First production at Texas asset transforms Pantheon Resources into full-cycle energy and power business

Oil and gas exploration firm Pantheon Resources announced "another year of progress" in its full-year results on Wednesday, as it completed the transition from a pure-play exploration company to a full-cycle energy and power business.

Pantheon, which completed first production in November, reported that operating losses widened from $1.36m to $1.74m over the twelve months leading to 31 June.

But after a successful $12.5m fundraise in July to accelerate the programme's development, the firm had managed to boost its cash on hand to $11.7m as of 21 November, ahead of the $4.43 it held at the end of the 2016 financial year.

The group said it witnessed "continued demonstration" of the resource potential at its East Texas asset after a commercial discovery in its VOBM#3 well and the discovery of two new potentially significant horizons in the VOBM#4 well.

Pantheon had expected to receive first production receipts from operations between late December and early January 2018.

Jay Cheatham, chief executive, said, "The period since the beginning of the year has been one of progression which has seen us continue to demonstrate the resource potential of our acreage in East Texas, which included a commercial discovery in the VOBM#3 well and the discovery of two new horizons in the VOBM#4 well.

"Additionally, Pantheon achieved the key milestone of first production in November 2017, with first cashflows to follow shortly. We also increased our working interest in both counties; in Polk County from 50% to 58%* and in Tyler County from 50% to 75% in the VOBM#4 well, with an option to move to 75% over a larger area in Tyler County," he added.

Pantheon's "clear objective" for the 2018 financial year was to accelerate drilling, with plans to spud an additional conventional Eagle Ford sandstone early in the new calendar year as it "doggedly" pursued its goals of maximising assets while minimising equity dilution.

"Although our drilling and development programme has not progressed as quickly as we had hoped, our confidence in the geological potential of our acreage is undiminished. As production ramps up, we will be generating cash as we head into 2018 with an exciting portfolio of high-quality prospects which should manifest into an active drilling period ahead," Cheatham said.

As of 1530 GMT, shares had fallen back 4.66% to 56.25p.