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  • Writer's pictureMark Watson-Mitchell

Pantheon Resources – CEO comes out fighting and looks for significant improvement

It seems as though Jay Cheatham, the CEO of Pantheon Resources (LON:PANR), has come out fighting this morning.


In announcing the company’s interim results for the six months to end December 2022 showing a $1.6m loss, he has also given operational highlights since the half-year end.


The £189m capitalised company is focused on several large projects located on the North Slope of Alaska, onshore USA, where it has a 100% working interest in 153,000 highly prospective acres with potential for multi billion barrels of oil recoverable.


Pantheon’s primary assets include two major oil appraisal and development projects named Greater Alkaid and Talitha, which have both been drilled and proven oil-bearing.


Wood Mackenzie has described Pantheon's Theta West #1 well as "the fourth largest discovery well globally in 2022", while assessing Theta West as a contingent resource requiring additional drilling and testing before potentially being considered commercial.


Pantheon’s near-term focus is to prove the reserve and commercial potential of its discovered resources at Greater Alkaid and Talitha where the company believes a world class resource has been discovered.


This includes discovered and tested light oil at Greater Alkaid and discovered light oil at Talitha in both the Brookian and Kuparuk formations.


Recent work has continued to upgrade the resource potential in these two oil accumulations.


The Talitha Area Unit (44,463 acres) and the Alkaid Unit (22,804 acres) are near each other and are located adjacent to both the Trans Alaska Pipeline System and the Dalton Highway approximately 20 miles south of the Prudhoe Bay Unit, and 25 miles southeast of Kuparuk River Unit, which are two of the largest conventional oilfields in North America.


All of its operations are onshore USA, with drilling costs materially below that of offshore wells.


Pantheon's projects have the potential to be a nationally significant oil resource in a safe jurisdiction onshore USA.


A major differentiator to other ANS projects is its close proximity to transport and pipeline infrastructure which offers a significant competitive advantage to Pantheon, allowing for materially lower capital costs and much quicker development times.


CEO Jay Cheatham defended his company’s lower share price:


"We do understand that Pantheon's share price has suffered, as a result of a number of factors including the results at Alkaid which represents less than 4% of our resource, social media mistruths, a lower oil price, and rising interest rates.


I reiterate again to shareholders that we see great potential in the Alkaid project. We know the flow test result was impacted because our fracks intercepted a gas cap. We will adjust for this in future wells by positioning them a little deeper and would expect to see significant improvement.


Alkaid #2 was designed as a test well to gain data to optimise future wells. This is industry standard practice - at Prudhoe Bay, America's largest oilfield and only 20 miles north of us, the initial wells were dry holes!


Alkaid was anything but a dry hole; far from it, our modelling points to Alkaid being a potential commercial development."


Analyst Opinion - downgrade


Analyst Charlie Sharp at Canaccord Genuity earlier this month expressed some disappointment in the recent Alkaid #2 production rates.


He raised his risk profile on the group and downgraded his Target Price from 250p to 205p for its shares, which were then 53p.


In early dealings the shares are steady at 23.30p.

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