REG - Pantheon Resources - Convertible Bond of US$30.5 million

Pantheon ResourcesAnnouncement

20/02/2025 09:15

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RNS Number : 8641X  Pantheon Resources PLC  20 February 2025

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR
INDIRECTLY, IN, INTO OR FROM THE UNITED STATES OF AMERICA, AUSTRALIA, CANADA,
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PUBLICATION OR DISTRIBUTION MAY CONTRAVENE LOCAL SECURITIES LAWS OR
REGULATIONS.

 

THIS ANNOUNCEMENT DOES NOT ITSELF CONSTITUTE AN OFFER TO BUY, ACQUIRE OR
SUBSCRIBE FOR (OR THE SOLICITATION OF AN OFFER TO BUY, ACQUIRE OR SUBSCRIBE
FOR) ORDINARY SHARES OR CONVERTIBLE BONDS TO ANY PERSON.  IN PARTICULAR, THIS
ANNOUNCEMENT, DOES NOT CONSTITUTE OR CONTAIN ANY INVITATION, SOLICITATION OR
OFFER TO ANY PERSON WITH A REGISTERED ADDRESS IN, LOCATED IN, OR WHO IS A
RESIDENT OF, THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, NEW ZEALAND, THE
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SOLICITATION OR OFFER WOULD BE UNLAWFUL OR CONTRAVENE ANY REGISTRATION OR
QUALIFICATION REQUIREMENTS UNDER THE SECURITIES LAWS OF ANY SUCH JURISDICTION.

 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF THE MARKET
ABUSE REGULATION (596/2014/EU) AS IT FORMS PART OF UK DOMESTIC LAW PURSUANT TO
THE EUROPEAN UNION (WITHDRAWAL) ACT 2018, AS AMENDED ("UK MAR").

 

20 February 2025

 

Pantheon Resources plc

 

Convertible Bond of US$30.5 million

 

Pantheon Resources plc ("Pantheon" or the "Company"), the AIM-quoted oil and
gas exploration company with 100% working interests in certain projects
located adjacent to transportation and pipeline infrastructure on the Alaska
North Slope, is pleased to announce that it has agreed to issue between
US$30.5 million and US$35 million in aggregate principal amount of senior
convertible bonds due March 2028 (the "Convertible Bonds") to Sun Hung Kai
& Co. Limited and its affiliates, clients and funds managed or advised by
them (the "Convertible Bond Investor"), as the lead investor to the
Convertible Bonds. The Convertible Bond Investor is a leading Hong Kong-based
financial institution recognised for its expertise in alternative investments
and wealth management, listed in Hong Kong. Pantheon has agreed to issue, and
the Convertible Bond Investor has agreed to subscribe for, the Convertible
Bonds on or before 24 March 2025.

 

The Convertible Bonds will have a coupon of 5.0% per annum payable quarterly
in arrears commencing three months from 24 March 2025 (the "Issue Date"). The
initial conversion price will be US$0.8675 subject to adjustment for splits,
consolidations, and similar corporate actions. The Convertible Bonds will be
repaid on the third anniversary ("Maturity Date") unless previously converted
or redeemed as noted below.

 

The main purpose of the issuance of the Convertible Bonds will be (i) to allow
the Company to fund the future repayment(s) of the then outstanding principal
of $12.25 million principal remaining on the US$55 million senior unsecured
convertible bonds due 2026 ("Existing Bonds") in cash ; (ii) for general
corporate purposes including additional costs for flow testing of the Megrez-1
well resulting from additional high potential zones identified; and (iii)
continued marketing activity for strategic investment into the Company's
assets.

 

Further details of the terms of the Convertible Bonds are set out below.
Notwithstanding that the definitive documentation has not been finalised,
under the agreement the Company is obliged to issue and the Convertible Bond
Investor is obliged to subscribe for the Convertible Bonds.  The Convertible
Bonds will be issued on or before 24 March 2025 with definitive documentation
reflecting the terms set out below (or otherwise being on terms no more
onerous on the Convertible Bond Investor and the Company than the Existing
Bonds).

 

Rationale for the new Convertible Bond

Pantheon has made significant progress over the last 12 months including the
Megrez-1 discovery on the Company's Ahpun East acreage and the impending
commencement of the flow testing programme over up to seven separate horizons,
continuing progression of the Alaska LNG project (and Phase 1 natural gas
pipeline) and now the removal of quarterly share issues to satisfy the
Existing Bond repayments.

 

Pantheon continues to focus on its stated goals of advancing both the Ahpun
and Kodiak projects towards FID, and ultimately development of these projects.
Fundamental to this goal is to provide sufficient additional data to both
support, and potentially accelerate these objectives. Megrez-1 is located on
the new Ahpun East Area where the reservoir section encountered is younger and
shallower, with superior reservoir characteristics than in any of Pantheon's
wells to date. The Company is currently finalizing testing plans and modelling
planned flow rates, recognizing constraints on oil storage and physical
equipment limitations. An update prior to the start of testing will be
provided in the coming fortnight.

Use of proceeds

The gross minimum proceeds of the Convertible Bond of US$30.5m, before
expenses are expected to be used as follows:

 Cash to fund repayment of Existing Bonds  US$12.25m
 Working Capital, Expenses and G&A         US$18.25m

 

David Hobbs Executive Chairman of Pantheon Resources, said:

 

"This agreement removes speculation around the issuance of shares for
quarterly interest and amortization of the Existing Convertible Bond,
providing three years during which Pantheon's ultimate development financing
strategy can be implemented. It provides flexible long-term capital that we
can retire after a year, if the Company continues successful execution of its
core strategy of bringing its discovered resources into production. We are
delighted to begin this relationship with Sun Hung Kai and to work together to
ensure that Pantheon has the liquidity to press ahead with the work to
progress Ahpun Field FID."

 

 

Further information:

 

UK Corporate and Investor Relations Contact
Pantheon Resources plc

Justin Hondris

+44 20 7484 5361
contact@pantheonresources.com (about:blank)

 

Nominated Adviser and Broker

Canaccord Genuity Limited

Henry Fitzgerald-O'Connor, James Asensio, Charlie Hammond

+44 20 7523 8000

 

Public Relations Contact
BlytheRay

Tim Blythe, Megan Ray, Matthew Bowld

+44 20 7138 3204

 

USA Investor Relations Contact

MZ Group

Lucas Zimmerman, Ian Scargill

+1 949 259 4987
PTHRF@mzgroup.us (about:blank)

CONVERTIBLE BONDS - SUMMARY OF PRINCIPAL TERMS

 Below is a summary of certain of the key terms of the Convertible Bonds.
This summary does not contain all of the terms of the Convertible Bonds.

 Bonds:                Convertible 3-year bonds, due [March 2028]; issued at par; subject to English
                       law

                       Issued in denominations of US$100,000 per bond
 Initial Amount:       US$30.5 million unless increased to US$35 million by the parties
 Coupon:               5.00% per annum, computed on a 30/360 basis, payable quarterly in arrears,
                       commencing three months after the Issue Date.
 Repayment:            Unless earlier converted or repaid, bullet repayment of the at par on the
                       Maturity Date.
 Conversion Right:     Unless previously redeemed or purchased and cancelled, bonds will be
                       convertible into shares in the capital of the Issuer ("Shares")  at the
                       Conversion Ratio at the option of the Bondholders at any time from the Issue
                       Date up to and including the 5(th) business day prior to the Maturity Date.
 Conversion Price:     US$0.8675, subject to adjustment for splits, consolidations, and similar
                       corporate actions.
 Conversion Ratio:     The principal amount of a bond divided by the Conversion Price on the date of
                       conversion.
 Security:             Upon the full redemption of the outstanding principal of the US$55 million
                       senior unsecured convertible bonds due 2028 first-ranking security over the
                       assets of the Issuer and its subsidiaries, subject to certain carve outs
                       including financings to which the majority of bondholders has consented.
 Negative pledge:      Yes
 Transferability:      The Bonds may be transferred at any time and from time to time, in whole or in
                       part, by the bondholders, subject to applicable restrictions under applicable
                       laws
 Ratings:              None
 Call Right            If at any time from the first anniversary of the Issue Date to 10 business
                       days preceding the Maturity Date the volume weighted average price for the 10
                       preceding days exceeds US$1.119, the Issuer may call the bonds for redemption
                       and all outstanding bonds shall be redeemed at the call price (being 90% of
                       the US$ equivalent of such volume weighted average price of the Shares).

                       The bondholders shall have the right to preempt the Call Right by exercising
                       their conversion right during the 5 business days following the date on which
                       notice of exercise of the Call Right is given.
 Financing Call Right  If the majority of bondholders refuse consent to release security to permit a
                       proposed financing with net proceeds of no less than US$50,000,000 within  10 
                       business days after being given notice of the relevant proposed financing (a
                       "Financing Call Notice"), the Issuer may, on the 15(th) business day after the
                       Financing Call Notice either redeem all outstanding bonds for cash at par plus
                       accrued interest or, if the US$ equivalent of the volume weighted average
                       price of the Shares (for the 10 trading days prior to the date of the
                       Financing Call Notice (the "Financing Call VWAP") exceeds the Conversion
                       Price, redeem all outstanding Bonds for Shares at a price equal to 90% of the
                       Financing Call VWAP.

                       The bondholders shall have the right to preempt the Financing Call Right by
                       exercising their conversion right during the 15 business days following the
                       Financing Call Notice.

 IMPORTANT INFORMATION

This Announcement is released by Pantheon Resources plc and contains inside
information for the purposes of Article 7 of UK MAR. It is disclosed in
accordance with the Group's obligations under Article 17 of UK MAR.

Neither the content of the Company's website nor any website accessible by
hyperlinks on the Company's website is incorporated in, or forms part of, this
Announcement.

 

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