Pantheon Resources PLC (LON:PANR) hasn’t waited for Christmas; it has gone out and bought itself some prospects in Alaska.
The oil and gas producer has conditionally agreed to acquire for US$49mln the Great Bear Companies, which have more than 250,000 leased acres onshore on the North Slope of Alaska.
READ Pantheon Resources shares rise as VOS well starts producing
Great Bear's acreage has an estimated P50 technically recoverable resource (Gross) of 2.0 billion barrels of oil.
Pantheon said more than US$200mln has been invested to date in the Great Bear assets to produce in excess of 1,000 square miles of 3D seismic data.
The purchase consideration will consist of a combination of Pantheon ordinary shares, non-voting B shares, cash and warrants. The shares component of the consideration will be capped at 100mln ordinary shares, with the remainder comprising the B shares.
Pantheon is intending to raise a minimum of US$16mln through the placing of shares at no less than 15.25p a share.
The funds raised will go towards the financing of a flow-test of Great Bear's Alkaid well, commencing in the first quarter of 2019, plus participation in an exploration well in the Winx prospect; the company also plans to drill a sidetrack on the VOBM#1 discovery well in East Texas, which has been compromised by a collapsed casing.
Following the acquisition and the capital raising, the existing Pantheon shareholders will own, in aggregate, around 43% of the enlarged share capital of Pantheon.
"I am extremely pleased that we have the opportunity to bring such quality assets into Pantheon, and to complete a significant fundraise in extremely difficult market conditions when other transactions are being pulled,” declared Jay Cheatham, the chief executive officer of Pantheon.
“The fund-raise provides capital for an incredibly impactful winter testing with three significant wells, in both East Texas and Alaska. In addition to the geological prospects, the transaction delivers a very talented and experienced team who bring the added benefit of adding to our East Texas knowledge,” he added.
The company also released its results for the year to the end of June, which management admitted was a mixed year for the company.
The period marked the company’s transition from an exploration company to a producer, as evidenced by revenues of US$1.01mln, up from zero the year before.
A US$6.8mln non-cash impairment of intangible assets put a serious dent in the bottom line, with the company posting a loss from operations of US$8.75mln, compared to a loss the year before of US$1.74mln.
The company ended the period with cash and cash equivalents of US$3.4mln, down from US$4.4mln the year before.
"During the year we maintained progress towards our stated objective, but it was not without challenges,” Cheatham acknowledged.
“Operational difficulties and mixed quality of service providers all contributed to hampering the rate of progress made during this time; however, we have strengthened the operational and technical capabilities of the company.
“Looking forward, the plan to buy 2/3 of Vision allows Pantheon to take control of the operatorship and direction of the project. I now believe that we are in a superb position to deliver on the company's long-term strategy,” Cheatham said.
The shares were the third worst performers in London in early deals, down 8.6% at 16p.