Pantheon Resources cuts losses ahead of significant year

Pantheon Resources reported reduced losses in a year where it struck hydrocarbon resources at four wells and began the move from an explorer to a developer on the brink of production.

For the year to 30 June 2016 the group incurred a loss from operations of £0.9m, from the £1.2m loss recorded in 2015.

After the AIM-listed company encountered "significant hydrocarbons" at its VOS#1 and VOBM#1 wells, with encouraging flow rates, first production revenues are targeted for spring 2017.

Cash on hand stood at £17.9m at 30 June 2016 after a placing in March.

With oil prices wavering in a range between $40 and $50 in recent months, Pantheon said the projected economics of its wells continue to point to profitability even assuming low-case pricing scenarios of oil prices below US$30/barrel, thanks to capital and operating costs estimated to be potentially as low as $5 per barell of oil equivalent.

Chief executive Jay Cheatham believes the company is “poised for an outstanding 2017” as production begins and further important drilling results are due.

“Our balance sheet is strong and we continue to improve our understanding and overcome the challenges of developing the complex but high reward geology we are targeting,” he said.

The share price rose 5.91% to 98.50p at 1105 GMT on Wednesday.