Shares in Pantheon Resources LON:PANR are up almost 20% in the last six months, having really fallen off a cliff back in March. In February the stock was trading at 58p, and at time of writing was nudging 29p. That still leaves some considerable upside for the energy explorer, although it still seems as if oil equities are trailing a bullish energy market.
The big news with Pantheon Resources has been around its Kodiak project, located in Alaska’s North Slope energy field. This was just reviewed by a third party – Netherland Sewell & Associates – which put an estimate on it of around a billion barrels in oil resources. This is really the first independent review of this kind carried out on the asset.
The report confirmed gross and net 2C contingent resources of oil and natural gas liquids of about 962m barrels of marketable liquids. Given the scale of the field – 126,000 acres – Pantheon Resources is sounding very bullish about its prospects here.
The review is just the first step in a process to establish the economic value of Kodiak. We would expect more news flow coming out of Pantheon in the near future, and if this is positive, look for the share price to tick up further.
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Who are Pantheon Resources?
Pantheon Resources was set up in 2005 as an independent, UK-based oil and gas exploration company. Its focus has been on onshore US basins. The company listed on the London AIM market in 2006. In 2019 the company acquired Great Bear Petroleum which brought with it a portfolio of high quality prospects in Alaska’s North Slope.
The projects in Alaska are extremely well located when it comes to relative connectivity with the state’s infrastructure, for example the Trans Atlantic Pipeline System. This means that the company will not need to spend the sort of money that would be required if the project was more remote, and in Alaska, things can get very remote.
Pantheon’s board is wedded to a strategy of “prove up and sell” – i.e. establish the credentials of the resource. The company is now focused on next stage exploration, with a view to selling its resources as and when appropriate, and sufficient resources have been proven.
Economic viability is key
The company is currently assembling the technical data needed at its projects to pave the way to the requisite field development and regulatory permits. Economic viability is key here. Development drilling and reservoir simulation will be an important part of determining the field economics. Pantheon plans to cut whole core on the next Kodiak appraisal well and gather a full suite of high-resolution logs.
Pantheon’s objective is to deliver sustainable market recognition of a value of between $5-$10 per barrel of 1C/1P recoverable resources by the end of 2028. A final investment decision on its Ahpun project is anticipated by 2025, and for Kodiak by 2028.
Note also that company management has as one of its strategic objectives the reduction of the supply of loose equity into the market, and is going to place a convertible bond for a long term holder. Management wants to see positive net operating cash flow to fund future development and production growth by 2028.
