Pantheon Resources PLC (AIM:PANR, OTC:PTHRF) is raising around US$96mln of new funds to tee up the company for a high impact exploration programme in Alaska.
It is raising US$41mln of equity, via an oversubscribed placing, and is issuing US$55mln of convertible bonds.
As a result, the AIM-quoted firm is set to test eight significant exploration targets across three wells slated for 2022.
"Raising up to US$96 million through a combination of equity and convertible debt is a fantastic result, and the fact that the equity raise was substantially oversubscribed is a great show of confidence in our projects by both existing and new shareholders,” said chief executive Jay Cheatham.
He added: “In total we're targeting 17 billion barrels of oil in place and over 2.2 billion barrels of recoverable resource, according to our estimates. Additionally, we now have sufficient funding for additional drilling, testing and completion, and we can evaluate the drilling of a second production well.”
Cheatham highlighted that the new funds mean that Pantheon will have flexibility into 2023 and provides a stronger balance sheet ahead of future farm-out or financing negotiations.
In the share placing, Pantheon is selling 47.6mln news shares at a price of 65p each. The placing was arranged by Pantheon’s nominated advisor and sole bookrunner Canaccord Genuity (TSX:CF, LSE:CF) alongside UK placing agent Olivetree Financial.
The equity raise was expanded by US$3mln due to high demand.
At the same time, the bond issue was also expanded to US$55mln from US$50mln. The bonds carry 4% annual interest and are initially convertible at a 20% premium to the issue price set in the equity raise.
Pantheon expects to spend US$10.7mln on the Talitha discovery - drilled last year - along with US$16.7mln and US$23.2mln on the Theta West and Alkaid projects respectively,
It budgeted US$17.1mln for contingencies and corporate development, prior to the over-funding above the initial US$70mln target.
Cheatham added: “This funding allows the company to fully execute our 2022 programme to assess eight targets across three wells - four targets with the reentry of Talitha #A, and two targets each at Theta West and at our Alkaid 2H development well adjacent to the Dalton Highway and TAPS.
“On success, the Alkaid 2H well will be the first producer for Pantheon on the North Slope, a fantastic milestone.”