Pantheon Resources PLC (AIM:PANR, OTCQX:PTHRF) has agreed to issue US$30.5 million and US$35 million of three-year senior convertible bonds to repay existing bonds and for working capital.
The bonds, due March 2028 and with a coupon of 5.0% per annum, are being issued to Hong Kong-listed financial institution Sun Hung Kai & Co.
Pantheon, which also appointed a new CEO today, said the proceeds will allow the repayments of the outstanding principal of $12.25 million principal remaining on the US$55 million senior unsecured convertible bonds due 2026.
The remaining proceeds will be used for general corporate purposes including additional costs for flow testing of the Megrez-1 well resulting from additional high-potential zones identified; and continued marketing activity for strategic investment into the company's assets.
Executive chairman David Hobbs 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."
Pantheon said it continues to focus on advancing both the Ahpun and Kodiak projects towards final investment decision, currently finalizing testing plans and modelling planned flow rates, recognizing constraints on oil storage and physical equipment limitations.
An update before the start of testing will be provided in the coming fortnight, it added.