Pantheon Comments

This is from Mike Walters...a UK based financial commentator....Cant wait for Tyler results!

MW15Dec15 PANR

Every One A Winner

Nothing but good news today from the annual meeting of Pantheon Resources (PANR), the phenomenal winner which has hit two big oil scores out of two in East Texas. Last year, there were one or two at the annual meeting in London. This year? A packed room, and maybe 60 happy punters.

You can read the statement from chairman John Walmsley, and study the updated presentation on the website at www.pantheonresources.com. Chief executive Jay Cheatham expanded on it exuberantly. We are indebted to a poster Scot126 on the ADVFN bulletin board, who has used the Pantheon thread to post two long series of quotations from the meeting at post 6511 and 6519. Read them. Tonwalth has posted the main one on our bulletin board.

No point in trying to come up with new estimates of what it all might mean, other than to say if it all comes together, we could be talking about heavy multiples of today's 126p. There are reports here on December 3, December 4, and December 8 which attempt to sketch in some numbers. They are all guesses, and could all probably emerge as highly conservative, even though we get up to 660p at one point.

Pluck a few quotes out of the meeting, starting with Walmsley saying that there is no intention of diluting shareholders to raise the extra funds needed to speed up drilling.

Then we have - lowest cost production to anyone outside national owned oil companies; very, very high hopes for the second well; we shouldn't hit a dry hole from now on; we should be able to average Pmean forecasts... when cost per barrel of capex plus opex will be closer to $2.50 than $4; P50 payback period per well is 5-6 months; the Tyler target basin is 12 miles long vs Double A being 6 square miles (3 miles times two miles) and I can assure you it's more than one mile wide.

Don't count on this being carved in stone yet. The flow test results, which might just come before Christmas, but might not, are crucial. If they disappoint, Pantheon shares will tumble. Clearly, the best guess from the boys who are involved is that the test results will be good 'very, very high hopes' for the well, says Cheatham. If that is so - and remember, they tested much higher flow rates on the first well than they reported - we should be up and away again.

So many of the projections are based on $40 oil and $2.50 gas, and need to be scaled back. But check the chart on page 12, and look at the figures for higher oil and gas prices. They will not remain depressed forever. Reflect, too, that Cheatham was talking at the agm of averaging Pmean forecasts, more than double the P50 values.

We could still be looking at disappointment. We can never be absolutely sure what is beneath the ground, or what trouble might upset the exploration and production business. But Pantheon appears to be moving towards a near-perfect result. Certainly Cheatham reckons they probably have the geology sorted 'hard to see it going wrong' he says.

It is way beyond my capacity to form a sensible judgement about real value here - but, flow test apart, it is hard to see how Pantheon could not be worth a great deal more from here. Hold tight.

I have a holding in Pantheon Resources.

Ends