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PANR - Pantheon Resources


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An UK-listed oil exploration company with leases in Alaska North Slope.

 

https://uk.finance.yahoo.com/quote/PANR.L?p=PANR.L

 

Market cap: £196M = US$262M

 

Last week they had a rights issue where they raised around $30M selling new shares at around 10% below market price:

https://www.lse.co.uk/rns/PANR/result-of-capital-raise-25osrdtnfcag3hd.html

 

This raises the effective market cap to around US$262M + $30M = $292M

 

 

Assets:

They own the "Talitha" lease around 20 km south west of Deadhorse/Prudhoe Bay, not far from the pipeline and the Dalton Highway, with a $3.7 billion NPV10 profit on oil potentially available (details below).

 

This consists of three horizons:

1. Shelf Margin Deltaic' ("SMD")

2. "Slope Fan System"

3. Kuparuk

 

 

1. Starting with  Shelf Margin Deltaic' ("SMD")

Looking in:

http://www.pantheonresources.com/news-media/press-releases

 

on 25th Sept 2020 "Receipt of Independent Resource Report – Talitha":

https://polaris.brighterir.com/public/pantheon_resources/news/rns/story/w0l33pw

says:

 

"Independent Expert Report and Resource Statement from ... Lee Keeling & Associates, Inc. ("LKA") on the Shelf Margin Deltaic ("SMD") horizon ... (all of which were oil bearing in the nearby Pipeline State #1 discovery well drilled in 1988.).

The directors are pleased to announce that LKA have confirmed a Prospective Resource of 302 Million Barrels of Recoverable Oil ...

302 Million Barrels of Oil ("MMBO") Prospective Resource (Recoverable)

$2.7 billion(1) NPV10 modelled on 91 producing wells, using a long term Brent oil forward curve ranging from $45.84 to $54.89"

 

2. <TBC>

 

3. Kuparuk

Again in:

http://www.pantheonresources.com/news-media/press-releases

13 October, 2020 "Upgraded management resource estimates – Kuparuk":

https://polaris.brighterir.com/public/pantheon_resources/news/rns/story/wkv4m2r

 

"The Company has now completed its analysis of the Kuparuk, the deepest of these three horizons, and estimates this horizon (on a 100% basis) to contain 1.4 billion barrels of oil in place (OIP) and a Prospective Resource (Recoverable) of 341 million barrels of oil (MMBO) as a most likely case. The Company has modelled an illustrative development plan(1) for this zone with 62 producing wells, exploiting 247 MMBO of this resource, and using the WTI current forward price curve, yields a potential NPV10 of over US$1.48 billion, with NPV per barrel of $6.00 and an Internal Rate of Return of 55%."

 

 

Summary:

Add these two amounts together gives a NPV10 (net present value of future revenues streams discounts at 10%/year) of $2.7B + $1.48B = $4.18B

 

The company owns 90% of this asset. = $4.18B * 0.9 = $3.7B

 

Divide this by the market cap (from above $292M) = 12.8

 

 

The main risk, as I see it, is that they drill and find no oil. In which case the share price will presumably collapse.

However a company (Great Bear Petroleum) that they had purchased last year to obtain the lease, had spent $200M on surveys.

 

The rights issue they did last week raised $30M. They are spending this in January 2021 to drill:

https://www.lse.co.uk/rns/PANR/contract-for-a-drilling-rig-for-talitha-a-well-woan8g5tgfaa0a4.html

" is pleased to announce the execution of a rig contract with Nordic Calista Services (a wholly owned subsidiary of Calista Corporation), to drill the Talitha #A well on our Talitha Unit, with operations expected to commence in January 2021"

 

This rights issue, made on the new PrimaryBid mobile platform (officially endorsed by the London Stock Exchange) was three times oversubscribed. Indeed I tried to buy equivalent $10K of stock, but was only given $3K.

Shares puchased in this way come avaiable to shareholders tomorrow (26th Nov 2020).

 

https://www.lse.co.uk/rns/PANR/result-of-capital-raise-25osrdtnfcag3hd.html

 

The company has only around $17M of debt.

Edit: I was wrong, the company in fact has ZERO debt - thanks to a couple of forum members who corrected me.

 

In the words of the (admittedly biased) CEO Jay Cheatham, it is the best opportunity he has had in the past 40 years working in the oil industry.

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