Pantheon Resources plc Regulatory News (PANR)

31 Mar 2008 07:01

Pantheon Resources PLC31 March 2008 31 March 2008 Pantheon Resources PLC Interim Results for the 6 months ended 31 December 2007 Pantheon Resources, the AIM-listed oil and gas exploration company active in theGulf of Mexico, is delighted to announce its interim results for the periodended 31 December 2007. CEO, Jay Cheatham commented: "The last six months of 2007 were exciting times for Pantheon Resources plc ("Pantheon"). Pantheon participated in three discoveries with the two mostsignificant being Wilson and Dunn Deep #2 both coming on stream during theperiod. As a result, Pantheon's gross working interest ("WI") production rosefrom 80 thousand cubic feet a day ("mcfd") in the April to June quarter 2007 to1,100 mcfd average in the October to December quarter 2007. Production inJanuary and February averaged 995 thousand cubic feet a day. In addition,Pantheon raised £900,000 through a placing of 1.5 million shares withinstitutional investors. These proceeds, along with cash flow from production,provided additional working capital to contribute towards Pantheon's currentSouth Louisiana drilling Programme. With production and revenue imminent, the Board of Directors strengthened theBoard with the appointment of John Walmsley as a non-Executive Director, andcommenced a formal executive search for a CEO. John brings over 30 yearsexperience in the UK oil and gas sector to his duties as a Board member. InJanuary 2008, I joined the Company as CEO. I started my career as an engineerwith Arco in 1969, however my oil and gas experience started from a very earlyage, as both my father and grand-father were independent oil and gas explorersand producers in Louisiana and Texas. I ended my Arco career as President ofArco International Oil & Gas after several years running the Gulf Coastexploration and production operations. Since I joined the company, Pantheon Resources has had a major disappointment.On February 21 Petro-Hunt LLC ("Petro-Hunt") abandoned the Fay Weil Ross et al #1 well on the Nottoway prospect. This was due to mechanical difficulties afterthe drill pipe stuck twice before reaching the final objectives. Petro Hunt willconduct a review of this well before making further recommendations. Petro-Hunt has now spudded the State Lease 19255 et al #1 well (the Point Clairprospect) which was part of the original Nottoway Dome farm-in. Point Clair hasa best estimate reserve potential of nine million barrels oil equivalent ("mmboe"). The last drilling report had this well drilling below 11,100 feet.Petro-Hunt should reach total depth in early April on a trouble-free basis.Pantheon has a 7.5% WI BPPO ("before project payout") carrying the farmeecompany for 25% (pro-rata share) until project payout. Pantheon's next highimpact well, Bullseye (Pantheon 15% WI), should spud in April. Bullseye willtest two zones with a combined best estimate potential reserve of 19 mmboe. Since the start of 2008, Pantheon also elected not to participate in the ManzanoDeep project on Padre Island. This was due to an increase in the risk profileand commercial terms compared with other opportunities. On the personnel front Bob Rosenthal decide to stand down as a Board member andtechnical director. To bolster our technical expertise Pantheon has hiredLedgerock Energy Consulting to provide geologic and geophysical consulting tothe company. Dr Ed Duncan is President and Technical Director of Ledgerock. Edbrings 30 years experience in the industry most recently as Vice PresidentExploration for Swift Energy Company. In closing I want to assure shareholders that your Board is working hard toenhance shareholder value in these volatile market times. We are currentlyreviewing several high impact opportunities that, if successful, have theopportunity to move Pantheon Resources to another level." In accordance with the AIM Rules, the information in this report has been reviewed and signed off Jay Cheatham, who has over 30 years relevant experience within the sector. For further information on Pantheon Resources plc, see the website atwww.pantheonresources.com - end - Further information: Pantheon Resources PLCJay Cheatham, CEO +44 20 7484 5359 Oriel Securities LimitedScott Richardson Brown +44 20 7710 7600 Notes to editors: Pantheon Resources plc Pantheon Resources plc was formed in 2005 to be an independent gas explorationcompany focused on hydrocarbon producing basins onshore or near shore the Gulfof Mexico. On 5 April 2006, Pantheon was admitted to the AIM, havingsuccessfully raised £10m from a mix of quality institutional and privateinvestors. Review of Operations Padre Island Dunn Deep #2 (Pantheon WI 7.5%) Production commenced on September 17, 2007. This occurred less than two weeksfrom confirmation of a natural gas find. Initial gross production from thefield was 3 million standard cubic feet of gas per day and 60 barrels a day ofcondensate, equating to approximately 560 barrels of oil equivalent per day. Although located on Padre Island, Dunn Deep is separate from the Padre IslandJoint Venture. It should also be recognised that Dunn Deep is an appraisal/development of La Playa Mid-Frio Unit #1 ("La Playa Deep"). However Pantheondoes not have an interest in La Playa Deep #1. The operator is BNP, a privateTexas-based company. Wilson (Pantheon WI 31.77%) Wilson was declared commercial on June 18, 2007. Production commenced onSeptember 10, 2007. Initial production from the field was 2.5 million standardcubic feet of gas per day , equating to approximately 450 barrels of oilequivalent per day. Testing of two remaining zones was not completed adequately. This was a resultof poor well conditions. The Wilson partners decided that it was better tocomplete the well for commercial production in the bottom zone rather thanpersist with testing operations in poor well bore conditions. This strategy hadthe benefit of avoiding problems further up the well bore. The strong prevailingUS gas prices also represented a major incentive to bring the lower Wilson zoneinto production as soon as possible. Potential reserves in the other zones willbe evaluated further in a subsequent appraisal/development well to be drilledfollowing extended production. Project Wharton The Project Wharton wells generally continue to produce at or aboveexpectations. Baptist ( Pantheon WI 11.25%) Baptist #1 encountered natural gas in April 2007 in both its primary andsecondary objectives. The Baptist #1 well was drilled to test a large Frioseismic amplitude anomaly revealed by the Shell East Graceland 3D (vintage1996). It was brought on stream on June 19, 2007. Caddo (Pantheon 18.75%) Caddo #1 encountered natural gas in a shallow Frio formation (4,470 feet) inOctober 2006. It was brought on stream on February 8, 2007. The Caddo #1discovery is located in an area of mutual interest that covers a large areawhere six other prospects exist. These target comparable Yegua and Frioanomalies, but Miocene objectives are also present in all of them. The Caddowell was abandoned when production levels dropped and the well became uneconomicto produce. Mohawk (Pantheon 18.75%) Mohawk #1 was a discovery in October 2006 and brought onstream on December 1,2006. Mohawk #1 encountered natural gas in both its primary and secondary Frioobjectives. Zebu (Pantheon 9.375%) Zebu #1 was a discovery in August 2006 and commenced production on September 29,2006. Zebu discovered natural gas in two Frio sands. It produced from the deepersecondary zone at around 4,280 feet until December 2007 when this lower zone wasdepleted. At that time Zebu was recompleted in the main objective at 3,750feet. Nottoway (Pantheon 7.5% WI BPPO) The Fay Weil Ross et al #1 well commenced drilling in Iberville Parish,Louisiana in October 2007. The well was scheduled as a 15,498 feet test of theNottoway Prospect, a geological feature unknown until a new 3D seismic surveywas shot in late 2005. The operator is Petro-Hunt, L.L.C. ("Petro-Hunt"). The Nottoway Prospect is located between two existing oil and gas fields, WhiteCastle Dome and Laurel Ridge. Deeper exploration was undertaken on both fieldsin 2006. New discoveries were made in both White Castle Dome and Laurel RidgeField in the deeper Oligocene section in 2006. Similar zones are objectives inthe Nottoway Prospect. The well was drilling at 13,894 feet measured depth. Very high pressure wasencountered at one of the deeper objectives. While trying to control the well,the drill pipe became stuck in the hole. After consultation, Petro -Hunt LLC,the Operator, elected to come back up the hole, set a cement plug, sidetrack thewell and drill to the original objectives. While re-drilling in the sidetrack,the drill pipe became stuck again and Petro-Hunt decided to abandon the well.The well was abandoned for mechanical purposes only. Pantheon is participating with a 7.5% working interest ("WI"), carrying thefarm-out companies for a 25% back-in after project payout ("BIAPPO"). All costswill be recovered by Pantheon prior to back-in by the farm-out partners and norevenues will be received by these companies until Pantheon attains payout. CONSOLIDATED INCOME STATEMENTFOR THE PERIOD ENDED 31 DECEMBER 2007 6 months ended 31 6 months ended 31 Year ended December 2007 December 2006 30 June 2007 (unaudited) (unaudited) (audited) £ £ £ Turnover 171,640 6,823 23,693Cost of sales:Production costs (18,851) - (877)Depreciation, depletion and amortisation (370,302) - -Total cost of sales (389,153) 6,823 (877) Gross (loss)/profit (217,513) 6,823 22,816 Administrative expenses:Share based payments (50,700) (487,540)Impairment of intangible assets (341,860) (3,260,859) (4,438,420)Other (262,823) (444,240) (427,679)Total administrative expenses (655,383) (3,705,099) (5,353,639) Operating loss (872,896) (3,698,276) (5,330,823) Finance revenue 12,841 149,833 235,789 Loss before taxation (860,055) (3,548,443) (5,095,034) Taxation - - - Loss for the period (860,055) (3,548,443) (5,095,034) Loss per ordinary share - basic and diluted (note 2) (5.41)p (22.82)p (32.76)p All of the above amounts are in respect of continuing operations. CONSOLIDATED STATEMENT OF CHANGES IN EQUITYFOR THE PERIOD ENDED 31 DECEMBER 2007 Share Share Retained Currency Equity Total capital premium earnings reserve reserve £ £ £ £ £ £GroupAt 30 June 2007 155,524 9,698,748 (5,434,548) (234,275) 649,053 4,834,502Net loss for the period - (860,055) - - (860,055)Foreign currency - - - 44,894 - 44,894Share based payment - - 50,700 50,700Proceeds from issue of 15,000 885,000 - - - 900,000shares (note 5)Share issue costs (61,313) - - - (61,313)At 31 December 2007 170,524 10,522,435 (6,294,603) (189,381) 699,753 4,908,728 CONSOLIDATED BALANCE SHEETAS AT 31 DECEMBER 2007 31 December 31 December 2006 30 June 2007 2007 (unaudited) (unaudited) (audited) £ £ £Fixed assetsIntangible fixed assets (note 3) 811,190 911,074 3,792,161Tangible fixed assets (note 4) 3,606,247 2,077 249,566 4,417,437 913,151 4,041,727 Current assetsTrade and other receivables 164,356 125,253 69,049Cash and cash equivalents 753,969 5,348,887 1,447,432 918,325 5,474,140 1,516,481Creditors: amounts falling due within one year 427,034 259,463 723,706Net current assets 491,291 5,214,677 792,775 Total assets less liabilities 4,908,728 6,127,828 4,834,502 Capital and reservesCalled up share capital 170,524 155,524 155,524Share premium account 10,522,435 9,698,748 9,698,748Retained losses (6,294,603) (3,887,957) (5,434,548)Currency reserve (189,381) 161,513 (234,275)Equity reserve 699,753 - 649,053 Shareholders' funds 4,908,728 6,127,828 4,834,502 CONSOLIDATED STATEMENT OF CASH FLOWSFOR THE YEAR ENDED 30 JUNE 2007 6 months ended 6 months ended 31 Year ended 31 December December 2006 30 June 2007 2007 (unaudited) (unaudited) (audited) £ £ £Net cash (outflow)/ inflow from operating activities (501,667) (854,302) (279,631) Cash flows from investing activitiesInterest received 12,841 149,833 235,789Expenditure on tangible fixed assets (499) (2,769) (2,769)Net funds used for other capital expenditure (1,059,989) (2,353,574) (6,536,068)Net cash inflow from investing activities (1,047,647) (2,206,510) (6,303,048) Cash flows from financing activitiesProceeds from issue of shares 900,000 - -Issue costs (61,313) - -Net cash inflow from financing activities 838,687 - - Net decrease in cash and cash equivalents (710,627) (3,060,812) (6,582,679) Effect of foreign currency translation reserve 17,164 - (379,588) Cash and cash equivalents at the beginning of the period 1,447,432 8,409,699 8,409,699 Cash and cash equivalents at the end of the period 753,969 5,348,887 1,447,432 RECONCILIATION OF OPERATING LOSS TO NET CASH OUTFLOW FROM OPERATING ACTIVITIES 6 months ended 6 months ended 31 Year ended 31 December December 2006 30 June 2007 2007 (unaudited) (unaudited) (audited) £ £ £Operating loss (872,896) (3,698,276) (5,330,823)Impairment 341,860 3,264,552 4,438,420Depreciation 370,648 692 22,027Cost of issuing share options 50,700 - 487,540Decrease/(increase) in trade and other receivables (95,307) (15,348) 40,858Increase/(decrease) in creditors (296,672) (405,922) 62,347 (501,667) (854,302) (279,631) This information is provided by RNS The company news service from the London Stock Exchange