REG - Pantheon Resources - Progress on Funding and Development Planning

Pantheon ResourcesAnnouncement

28/03/2024 07:15

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RNS Number : 6720I  Pantheon Resources PLC  28 March 2024

28(th) March 2024

Pantheon Resources plc

Progress on Funding Arrangements and Development & Appraisal Planning

Investor Presentation via Investor Meet Company

 

Pantheon Resources plc (AIM: PANR) ("Pantheon" or "the Company"), the oil and
gas company with a 100% working interest in the Kodiak and Ahpun projects,
covered by 193,000 acres of leases with an additional c. 66,000 acres to be
awarded following successful bids in the December 2023 lease sales, all in
close proximity to pipeline and transportation infrastructure on Alaska's
North Slope, is pleased to share the following update on its development
planning and funding initiatives.

 

Ahpun Development Planning

 

·    Initial dynamic modelling for 10,000 ft lateral well in the Ahpun
topset horizons ("Topsets") supports Pantheon's previously released analysis
of > 2 million barrels ("mmbbl") per well Estimated Ultimate Recovery
("EUR") and first year average production rate of 2,000 bpd of marketable
liquids.

·    SLB is concluding the development plan for the deeper Ahpun Alkaid
Zone and will now turn to the shallower Ahpun Topsets development plan.

·    Pantheon's technical team has identified well pad and bottom hole
locations sufficient to recover Company estimates of 481 mmbbls from the Ahpun
Topsets and Alkaid Zone (best estimate contingent recoverable resources).

·    In order to mitigate delays to financing discussions that would have
resulted from Netherland, Sewell & Associates, Inc.'s ("NSAI") Ahpun
report only becoming available around the end of Q2 2024, Pantheon
commissioned Independent Expert Reports ("IER") for (the shallower) Ahpun
Topsets and (the deeper) Alkaid Zone from Cawley Gillespie & Associates
("CGA") and Lee Keeling & Associates (LKA) respectively. The full reports,
expected shortly, are integral to financing discussions, and will be announced
to the market and posted to Pantheon's website when completed.

o  Given NSAI could not commence Ahpun work until after the completion of its
work on Kodiak, CGA was appointed as it could commence earlier, thereby
reducing the timeline to delivery of an IER on the Ahpun Topsets by some three
months. CGA has conducted reserves auditing work on existing North Slope
fields and has been able to work in parallel with NSAI's evaluation of Kodiak.

o  LKA has previously evaluated the Alkaid Zone in the Ahpun Field and, given
their existing knowledge, was able to update this work with subsequent data
from Alkaid-2 in a shorter timeframe.

o  NSAI will now prepare its IER on the entirety of the Ahpun Field,
including any additional resources confirmed by successful appraisal of the
eastern extension, prior to Final Investment Decision ("FID").

·    Pantheon is completing management estimates of prospective resources
in the eastern extension to Ahpun Topsets covered by the new leases
successfully bid for in December 2023, and accessible from western side of Sag
River. Results will be released as soon as available.

 

Kodiak and Eastern Extension of Ahpun: Appraisal Planning

 

·    Expect to receive the initial NSAI Kodiak recoverable resource update
to incorporate the new acreage at or near end of Q1 2024 / early Q2 2024.

·    Full NSAI report will be announced to the market and posted to
Pantheon's website when received.

·    Pantheon is undertaking preparations to support winter campaigns for
up to three appraisal wells in western portion of Kodiak field, subject to
funding.

·    The Company is currently preparing drilling plans for a Megrez-1 well
into eastern Ahpun Topsets from alongside Dalton Highway using either an ice
pad for winter drilling or rig mats for summer drilling, again subject to
funding.

 

Funding Arrangements

 

·      Offtaker Finance Initiatives:

o Advanced discussion on a proposed agreement with Alaska Gasline Development
Corp ("AGDC"), subject to regulatory approvals, Alaska LNG FID and assignable
to ultimate customers, to supply up to 500 million cubic feet per day
("mmcfd") of natural gas at exit of Ahpun gas plant at a base price not to
exceed $1/ million British thermal unit ("mmbtu"), with a final price subject
to negotiation, for up to 40 years. Targeting delivery of initial volumes in
2029, ramping up to full capacity by 2032.

o Pantheon and AGDC are working cooperatively to identify mutually beneficial
opportunities to further reduce the natural gas price.

o Pantheon retains the rights to any helium and other gaseous products
produced or remaining as a byproduct of future LNG produced with Pantheon
natural gas via Alaska LNG.

o Well tests of associated gas from the Ahpun and Kodiak fields indicate
approximately 0.5% CO2 content, well below the 3% maximum limit for in-state
utility gas.

 

·    Vendor Finance Initiatives:

o  Pantheon is working with two large service companies on mutually
beneficial arrangements for oilfield services. This would reduce upfront cash
requirements and allow scheduling of equipment availability, including
potentially new build facilities customised to field conditions. Services
would be supplied under long term contracts benchmarked to industry norms and
with incentives for exceeding target service costs.

o  Pantheon expects to be able to provide details of other discussions with
vendors in the coming months.

·    There can be no guarantees that either vendor financing or offtaker
financing arrangements can be concluded on terms acceptable to each party.

 

The Company will host an Investor Meet Company webinar to discuss the status
of development and appraisal planning on 10 April 2024 at 17:00 BST.
Participants can register via the following link:

https://www.investormeetcompany.com/pantheon-resources-plc/register-investor
(https://www.investormeetcompany.com/pantheon-resources-plc/register-investor)
.

 

Anyone following Pantheon Resources PLC with Investor Meet Company will
automatically receive a notification.

 

The presentation is open to all existing and potential shareholders. Questions
can be submitted pre-event via your Investor Meet Company dashboard up until
09 Apr 2024, 09:00 BST, or at any time during the live presentation.

 

David Hobbs, Executive Chairman of Pantheon Resources, commented:

 

"We have made considerable progress during the past several months towards
accessing funding on the least dilutive basis possible. The competitive
advantage of our location and gas composition, which could potentially provide
gas for in-State use through Alaska LNG, should allow Pantheon to capture the
benefit of reduced numbers (and CapEx) of gas reinjection wells along with a
path to low-cost commercialisation of the helium potential now identified in
the Kodiak field.

 

"The updated Independent Expert Report from NSAI on our 100% owned Kodiak
project and the two Independent Expert Reports from CGA and LKA have shortened
the timeframe for potential partners to fast-track their technical and
commercial due diligence to meet our target of concluding non-equity funding
arrangements by the end of Q2 2024. These will be released, along with SLB's
dynamic modelling results, when they are received in the next few weeks. We
will delay completion of NSAI's assessment of Ahpun from its original
timetable to incorporate the results of planned further drilling in the
Topsets (previously referred to as SMD) and to support the FID for the overall
Ahpun Development."

 

Frank Richards, President of AGDC, commented:

 

"Alaska is facing an energy crisis, and AGDC is exploring every option to
deliver a new, affordable, reliable, and long-term energy supply. This
proposed agreement provides for more than enough gas to meet Alaska's in-state
energy requirements, this gas features very low carbon dioxide content
eliminating the need for additional treatment costs, and Pantheon's fields are
conveniently situated directly along the Alaska LNG pipeline route. We look
forward to working with Pantheon to finalize these agreements as we advance
Alaska LNG."

 

 

 

 

Further information, please contact:

 

 Pantheon Resources plc                                       +44 20 7484 5361
 David Hobbs, Executive Chairman

 Jay Cheatham, Chief Executive Officer
 Justin Hondris, Director, Finance and Corporate Development

 Canaccord Genuity plc (Nominated Adviser and broker)         +44 20 7523 8000
 Henry Fitzgerald-O'Connor

 James Asensio

 Ana Ercegovic

 BlytheRay                                                    +44 20 7138 3204
 Tim Blythe

 Megan Ray

 Matthew Bowld

 AGDC                                                         +19 0771 74978

 Tim Fitzpatrick

 

The information contained within this Announcement is deemed by Pantheon
Resources PLC to constitute inside information as stipulated under the Market
Abuse Regulation (EU) No. 596/2014 as it forms part of UK law by virtue of the
European Union (Withdrawal) Act 2018 ("MAR").

 

 

Notes to Editors

 

Pantheon Resources plc is an AIM listed Oil & Gas company focused on
developing the Ahpun and Kodiak fields located on state land on the Alaska
North Slope ("ANS"), onshore USA, where it has a 100% working interest in c.
193,000 acres. In December 2023, Pantheon was the successful bidder for an
additional 66,240 acres with very significant resource potential, contiguous
to the Ahpun and Kodiak projects. Following the issue of the new leases, which
are expected to be formally awarded in summer 2024 upon payment of the balance
of the application monies, the Company will have a 100% working interest in c.
259,000 acres. Certified contingent resources attributable to these projects
exceeds 1 billion barrels of marketable liquids, located adjacent to Alaska's
Trans Alaska Pipeline System ("TAPS").

Pantheon's stated objective is to demonstrate sustainable market recognition
of a value of $5-$10/bbl of recoverable resources by end 2028. This is based
on targeting Final Investment Decision ("FID") on the Ahpun field by the end
of 2025, subject to regulatory approvals, building production to at least
20,000 barrels per day of marketable liquids into the TAPS main oil line, and
applying the resultant cashflows to support the FID on the Kodiak field by the
end of 2028.

A major differentiator to other ANS projects is the close proximity to
existing roads and pipelines which offers a significant competitive advantage
to Pantheon, allowing for materially lower infrastructure costs and the
ability to support the development with a significantly lower pre-cashflow
funding requirement than is typical in Alaska.

The Company's project portfolio has been endorsed by world renowned experts.
Netherland, Sewell & Associates ("NSAI") estimate a 2C contingent
recoverable resource in the Kodiak project that total 962.5 million barrels of
marketable liquids and 4,465 billion cubic feet of natural gas. NSAI is
currently working on updated estimates for the Kodiak Field to incorporate the
additional acreage, and CGA and LKA are working on estimates for the Ahpun
Field.

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