan oil infrastructure and the immense opportunities it presented.

ProjectsEdit

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Pantheon Acreage North Slope.jpg


Advantageous location.jpg

Greater AlkaidEdit

In 2015, the Alkaid #1 well was drilled close to both the Dalton Highway and the Trans Alaska Pipeline System (TAPS) – the main transportation route and significant export pipeline on the Alaska North Slope, respectively.[2] The drilling was halted before reaching its target depth due to environmental concerns: the nearby Sag River flooding led to the closing of the Dalton Highway.[2] While Alkaid was meticulously documented, no production tests were carried out then.[2] The well had shown promising signs, having encountered a 400-foot gross pay without an oil-water contact. Pantheon began activities again in 2019, successfully testing the Primary Zone of Interest.[2] The recent oil discovery at Talitha #A enhanced the potential for oil in the Greater Alkaid structure.[2]

Alkaid #1 Pay IntervalsEdit

Comprehensive data from Alkaid well revealed a 400-foot gross pay, with 240 feet of net oil pay.[2] Expert consultations confirmed the potential of this project.[2] Notably, only a small fraction of the well’s capacity was accessed during the tests. Pantheon projects that optimally designed horizontal development wells could significantly increase oil production.[2] Advanced seismic imaging indicates even better reservoir potentials in the core.[2] The company envisions using an early production unit (EPU) to facilitate early cash flow and obtain valuable data.[2] A full-fledged Central Processing Unit (CPU) is in the pipeline for optimal resource utilisation.[2] Pantheon is keen to use unconventional oil production technologies, which has become standard across the Alaska North Slope.[2]

In 2020, an independent report on the Greater Alkaid oil accumulation cited 76.5 million barrels of recoverable reserves, valuing the project at $595m (considering a $55/Bbl oil price).[2] The company plans to commission a pilot test producer in 2022, which could provide immediate cash flow.[2] Alkaid’s strategic location offers year-round activity advantages.[2]

Alkaid #1 HighlightsEdit

Pantheon secured a unit over Alkaid and outlined its proposed activities in a First Plan of Exploration (POE) in November 2020.[2] The plan includes reprocessing 3D seismic data and studying potential 'hot-tap' integrations into the TAPS.[2] Though there are no fixed drilling commitments, the POE proposes drilling two wells near the Dalton Highway for year-round operations.[2] Depending on the Alkaid #2 well results, the Alkaid #3 well will follow.[2]

GBP, a significant exploration leaseholder, controls over 250,000 acres, positioned south of North America's major oil fields, Prudhoe Bay and Kuparuk.[2] The region, blanketed by 3D seismic data, hosts several discoveries and promising exploration prospects.[2] Pantheon holds complete interest in all its ventures.[2]

TalithaEdit

The Talitha #A well, drilled in 2021, appraised an oil accumulation initially discovered by the Pipeline State #1 well in 1988.[3] While the original well in 1988 showed significant oil potential, it was halted due to economic reasons and lack of advanced technology.[3] However, high-resolution 3D seismic data acquired in 2013 reignited interest in the area.[3] The Talitha #A well confirmed oil presence across several zones, and recent tests in 2022 further validated the well's promising prospects.[3]

Key FindingsEdit
  • The Talitha #A well, located eight miles west of the Dalton Highway and TAPS, identified movable light oil across multiple horizons, with over a billion barrels of recoverable oil potential.[3]
  • Its proximity to existing infrastructure offers economic advantages, potentially allowing for faster production ramp-up with minimised capital expenditure.[3]
  • The well reached a depth of c. 10,456 ft, revealing five potentially productive zones. Challenges arose during testing due to operational issues and inclement weather, but significant findings were still achieved.[3]
Specific Zones and ResultsEdit
  1. Basin Floor Fan (BFF): Tests indicated quality oil with sustained production rates.[3] Future developments would potentially be at structurally higher positions for better results.[3]
  2. Slope Fan System (SFS): Testing showed producible oil, with implications for resource and oil recovery estimates. The success here suggests potential for other areas of the North Slope.[3]
  3. Shelf Margin Deltaic (SMD): Testing faced challenges from blockages and weather, but earlier data and the success of the deeper zones have kept the company's optimism intact for the potential of this zone.[3]
  4. Kuparuk: As the deepest oil formation, the Kuparuk provided significant findings.[3] It's a regional producer with an adjacent giant oilfield, the Kuparuk Field.[3] The Talitha #A well showed promising signs, although testing encountered issues.[3]
ConclusionEdit

The data from Talitha #A has increased confidence in the commercial viability of these zones.[3] Pantheon remains encouraged by the analysis and sees potential for further exploration and drilling.[3] The discovery augments the prospectivity of adjacent potential oil-bearing structures, which will be explored in future programs.[3]

KodiakEdit

The Kodiak project, previously known as Theta West, is a significant appraisal project for Pantheon Resources. The project has garnered attention due to its potential to rival the immense hydrocarbon pore volume plays outside the renowned Prudhoe Bay Oilfield in the Alaska North Slope (ANS). Geologically, the Kodiak field can be likened to the deepwater offshore regions in the Gulf of Mexico, West Africa, and recent discoveries off Guyana's coast.[4]

Independent Expert Report (IER) FindingsEdit

An Independent Expert Report (IER) by Netherland, Sewell & Associates (NSAI) on the Kodiak project has provided a contingent resource estimate. The 2C (best estimate) for the Kodiak field stands at a staggering 962.5 million barrels of marketable liquids. This comprises both oil and natural gas liquids (NGLs). The NGLs are of significant value as they can be blended with the oil, yielding approximately 90% of the Alaska North Slope (ANS) price per barrel.[4]

Gross 100% Working Interest Contingent Resources
Resource Category Oil (million bbls) NGLs (million bbls) Residual Gas (BCF) Total Marketable Liquids[5] (million bbls)
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

Kodiak Project Horizon (illustrative type log)

Location of Kodiak and Ahpun Projects

Field Development and InfrastructureEdit

The Kodiak project spans an area of 126,000 acres, which includes recently awarded additional acreage. The field is defined by the hydrocarbon bearing horizons contained within the large basin floor fan system. This system stretches from the Hue Shale top seal to the underlying HRZ shale. The field's vastness and potential make it one of the largest basin floor fan systems discovered onshore in recent decades.[4]

Pantheon's proprietary 3D seismic data and three wells (Pipeline State 1, Talitha-A, and Theta West-1) have confirmed the field's potential. The company plans to further develop the Kodiak project, focusing on the recently acquired "chimney acreage" and the delineation provided by the seismic data.[4]

Appraisal and Future PlansEdit

Pantheon intends to drill the next Kodiak appraisal well in the recently acquired leases, northwest of Theta West-1. This drilling aims to encounter a reservoir section with improved reservoir characteristics, potentially yielding higher flow rates and hydrocarbon recovery rates. The company's detailed geological model, which takes into account data from nearby producing fields, supports this approach.[4]

To address the contingencies highlighted in NSAI's evaluation, Pantheon plans to cut full cores and acquire a comprehensive suite of wireline logs and fluid samples in future appraisal wells. This granular data could potentially lead to future increases in recoverable resource estimates.[4]

ConclusionEdit

The Kodiak project represents a transformative opportunity for Pantheon Resources. With nearly one billion barrels of recoverable liquids, the project's potential is immense. The close proximity to existing infrastructure, combined with the vast resource base, positions Pantheon advantageously for future growth and development. The forthcoming appraisal activities and the company's strategic approach to the Kodiak field further underscore its potential as a world-class project in a prime location.[4]

StrategyEdit

Pantheon's primary strategy is to maximize shareholder value through the following means:

  • High Working Interest Maintenance: Pantheon retains a 100% working interest through the evaluation process of its assets. This high stake allows the company to have significant control over its projects and potential returns.
  • Strategic Drilling and Farm-outs: The company aims to prove up its assets through targeted drilling. Where appropriate, Pantheon may pursue farm-outs, partnering with other entities to share the costs and risks of exploration and development.
  • Asset Monetisation: Pantheon's endgame is to monetize its assets, either through a sale or other means, at the opportune moment. This "prove up and sell" approach is designed to offer investors a chance to capitalize on high-impact, risk-managed drilling.

TeamEdit

Pantheon boasts a seasoned board and a robust advisory group, all of whom are shareholders with established track records in the oil and gas sector. They have a rich history of building profitable companies for acquisition. Additionally, Pantheon's board and management team have extensive experience with oil and gas operations in Alaska.

David Hobbs.

David Hobbs, Executive Chairman[6]Edit

  • Experience: Graduated as a Petroleum Engineer from Imperial College in 1984. Worked at British Gas, Monument Oil & Gas, and Hardy Oil and Gas. Former Chief Energy Strategist at Cambridge Energy Research Associates (CERA) and part of the leadership team at King Abdullah Petroleum Studies and Research Center (KAPSARC) in Riyadh, Saudi Arabia.[7]
  • Education: Petroleum Engineer from Imperial College.[7]
  • Prominent Roles: Drilling engineer at British Gas; commercial and business development roles at Monument Oil & Gas and Hardy Oil and Gas; Chief Energy Strategist at CERA; leadership role at KAPSARC.[7]
  • Pantheon Committees: Details to be confirmed.[7]
  • Current Directorships: SV-Pleione Limited, Polar Energy LLC.[7]

Jay Cheatham, Chief Executive Officer[8]Edit

Jay Cheatham.
  • Experience: Over five decades encompassing all aspects of the petroleum business.[8]
  • Prominent Roles: Senior Vice President and District Manager for ARCO's eastern District; President of ARCO International; President and CEO of Rolls-Royce Power Ventures.[8]
  • Specialties: Operational expertise with significant financial acumen; formerly served as CFO for ARCO's Oil & Gas, and CEO of Petrogen Fund.[8]
  • Pantheon Committees: Member of the Remuneration and Nominations, Audit, Conflicts, and Anti-Corruption and Bribery Committees.[8]

Justin Hondris, Director of Finance and Corporate Development[8]Edit

  • Experience: Over 15 years in public company management, specifically in the upstream oil and gas sector.[8]
  • Background: Corporate finance, private equity, and capital markets in the UK and internationally; previous private equity involvement.[8]
  • Responsibilities: Manages Pantheon's financial, legal, administrative, and corporate development functions.[8]
  • Pantheon Committees: Chairs the Anti-Corruption and Bribery Committee. Member of the Remuneration and Nominations and Conflicts Committees.[8]

Robert (Bob) Rosenthal, Technical Director[8]Edit

Bob Rosenthal.
  • Experience: Over 40 years globally as an Exploration Geologist and Geophysicist.[8]
  • Key Roles: Senior exploration roles at Exxon and BP, gaining expertise in the geology of North Slope of Alaska and Texas.[8]
  • Current Engagement: Since 1999, he has operated a successful consulting business, leading exploration initiatives for various private and public entities.[8]

Jeremy Brest, Non-Executive Director[8]Edit

Jeremy Brest
  • Experience: Over 25 years in investment banking and financial advisory.[8]
  • Current & Past Roles: Founder of Framework Capital Solutions, a boutique advisory firm; Former head of structuring for Indonesia at Credit Suisse and a derivatives trader at Goldman Sachs.[8]
  • Pantheon Committees: Member of the Audit, Remuneration and Nominations, Conflicts, and Anti-Corruption and Bribery Committees.[8]

Allegra Hosford Scheirer, Independent Non-Executive Director[9]Edit

Allegra Hosford Scheirer.
  • Experience: Internationally recognised expert in petroleum system analysis with significant experience in basin modelling, organic geochemistry, geophysical techniques, and machine learning. Evaluated numerous oil and gas provinces globally, including the Alaska North Slope.[9]
  • Education: Ph.D. in marine geology and geophysics from the Massachusetts Institute of Technology.[9]
  • Prominent Roles: Scientist at Stanford University for 15 years; worked with the Energy Resources Program at the U.S. Geological Survey ("USGS"); independent adviser for Great Bear Petroleum.[9]
  • Pantheon Committees: Details to be confirmed. Current Directorships: Geomodelling Solutions LLC.[9]

MarketEdit

Total Addressable MarketEdit

Here, the total addressable market (TAM) is defined as the global market for oil and gas exploration and production, which includes every potential consumer or business that could use or buy oil and gas, and based on a number of assumptions, it is estimated that the size of the market as of today (3rd September 2023), in terms of revenue, is $5.3 trillion.[10]

Serviceable Available MarketEdit

Here, the serviceable available market (SAM) is defined as the oil and gas exploration and production market in the Alaskan North Slope, and based on a number of assumptions, it is estimated that the size of the market as of today (3rd September 2023) is 3.6 billion barrels of oil and 8.9 trillion cubic feet of natural gas conventional resources, which equates to around $242.7 billion in terms of revenue.[11]

Serviceable Obtainable MarketEdit

Here, the serviceable obtainable market (SOM) is defined as the Alaskan North Slope oil and gas exploration and production market in which the company holds lease licenses, and based on a number of assumptions, it is estimated that the size of the market as of today (3rd September 2023), in terms of revenue, is $ccc billion.

FinancialsEdit

Most recentEdit

After the interim results' period end, the company raised approximately $22 million, net of fees, on 16th May 2023.[12]

On 15th June 2023, to address its obligations for the senior unsecured convertible bonds due 2026, the company settled a quarterly principal of US$2.45 million and interest of US$367,500 by issuing 15,172,320 new Ordinary Shares. This arrangement reduces the Convertible Bond's outstanding principal to US$34.30 million.[13]

On 7th September 2023, Pantheon Resources plc announced a private placement of 11.9 million new shares at £0.1878 each, raising $2.793 million from IPGL Limited. The amount will be used to cover a bond repayment, making the placement cash-neutral for Pantheon. The new shares, constituting 1.3% of the pre-placement share capital, will be issued around 29 September 2023.[14]

Accordingly, since the company's interim results, the company has raised raise a total of $27.243 million.

Interim resultsEdit

Profit and lossEdit

Profit and loss
2021[15] 2022[15]
Currency USD USD
Continuing operations
Revenue - 455,309
Production royalties - (57,101)
Facilities commissioning and operations - (837,503)
Cost of sales - (183,296)
Gross loss - (622,590)
Administration expenses (3,150,888) (3,699,831)
Share Based payment expense (2,013,966) (2,935,897)
Operating loss (5,174,854) (7,258,318)
Convertible Bond - Interest Expense (570,295) (3,151,102)
Convertible Bond - Revaluation of Derivative Liability (200,531) 7,937,855
Interest receivable 143 152,492
Loss before taxation (5,945,537) (2,319,073)
Taxation 1,497,945 743,097
Loss for the year (4,447,592) (1,575,796)
Other comprehensive income for the year
Exchange differences from translating foreign operations 844,484 (97,473)
Total comprehensive loss for the year (3,603,108) (1,673,449)
Loss per share from continuing operations:
Basic and diluted loss per share (0.66)¢ (0.21)¢

Balance sheetEdit

Balance sheet
2021[15] 2022[15]
Currency USD USD
Assets
Non-current assets
Exploration & evaluation assets 195,662,187 274,321,398
Property, plant and equipment 4,245 66,199
Total non-current assets 195,666,432 274,387,597
Current assets
Trade and other receivables 275,315 2,823,089
Cash and cash equivalents 92,667,269 16,335,676
Total current assets 92,942,584 19,158,765
Total assets 288,609,016 293,546,363
Liabilities
Current liabilities
Convertible Bond – Debt - 9,929,027
Trade and other payables 1,120,647 6,336,999
Provisions 1,250,000 5,282,866
Lease Liabilities 4,702 60,007
Other Liabilities - -
Deferred tax liability 2,207,792 940,306
Total current liabilities 4,583,141 22,549,205
Non-current liabilities
Lease Liabilities - 2,956
Convertible Bond – Debt 39,734,584 19,228,219
Convertible Bond – Derivative 16,023,781 3,587,629
Total non-current liabilities 55,758,365 22,818,804
Total liabilities 60,341,506 45,368,009
Net assets 228,267,510 248,178,354
Equity
Capital and reserves
Share capital 10,418,381 10,848,761
Share premium 249,429,603 272,264,411
Retained losses (40,778,990) (49,647,328)
Currency reserve 2,079,046 395,605
Share based payment reserve 7,119,470 14,316,906
Shareholders’ equity 228,267,510 248,178,354

Cash flowEdit

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Cash flow
Year 2021[15] 2022[15]
Currency USD USD
Net outflow from operating activities (2,446,588) (6,722,549)
Cash flows from investing activities
Interest received 143 152,492
Funds used for drilling, exploration and leases (6,707,468) (36,601,678)
Advance for Performance Bond - -
Interest paid (7,961) -
Property, plant and equipment - (3,033)
Net cash outflow from investing activities (6,715,286) (36,452,218)
Cash flows from financing activities
Proceeds from share issues 42,140,595 1,756,018
Issue costs paid in cash (946,710) -
Proceeds from Convertible Bond 55,000,000 -
Repayment of borrowing and leasing liabilities (28,218) (29,696)
Net cash inflow from financing activities 96,165,667 1,726,323
Increase in cash & cash equivalents 87,003,793 (41,448,445)
Cash and cash equivalents at the beginning of the year 5,663,476 57,784,121
Cash and cash equivalents at the end of the year 92,667,269 16,335,677

Full-year resultsEdit

Profit and lossEdit

Profit and loss
Year 2018[16] 2019[17] 2020 (restated)[18] 2021[8] 2022[8]
Currency USD USD USD USD USD
Year since incorporation 13 14 15 16 17
Continuing operations
Revenue 1,009,570 724,589 - - -
Production royalties (244,783) (205,458) - - -
Depletion of developed oil & gas assets (88,293) (148,485) - - -
Cost of sales (562,986) (737,208) - - -
Gross profit/(loss) 113,508 (366,562) - - -
Administration expenses (1,922,917) (3,438,239) (3,667,635) (5,034,361) (7,430,653)
General & Administrative expenses – Vision - (1,744,730) - - -
Impairment of exploration & evaluation assets (6,805,537) (34,138,156) (130,112) - -
Share Based payments expense - - - (3,211,038) (8,256,575)
Impairment of developed oil & gas assets - (13,092,684) - - -
Impairment of property plant and equipment - (1,397,950) - - -
Impairment of Goodwill - (796,236) - - -
Depreciation of production & pipeline facilities (145,516) (275,665) - - -
Operating loss (8,760,462) (55,250,222) (3,797,747) (8,245,400) (15,687,228)
Convertible Bond - Interest Expense - - - - (4,640,537)
Convertible Bond - Revaluation of Derivative Liability - - - - 4,310,773
Gain on bargain purchase - 100,757,286 - - -
Less: deferred tax thereon - (28,783,396) - - -
Interest receivable 6,858 25,781 23,759 4,234 42,674
Loss before taxation (8,753,604) 16,749,449 (3,773,988) (8,241,165) (15,974,318)
Taxation - 18,757,633 965,681 1,573,094 2,022,334
Loss for the year from Continuing Operations after Taxation - - (2,808,307) (6,668,071) (13,951,984)
Loss for the year from discontinued operations - - (14,170,288) (54,415) -
Loss for the year (8,753,604) 35,507,082 (16,978,595) (6,722,487) (13,951,984)
Other comprehensive income for the year Exchange differences from translating foreign operations 277,183 (179,284) (47,800) 1,503,199 (741,484)
Total comprehensive loss for the year (8,476,421) 35,327,798 (17,026,395) (5,219,288) (14,693,468)
Loss per share from continuing operations:
Basic and diluted loss per share (3.72)¢ 10.54¢ (0.56)¢ (1.17)¢ (1.93)¢
Loss per share from discontinued operations:
Basic and diluted loss per share - - (2.83)¢ (0.01)¢ -

Balance sheetEdit

Balance sheet
2018[16] 2019[17] 2020[18] 2021[8] 2022[8]
Currency USD USD USD USD USD
Year since incorporation 13 14 15 16 17
Assets
Non-current assets
Exploration & evaluation assets 43,498,422 160,887,260 156,097,609 188,954,719 237,722,294
Developed oil & gas assets 13,736,007 6,961,445 - - -
Property, plant and equipment 2,237,698 2,494,464 658,898 30,308 91,691
Total non-current assets 59,472,127 170,343,169 156,756,507 188,985,027 237,813,985
Current assets
Trade and other receivables 700,939 1,843,649 74,167 109,876 2,498,447
Cash and cash equivalents 3,399,290 1,853,986 4,802,965 5,663,477 57,784,121
Total current assets 4,100,229 3,697,635 4,877,132 5,773,353 60,282,568
Total assets 63,572,356 174,040,804 161,633,639 194,758,380 298,096,553
Liabilities
Current liabilities
Convertible Bond – Debt - - - - 10,001,704
Trade and other payables 316,976 1,410,347 388,092 1,107,090 6,377,986
Provisions - 1,335,863 1,335,863 1,250,000 5,285,440
Lease Liabilities - - 46,311 32,788 60,297
Other Liabilities - - - - 1,964,441
Deferred tax liability - 10,025,763 5,293,296 3,705,737 1,683,403
Total current liabilities 316,976 12,771,973 7,063,562 6,095,615 25,373,271
Non-current liabilities
Lease Liabilities - - 27,914 - 30,004
Convertible Bond – Debt - - - - 20,474,664
Convertible Bond – Derivative - - - - 12,816,226
Total non-current liabilities - - 27,914 - 33,320,894
Total liabilities 316,976 12,771,973 7,091,476 6,095,615 58,694,166
Net assets 63,255,380 161,268,831 154,542,163 188,662,765 239,402,388
Equity
Capital and reserves
Share capital 3,852,673 7,966,075 8,568,721 9,739,203 10,720,459
Share premium 106,678,805 164,044,720 173,687,092 208,683,936 264,879,196
Retained losses (48,137,398) (12,630,316) (29,608,911) (36,331,398) (48,466,591)
Currency reserve (41,554) (220,838) (268,637) 1,234,562 493,078
Share based payment reserve 902,854 2,163,898 2,163,898 5,336,462 11,776,246
Non controlling interests - (54,708) - - -
Shareholders’ equity 63,255,380 161,268,831 154,542,163 188,662,765 239,402,388

Cash flowEdit

Cash flow
Year 2018[16] 2019[17] 2020[18] 2021[8] 2022[8]
Currency USD USD USD USD USD
Year since incorporation 13 14 15 16 17
Net outflow from operating activities (2,082,803) (5,513,085) (5,707,802) (3,098,495) (941,506)
Cash flows from investing activities
Interest received 6,858 25,781 25,881 4,295 42,674
Funds used for drilling, exploration and leases (10,679,594) (10,579,750) (1,591,591) (24,973,399) (45,267,175)
Developed oil & gas assets (495,183) (523,934) - - -
Decommissioning Provision (Exploration & Evaluation) - 676,464 - - -
Decommissioning Provision (Developed Oil & Gas Assets) - 409,400 - - -
Advance for Performance Bond - - - - (2,400,000)
Property, plant and equipment 208,682 (312,637) - - (3,368)
Acquisition of a subsidiary (Great Bear), net of cash acquired - (6,098,215) - - -
Acquisition of a subsidiary, (Vision Resources LLC) net of cash acquired - 1,920 - - -
Disposal - - (1,134) - -
Net cash outflow from investing activities (10,959,237) (16,400,971) (1,566,844) (24,969,105) (47,627,869)
Cash flows from financing activities
Proceeds from share issues 12,596,484 21,259,057 10,816,383 30,181,084 46,739,796
Issue costs paid in cash (537,360) (890,304) (571,364) (1,197,275) (994,694)
Proceeds from Convertible Bond - - - - 55,000,000
Repayment of borrowing and leasing liabilities - - (21,394) (55,698) (55,083)
Net cash inflow from financing activities 12,059,124 20,368,753 10,223,625 28,928,111 100,690,020
Increase in cash & cash equivalents (982,916) (1,545,304) 2,948,979 860,511 52,120,645
Cash and cash equivalents at the beginning of the year 4,382,206 3,399,290 1,853,986 4,802,965 5,663,476
Cash and cash equivalents at the end of the year 3,399,290 1,853,986 4,802,965 5,663,476 57,784,121

RisksEdit

As with any investment, investing in Pantheon Resources Plc carries a level of risk. Overall, based on the Pantheon Resources Plc's adjusted beta (i.e. 0.55)[1], the degree of risk associated with an investment in Pantheon Resources Plc is 'medium'.

Here, to estimate the adjusted beta, we used the iShares MSCI World ETF to represent the market portfolio; and in terms of the time period and frequency of observations, we used five years of monthly data (i.e. 60 observations in total), which is supported by a study and is the most common choice. The beta value in a future period has been found to be on average closer to the mean value of 1.0, and because valuation is forward-looking, it is logical to adjust the raw beta so it more/most accurately predicts a future beta. In addition, here, we have assumed that for an investment to be considered 'medium' risk, it must have a beta value of between 0.5 and 1.5. Further information about the beta ratings can be found in the appendix section of this report.

The key risks can be found below. For us, currently, the biggest risk to the valuation of the company relates to the ability to adequately source sufficient funding to meet the company’s working capital requirements (i.e. liquidity risk).

  1. Liquidity Risk: The primary liquidity risk is the ability to adequately source sufficient funding to meet the company’s working capital requirements. Funding availability, and hence risk, within the capital markets remains volatile.[8]
  2. Oil & Gas Price Risk: Future oil and gas sales revenues are subject to the volatility of the underlying commodity prices throughout the year. Over the past year the energy sector has been impacted by volatility in commodity prices, which may continue to impact the group going forward.[8]
  3. Currency Risk: Most capital expenditures for the year (and future years), as well as possible future operational revenues from oil sales were or will be denominated in US dollars. The group keeps the majority of its cash resources denominated in US dollars to minimise volatility and foreign currency risk.[8]
  4. Credit Risk: The group’s credit risk is primarily attributable to its cash balances. The credit risk on liquid funds is limited because the third parties are large banks with a minimum investment grade credit rating. The group’s total credit risk amounts to the total of other receivables and cash and cash equivalents.[8]
  5. Lease Obligations: The group leases properties for oil and gas exploration, requiring annual payments. Any default can lead to lease termination, which would adversely impact business and financial operations. Pantheon has actively participated in annual lease sales and secured 40,000 leases in November 2022. These leases have a 10-year life and favorable terms.[8]
  6. Lease Renewal: Leases may be terminated if the group fails to meet specific obligations, like timely exploration. Not renewing these leases can significantly harm the business. However, the group has obtained unitisation for certain projects to possibly extend their initial lease term.[8]
  7. Licensing and Permissions: The group needs various approvals for developing their leases. Failure to obtain these permissions can hamper the group's ability to operate. To counter this, the group employs personnel experienced in navigating regulatory requirements.[8]
  8. Political and Regulatory Changes: Changes in the political environment, particularly in the Northern Slope Borough, Alaska, and the U.S., can adversely affect operations. New regulations or stricter enforcement of current ones can pose challenges. However, Pantheon's projects are on state lands, thus less affected by federal policy changes.[8]
  9. Legal Proceedings: The group might face legal challenges that can be costly and can damage its reputation. They engage with legal counsel proactively to mitigate potential risks.[8]
  10. Relationships with Stakeholders: The oil and gas sector often faces scrutiny. Failure to manage relationships with communities and environmental groups might adversely affect the group’s reputation and operations. The group endeavors to conduct operations responsibly and legally.[8]
  11. Regulatory Changes: Amendments to existing laws regarding oil and gas exploration could adversely affect the group's business. They continuously monitor potential regulatory shifts and maintain relationships with regulatory agencies.[8]
  12. Supply Chain Disruptions: Global events, like the Covid-19 pandemic and the Russia/Ukraine conflict, have affected the supply chain and caused inflation. The group plans its operations meticulously and orders equipment in advance to minimise disruptions.[8]

ValuationEdit

Absolute ValuationEdit

What's the expected return of an investment in the company?Edit

The Stockhub users estimate that the expected return of an investment in the company over the next five years is ccc%, which equates to an annual return of ccc%. In other words, an £1,000 investment in the company is expected to return £ccc in five years time. The assumptions used to estimate the return figure can be found in the table below.

Assuming that a suitable return level over five years is ccc% per year or less, and Pantheon Resources achieves its expected return level (of ccc%), then an investment in the company is considered to be an 'suitable' one.

Net present values of core company projects
Project Net present value ($million) Comment
Greater Alkaid $595 million[19]
Talitha N/A
Theta West N/A
Total $595 million

What are the assumptions used to estimate the return?Edit

ccc

Sensitivity analysisEdit

The main inputs that result in the greatest change in the expected return of the Pantheon Resources investment are, in order of importance (from highest to lowest):

  1. The size of the total addressable market (the default size is $ccc);
  2. Pantheon Resources peak market share (the default share is ccc%); and
  3. The discount rate (the default time-weighted average rate is ccc%).

The impact of a 50% change in those main inputs to the expected return of the Pantheon Resources investment is shown in the table below.

Pantheon Resources investment expected return sensitivity analysis
Main input 50% worse Unchanged 50% better
The discount rate ccc% ccc% ccc%
The size of the total addressable market ccc% ccc% ccc%
Pantheon Resources peak market share ccc% ccc% ccc%

AppendixEdit

Cost of equityEdit

Cost of equity
Input Input value Additional information
Risk-free rate (%) 4.297% Here, the risk free rate is the US 30 year treasury bond, and is calculated as at 3rd September 2023. Research suggests that for the risk-free rate, it's best to use one that has the same or similar maturity to the estimated remaining lifespan of the company. Here, we have assumed that the estimated lifespan of the company is 30 years years or longer, so we have used the longest maturity, which is 30 years.
Beta 0.5508 Here, to estimate the adjusted beta, we used the iShares MSCI World ETF to represent the market portfolio; and in terms of the time period and frequency of observations, we used five years of monthly data (i.e. 60 observations in total), which is supported by a study and is the most common choice. The beta value in a future period has been found to be on average closer to the mean value of 1.0, and because valuation is forward-looking, it is logical to adjust the raw beta so it more/most accurately predicts a future beta.
Equity risk premium (%) 7.98% Research suggests that for the region of equity risk premium, it's best to use one that is the same or similar to the region of the beta market portfolio. Here, the region of the beta market portfolio is the world/global, so we have used the world/global region for the equity risk premium, and is calculated as at 5th January 2023.
Cost of equity (%) 8.69% Cost of equity = Risk-free rate + Beta x Equity risk premium.

Relative valuationEdit

As noted earlier in this report, research suggests that in terms of estimating the expected return of an investment over a period of 12-months or more, the approach that is more accurate is the discounted cash flow approach, so that's the approach that Stockhub suggests using to determine the estimated value of the company (the valuation based on the discounted cash flow approach can be found in the valuation section of this report); nevertheless, for completeness purposes, separately, the valuation of the company is also estimated using the relative valuation approach.

What's the expected return of an investment in Pantheon Resources using the relative valuation approach?Edit

Stockhub estimates that the expected return of an investment in Pantheon Resources over the next 12-months is 185%. In other words, an £1,000 investment in the company is expected to return £2,849 in one year time. The assumptions used to estimate the return figure can be found in the table below.

What are the assumptions used to estimate the return figure?Edit

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Key inputs
Description Value Commentary
Which type of multiple do you want to use? Price-to-book value The price-to-book value is really the only available commonly used value, so we suggest using that.
In regards to the price-to-book value multiple, for the book value figure, which year to you want to use? Year 1 Research suggests that when using the relative valuation approach, it's best to use a time period of 12 months or less. Accordingly, for the book value figure, we suggest using Year 1, which is on 12th September 2024.
In regards to the price-to-book value multipl, what multiple figure do you want to use? 1.54x Here, we suggest using a multiple of 1.54x, which is in-line with the multiples of Pantheon Resources's peers (for details on the peers can be found in the table below).
What is the estimated compound annual growth rate of the book value between one year from now and the most recent value? 46.37% One year from now is 12th September 2024, and the most recent book value date is 31st December 2022. For simplicity, we based the estimate on the CAGR of Pantheon Resources over the last five years, which is 46.37%. The most recent value is $248,178,354 (as at 31st December 2022).
What's the current market capitalisation of the company? £205.44 million As at 12th September 2023, the market capitalisation of Pantheon Resources Plc is £205.44 million.
Which time period do you want to use to estimate the expected return? Between now and one year time Research suggests that when using the relative valuation approach, it's best to estimate the expected return of the company between now and one year time.
What's the FX rate? $1.25 The current FX rate of GBPUSD is $1.25.
Peers analysis
Market capitalisation (local) Cash Debt Enterprise value Proved reserves Probable reserves Possible reserves EV/Proved Reserves EV/Proved + Probable Reserves EV/Proved + Probable + Possible Reserves
Pantheon Resources Plc
88 Energy Limited
Brookside Energy Limited
Diversified Gas & Oil PLC
ConocoPhillips
Local peers - BICS Best Fit (Algorithm)
Name Ticker 2Y Corr Mkt Cap (USD) BF P/E BF EV/EBITDA BF EV/EBIT BF EV/Rev LF P/BV
Pantheon Resources PLC PANR LN 248763255.1 -- -- -- -- 0.8599
EnQuest PLC ENQ LN 0.2638 342484769.1 1.3755 1.4467 2.0561 0.9302 0.7375
Harbour Energy PLC HBR LN 0.2596 2362103778 6.4952 0.9316 1.8074 0.6763 1.6824
Serica Energy PLC SQZ LN 0.223 1227222775 -- -- -- -- 1.7056
Gulf Keystone Petroleum Ltd GKP LN 0.2189 250637412.4 2.1706 0.9949 1.756 0.6632 0.453
OKEA ASA OKEA NO 0.2091 372011265.3 3.0588 0.3939 0.5296 0.2736 1.8361
BLUENORD ASA BNOR NO 0.2079 1243069610 7.3107 2.866 3.71 1.9001 1.7456
Tullow Oil PLC TLW LN 0.1981 666476192.9 2.2878 2.685 3.7652 2.0689 --
DNO ASA DNO NO 0.1976 921463861.7 5.3441 1.3689 1.9461 0.8614 0.7003
Genel Energy Plc GENL LN 0.1923 287304379.2 0.4852 1.2792 9.3474 0.8072 0.6281
Capricorn Energy PLC CNE LN 0.0962 283070688.1 -- -- -- -- 0.2424
Mean   (Including PANR LN) 745873453.2 4.0061 1.4958 3.1147 1.0226 1.0214
Current Premium to Comps Mean -- -- -- -- -15.8058


North America peers - BICS Best Fit (Algorithm)
Name Ticker 2Y Corr Mkt Cap (USD) BF P/E BF EV/EBITDA BF EV/EBIT BF EV/Rev LF P/BV
Pantheon Resources PLC PANR LN 249401660.5 -- -- -- -- 0.8621
Bonterra Energy Corp BNE CN 0.2145 201202900.1 5.7932 -- -- 5.3528 0.5485
Canacol Energy Ltd CNE CN 0.2055 291229291.5 4.4749 3.991 6.2457 2.7131 0.8688
Journey Energy Inc JOY CN 0.1826 250649018.6 10.0903 3.2022 -- -- 1.1123
Gran Tierra Energy Inc GTE US 0.1772 242916614 3.0209 1.6716 2.4108 1.0112 0.5344
Reconnaissance Energy Africa L RECO CN 0.1628 201636539 -- -- -- -- 3.7743
Evolution Petroleum Corp EPM US 0.1535 298752800.3 9.5026 5.339 5.8633 2.5077 3.1245
Alvopetro Energy Ltd/CA ALV CN 0.149 258641189.1 5.3166 -- 5.022 3.4221 2.8451
Amplify Energy Corp AMPY US 0.1002 277732974.3 1.8069 4.1816 6.8549 1.2493 0.7737
CGX Energy Inc OYL CN 0.099 239180966.5 -- -- -- -- 4.342
Global Tech Industries Group I GTII US 0.0407 290690567.5 -- -- -- -- 24.9919
Mean 254730411.1 4.407 3.991 5.6339 2.3821 1.4639
Current Premium to Comps Mean -- -- -- -- -41.1063
Global peers - Global Industry Classification Standard
Name Ticker 2Y Corr Mkt Cap (USD) BF P/E BF EV/EBITDA BF EV/EBIT BF EV/Rev LF P/BV
Pantheon Resources PLC PANR LN 248743297.3 -- -- -- -- 0.8599
Jadestone Energy PLC JSE LN 0.2226 256103808.5 12.1425 0.8699 1.7002 0.3279 1.7301
Gulf Keystone Petroleum Ltd GKP LN 0.2189 250617304.2 2.1706 0.9949 1.756 0.6632 0.4529
Genel Energy Plc GENL LN 0.1924 287281329.3 0.4852 1.2792 9.3474 0.8072 0.6281
Journey Energy Inc JOY CN 0.1826 250722843.5 10.0903 3.2022 -- -- 1.1123
Gran Tierra Energy Inc GTE US 0.1772 242916614 3.0209 1.6716 2.4108 1.0112 0.5344
Alvopetro Energy Ltd/CA ALV CN 0.149 258717367.9 5.3166 -- 5.022 3.4221 2.8451
Touchstone Exploration Inc TXP CN 0.1276 199349168.4 16.338 3.3236 5.7614 2.0963 2.5903
La Francaise De L'energie SACA FDE FP 0.1153 227020391.8 11.7018 7.3477 9.0049 4.3978 2.8113
Amplify Energy Corp AMPY US 0.1002 277732974.3 1.8069 4.1816 6.8549 1.2493 0.7737
CGX Energy Inc OYL CN 0.099 239251413.6 -- -- -- -- 4.342
Capricorn Energy PLC CNE LN 0.0962 283047977.8 -- -- -- -- 0.2423
Coelacanth Energy Inc CEI CN 0.0954 260548386.6 -- -- -- -- 3.7122
Kistos Holdings PLC KIST LN 0.0891 253019056.7 -- -- -- -- 2.2992
Cohen Development Gas & Oil Lt CDEV IT 0.0795 211048552.1 -- -- -- -- 6.5187
Hindustan Oil Exploration Co L HOE IN 0.0428 255827680.6 -- -- -- -- 2.2394
Mean   (Including PANR LN) 250121760.4 9.0748 2.7631 5.3661 2.0603 1.4934
Current Premium to Comps Mean -- -- -- -- -42.4215
North America - Global Industry Classification Standard
Name Ticker 2Y Corr Mkt Cap (USD) BF P/E BF EV/EBITDA BF EV/EBIT BF EV/Rev LF P/BV
Pantheon Resources PLC PANR LN 248743297.3 -- -- -- -- 0.8599
Saturn Oil & Gas Inc SOIL CN 0.2403 289188348.4 1.6041 0.8074 -- 0.6336 0.6728
Bonterra Energy Corp BNE CN 0.2145 201232526.3 5.7932 -- -- 5.3528 0.5485
Canacol Energy Ltd CNE CN 0.2055 291272173.8 4.4749 3.991 6.2457 2.7131 0.8688
Journey Energy Inc JOY CN 0.1826 250685925.6 10.0903 3.2022 -- -- 1.1123
Gran Tierra Energy Inc GTE US 0.1772 242916614 3.0209 1.6716 2.4108 1.0112 0.5344
Reconnaissance Energy Africa L RECO CN 0.1628 201666229.1 -- -- -- -- 3.7743
Evolution Petroleum Corp EPM US 0.1535 298752800.3 9.5026 5.339 5.8633 2.5077 3.1245
Alvopetro Energy Ltd/CA ALV CN 0.149 258679272.9 5.3166 -- 5.022 3.4221 2.8451
Lucero Energy Corp LOU CN 0.132 324574582.1 6.5686 2.2905 4.647 1.4365 0.9152
Touchstone Exploration Inc TXP CN 0.1276 199319815.1 16.338 3.3236 5.7614 2.0963 2.5903
Amplify Energy Corp AMPY US 0.1002 277732974.3 1.8069 4.1816 6.8549 1.2493 0.7737
CGX Energy Inc OYL CN 0.099 239216184.9 -- -- -- -- 4.342
Coelacanth Energy Inc CEI CN 0.0954 260510022 -- -- -- -- 3.7122
San Juan Basin Royalty Trust SJT US 0.08 309016317.5 -- -- -- -- 81.0503
Empire Petroleum Corp EP US 0.0627 181790240 -- -- -- -- 9.6501
Mean   (Including PANR LN) 254706082.7 8.384 2.7073 5.6339 1.945 1.5358
Current Premium to Comps Mean -- -- -- -- -44.0125

Sensitivity analysisEdit

The main inputs that result in the greatest change in the expected return of the Pantheon Resources investment are, in order of importance (from highest to lowest):

  1. The compound annual growth rate of the Pantheon Resources book value (the default figure is 46.37%);
  2. The price-to-book value multiple (the default multiple 1.57x); and
  3. Pantheon Resources most recent book value figure (the default figure is $248,178,354, or £198,542,683 at the current exchange rate of $1.25).

The impact of a 50% change in those main inputs to the expected return of the Pantheon Resources investment is shown in the table below.

Pantheon Resources investment expected return sensitivity analysis
Main input 50% worse Unchanged 50% better
The compound annual growth rate of the Pantheon Resources book value between one year ahead and the most recent value 113% 185% 266%
The price-to-book value multiple 42% 185% 327%
Pantheon Resources most recent book value figure 42% 185% 327%

Significant holdingsEdit

Significant holdings as of 15th June 2023[20][21]
                Number of Ordinary Shares % of Share Capital
Vidacos Nominees Limited 100,084,318 11.34
Interactive Brokers LLC 80,121,067 9.08
Lynchwood Nominees Limited 67,134,041 7.60
Vidacos Nominees Limited 38,521,840 4.36
Vidacos Nominees Limited 34,549,659 3.91
Barnard Nominees Limited 29,352,283 3.32
Barnard Nominees Limited 27,714,204 3.14

Capital structureEdit

The Company has 919,111,769 ordinary fully paid shares in issue.[14] The number of ordinary shares not in public hands amounts to 6,956,691[22], equivalent to 0.76% of the issued allotted and fully paid ordinary shares.[23]

Share optionsEdit

Share options[22]
Exercise price (£) Number of share options exercisable into ordinary shares on issue Expiry Date                                      Share options as a % of issued shares
0.30 4,825,000 30 September 2024 0.62%
0.27 7,000,000 6 July 2030 0.90%
0.33 12,430,000 27 January 2031 1.60%
0.671 21,705,000 18 January 2027 2.80%

Share warrantsEdit

Share warrants[24][22]
Exercise price (£) Number of share warrants exercisable into non-voting shares Expiry date Share options as a % of issued shares
0.30 4,803,921 30 September 2024 1.29%

Beta risk profileEdit

Beta value Risk rating
0 to 0.50 Low
0.50 to 1.50 Medium
1.50 to 3.00 High
3.00 and above Extremely high

Pantheon Resources beta calculationEdit

Pantheon Resources beta calculation
Date iShares MSCI World ETF unit price (USD) Pantheon Resources plc share price (GBP) iShares MSCI World ETF unit price change (%) Pantheon Resources plc share price change (%)
01/10/2018 85.25 16.24
01/11/2018 86.21 17.1 1% 5%
01/12/2018 78.87 16 -9% -6%
01/01/2019 84.96 23.375 8% 46%
01/02/2019 87.49 24.75 3% 6%
01/03/2019 88.79 28.6 1% 16%
01/04/2019 92.09 21.425 4% -25%
01/05/2019 86.76 21.25 -6% -1%
01/06/2019 91.02 21.25 5% 0%
01/07/2019 91.86 18.68 1% -12%
01/08/2019 89.84 17.9 -2% -4%
01/09/2019 91.78 16.03 2% -10%
01/10/2019 94.12 16.25 3% 1%
01/11/2019 96.76 16.5 3% 2%
01/12/2019 98.78 16.5 2% 0%
01/01/2020 97.73 16.5 -1% 0%
01/02/2020 89.67 11.95 -8% -28%
01/03/2020 77.93 13 -13% 9%
01/04/2020 86.36 13.75 11% 6%
01/05/2020 90.7 15.95 5% 16%
01/06/2020 92.14 13.775 2% -14%
01/07/2020 96.65 21.15 5% 54%
01/08/2020 102.96 22.35 7% 6%
01/09/2020 99.52 37.2 -3% 66%
01/10/2020 96.53 31 -3% -17%
01/11/2020 108.94 37.4 13% 21%
01/12/2020 112.41 43.5 3% 16%
01/01/2021 111.49 36.3 -1% -17%
01/02/2021 114.27 39.1 2% 8%
01/03/2021 118.49 35.7 4% -9%
01/04/2021 123.61 34.25 4% -4%
01/05/2021 125.6 29.4 2% -14%
01/06/2021 126.57 41.25 1% 40%
01/07/2021 128.83 55.3 2% 34%
01/08/2021 132.02 59.7 2% 8%
01/09/2021 126.46 71.6 -4% 20%
01/10/2021 133.84 77.6 6% 8%
01/11/2021 131.1 69.6 -2% -10%
01/12/2021 135.32 77.3 3% 11%
01/01/2022 128.32 79.6 -5% 3%
01/02/2022 124.58 142 -3% 78%
01/03/2022 128.16 117.6 3% -17%
01/04/2022 117.42 123.2 -8% 5%
01/05/2022 117.94 100.6 0% -18%
01/06/2022 106.88 89.4 -9% -11%
01/07/2022 115.57 117 8% 31%
01/08/2022 110.28 133.7 -5% 14%
01/09/2022 99.95 104.1 -9% -22%
01/10/2022 107.42 100.1 7% -4%
01/11/2022 115.44 72.95 7% -27%
01/12/2022 109.25 42.52 -5% -42%
01/01/2023 117.01 50.15 7% 18%
01/02/2023 113.98 57.1 -3% 14%
01/03/2023 117.67 23.64 3% -59%
01/04/2023 119.79 18.67 2% -21%
01/05/2023 118.6 15.74 -1% -16%
01/06/2023 124.52 12.71 5% -19%
01/07/2023 128.54 10.8 3% -15%
01/08/2023 125.7 25 -2% 131%
01/09/2023 125.91 22.42 0% -10%
Pantheon Resources beta and adjusted beta
Pantheon Resources
Beta 0.3262
Adjusted beta 0.5508

GlossaryEdit

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Glossary
Term Definition
/Net pay The net thickness of an oil reservoir which is capable of producing hydrocarbons.
AMI Area of mutual interest.
Anticline A structure in the subsurface in which rock layers have been folded to produce an arch or dome.
Appraisal well A well drilled to evaluate the extent of a discovery made by a previous well drilled on the same trap.
Barrel (BBL) A unit of measurement commonly used in quoting liquid hydrocarbon volumes.
  • 1 barrel _ 42 U.S. gallons
  • 35 imperial gallons (approx)
  • 159 liters (approx)
Basin A depression in the earth's surface containing relatively thick deposits of sedimentary rocks.
BCF Billion cubic feet, or 28.317 cubic meters. A unit commonly used in quoting volumes of natural gas.
BCFG Billion cubic feet of gas.
Behind pipe A productive reservoir which is isolated from the well bore by the casing.
BHL Bottom hole location.
BO Barrel of oil.
BOE Barrel of oil equivalent. Used when converting oil and gas into an equivalent unit of volume. Typically, a figure of 6000 CFG per BBLO is used.
BOPD Barrels of oil per day, a unit commonly used to describe daily rates of liquids production from a flowing well.
BTU British Thermal Unit. A unit index of energy content in gas.
Casing Steel pipe which lines the well bore from surface. The casing isolates subsurface fluids from the well bore and prevents rock material from sloughing off the sides of the well bore.
CFG Cubic feet of gas
Charge risk A general term for risk that a source rock exists, that it has been is or still is generating hydrocarbons, that a trap was in place before generation , and that a conduit exists between the source rock and the reservoir.
Clastic A modifier describing rocks that were deposited by the mechanical action of water, i.e., being carried in suspension and then dropped when the energy in the flow becomes too weak to support the material. Typically, sandstone and shale.
Closure On an isolated structural high, the area enclosed by the lowest closing contour.
Condensate A hydrocarbon phase which separates out from natural gas and condenses into liquids when the hydrocarbons are produced.
Cretaceous Late Mesozoic time; roughly 140 to 65 million years ago.
Darcy 1000 millidarcies (see definition for mD below).
Deposition The process of depositing unconsolidated sediments, usually in a basin.
DHC Dry hole cost. The cost of an unsuccessful well.
Dip The angle that a rock surface forms with respect to the horizontal. Can be referenced as degrees, in the case of depth, or, in the case of seismic reflection data, in time (e.g. milliseconds per km ).
Dipmeter A tool used in logging a well which measures the dip of rock surfaces in the borehole of the well.
DMO Dip Moveout . A correction applied to seismic trace processing to account for dip. (See dip above).
DOGGR California Department of Conservation/Division of Oil, Gas, and Geothermal Resources
Dry hole A well in which no commercial hydrocarbons were discovered.
Exploration well A well drilled into a previously undrilled or noncommercial trap to test for the presence of a new hydrocarbon accumulation.
Facies An association of rock types which share a common trait. In the case of sedimentary rocks, usually used with reference to the environment in which the sediments were deposited (for example, deltaic).
Fault Any brittle failure of rock layers along which rocks are displaced on one side relative to the other.
Fault trap A structural trap where at least one of the components of closure is formed by offset of rock layers across a fault.
Fold Deformation of a rock surface.
Formation A formal term used to reference a genetically related rock unit (e.g. the Monterey Formation).
Four way dip A simple structure in which rock surfaces dip in all four directions, thus creating structural closure. Often forms a hydrocarbon trap.
Geology The study of the earth and the processes affecting its crust.
Geophysics The study of rock properties and stratigraphy through the use of analytical methods involving various types of data collection and interpretation.
GIP Gas in place. The volume of natural gas stored in a subsurface accumulation . Differs from recoverable reserves in that some of this gas will not be recovered to the surface due to properties of the rock and/or gas, and in situ pressure.
GOR Gas-oil ratio: the volume of dissolved gas per barrel of oil.
Horizon A term describing a layer of rock, most typically associated with a seismic reflection.
Hydrocarbons A compound of the elements hydrogen and carbon, in either liquid or gaseous form. Natural gas and petroleum are mixtures of hydrocarbons.
Lithology The physical, sedimentary, or mineralogical characteristics of a rock.
Marine Used as a modifier of sedimentary rock to denote deposition in the ocean.
Mature Used in association with source rock. A description applied to organic rich rock which is capable, because of sufficient temperature and burial depth, of generating hydrocarbons.
mD Millidarcy , a unit of measurement used to describe permeability, i.e., the tendency for liquids to flow through a rock unit. A high permeability indicates a good reservoir.
Migration The movement of hydrocarbons from the source rock to the reservoir.
MMBLS Million barrels.
MMBO Million barrels of oil.
MMBTU Million British Thermal Units.
MMCFD Million cubic feet of gas per day. A measure of gas flow rates from a producing well.
Monte Carlo A methodology for estimating a given quantity based on the statistical distribution of input values on which the quantity depends. Typically, the output quantity is calculated several thousand times (each calculation is called a trial), for each trial using input parameter values extracted randomly according to their statistical distributions. The result is a statistical distribution of output values.
MSCF Thousand standard cubic feet at atmospheric conditions.
N/G Net to gross ratio. The percentage of a gross thickness of reservoir with sufficient permeability such that it is capable of flowing hydrocarbons.
Oil Liquid hydrocarbons, generally more viscous and darker in color than condensates.
oil field A subsurface accumulation of hydrocarbons.
oil window The depth interval in which source rock can actively generate mobile oil.
OIP Oil in place. The volume of oil held in a reservoir in the subsurface . Not all of this oil can be recovered.
OWC Oil-water contact, which marks the base of an oil accumulation.
P10 In a Monte Carlo simulation, a measure of the high end expectation of a particular parameter's occurrence. For example, a P10 net pay of 150 ft means that there is a 10 per cent. probability that at least 150 ft of net pay will be encountered in a given trial in the simulation.
P50 In a Monte Carlo simulation, the median value of a particular parameter's occurrence. For example, a P50 net pay of 50 ft means that half of the trials in the simulation encountered a value less than 50 ft.
P90 In a Monte Carlo simulation, a measure of the low end expectation of a particular parameter's occurrence. For example, a P90 net pay of 25 ft means that there is a 90 per cent. probability that at least 25 ft of net pay will be encountered in a given trial in the simulation.
Permeability A measure of the ability of liquids to flow through a porous solid. (See mD ).
Petroleum (See Hydrocarbons).
PINS Padre Island National Seashore.
Pipeline A pipe through which any hydrocarbon or its products is delivered to an end user.
Porosity The percentage of open pore space in a rock.
POS Probability of success (technical, as opposed to commercial).
Potentially Recoverable Hydrocarbons The volume of hydrocarbons that are estimated to be producible from a given trap. Used in the context of a prospect or an undeveloped hydrocarbon accumulation.
Prospect An undrilled or poorly understood, and therefore hypothetical, hydrocarbon trap.
PSDM Pre-stack depth migration. A seismic processing technique which utilises rock velocity models to iteratively arrive at a depth converted seismic data volume.
PSTM Pre-stack time migration. A seismic processing technique which approximates PSDM but does not build a depth model. The seismic data volume is in two way travel time.
Reflector An event observed on a seismic section that usually corresponds to a buried rock surface.
Reserves The volume of oil or gas that can be recovered from the subsurface. Generally used in the context of commerciality.
Reservoir A porous rock unit in which hydrocarbons occur in an oil field.
Risk A measure of uncertainty relating to the likelihood of finding hydrocarbons, or, the likelihood that any or all of the individual geological elements required for the accumulation of hydrocarbons is met.
Sandstone A sedimentary rock composed primarily of sand sized grains, usually quartz. A common hydrocarbon reservoir rock.
SCF Standard cubic feet. See MSCF
Seal An impermeable rock unit that prevents hydrocarbons from escaping from the reservoir.
Sediment Generally, water borne debris that settles out of suspension.
Sediment rock A type of rock formed by aggregation of sediments.
Seismic reflection An event observed on seismic data that corresponds to a given rock layer in the subsurface.
Seismic survey A tool employing an energy source, such as dynamite, and recording devices used to measure the travel time from a rock layer to the surface. The primary tool used to detect hydrocarbon traps.
Shale A very fine grained rock often thinly layered. An important seal rock.
Show An indication while drilling that hydrocarbons are present in the well.
Silt/siltstone A rock whose grain size is intermediate between sand and shale.
Source/source rock An organic rich rock (typically shale) capable of generating hydrocarbons under certain conditions of temperature and pressure.
STB Stock tank barrel, the volume of a barrel of oil at the earth's surface as opposed to the corresponding volume in the subsurface.
Stratigraphy The study of the vertical and horizontal distribution of stratified rocks, with respect to their age, lateral equivalence, and environment of deposition.
Structural trap Generally, a hydrocarbon trap formed by dipping rock layers and/or faults.
Structure A geological feature usually higher in elevation than the surrounding rock, formed by local deformation of the rock layers.
TCF Trillion cubic feet of gas.
Tertiary A period of geological time from approximately 2 to 65 million years ago. Subdivided into the Pliocene, Miocene, Oligocene, Eocene, and Paleocene.
Total depth (TD) The final depth reached when drilling a well.
Trap A structure capable of retaining hydrocarbons.
Trend A particular direction in which similar geological features are repeated.
TVD True vertical depth. The vertical depth below a given datum.
Unconformity A break in the succession of sedimentary deposition, commonly associated with erosion of underlying rock units. Often marked by rock surfaces which are non-parallel above and below the unconformity.
Unrisked Associated with an estimate of possible hydrocarbons for which a discount attributable to risk has not been applied.
Updip Toward a higher elevation on a rock surface.
Uplift Elevation by means of geological activity of one surface or area relative to another.
Well log A device which records rock physical parameters in the well bore during or after drilling, or, the data obtained by these devices.

References and notesEdit

  1. ↑ 1.0 1.1 Research shows that an investment has two main types of risks: 1) non-systematic and 2) systematic. Systematic risk is the risk related to the overall market, and non-systematic risk is the risk that's specific to an individual investment. Evidence shows that taking on non-systematic risk is inefficient, and it's, therefore, best to eliminate it; and in most cases, elimination is fairy easy to do [by holding a diversified portfolio of investments (i.e. around 15 investments)]. Accordingly, when assessing the riskiness of an investment, it’s best to look at the systematic risk only (i.e. ignore the non-systematic risk). A key measure of systematic risk is beta, and a main way to determine the riskiness of an investment is to compare the beta of the investment with the beta of the market, which is 1. For estimating an asset's beta, in terms of time period, and frequency of observations, the most common choice is five years of monthly data, yielding 60 observations. One study of U.S. stocks found support for five years of monthly data over alternatives. The beta value in a future period has been found to be on average closer to the mean value of 1.0, the beta of an average-systematic-risk security, than to the value of the raw beta. Because valuation is forward looking, it is logical to adjust the raw beta so it more accurately predicts a future beta.
  2. ↑ 2.00 2.01 2.02 2.03 2.04 2.05 2.06 2.07 2.08 2.09 2.10 2.11 2.12 2.13 2.14 2.15 2.16 2.17 2.18 2.19 2.20 2.21 https://www.pantheonresources.com/about-pantheon/projects/greater-alkaid
  3. ↑ 3.00 3.01 3.02 3.03 3.04 3.05 3.06 3.07 3.08 3.09 3.10 3.11 3.12 3.13 3.14 3.15 3.16 https://www.pantheonresources.com/about-pantheon/projects/talitha
  4. ↑ 4.0 4.1 4.2 4.3 4.4 4.5 4.6 https://polaris.brighterir.com/public/pantheon_resources/news/rns/story/rmvz29r
  5. ↑ Pantheon addition of Oil & NGLs.
  6. ↑ https://polaris.brighterir.com/public/pantheon_resources/news/rns/story/xel4enr
  7. ↑ 7.0 7.1 7.2 7.3 7.4 https://polaris.brighterir.com/public/pantheon_resources/news/rns/story/xleqqjw
  8. ↑ 8.00 8.01 8.02 8.03 8.04 8.05 8.06 8.07 8.08 8.09 8.10 8.11 8.12 8.13 8.14 8.15 8.16 8.17 8.18 8.19 8.20 8.21 8.22 8.23 8.24 8.25 8.26 8.27 8.28 8.29 8.30 8.31 8.32 8.33 8.34 8.35 https://www.pantheonresources.com/investors/financial-reports/673-final-results-for-the-year-ended-30-june-2022/file
  9. ↑ 9.0 9.1 9.2 9.3 9.4 https://polaris.brighterir.com/public/pantheon_resources/news/rns/story/rmvm22r
  10. ↑ https://www.ibisworld.com/global/market-size/global-oil-gas-exploration-production/#:~:text=The%20market%20size%2C%20measured%20by,is%20%245.3tr%20in%202023.
  11. ↑ To estimate the revenue from 3.6 billion barrels of oil and 8.9 trillion cubic feet (Tcf) of natural gas, you would need to know the prevailing market prices for both commodities. Please note that oil and gas prices can fluctuate significantly based on various factors, so this is a very general estimate. 1) Oil: Let's use an average price of $60 per barrel, which is a rough average for Brent crude over various periods in the late 2010s and early 2020s. 3.6 \text{ billion barrels} \times $60/\text{barrel} = $216 \text{ billion} 2) Natural Gas: Natural gas prices can be more region-specific than oil prices. In the U.S., the Henry Hub spot price is a common benchmark. Let's use an average price of $3 per thousand cubic feet (Mcf) for simplicity, though this price can vary widely. 8.9 \text{ Tcf} \times $3/\text{Mcf} = $26.7 \text{ billion} Adding these together: $216 \text{ billion (from oil)} + $26.7 \text{ billion (from gas)} = $242.7 \text{ billion} So, based on these rough price estimates, 3.6 billion barrels of oil and 8.9 Tcf of natural gas could equate to approximately $242.7 billion in revenue. However, it's essential to consider several factors: 1) Extraction Costs: The revenue figures above don't account for the costs of extracting, refining, transporting, and selling the oil and gas. These costs can be substantial. 2) Price Fluctuations: Oil and gas prices can fluctuate significantly based on global demand, geopolitical events, technological advancements, and other factors. 3) Taxes and Royalties: Governments often take a share of the revenue in the form of taxes, royalties, or other fees.
  12. ↑ https://polaris.brighterir.com/public/pantheon_resources/news/rns/story/w03k7zw
  13. ↑ https://polaris.brighterir.com/public/pantheon_resources/news/rns/story/x5zjy8x
  14. ↑ 14.0 14.1 https://www.investegate.co.uk/announcement/rns/pantheon-resources--panr/private-placement/7740310
  15. ↑ 15.0 15.1 15.2 15.3 15.4 15.5 https://polaris.brighterir.com/public/pantheon_resources/news/rns/story/xp8nljr
  16. ↑ 16.0 16.1 16.2 https://www.pantheonresources.com/investors/financial-reports/648-pantheon-resources-annual-report-and-financial-statements-year-ended-30-june-2019/file
  17. ↑ 17.0 17.1 17.2 https://www.pantheonresources.com/investors/financial-reports/654-final-results-for-the-year-ended-june-2020/file
  18. ↑ 18.0 18.1 18.2 https://www.pantheonresources.com/investors/financial-reports/660-final-results-for-the-year-ended-30-june-2020/file
  19. ↑ chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/http://www.pantheonresources.com/investors/presentations/645-investor-presentation-january-2020/file
  20. ↑ As of 23 June 2022, CHONS LLC was the registered holder of 38,068,993 shares, representing 4.95% of the share capital of the Company.  These shares were held through one or more nominees accounts which may or may not be wholly in the top shareholder list presented above.  Pantheon has been advised by Farallon Capital Management LLC, the discretionary investment manager of CHONS LLC that it qualifies for an investment manager exemption pursuant to DTR 5.1.5 R (1)(a) in the FCA Rules. The practical effect of the investment manager exemption is that, where a person is acting as investment manager to another person, the applicable disclosure thresholds under the DTRs are only at 5%, 10% and 1% increments above 10%. Accordingly, the referenced shareholdings are subject to change without additional notification and therefore cannot be considered accurate apart from on the referenced date. On 3 August 2021, Mr Michael Spencer and IPGL Limited advised they were the registered holder of 25,888,710 shares representing 3.7% of the share capital of Pantheon on that date, and were the holder of 7,816,200 Financial instruments of similar economic effect, representing 1.13% of the registered share capital of Pantheon at that time. These shares were held through one or more nominees accounts which may or may not be wholly in the top shareholder list presented above. The referenced shareholdings are only considered accurate on the referenced data and are not expected to be updated until the next reporting threshold (higher or lower) is crossed. On 1 April 2022, Mr Sanjay Motwani notified of a direct holding in 3,271,788 ordinary shares and an indirect holding in 19,851,474 ordinary shares, collectively  representing 3.05% of the share capital of Pantheon on that date. These shares were held through one or more nominees accounts which may or may not be wholly in the top shareholder list presented above. The referenced shareholding(s) are only considered accurate on the referenced data and are not expected to be updated until the next reporting threshold (higher or lower) is crossed.  
  21. ↑ https://www.pantheonresources.com/investors/significant-holdings
  22. ↑ 22.0 22.1 22.2 https://www.pantheonresources.com/investors/capital-structure
  23. ↑ The calculation here is 6,956,691 divided by 919,111,769.
  24. ↑ The share options are exercisable into ordinary shares upon exercise, whereas the warrants are convertible on a 1:1 basis into non-voting shares upon exercise. Non voting shares are further convertible into ordinary shares on a 1:1 basis. The Ordinary Shares of the Company have not been nor will they be registered under the United States Securities Act of 1933, as amended ("Securities Act"), or under the securities laws of any state of the United States or under the applicable securities laws of Australia, the Republic of South Africa, the Republic of Ireland, Japan or Canada.  Accordingly, subject to certain exceptions, the Ordinary Shares may not, directly or indirectly, be offered, sold, transferred, taken up or delivered, directly or indirectly, in the United States, Australia, the Republic of South Africa, the Republic of Ireland, Japan or Canada or for the benefit of any US person (as defined in Regulation S under the Securities Act).
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