REG - Pantheon Resources - Incentive Plan to Align with Shareholder Interests

Pantheon ResourcesAnnouncement

23/10/2024 07:00

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RNS Number : 2065J  Pantheon Resources PLC  23 October 2024

 

23 October 2024

 

Pantheon Resources plc

Pantheon Announces Revised Incentive Plan to More Strongly Align With
Shareholder Interests

 

Pantheon Resources plc (AIM: PANR) ("Pantheon" or "the Company"), developing
the Kodiak and Ahpun oil fields in close proximity to pipeline and
transportation infrastructure on Alaska's North Slope, today announced the
details of the replacement Employee Stock Ownership Plan ("ESOP") having
retired all earlier plans, as previously indicated. The new ESOP consists of a
share award scheme (the "Share Award Scheme") for all employees and a
long-term incentive plan ("LTIP") for Executive Directors and certain other
officers of the Company.

ESOP Highlights:

·    Under the Share Award Scheme, all employees of the Company, including
Executive Directors, will be eligible to receive share awards (via Restricted
Stock Units or "RSU's") vesting over three years for either 25% or 33% of
their total base compensation.

·    The LTIP strengthens alignment with shareholders by ensuring that the
initial share option awards are subject to challenging performance conditions
(noted below) and have exercise prices of nearly 4x Pantheon's 22nd October
2024 closing share price.

New Incentive Plan Background

The new incentive arrangements have been designed to incentivize, retain and
attract talent, simplify historic schemes, reduce potential future dilution
and align management and all staff with shareholders.

Historically, Pantheon's long term incentive programme comprised two
components; (1) share options, and (2) a milestone based plan whereby benefits
accrued upon the booking of reserves, put in place when Pantheon's core focus
was in East Texas. No benefit was ever paid from the second plan and, in late
2023 Pantheon announced the cancellation of this reserves-based incentive
plan.

The Company has now retired its remaining share option based incentive plan
(originally adopted in 2009 and amended in 2014) with the ESOP which, where
practicable, looks to follow the principles of the Main Market of the London
Stock Exchange. No share options had been awarded to employees since January
2022. The new ESOP reduces the total award limit to 10% of the current total
issued share capital of the Company over a 10-year period (down from 15% under
the 2009 plan), with a maximum of 5% of this limit awarded as discretionary
awards to individuals, rather than as part of a common award scheme.

While the ESOP has been under consideration over the past year, with delivery
of Independent Expert Reports covering all the Company's discovered resources,
signing of the Gas Sales Precedent Agreement with the Alaska Gasline
Development Corporation and completion of a fundraise for the planned Megrez
well, the Company is now in a window ahead of spudding the Megrez well to make
the initial grants under the new plan:

Pantheon's Non-Executive Directors ("NEDs") do not participate in the ESOP.
However, each of them is committed to investing personally in the Company.

While the ESOP is flexible and permits a range of awards, the Remuneration
Committee has adopted an award framework split into two elements:

Share Award Scheme Framework

The Company has adopted a revised remuneration structure available to all
staff, consisting of base pay and a significant proportion (with a minimum of
25% rising to 33% for senior employees) of overall remuneration paid in
contingent share awards or RSUs. Contingent share awards are share grants with
deferred vesting and potentially other conditions to issue. RSUs are
non-tradable securities with deferred vesting, commonly used in the United
States for employee incentive and retention by providing equity exposure that
is relinquished upon resignation, convertible into ordinary shares of the
Company ("Ordinary Shares") on a one for one basis at vesting. Contingent
share awards and RSUs can have slightly different tax treatment depending on
the holders residency. However, they are economically equivalent (provided
they have similar vesting and other conditions), and are referred to
throughout collectively as "RSUs".

The Company is today accordingly issuing in aggregate 9,087,584 RSUs across
all staff members (excluding NEDs). The number of RSUs in this initial grant
has been calculated using a price of $0.2206, being the 17p price for the July
2024 placement, using current exchange rates, and represents a small premium
to the closing share price on 22nd October 2024). Under the Share Award
Scheme, the initial RSUs, granted to all staff, vest over three years
beginning in 2025. Subsequent awards will generally be issued at the market
price and vest over three years beginning on the first anniversary of a grant.
Details of grants to Persons Discharging Managerial Responsibilities ("PDMRs")
are disclosed below.

The Company anticipates annual grants under the Share Award Scheme following
the Annual General Meeting ("AGM") each year on a consistent basis, with new
employees typically becoming eligible for such grants 12 months from their
joining date unless earlier eligibility is expressly agreed by the Board.

LTIP

The Remuneration Committee has also adopted a strategy for discretionary
incentives that involves issuing out-of-the-money options to senior
management, which are subject to milestone- and/or time-based vesting
conditions. The exercise price of the initial option grant, the first for more
than two and a half years, is $0.835 (c. 64p at current exchange rates),
representing a 290% premium to the share price of 16.56p (as at close on 22nd
October 2024). The Company is today making aggregate awards of options over
9,500,000 ordinary shares in the Company ("Ordinary Shares") with the grants
to PDMRs disclosed below.

Accordingly, the total initial awards issued under the ESOP (being the Share
Award Scheme and LTIP) aggregate to 18,587,584 shares or 1.64% of the current
issued share capital. This brings the total awards under the ESOP plan
combined with all options granted in the past 10 years to 6.1%,  of the newly
reduced headroom of 10%. Together, these measures serve to increase alignment
of employee incentives with value creation for shareholders and to reduce
employee churn.

Awards to PDMRs

The initial awards to PDMRs of the Company under the new ESOP are:

 Grantee                                    Number of RSUs Awarded  Number of LTIP  Options Awarded   LTIP Exercise Price
 John Cheatham, Chief Executive Officer     969,818                 1,500,000                         $0.835
 Robert Rosenthal, Technical Director       953,752                 1,500,000                         $0.835
 David Hobbs, Executive Chairman            543,039                 5,000,000                         $0.835
 Philip Patman Jr, Chief Financial Officer  815,986                 Nil                               -

The terms of the RSUs are as described above.

Under the LTIP, in each case, 500,000 options are subject to continued
employment, vesting 20% annually, commencing on December 31, 2024. The
remaining options are subject to challenging performance targets with
differentiated criteria applying to different roles. In all cases, vesting
occurs over five years (with no vesting until performance condition is met and
catch up thereafter) subject to continued employment and with Board discretion
to extend deadlines by up to six months, unless otherwise specified. The
relevant performance criteria are:

·    U.S. Listing Award: Securing a listing on a senior U.S. exchange by
December 31, 2025. If the Board determines that a U.S. listing is not
desirable or practicable (other than due to the company failing to prosecute
the listing plan effectively), the Board can delay the measuring date by up to
one year instead of making such a determination. If the Board makes such a
determination, vesting is pushed out by one year.

·    Non-Dilutive Financing Award: This award vests if non-dilutive
financing is committed - with what the Board believes are reasonably
achievable conditions - for an amount of at least $100 million by December 31,
2027.

·    Final Investment Decision ("FID") Award: This award vests if the FID
for the Ahpun project is taken by December 31, 2027.

·    FID Award with Backup: This award vests if the FID for the Ahpun
project is taken by December 31, 2027 or proven and probable ("2P") reserves
of more than 2 billion barrels are booked at Kodiak by December 31, 2028.

The resulting PDMR interests are:

 Name                                       Ordinary Shares owned  Ordinary Shares owned as a % of current issued share capital  RSUs subject to vesting  Total Share Options (vested and unvested)  RSUs and Share Options as a % of Current Issues Share Capital  Avg Ex Price of Share Options *
 John Cheatham, Chief Executive Officer     4,529,463              0.40%                                                         969,818                  8,475,000                                  0.84%                                                          51p
 Robert Rosenthal, Technical Director       2,073,122              0.18%                                                         953,752                  8,475,000                                  0.83%                                                          51p
 Philip Patman Jr, Chief Financial Officer  114,184                0.01%                                                         815,986                                                             0.07%
 David Hobbs, Executive Chairman            4,040,238              0.36%                                                         543,039                  5,000,000                                  0.49%                                                          64p

 

* Calculated as the weighted average price using £1.00 = $1.30 for the
current grants

Jeremy Brest, Chairman of Pantheon' Remuneration Committee, commented: "This
new incentive program and award framework provides significant incentive
alignment for every employee - from the most junior to the CEO - with a
significant portion of their overall pay delivered in shares. Moreover, the
initial set of option awards further cements this alignment by setting
ambitious targets for senior management. These options only have value if the
share price more than triples from today's and if our ambitious performance
targets are achieved."

David Hobbs, Pantheon Executive Chairman, commented: "Jeremy and the
Remuneration Committee have followed through on the Board's commitment to
recast executive compensation such that it is aligned with shareholders'
interests to reduce the risk of the plan paying out without investors also
achieving significant realisable gains."

 

About Pantheon Resources

Pantheon Resources plc is an AIM listed Oil & Gas company focused on
developing its 100% owned Ahpun and Kodiak fields located on State of
Alaska land on the North Slope, onshore USA. Independently certified best
estimate contingent recoverable resources attributable to these projects
currently total c. 1.6 billion barrels of ANS crude and 6.6 Tcf of associated
natural gas. The Company owns 100% working interest in c. 259,000 acres.

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 bringing the Ahpun field forward to FID and producing into the TAPS main
oil line (ANS crude) by the end of 2028. The Gas Sales Precedent Agreement
signed with AGDC provides the potential for Pantheon's natural gas to be
produced into the proposed 807mile pipeline from the North Slope to
Southcentral Alaska during 2029. Once the Company achieves financial
self-sufficiency, it will apply the resultant cashflows to support the FID on
the Kodiak field planned, subject to regulatory approvals, targeted by the
end of 2028 or early 2029.

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 shorter development timeframes, materially lower
infrastructure costs and the ability to support the development with a
significantly lower pre-cashflow funding requirement than is typical
in Alaska. Furthermore, the low CO2 content of the associated gas allows
export into the planned natural gas pipeline from the North Slope to
Southcentral Alaska without significant pre-treatment.

The Company's project portfolio has been endorsed by world renowned
experts. Netherland, Sewell & Associates estimate a 2C contingent
recoverable resource in the Kodiak project that total 1,208 mmbbl of ANS
crude and 5,396 bcf of natural gas. Cawley Gillespie &
Associates estimate 2C contingent recoverable resources for Ahpun's western
topset horizons at 282 mmbbl of ANS crude and 803 bcf of natural gas. Lee
Keeling & Associates estimated possible reserves and 2C contingent
recoverable resources totalling 79 mmbbl of ANS crude and 424 bcf natural
gas.

 

Further information, please contact:

Corporate Contact
Pantheon Resources plc

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

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

Investor Relations Contact

MZ Group

Lucas Zimmerman, Ian Scargill

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

 

 

 

NOTIFICATION AND PUBLIC DISCLOSURE OF TRANSACTIONS BY PERSONS DISCHARGING
MANAGERIAL RESPONSIBILITIES AND PERSONS CLOSELY ASSOCIATED WITH THEM

 1   Details of the person discharging managerial responsibilities / person closely
     associated

 a)  Name                                                         a.    David Hobbs

                                                                  b.    Jay Cheatham

                                                                  c.     Robert Rosenthal

 2   Reason for the notification

 a)  Position/status                                              a.    Executive Chairman

                                                                  b.    Chief Executive Officer

                                                                  c.     Technical Director

 b)  Initial notification/Amendment                               Initial Notification

 3   Details of the issuer, emission allowance market participant, auction
     platform, auctioneer or auction monitor
 a)  Name                                                         Pantheon Resources plc

 b)  LEI                                                          213800SWHY5DNQS64J23

 4   Details of the transaction(s): section to be repeated for (i) each type of
     instrument; (ii) each type of transaction; (iii) each date; and (iv) each
     place where transactions have been conducted

 a)  Description of the financial instrument, type of instrument  Options over ordinary shares

                                                                  ISIN: GB00B125SX82

 b)  Nature of the transaction                                    Grant of Options over Ordinary Shares

 c)  Price(s) and volumes(s)                                      a.     5,000,000 options to acquire shares at an exercise price
                                                                  of $0.835 per share

                                                                  b.     1,500,000 options to acquire shares at an exercise price of $0.835
                                                                  per share

                                                                  c.     1,500,000 options to acquire shares at an exercise price
                                                                  of $0.835 per share

 d)  Aggregated information                                       N/A (single transaction)

     -      Aggregated volume

     -      Price

 e)  Date of the transaction                                      22 October, 2024
 f)  Place of the transaction                                     Outside of a trading venue

 

 1   Details of the person discharging managerial responsibilities / person closely
     associated

 a)  Name                                                         a.    David Hobbs

                                                                  b.    Jay Cheatham

                                                                  c.     Robert Rosenthal

                                                                  d.    Philip Patman, Jr

 2   Reason for the notification

 a)  Position/status                                              a.    Executive Chairman

                                                                  b.    Chief Executive Officer

                                                                  c.     Technical Director

                                                                  d.    Chief Financial Officer

 b)  Initial notification/Amendment                               Initial Notification

 3   Details of the issuer, emission allowance market participant, auction
     platform, auctioneer or auction monitor
 a)  Name                                                         Pantheon Resources plc

 b)  LEI                                                          213800SWHY5DNQS64J23

 4   Details of the transaction(s): section to be repeated for (i) each type of
     instrument; (ii) each type of transaction; (iii) each date; and (iv) each
     place where transactions have been conducted

 a)  Description of the financial instrument, type of instrument  Restricted Stock Units

 b)  Nature of the transaction                                    Initial Grant

 c)  Price(s) and volumes(s)                                      a.     Restricted Stock Units to acquire 543,039 ordinary fully paid
                                                                  shares for nil consideration.

                                                                  b.     Restricted Stock Units to acquire  969,818 ordinary fully paid
                                                                  shares for nil consideration.

                                                                  c.     Restricted Stock Units to acquire 953,752 ordinary fully paid
                                                                  shares for nil consideration.

                                                                  d.     Restricted Stock Units to acquire 815,986 ordinary fully paid
                                                                  shares for nil consideration.

 d)  Aggregated information                                       N/A (single transaction)

     -      Aggregated volume

     -      Price

 e)  Date of the transaction                                      22 October 2024
 f)  Place of the transaction                                     Outside of a trading venue

 

 

 

 

 

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