Member Info for Scot126

[Part 2, continued from part 1 below]

• Valuation: According to Pantheon Resources’ statement, Cawley Gillespie & Associates have estimated that the success-case valuation of the 2C development case (excluding any value for gas monetisation) amounts to $1.74 billion (NPV10), equating to a value of $6.17/barrel of liquids. That valuation, and the associated resource recovery, has potential to increase under a more intensive drilling scenario: For reference, Pantheon Resources estimates that switching to a wine-rack style drilling pattern has potential to increase the liquid recovery by 80 million barrels (with well placements in the productive reservoir comparable to bottles of wine in a rack vs. the flat well placements assumed by Cawley Gillespie & Associates).

• Growth of US shale oil production: In respect of US shale oil production growth, for 2024, according to Bloomberg: “Many analysts are predicting an increase of less than 500,000 barrels a day, about half the rate of 2023.” Less oil production growth out of the Lower 48 and the eventual plateau and decline of oil production in the Lower-48, will represent a transformational development for oil markets and for the fortunes of oil producers outside of the Lower-48. It is critical to appreciate that the timescales of Pantheon Resource’s developments are very likely to overlay with a period of weaker production potential from the Lower-48. That could have implications for both i) developmental costs, and ii) oil prices.

• WHI View: Viewed from the perspective of having completed a wholistic quantification of the resource potential of the company’s discovered/drilled assets, we believe the announcement represents the culmination of several very significant workflow streams. The company is now poised to advance on the crucial next steps involving resource development planning and the associated preparation of environmental assessments."

Dear All - please see below most of the written commentary from WH Ireland's note, dated 12/6/24.

"Initial Third-Party Resource Estimate for Ahpun Topsets

Pantheon Resources announced yesterday (11 June 2024) that Cawley Gillespie & Associates’ Initial 2C Resource Estimate for the Ahpun Topsets amounts to 282 million barrels of recoverable liquids (gross), consisting of 54% oil and 46% natural gas liquids (“NGLs”). Inclusive of 803.5 bcf of natural gas, the total 2C resource estimate for the Ahpun Topsets as estimated by Cawley Gillespie & Associates amounts to 416 million barrels of oil equivalent. We believe that the estimate is of interest in its own right and also because it completes the quantification of the resource estimates for Pantheon Resources’s core assets (Table 1). Therefore, we believe, yesterday’s announcement sets the scene for Pantheon Resources to elaborate a comprehensive developments strategy. Likewise, with this final piece of the puzzle quantified, we are now positioned to assess and provide, in due course, a view on the comprehensive value of Pantheon Resources.

• Background: Formerly labelled the Shelf Margin Deltaic (“SMD”) resource, the Ahpun Field Topset was successfully tested from the Alkaid-2 well in Q4 2023. As a reminder, that well test incorporated the learnings from prior testing and utilised finer mesh at a lower concentration in a slick water stimulation and it resulted in a successful production test and the successful recovery of downhole pressure data/fluid samples. That data was incorporated into the existent broad and in-depth data set for the Ahpun Field Topsets, inclusive of extensive 3D seismic coverage and the results of prior wells.

• Strategic Importance of the Ahpun Topsets: The proximity of Ahpun Topsets to the Trans Alaska Pipeline System and the Dalton Highway make it a natural candidate to kickstart a self-funded growth trajectory, culminating, under a success case, in the complete development of the company’s assets and their full monetisation.

• Project validation: We highlight that Cawley Gillespie & Associates is the latest of a long string of recognised industry experts who have validated the potential of Pantheon Resources’ assets, namely, eSeis (seismic interpretation), SLB (formerly Schlumberger; dynamic reservoir modelling), Baker Hughes (VAS analysis), Netherland Sewell & Associates (resource quantification) and Lee Keeling and Associates (resource quantification)."

[End of Part 1, see above for Part 2]

......I have only one username on lse and it's scot126. Fact.

Canaccord has just published a note. I'll try to copy over the written commentary later but TP is 90p, risked valuation is 97p and the unrisked valuation is 283p.

When is the market going to wake up to PANR??!!

PANR's Alaskan asset just keeps getting better and better.....and more and more "independently validated"!! Properly impressive.

Good to see an NPV figure for the western topsets. Could really do with an asset-wide NPV (from management if need be) so the market is confronted by a) the extent of upside risk and b) the extremely low CoS the market is imputing to the successful development of the asset.

14:44

Brevarthan - I beseech you to increase your short. Do it right now, this afternoon. There's no time like the present. Don't forget to let us know once you've received your sell trade confirmation.

12:31

BOBHOPE - not how it works, I'm afraid. If the downdip portions of these shared reservoirs are not deemed commercial then why in the wide, wide world of sport would anyone invest in those leases. Then again, your username appears to suit your disposition!

11:35

Ddraig - predictably uninformed as usual. Just to nip this unsound narrative in the bud before some members of this forum pick it up and run with it......PANR's gas deal only makes sense from the standpoint that the oil/NGLs/condensate are a viable *primary* commercial proposition. If/when the gas pipeline is built, PANR's associated gas becomes a welcome by-product of the liquids production rather than a liability to be reinjected back into the reservoirs.

This forum should be under no illusion that 88E's gas has, or will have, a commercial value. It would only be of value as an adjunct to commercial liquids production at this stage. Might that change if Stage 2 of AGDC's mission, the LNG export facility, comes to pass? Perhaps, but I doubt it very much.

I "get" how shareholders like to sound off against management when the SP is going down. That said, I find it totally bizarre that none of you appear to hold Dave Wall and Erik Opstad responsible for their wholesale pillaging of 88E. By comparison, Ashley Gilbert is a saint.

Part 2, continued from Part 1 below]

• Relaxation of funding challenge: We believe that the proposed development plan envisioned by the Gas Sales Precedent Agreement would have the effect of alleviating Pantheon’s long-term funding needs by providing line of sight on a straightforward self-funded growth strategy. We note the increased bankability of any project with State of Alaska support that is critical to the state’s energy security. We also note that the envisioned project would lay out a simplified developmental plan for Pantheon Resources, allowing for newly drilled wells to have a multiplier effect, with the value of new wells being recognised via the provision of credit for further drilling. We also believe that the circa $120-150m of capital expenditure required to achieve self-funded growth will be secured with increased ease in the context of the envisioned strategy to alleviate Alaska’s energy crisis.

• Alaska’s Energy Crisis: For background, the population centres of the State of Alaska are supplied with natural gas from the Cook Inlet; however, that source of supply is in decline leaving the state in a precarious situation of having insufficient energy. The issue is particularly critical for Alaska where the winters are dangerously cold.

WHI View: We believe the announcement is significant because it makes Pantheon Resources a strategic partner with the State of Alaska, which in our view, will significantly favour project funding in several ways. We recognise the severity of the energy crisis in Alaska. We see today’s announcement as a critical development in a context where it takes bold first steps around which a greater project can take form. The State of Alaska is clearly taking charge of the situation and in doing so making Pantheon Resources a critical partner. In time, the proposed strategy would, inevitably, in our view, lead to a full-scale LNG export project." /end

Dear All - please see below the Morning Comment from WH Ireland, dated 5/6/24.

"Pantheon Resources

Signature of Gas Sales Precedent Agreement with AGDC

Pantheon Resources announced it has entered a Gas Sales Precedent Agreement with the Alaska state owned Alaska Gasline Development Corporation (“AGDC”), which is leading the development of the Alaska LNG Project. We are at once surprised by the announcement and the extent to which Pantheon Resources has become a key strategic partner for the State of Alaska. We view the development as a critical and positive achievement for Pantheon Resources.

• Alaska LNG: For reference, the Alaska LNG Project is a federally authorised integrated natural gas and LNG export project under development to deliver natural gas within Alaska and to export up to 20 million tonnes per annum of LNG. The project involves a first phase, envisioned to consist of the pipeline component as early as 2029 to address Alaska’s energy crisis.

• Key Terms: The company stated that the Gas Sales Precedent Agreement contains key commercial terms to be incorporated into the binding take-or-pay Gas Sales Agreement to take effect after FID; including that Pantheon Resources agrees to supply up to 500 mmcf/d of natural gas at a maximum base price of $1 per mmbtu in 2024 dollars; the initial term of the gas sales agreement will be 20 years.

• Implications for Ahpun: In conjunction with the development, Pantheon Resources announced that it is envisioning increasing the scale of the Ahpun development (from a circa 40,000b/d liquids development) to capture a total aggregate resource potential of 900 mmb of ANS blend liquids and 4.5 tcf of pipeline quality natural gas (potentially a circa 6x increase in scale), subject to the successful appraisal of Ahpun’s Eastern Topsets. In conjunction with that increased scale, the company believes that the scaled-up project may require an Environmental Impact Assessment (vs. the Environmental Assessment under the National Environmental Policy Act), which would extend the timescale of the project between two and three years, most likely pushing production start up to 2028, according to the company.

• More newsflow forthcoming: The company indicated it intends to provide a further update by the end of June in relation to the planned progress towards Final Investment Decision and an associated funding strategy. Additionally, Pantheon Resources is working with Cawley Gillespie & Associates to finalise their independent resource report on the Aphun Topsets, which should be completed and published in the following weeks, according to today’s update.

• Project validation: The State of Alaska is publicly tying the success of addressing its energy crisis to the resource development of Pantheon Resources’ assets, providing, we believe, another high-profile public endorsement of the company’s assets.

[Part 1 , see above for Part 2]

Dear All - please see below the first reaction from Canaccord, dated 5/6/24. I *understand* a more formal note from the analyst will follow tomorrow.

"Gas sales agreement: Pantheon and Alaska Gasline Development Company (AGDC) has signed a gas sales precedent agreement (GSPA) for the potential sales of large volumes of gas (up to 500 mmcf/d) at low price (max $1/mmbtu) for long term delivery (initial 20 years). For Alaska this has the potential to solve/partially solve its long term gas requirements and at low cost; for Pantheon this has the potential to resolve the challenges of handling large gas volumes, reduce development costs, generate some gas revenue in addition to liquids revenue, and provide a pathway for additional longer term development financing.

Comment: A significant step forward for Pantheon, though still multiple stages yet to be delivered are required to hardwire the potential benefits. But we see three key positive elements for Pantheon:

1. AGDC has reviewed the data so far and we see its participation in the GSPA as validation of the technical work done by Pantheon and confirmation (subject to further technical/operational work) of the potential for large scale gas delivery from Pantheon's licences.

2. The projected delivery of Pantheon gas by pipeline to the Alaskan market can be expected to simplify and reduce the cost of Pantheon's potential developments.

3. The gas anticipated to be delivered looks likely to be priced attractively for the offtaker (expected to be the state of Alaska) with a concomitant pathway to provide funding for the longer-term full scale development."

[scot126 - hmmm, perhaps rather than the SoA itself, the offtakers will be Alaska's two utility companies, plus maybe Nutrien (the fertilizer manufacturer?)]

Https://youtu.be/CJ0ncyKFH7k?si=998ke2ZpeEi4pPAc

so umiat and icewine west are to be divested/leases relinquished. a number of forum members decried my assessment that umiat was worthless, icewine west much the same. there was widespread contempt at my valuation with heaps of wailing and gnashing of teeth. lo and behold, the company is looking to save money by ceasing to pay the annual lease costs on that acreage.

peregrine will be next. it's a stranded asset at best and relies *entirely* on other conoco projects being developed and constructed prior to even considering any further appraisal at that location. plus the geology is highly, highly questionable. 88e shareholders must be delighted with dave wall's decision to **** >us$60m up the wall on that acreage.

but not to worry! dave wall's xcd shareholding was purchased at a significant premium by 88e => received 88e shares in scrip deal only to sell them into the suspiciously organised us otc spike of 2021. and erik opstad's elko (project manager and prime contractor of both merlin wells at peregrine) made two fortunes: completing the merlin wells (at double the budget) and circular invoicing/placings allowing elko to trade the us otc spikes in 2021/22.

they've played 88e shareholders like a stradivarius. and 88e shareholders are still paying dave wall's inyati capital 6% commission on funds raised since he departed 88e in april '21.

can't help recalling olderwiser and rabito79 and scot126 urging uk and aussie shareholders to hold their company officers to account. i think i even wrote content for a letter to the chairman! all we got was personal abuse and threats in return. and forum members who held 88e have lost their socks.

by the way, brom, you never did get back to the forum with an answer to whether erik opstad is still retained by 88e? if not, why not? he was the boss of alaska operations for many years after all. remember you told the forum repeatedly that 88e management always replied to your communications very swiftly? hmmm........it stinks.

[Part 3, continued from Part 2 below]

Now I move on to the most egregious content posted, and repeated, by these two individuals. They both accuse PANR directors of some sort of sleight of hand whereby the shares sold in the market were immediately “replaced” by the issue of new options. This is complete and utter garbage, drivel, gibberish, g0bbledyg00k, twaddle, claptrap, balderdash = made up nonsense.

That these two individuals failed to understand the process is bad enough. That they made it far worse by electing to publish on a public forum their wilful ignorance in the hope that it would support their agenda, such as it is, is contemptible.

Here's the thing, Stas20 and Brom……the exercise of options and ***immediate*** sale of the shares are ***contemporaneous*** actions. There was *no* immediate replacement of the sold shares the same day at a 70% discount, as you would have had other forum members believe. If either of you don’t understand the definition of “contemporaneous” then look it up.

Your ignorance of this process is, I suppose, understandable. The fact you both elected to post your accusations without firstly asking questions of your fellow forum members about the rules of the stockmarket or UK corporate law is clear evidence you vastly overestimate your knowledge of the workings of the equity markets. You have chosen to repeat these false accusations which is bewildering and suspicious. That you have not formally apologised and retracted your scurrilous accusations is deeply dishonourable and reflects very poorly on your values.

Stas20 and Brombarb – I invite you both to apologise for posting on a public forum false allegations concerning the activities of three PANR directors in September ’22. I further request you each post a withdrawal of the baseless allegations you made in multiple submissions to this forum.

I beseech you both to do better by your fellow man. /end

[Part 2, continued from part 1 below]

Ok, so now let’s look at the process which took place in Sept ’22. The three executive directors exercised some of their employee options and sold the shares in the secondary market. For ease, let’s say the exercise price for all the options was 30p and the shares were sold at 125p….nice round numbers which are 2p or 3p away from the actual prices, ok?

Here's what happens. The directors will ask their Chairman/NEDs for permission to undertake the intended transactions. Provided the Chairman agrees the directors aren’t in a closed period (eg. near the publication of statutory financial reports) and that they don’t possess any inside information which, if published, would be likely to alter the market in the company’s securities then permission is granted. The FD, in this case JH, will contact the company’s broker (Canaccord) to handle the sale of the shares (4.2m shares in this case). On settlement day, Canaccord will either send the cash to two separate PANR company accounts or JH will split the monies when sent by Canaccord to PANR.

Let’s say for ease that JH elected to exercise 1000 options, sold 1000 shares @ 125p and the proceeds were £1250 (forget commissions, etc), ok? The exercise price of the employee options was 30p so £300 (out of the £1250 gross sale proceeds) will be sent to the company’s (treasury) account. The remaining £950 will be sent to the company’s payroll account where JH, as a UK resident, will see the £950 sum treated as income for tax purposes and taxed at, say, 50%. Net, net, net, JH will receive £475 (out of the £1250 gross sale proceeds) in his bank account after this process.

The three directors who exercised options and sold stock (it’s a contemporaneous process, legally and process-wise) collectively reduced their total exposure to PANR by between 9% and 13%. I don’t know about other members of this forum but maintaining an exposure of 87% - 91% of my total exposure to a stock is *not* evidence of directors ceasing to be aligned with the wider shareholder base. I would also not characterise such percentage reductions in exposure as “huge” or “substantial” as our two prolific posters would have us believe.

It’s worth recognising that the net cash percentage which each director eventually saw in their personal bank accounts following this specific event was circa 40% of the headline gross sale proceeds. So that’s the first part of this correction sorted, agreed?

[End of Part 2, see above for Part 3]

Dear All - I would never in a month of Sundays dream of advising a dentist how to carry out a root canal treatment. I also wouldn’t dream of advising a toolpusher how to do his job on a rig in the North Sea. The reason for not offering such advice is simple. I am not a dentist. I never trained as a dentist. I'm not a toolpusher on a rig, and never trained in that occupation either.

And yet online public forums permit individuals ignorant of stockmarket rules and corporate finance laws to post not only nonsensical drivel but also content which is in direct opposition to the actual truth. I’m going to highlight below a perfect example of such wilful ignorance; the comical self-confidence of the posters involved; and their willingness to go to extreme lengths to advance their nefarious agendas.

Stas20 and Brombarb are two such posters who have recently become more prolific on this forum.

I wish to address head on some of their outrageous content posted recently. I cannot be blunter when I describe the content in question as being completely and utterly false. False in fact. False in process. False in law.

If, following this factual correction, either of these two forum members elect to repeat their falsehoods on this forum, I will urge every other member to report them for publishing false and misleading information in order to promote a false market in the securities of PANR.

Stas20 and Brom (4th and 13th May) inaccurately described corporate actions around PANR director sales in September ’22. I’m going to describe how this process works in practicality in order to set the record straight and to rebut directly their falsehoods and insinuations. I will then invite these two posters to apologise for misleading the forum on matters of fact, and challenge them to post that they no longer stand behind the content of their posts on the subject. Let’s see if they’ll do the honourable thing, shall we?

Over the course of my career within investment banking, I must have executed hundreds, maybe thousands(?), of director purchases of shares and sales of shares in their company, so called “insider” transactions. In the UK, a company employee designated a PDMR (A Person Discharging Managerial Responsibilities) refers to an individual having authority over the issuer. Folk may have noticed declarations via RNS following share transactions involving such employees? They’re usually directors or very senior management, fyi.

[Part 1, see above for Part 2]

01:05

No, chrisev1, still simply seeking price discovery. The fact that you don't like the content of my posts does not make them inaccurate. It is a statement of fact that the methodology I use has been employed by equity analysts for decades. The reason I know this is true is because I was one and did exactly this for around 25 years.

Enough of the personal nonsense, trying to bully me away from posting here. Why not post your own valuation model? Is it because you lack the capacity to build your own valuation models? Or is it because in so doing and then publishing the conclusions, you would be confirming exactly the point I am making?

[Part 2, continued from Part 1 below]

Revised value per 88E barrel using *downgraded* CoS for SFS (from 50% to 35%) and SMD (from 81% to 40%) due to disappointing Hickory-1 flow test results would see each 88E Phoenix recoverable barrel in the ground valued at 19.1p.

Note that I am not using olderwiser’s “Netherland Sewell shrinkage of BFF” logic as a readacross for the SFS and SMD. Had I applied olderwiser’s analysis, an 88E barrel would be valued well in excess of 25p. I have kept the NSAI BFF P50 estimate at 102mmbo (net of W.I. but pre-royalties.

Bearing in mind the disappointing flow test results I cannot justify an 88E barrel in the ground being valued at *any* premium to a PANR barrel, never mind a premium of 12% - 54%.

For those 88E shareholders who were drawn to 88E to maintain exposure to the Phoenix asset then, *on the fundamentals and maths alone*, the lower downside risk/higher upside risk is to lock in that exposure via PANR equity. Naturally, I appreciate exposure to Project Phoenix may not be the primary motivation for some members of this forum. For those members whose primary motivation is indeed to remain exposed to Phoenix, the maths is incontrovertible. /end

The rationale for undertaking a comparative analysis of 88E and its direct peer, PANR, has illustrated accurately the risk/return inherent in the investment cases of both stocks. The premium value 88E enjoyed when comparing a Phoenix barrel in the ground v’s a superior (geologically) PANR barrel in the ground has decreased markedly following the recent flow test results.

An explanation provided by analysts focussing on the fundamentals of the asset suggests this is due to 88E shareholders belatedly confronting the data-supported, scientifically-consistent assertion that the downdip portion of the shared reservoirs is negatively affected by the effects of Dmax in an already tight-ish formation.

By some miracle however, an 88E barrel in the ground is today ***still valued at a premium of between 12% - 54%*** to a higher classification, commercial PANR recoverable barrel in the ground.

Using Monday’s closing prices of 0.16p for 88E and 29.15p for PANR, please find below an updated comparative valuation of both companies.

Assumptions:

GBP:USD = 1.259

88E SFS CoS = 50%

88E SMD-B CoS = 81%

[In light of the recent flow test results, I assess most analysts would lower significantly the Chance of Success for the SFS and SMD. For the purposes of this exercise, I will retain management’s unrevised guidance. However, I will re-calculate the comparative valuations below using, I suggest, downgraded and more realistic Chances of Success.]

PANR CB outstanding = US$27m

SOTP for 88E:

Namibia £3.13m (acquisition cost including latest US$920k share based payment, insufficient empirical data, option value for now);

Longhorn £6.3m (revalued from total investment of £12.1m due to underperformance of asset);

Leonis £1m (insufficient data, option value for now); Umiat & Peregrine £0 (stranded and poor quality asset).

A downdip, lower classification, questionable commercial 88E Phoenix recoverable barrel in the ground is today valued by the market at 13.9p.

An updip, higher classification, fully diluted, commercially confirmed (management and Schlumberger) PANR recoverable barrel in the ground is today valued by the market at 12.4p.

[Part 1, see above for Part 2]

1/5 @ 10:55

Hi jaffas - agreed ref. director lifestyles. I continue to be flummoxed by the passivity displayed by practically all forum members when it comes to 88E management's refusal to invest a single Aussie dollar in any fundraise since Ashley Gilbert became MD in H1'21 [apart from Dr Staley, but small absolute dollar investment]. It's all the more puzzling because so many forum members find it remarkably easy to post all sorts of flowery invective at olderwiser and me!!

I wholeheartedly agree with you that 88E is not going to be in a position to drill an exploration or appraisal well for the foreseeable future. In fact, I suggest 88E has drilled its last well in Alaska as an operator. I'd go further and suggest that unless Leonis attracts an external partner within the next 4 months, any drilling on 88E's Alaskan acreage will not occur until January '26 at the very, very earliest. For those E&P investors looking for a big impact event to act as a catalyst for the 88E SP, then I fear they are in for a very long wait indeed. And, no, drilling two new production wells in Texas doesn't count!!

There are some on this forum who appear content that the company has raised sufficient capital to keep themselves going for the next 12 months or so. Ok, fine. Let's say the two new wells in Texas deliver on management guidance such that 88E exits CY'24 anticipating a net annual dividend of US$3m from Texas. Forgetting for now the likelihood 88E will have had to use the debt facility to drill the two new wells, an annual dividend of US$3m will allow 88E to stand still....and that's really about all shareholders can reasonably expect without further corporate activity.

If anyone on this forum is expecting a potential farm in partner in Alaska to deliver to 88E anything other than a massive dilution (to the assets) and therefore tiny W.I. percentage then I contend they're being incredibly naïve. Going further still, if anyone expects a future farm in partner in Alaska to pay cash to 88E in recognition of back costs then I want what they're smoking!

1/5 @ 15:00

Dear, oh dear taximan57. I note you're still having trouble comprehending the E&P sector; still having trouble comprehending the distinct investment cases of individual companies within that sector; and definitely still having huge difficulty in comprehending how E&P stocks account for cash spent on activities and how the results from those activities can add or subtract value in the company's equity. Yikes!

Taximan57 - when a company doesn't yet produce and sell its oil/gas and yet is active in the field drilling and flow testing wells then how on earth is that expenditure going to be accounted for other than by declaring a headline loss? I've got to ask, are you intentionally posting facile content or is it an added extra?!