Pantheon cuts salaries as it continues to seek Alaska farm-out partner

East Texas and Alaska Slope-focussed oil and gas exploration company Pantheon Resources updated the market on Tuesday, saying that in response to recent global events that had negatively affected its sector’s outlook, it was reviewing its entire business to reduce non-essential costs.

The AIM-traded firm said it had implemented a 20% reduction in salaries across the company, which would last until such time as the board considers appropriate.

It said the measures, together with its “healthy” cash balance and lack of debt or work programme commitments, meant Pantheon was “resilient”.

The company said it was still seeking a farm-in partner for its Alaskan projects, where more than $200m had been invested, to pay a “meaningful” up-front cash component as well as carried terms on future drilling.

“While the oil and gas industry is presently facing serious challenges, the oil price decline has cast a spotlight on oil and gas assets that make sense in a low oil price environment,” said chief executive officer Jay Cheatham.

“The significant achievements we have made since the beginning of last year give me confidence that our Alaskan assets become even more attractive to many oil companies as we estimate that our modelled breakeven costs are lower than most of the industry.

“This is a result of our Alaskan asset's significant size and scale, being conventional - as opposed to unconventional - oil, its onshore location adjacent to infrastructure and can be brought onstream rapidly.”

Cheatham said he believed that the projects were material for “any” oil company.

Despite that, travel restrictions and the oil price fall would “undoubtedly impact” the due diligence efforts of some companies, Cheatham added, including their ability to visit its Houston data room, so the company needed to be prudent with its capital.

“These cost cuts allow us additional running room well into next year should farm-out discussions unexpectedly drag on.

“For the avoidance of doubt, our actions should not be interpreted that our farm-out efforts have stalled, rather we are acting sensibly given present global uncertainties.

“In fact, I am happy to report that we have received a number of enquiries from globally significant groups over the past month expressing interest in our projects, as well as favourable coverage in the US press.”

At 1550 BST, shares in Pantheon Resources were down 9.37% at 15p.