Pantheon gets $1.5m from shareholder as it seeks funding solution

Pantheon Resources has entered into a short-term draw down facility of $1.5m with an existing shareholder, it announced on Wednesday.

The AIM-traded firm previously announced that it must complete either a farmout or funding in the fourth quarter of 2021 to have sufficient resources for the expected winter drilling and testing campaign, and for ongoing working capital.

It said it was “actively engaged” in negotiations for a potential farmout, as well as other options, to ensure it was funded.

The company said it was “optimistic” about completing its financing objectives this quarter, in line with guidance, although the board cautioned there could be no guarantees of a successful outcome.

In the interim, to minimise the potential for disruption or delay to the expected operations, Pantheon said it had entered into a short term facility, which would enable it to make certain prepayments to suppliers and contractors for equipment, goods and services relating to the intended winter programme on its Alaska North Slope projects early enough to minimise the risk of supply chain disruption.

The facility was for a maximum of $1.5m, was unsecured, carried an interest rate of 10% per annum on amounts drawn down, and could be repaid in full at any time at the company's election.

{antheon said the impact of the Covid-19 pandemic on global supply chains was a “well-documented phenomenon”, affecting a number of industries including the oil and gas sector.

As a result, it said lead times for equipment and consumables required for its winter drilling season in Alaska had lengthened over the last 12 months.

“It is important that key equipment and materials can be ordered soon to minimise the potential for supply chain disruption to drilling operations,” the board said in its statement.

The company planned - subject to funding - an “active work programme” to test all untested zones of the ‘Talitha A’ well, and to drill at least one other well at either Alkaid or Theta West.

It said the necessary permitting applications had been submitted to the Alaskan authorities “in good time”, with the firm lining up the contractors and supplies required to complete the programme in its entirety.

The board confirmed that it had, subject to funding, secured the services of the Nordic-Calista No.3 rig and crew, as previously used for the drilling and testing of Talitha A.

At the same time, Pantheon said it had continued its technical work to further increase its understanding of the assets ahead of the drilling campaign.

“In line with our previous guidance, we are working to complete our financing this quarter for our forthcoming winter programme,” said chief executive officer Jay Cheatham.

“This facility is a precaution against short term supply issues by ensuring we are prepared as possible for drilling and testing in the new year.

“As always, we must caution that there can be no guarantees until a financing deal is signed.”

At 1545 GMT, shares in Pantheon Resources were down 6.1% at 87.7p.