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Honestly in all my years investing, today's share price reaction is the funniest thing I have ever seen. Huge opportunity. Unless Alkaid fails, you will never have the opportunity to buy the shares here ever again.
I note that SXEP Oil & Gas index is down 4% this morning, WTI 5%, FTSE 2.1% and S&P futures 0.9%.
Oh ok buddy. Sorry I thought it was you. Must have been someone else.
Hi Goldstinger,
Hope you’re enjoying the Easter weekend. I’ve been asking this question a few times and can’t seem to get an answer. I wondered if perhaps you could help?
Did you see rabbito posting comparing the negative relative porosity and permeability of the pantheon acreage to Pikka? He goes on to make the inference that flow rates will be lower and therefore our acreage cannot be said to be as valuable as the $3.10 Oilsearch paid.
Do you know if, as an oil man, that is a reasonable assertion?
Thanks, Neil. I have asked similar questions based for example on Rabbito's comments on the relatively lower permeability and porosity of our acreage Vs Pikka. His inference is that flow rates will be lower, and so the resources are less valuable. I simply do not know if that is true or not, and I've asked around.
Scot, great post. It seems to me that, for the moment, the farm-in ship has sailed in all probability. The decision coming into the tail end of last year was farm in Vs cap raise. I sense from Justin's remarks they probably would have gone for the "ten digits for a modest minority interest" if the other side hadn't buggered about at the last minute. But they did and there was a cap raise and so now here we are.
The current drilling campaign is fully funded and the Company is not in need of addtional finance until the '23 programme (and then even then, how much? Given cash on hand at 30/Mar/22 was still $72m and CBs can be satisfied in shares at Pantheon election), so Company is not in need of farm in discussions until the end of the year.
In my view Jay and Bob and team have always been very candid that their strategy is "prove and sell". That makes sense to me as if this field is of the scale and prospectivity we all believe it is, it would make little sense for tiny little Pantheon with its very small team to try and acquire the scale and expertise required to drill all the wells required to put the 2.2bn (minimum) into production.
Thus it seems to me that (godwilling drilling continues to go inthe + direction), it is a question for the board at what point the barrels have been proved to be close enough to being declared commercial, and hence multiples more valuable than currently implied by the share price, that they sell at an excellent outcome for shareholders, whilst of course still leaving enough on the table for the buyer.
I would be of the view that the results of this winter's drilling campaign have transformed the nature of any discussions with third parties in that regard.
cringsing: the board has no obligation to inform the market of private offers it receives. If it leaked, and there was an irregular share price movement, the panel would contact them and ask if they knew of anything and if so, the board would make some kind of holding statement.
ha ha ha. Yes still awake buddy. Thanks for that. Hope your fingers are not too sore!
cheers cbaron. Curious for your view. Here we are at around $0.70 / bbl for the 2.2bn. I accept they have not yet proved it can be extracted commercially. But relevant benchmarks if they were able to show that would be the $3.10 Pikka deal, and the company's own estimated NAV of around $9. So to my mind, the market is telling you it is extremely sceptical.
What do you think?
Hello beadle. I think you will find a community of helpful like minded, well informed, pantheon enthusiasts on this board. Although some are not so positive, and niggly fights have a habit of breaking out.
It all comes down to what $ / bbl do you want to put on those estimated 2.2bn bbl recoverable. The company has made great strides in its recent drilling campaign, hence the recent share price performance. But it is not yet in a position to be able to say definitively that this oil can be extracted commercially. So there remains some risk.
IMHO the risks are absurdly skewed in the negative direction and hence I think the stock is a screaming buy. But it will be volatile, and there will be disappointments. This is not a widows and orphans stock. It is a speculative e&p play.
Place your chips!
Scot, what do you make of the post on the other board about the relative porosity and permeability of Pikka vs our acreage? This is the bit where I get above my pay grade as I am not a specialist. Are his figures accurate? And if they are, do they tell us anything about likely flow rates / commerciality?
I think bob's emphatic "YES" at 6:30 mins in was very telling.
TO my mind, still trading at $0.60 / bbl (before the upgrade!) is just bonkers. Mkt is saying 93% chance these fields can't produce. Given the drilling results we have had, that is insane in my view. Help yourself!!
Guys, without meaning to sound condescending, please remember that all trades reflect two people. One who has bought the shares and one who has sold. A trade is not a buy OR a sell. It is both.
Do you know off the top of your head why they are still on AIM? They could move couldn't they? I know there would be some costs involved, but it would allow a broader pool of investors.
Yes, i understand - commerciality has not yet been proven. But if NPV is $9 / bbl, then when (inshallah!) it is, that is what the company should be worth. So at $0.60 the mkt is saying the chance it is not commercial is 93%. Those odds just seem wrong to me.
Thanks for the comment, Seahawk. But if Oilsearch paid $3.10 / bbl, and NPV if commercial (with oil at $70), is $9 / bbl, and profit / bbl with 17% Alaskan roylaties is around $40 / bbl (with oil at $70), how can we now be trading at $0.60 (before the forthcoming upgrade!)? Serious question. I'm just not getting it!!
Honestly, I'm really surprised at some of the negativity.
Before Talitha and TW drilling:
1. We didn't know if the oil was there. We do now.
2. We didn't know if it was high quality. We do now.
3. We didn't know if it was moveable. We do now.
4. We didn't know if it would flow. We do now.
I accept some people may quibble with the exact flow rates. I also accept that it has not yet been proven that the oil can be put into commercial production.
But whatever your success probability was before, it MUST now be significantly higher. IMHO, trading at $0.60 / bbl is a joke.
I think the question is for Pantheon. Jay and the boys have never made any bones about the fact this is a prove and sell situation. So the question for them is. now that they have delivered a high impact, extremely successful (my words) drilling program, so they go and find out what the bid is now? Possibly they could wait for Alkaid too. Or do they think the better balance of risk Vs reward is to go through another drilling season?
If Alkaid, a production well, is successful,will be even more grist to the mill.
I remain of the view that trading at $0.60 / bbl, we are extremely vulnerable to a t/o.
cbaron, I guess the short term question about that is that if, prior to this drilling programme, FO partner was prepared to offer "ten digits" for a "modest percentage", what are they thinking now? Surely Pantheon's negotiating position is much stronger? (imagine if the wells had failed), so I wonder what that conversation looks like now?
More flow is always better - agreed!