Pantheon Res Regulatory News (PANR)

Pantheon Resources plc

Unaudited Interim Results for the six months ended 31 December 2012

Pantheon Resources plc ("Pantheon" or "the Company"), the AIM-quoted oil and gas exploration company active in Louisiana and Texas, presents its interim results for the six months ended 31 December 2012.

At Pantheon's AGM held in December 2012, the Managing Director of Vision Gas Resources LLC ("Vision"), Mr Bobby Gray, made a presentation on the Tyler County Project for which Vision is the operator with a 75% interest. During this talk and the ensuing discussion, he expressed his confidence in the substantially increased reserve potential of the Joint Venture ("JV") acreage in which Pantheon holds a 25% working interest. He advised that he hoped that the Kara Farms #1H ("KF#1H") well would commence drilling during first quarter 2013. He also stated that this intention was contingent on two key factors; completion of the restructuring of the JV and availability of a suitable rig.

Over recent weeks the restructuring has moved forward positively with Pantheon taking a prominent and active part. The Group has been in the forefront of introducing potential new partners to Vision for entry into the JV although this restructuring will not impact upon Pantheon's 25% interest in the Tyler County Project. Discussions with two parties are now at an advanced stage. While these negotiations are by nature complex, with extensive geological and geophysical due diligence requirements, the prognosis is that they should be concluded satisfactorily in the second quarter. It is the current plan to commit to a rig and then drill the KFH#1 well immediately on finalisation of the restructuring of the JV.

The second stated condition for the commencement of drilling was the availability of a suitable rig. Concomitant with this were an experienced, high quality crew to manage the anticipated well conditions and some further reduction in rig rates. Circumstances have been moving in the JV's favour on both rig rates and commodity prices. As part of the restructuring negotiations, Vision has indicated that currently a rig may be on location possibly within 40 days of a request for mobilisation. The strengthening of the US natural gas price over recent months further underpins Pantheon's confidence in the Tyler County Project's economics.

Financial Review

For the period ended 31 December 2012 the Group made a loss from continuing and discontinued operations of £339,471 (unaudited) compared with a loss of £359,910 (unaudited) for the equivalent period of last year.

Cash and cash equivalents as at 31 December 2012 were £1,696,804. Additionally, the Group has prepaid USD2.975 million in back costs and direct costs towards the KF#1H well and is funded to complete this well. In the event of success, up to USD2.5 million of this may be repaid to the Group. The Group has no debt.

Further information:

For further information on Pantheon Resources plc, see the website at: www.pantheonresources.com

Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE PERIOD ENDED 31 DECEMBER 2012

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE PERIOD ENDED 31 DECEMBER 2012

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE PERIOD ENDED 31 DECEMBER 2012

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 30 JUNE 2012

CONDENSED CONSOLIDATED BALANCE SHEET

AS AT 31 DECEMBER 2012

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE PERIOD ENDED 31 DECEMBER 2012

RECONCILIATION OF OPERATING LOSS TO NET CASH OUTFLOW FROM OPERATING ACTIVITIES

NOTES TO THE FINANCIAL INFORMATION

FOR THE PERIOD ENDED 31 DECEMBER 2012

1. Accounting policies

A summary of the principal accounting policies, all of which have been applied consistently throughout the period, is set out below.

1.1. Basis of preparation

This financial information has been prepared using the historical cost convention. In addition, the financial information has been prepared in accordance with the International Financial Reporting Standards ("IFRS") including IFRS 6, Exploration for and Evaluation of Mineral Resources, as adopted by the European Union ("EU").

This interim report has been prepared on a basis consistent with the Group's expected accounting policies for the year ending 30 June 2013. These accounting policies are the same as those set out in the Group's Annual Report and Financial Statements for the year ended 30 June 2012, which are available from the registered office or the website (www.pantheonresources.com).

The group financial information and statements are presented in UK pounds sterling and is unaudited. This interim financial information does not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006. The comparative figures for the year ended 30 June 2012 have been taken from the Group's statutory accounts for that financial year, which have been reported on by the Group's auditors and delivered to the Registrar of Companies. The auditors' report on those accounts was unqualified, did not contain references to any matters to which the auditors drew attention without qualifying their report and did not contain any statement under section 498 (2) or 498 (3) of the Companies Act 2006.

1.2. Basis of consolidation

Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control ceases. The purchase method of accounting is used to account for the acquisition of subsidiaries by the Group. The cost of an acquisition is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any minority interest. The excess of the cost of acquisition over the fair value of the Group's share of the identifiable net assets acquired is recorded as goodwill. Goodwill arising on acquisitions is capitalised and subject to impairment review, both annually and when there are indications that the carrying value may not be recoverable.

Inter-company transactions, balances and unrealised gains on transactions between group companies are eliminated.

All the companies over which the Company has control apply, where appropriate, the same accounting policies as the Company.

1.3. Foreign currency translation

(i) Functional and presentational currency

The financial statements are presented in Pounds Sterling ("£"), which is the functional currency of the Company and is the Group's presentation currency.

Items included in the Company's subsidiary entities are measured using United States Dollars ("US$"), which is the currency of the primary economic environment in which they operate.

(ii) Transactions and balances

Transactions in foreign currencies are translated into Sterling at the rate of exchange ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the balance sheet date. The resulting exchange gain or loss is dealt with in the income statement.

The assets, liabilities and the results of the foreign subsidiary undertakings are translated into Sterling at the rates of exchange ruling at the year end. Exchange differences resulting from the retranslation of net investments in subsidiary undertakings are treated as movements on reserves.

1.4. Cash and cash equivalents

The company considers all highly liquid investments, with a maturity of 90 days or less to be cash equivalents, carried at the lower of cost or market value.

1.5. Deferred taxation

Deferred tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and expected to apply when the related deferred tax is realised or the deferred liability is settled.

Deferred tax assets are recognised to the extent that it is probable that the future taxable profit will be available against which the temporary differences can be utilized.

1.6. Exploration and development costs

The Group follows the 'successful efforts' method of accounting for exploration and evaluation costs. All costs associated with oil, gas and mineral exploration and investments are capitalised on a project by project basis, pending determination of the feasibility of the project. Costs incurred include appropriate technical and administrative expenses but not general corporate overheads. If an exploration project is successful, the related expenditures will be transferred to Developed Oil and Gas Properties and amortised over the estimated life of the commercial reserves on a unit of production basis. Where a licence is relinquished or project abandoned, the related costs are written off. Where the Group maintains an interest in a project, but the value of the project is considered to be impaired, a provision against the relevant capitalised costs will be raised.

The recoverability of all exploration and development costs is dependent upon the discovery of economically recoverable reserves, the ability of the group to obtain necessary financing to complete the development of the reserves and future profitable production or proceeds from the disposition thereof. When production commences the accumulated costs for the relevant area are transferred from intangible fixed assets to tangible fixed assets as 'Developed Oil & Gas Assets' or 'Production Facilities and Equipment', as appropriate.

Amounts recorded for these assets represent historical costs and are not intended to reflect present or future values.

1.7. Impairment of exploration and development costs and depreciation of fixed assets

Impairment reviews on development and producing assets are carried out regularly. When events or changes in circumstances indicate that the carrying amount of expenditure attributable to a successful well may not be recoverable from future net revenues from oil and gas reserves attributable to that well, a comparison between the net book value of the cost attributable to that well and the discounted future cash flows from that well is undertaken. To the extent that the carrying amount exceeds the recoverable amount, the cost attributable to that well is written down to its recoverable amount and charged as an impairment.

Developed Oil and Gas Properties are amortised over the estimated life of the commercial reserves on a unit of production basis

Exploration and Development costs in relation to the Tyler County Project are accounted for pursuant to the Successful Efforts method of accounting. All direct costs relating to the plugged and abandoned Vision Rice University#1 well have been written off. Accordingly the Intangible Fixed Asset carrying value solely represents back costs and other direct costs paid in relation to the groups projects and prepayments towards the forthcoming KF#1H well.

Other tangible fixed assets are stated at cost less depreciation. Depreciation is provided at rates calculated to write off the costs less estimated residual value of each asset over its estimated useful life as follows:

- Production Facilities and Equipment are depreciated by equal instalments over their expected useful lives, in most cases being seven years.

- Office equipment is depreciated by equal annual instalments over their expected useful lives, being four years.

2. Loss per share

The calculations above have been calculated by dividing the relevant loss classification by the weighted average number of ordinary shares in issue of 102,099,770. The diluted loss per share has been kept the same as the conversion of share options decreases the basic loss per share, thus being anti-dilutive.

3. Discontinued operations note

4. Intangible fixed assets

5. Property, plant and equipment

6. Approval by Directors

The interim report for the six months ended 31 December 2012 was approved by the Directors on 26 March 2013.

7. Availability of Interim Report

The interim report will be made available shortly on the Company's website (www.pantheonresources.com), with further copies available on request from the Company's registered office.

8. Events after the Reporting Period

There were no material events which occurred after 31 December 2012.