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Pantheon losses widen as it looks at options for its acreage
Oil and gas exploration company Pantheon Resources announced its interim results for the six months ended 31 December on Tuesday, reporting a loss for the period of $2.57m, widening from $0.87m year-on-year.
The AIM-traded firm said that loss included an impairment charge of $1.83m relating to the costs of the sidetrack of VOBM#4.
It had cash, receivables and prepayments of $5.98m as at 26 March.
Gross production revenue was $0.514m from first production in mid-November to the end of December, with the board also highlighting the completed oversubscribed fundraise of $12.5m in July last year.
On the operational front, Pantheon said that since the first half of the year there had been a period of progressive development.
Despite a number of operational and services based challenges, the board said its strategy to delineate prospectivity across its large acreage position in East Texas and seek a full value exit for shareholders remained unchanged.
It achieved the start of first production in November, and recorded its first period of production revenues.
Pantheon also made a number of "significant achievements" during and after the period, the board claimed, including the commissioning of the Kinder Morgan gas processing facility, closing the heavily-oversubscribed fundraising, and advancing its understanding of the geological model across the basins.
The VOBM#5 well logged 60 feet in the Eagle Ford sandstone, with the company awaiting results from the frac which was due to commence today.
It had "significantly" increased its working interests in the Core Offset prospect in Tyler County, and in the VOBM#5 well in Polk County from 50% to 75%.
Discussions were ongoing with two separate groups to explore the possibility of participating in a Wilcox play on Pantheon's Tyler County acreage, the board added.
Discussions with one group had now extended to the Navarro.
Looking ahead, Pantheon said fracking operations were due to begin on the VOBM#5 well on Tuesday.
Owing to proximity to infrastructure, the well could be tied into the existing gas plant on its success.
Planning was also in progress for the VOBM#6 well in Polk County, at an estimated cost to Pantheon of $2.3m to drill and complete.
"The half year period to the end of December 2017 maintained our progress towards our stated objective but was not without challenges," said CEO Jay Cheatham.
"Operational difficulties, long lead times, mixed quality of service providers and catastrophic flooding all contributed to hampering the rate of progress Pantheon made during this time."
However, Cheatham said the group made "significant" achievements during and after the period including closing a heavily oversubscribed fundraising, commissioning of the Kinder Morgan gas processing facilities, increasing its working interest positions, commencement of first production and corresponding first revenues.
The operator had conducted a large amount of analysis into the production declines announced in January as well, Cheatham reported, with the evidence indicating that the declines were caused by wellbore obstructions and collapsed casing.
"The operational and technical capabilities of the company have been strengthened, building upon the prior period appointments of both Phillip Gobe and Sierra Hamilton with a number of recent appointments, one of which is considered to be a global opinion leader in his field.
"We look forward to progressing with the company's 2018 drilling programme and believe the knowledge we have gained will allow us to achieve our long term strategy."