Company Number 05385506
Incorporated in England & Wales
PANTHEON RESOURCES PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS
YEAR ENDED 30 JUNE 2024
PANTHEON RESOURCES PLC
TABLE OF CONTENTS
Page
Directors secretary, and advisers
3
Chair’s statement
5
Chief Executive Officer’s statement and operational review
8
Section 172 statement
11
Chief Financial Officer’s report
15
Strategic report
18
Directors’ report
23
Directors’ biographies
33
Independent auditor’s report
35
Consolidated Statement of Comprehensive Income
42
Consolidated Statement of Changes in Equity
43
Company Statements of Changes in Equity
45
Consolidated Statement of Financial Position
47
Company Statement of Financial Position
48
Consolidated Statement of Cash Flows
49
Company Statement of Cash Flows
50
Notes to the Financial Statements
51
Glossary
78
PANTHEON RESOURCES PLC
DIRECTORS, SECRETARY AND ADVISORS
FOR THE YEAR ENDED 30 JUNE 2024
3
Directors
David Hobbs (Executive Chair)
John (Jay) Cheatham (Chief Executive Officer)
Robert (Bob) Rosenthal (Technical Director)
Jeremy Brest (Non-Executive Director)
Allegra Hosford Scheirer (Non-Executive Director)
Linda Havard (Non-Executive Director)
Company Secretary
Ben Harber
Registered Office
Shakespeare Martineau LLP
6th Floor
60 Gracechurch Street
London EC3V 0HR
Company Number
05385506
Auditors
PKF Littlejohn LLP
15 Westferry Circus
London E14 4HD
UK Legal Counsel
Bryan Cave Leighton Paisner LLP
Governors House
5 Laurence Pountney Hill
London EC4R 3AF
Simmons & Simmons LLP
CityPoint
1 Ropemaker Street
London EC2Y 9SS
USA Legal Counsel
Orrick, Herrington & Sutcliffe LLP
401 Union Street - Suite 3300
Seattle, WA 98101
United States
Registrars
Computershare Investor Services plc
PO Box 82
The Pavilions
Bridgwater Road
Bristol BS99 7NH
Principal Bankers
Barclays Bank plc
Level 27, 1 Churchill Place
London E14 5HP
Nominated Adviser
Canaccord Genuity Limited
& Broker
88 Wood Street,
London EC2V 7QR
Communications
BlytheRay Communications Ltd
& Public Relations
4-5 Castle Court,
London EC3V 9D
PANTHEON RESOURCES PLC
DIRECTORS, SECRETARY AND ADVISORS
FOR THE YEAR ENDED 30 JUNE 2024
4
MZ Group
27422 Alison Creek Road, Suite 250
Aliso Viejo, California 92656
United States of America
PANTHEON RESOURCES PLC
CHAIR’S STATEMENT
FOR THE YEAR ENDED 30 JUNE 2024
5
2024 has been a year of solid progress by a Pantheon team committed to delivering success for shareholders. In
September of 2023 the Board adopted a refreshed strategy aimed at achieving sustainable investor recognition of
a value of $5-$10 per barrel of proved resources and low case contingent resources within 5 years - in other
words by late 2028. The past year has reinforced our belief that this is achievable and we remain committed to
our objective of achieving these goals in the least dilutive manner possible.
Refining our Strategy to Commercialise the Growth in the Resource Base
Much of the past year has been focused on consolidating the extraordinary exploration success of the previous
years and laying the foundations on which the strategy’s delivery can be built. It was no small achievement that,
over a three year period, the Company discovered and confirmed two substantial oil fields, Kodiak and Ahpun to
add to the initial smaller scale success of the Alkaid-1 well from prior years.
Today Pantheon’s certified contingent resources stand at 1.6 billion barrels of total marketable liquids (or ‘ANS
crude’) across both major projects, with managements’s pre-drill estimate of 0.6 billion additional barrels of
prospective undiscovered ANS crude from the recently spudded Megrez-1 well. We hope to provide additional
updates on the results shortly.
To maximise shareholder realisation of the value uplift from the recent discoveries, it was necessary to redirect
the Company strategy to be laser focused upon development of the Ahpun and Kodiak projects. We needed to add
the capacity to plan and effectively control the capital programmes, including identifying the engineering,
regulatory and supply chain development aspects. We have continued to build these capabilities and I believe our
brief period of foundation building has ended.
Development Planning and Timetable to First Production
A year ago, the anticipated development plan was based upon early production from the Alkaid Zone using the
improved completion design. The work conducted by SLB (formerly Schlumberger) has established the ability to
produce oil and natural gas liquids (“NGL”) at commercial rates in a single stream to be exported through the
Trans Alaska Pipeline System (“TAPS”) and redelivered at Valdez as Alaska North Slope blend. However, once
serious development planning work was underway, it became clear that it would be impossible to reinject natural
gas into the Alkaid Zone reservoir at sufficiently high volumes over extended periods. Thus the optimum and
earliest production candidate became the Ahpun field’s western topsets, which exhibit 100x better permeability
than the Alkaid Zone, sufficient to overcome the gas reinjection constraint.
The expanded estimated ultimate recovery (“EUR”), and the corresponding surface footprint, of the expanded
project would be unlikely to achieve permitting approval under an environmental assessment (“EA”). Instead this
larger scale project would require the Company to prepare an environmental impact statement (“EIS”), a more
comprehensive and thus time consuming process. Access to TAPS would be required because an early production
scheme based on trucking oil to Deadhorse might not generate positive net cashflows and certainly would not
provide a return on the capital invested. TAPS access would require federal approval based on the EIS.
While the requirement for an EIS leads to a delay of some 18 months to a final investment decision (“FID”) on
the overall Ahpun development compared to the initial plan based on the Alkaid Zone alone, the new timetable
allowed drilling the potential extension of Ahpun to the east of the Sag River and, in the success case, to
incorporate it into the same development approval process. This would add enormous value to Pantheon’s
portfolio, and management estimates that it could potentially bringing the total recoverable oil and gas resources
across all projects to more than 3.5 billion barrels of oil equivalent. First production is now expected in 2028,
which leaves the strategic goal of achieving sustainable value recognition by late 2028 unchanged.
The inclusion of gas into the resource base became feasible following conclusion of a gas sales precedent
agreement (“GSPA”) with the Alaska Gasline Development Corporation (“AGDC”) in June of 2024. With the
prospect of monetising the methane resources, it also became feasible to consider the helium potential revealed in
gas samples in the Theta West-1 well. The presence of helium appears to be unique to the Kodiak Field and
would provide a significant uplift to the asset value if confirmed by subsequent appraisal drilling. We are actively
evaluating plans to incorporate helium rights into the leases and for this to be a potential distinct revenue stream
in the future.
PANTHEON RESOURCES PLC
CHAIR’S STATEMENT
FOR THE YEAR ENDED 30 JUNE 2024
6
Short- and Long-Term Funding Strategy
Since presenting the renewed strategy for developing the Ahpun and Kodiak fields, a key focus for management
has been securing the short term funding of appraisal and pre-development expenditures prior to FID and
accessing long term funding of development expenditures post-FID.
In terms of long term funding, the Company began the year by pursuing a two-pronged approach, exploring the
potential for vendor financing and off-taker financing. During negotiations, it became clear that the cost and
dilution of the vendor financing would exceed that of the off-taker financing and management took the decision
to narrow the focus on monetisation of the natural gas and potential helium resources as a strategy for reducing
the future equity dilution of funding post-FID activity to reach cashflow self-sufficiency.
Recent progress, including the support of the Alaskan gas pipeline project by President-elect Trump and the
Dunleavy Administration in Alaska, indicates that attempting to leverage the gas resources to fund the core oil
field development is a clear path forward for us.
Governor Dunleavy’s memorandum to Members and Members-Elect of the Alaska State Legislature in
November 2024 set out the value proposition very clearly: Alaska LNG Project Phase 1 (the in-state pipeline)
provides superior economics when compared to the alternatives, the full Alaska LNG project will dramatically
lower long-term Alaska energy prices, and the Alaska LNG Project Phase 1 could deliver $16 billion of
additional benefits to the State compared to alternatives. Pantheon is committed to working with the State of
Alaska to ensure these benefits are delivered because its advantaged resources (being low CO2 and with upside
helium potential) place it in a unique position to help secure the development of long term strategic infrastructure.
Over the course of the fiscal year, the Company issued 37 million shares to supportive shareholders through
private placements that maintained liquidity and created optionality on whether to pay the Convertible Bond
(“CB”) holder in cash or shares. The Company was successful in completing a $29 million (before costs) capital
raise, post fiscal yearend, in late July 2024. This provided sufficient funds to commit to drilling the Megrez-1
well and to continue with engineering and other activities to maintain the schedule to Ahpun FID and first
production.
The flexibility afforded by equity issuance both during the fiscal year and afterwards allowed Pantheon to
negotiate with counterparties from a stronger position than would otherwise have been the case. It was a
significant contributor to securing the benefits of the relationship with the State of Alaska and AGDC. In the year
ahead, we will seek to maintain the optionality for incremental capital formation – inclusive of equity, debt or
other strategic avenues that may be available to us – to support any future strategic needs. As always, we will
keep a sharp eye on minimizing dilution wherever practicable.
Shifting the Focus and Building the Foundation for an Initial Listing on a U.S. Senior Exchange
Until last year, the focus was on exploration and appraisal, growing the resource base and positioning the
Company for a possible farm-out or disposal. Under the refreshed strategy, the focus becomes engineering and
operations. In preparation for the planned listing on a senior U.S. exchange, the Company leadership is now U.S.
based. In September, we announced the appointment of Philip Patman, Jr. as the Company’s Chief Financial
Officer following the decision by Justin Hondris to step down from his role as Finance Director. We are delighted
to have been able to retain Justin’s continuing contribution to the Company’s success in his new role as Sr. Vice
President for Finance and International Investment.
We recently announced the appointment of MZ Group – a U.S. investor relations specialists who will help us better
establish Pantheon in the U.S. capital markets – as our Investor Relations Advisor, ahead of a potential listing on a
senior U.S. exchange such as the Nasdaq or the NYSE. Additionally, we are working with two highly respected
investment banking advisors that equip us to reach pools of capital in both North America and Asia that align with
our improving risk and reward profile.
As we ready ourselves to comply with U.S. listing requirements, we have been able to step up the pace of change,
with much of the background preparatory activity now complete. It should be noted that there are no current plans
PANTHEON RESOURCES PLC
CHAIR’S STATEMENT
FOR THE YEAR ENDED 30 JUNE 2024
7
to cancel Pantheon’s listing on the AIM Market of the London Stock Exchange. For as long as the UK market
provides the greatest pool of liquidity and we have a significant base of shareholders invested through the London
market, there is clear value in the listing.
In addition, the Board is being reshaped, towards an intended composition consistent with U.S. financial market
norms, while continuing to meet all UK regulatory requirements. Succession planning for our most senior
colleagues is also underway to prepare for a development program that will extend for years and even decades
after the Ahpun field FID.
Building a Long-Term Incentive Plan to Best Align with Shareholder Interests
In October 2024, the Company announced the closing of its historical incentive schemes and replacement with an
Employee Stock Ownership Plan (“2024 ESOP”) designed to follow the principles, as far as practicable, of the
Main Market of the London Stock Exchange. No awards had been made under the original scheme since January
2022 nor any awards ever under the reserves based plan that was cancelled in 2023.
The 2024 ESOP has reduced the ceiling for aggregate awards to 10% of the issued share capital over a 10 year
period from 15% under the original plan. The terms of the 2024 ESOP and its operation by the Remuneration
Committee of the Board will ensure challenging targets aligned with creation of shareholder value and the initial
grants under its terms demonstrate this determination. Under the 2024 ESOP, 9.5 million Executive Share
Options were awarded with an exercise price nearly 4x the prevailing share price (at the date of the award), with
challenging performance targets and a five year vesting period. This was a statement of intent to put shareholders
first while providing potential rewards that would attract and retain the talent needed for success. Some 4.8
million executive share options expired out of the money in September 2024.
Final Thoughts
Overall, the past year has seen a far more robust Pantheon emerging from this necessary period of consolidation.
Many of the building blocks to achieve the strategic goals are now in place and we are confident that, once the
market fully recognises the strength of the Ahpun and then Kodiak projects, the intrinsic value of the resource
base will be recognised in the share price.
A key theme for the year has been deepening Pantheon’s relationship with the State of Alaska through its key
decision makers and to enhance the Company’s recognition within the energy ecosystem in Houston. This does
not happen overnight and involves laying the groundwork that may not always be publicly visible, though
investors should no doubt appreciate that the Board and executive team at Pantheon are fully focused on the
creation of sustainable shareholder value over the long-term. It is through this long term focus that the Company
has built such a solid foundation this past year.
I would like to thank each and every one of our shareholders for their support, which ultimately makes
Pantheon’s continued success possible.
On Behalf of the Pantheon Board of Directors,
David Hobbs
Executive Chair
December 7, 2024
PANTHEON RESOURCES PLC
CHIEF EXECUTIVE OFFICER’S STATEMENT
FOR THE YEAR ENDED 30 JUNE 2024
8
As we reflect on progress made over the last year, I look back on 2024 as a year of foundation building. We have
received independent validation of the best estimate contingent resources at an incredible 1.6 billion barrels of
ANS crude. If we apply this resource to our targeted $5-$10 per bbl of resource, the size of the potential prize we
are targeting is clear for all to see.
As David outlined, Pantheon is moving forward to reach FID at Ahpun during 2H 2027. As we prepare to build
out the operational team in Houston, Texas for the next phase of our development journey at Ahpun, I have never
been more confident in the future of Pantheon and of its potential for shareholder value creation.
Re-entry of Alkaid-2 Demonstrated Successful Improvement to Frac Design
The most significant event during the period was the re-entry of the Alkaid-2 well and flow test of the Shelf
Margin Deltaic B ("SMD-B") Western Topsets horizon. This was successful and demonstrated producible oil
from the SMD horizon in the Ahpun field, comprised of both the shallower SMD formation and the previously
tested deeper Alkaid zone of interest (“ZOI”).
The Company had three clear objectives:
(i)
To assess the efficacy of the revised frac design;
(ii)
To gather representative fluid samples for pressure-volume temperature analysis ("PVT"); and,
(iii)
To better determine the initial reservoir pressure
All three objectives were successfully achieved.
The Company's preliminary estimate of the efficiency of the frac was 50% of theoretical design performance and
compares favourably with the calculated frac efficiency of c.20% experienced in the Alkaid-2 operations in the
deeper ZOI accumulation the previous year. This improvement was the result of several key changes to the frac
design, which allowed the frac to remain within the reservoir and validates the ability to achieve at least the
planned for 2x improvement in frac efficiency in future.
Multiple fluid samples were gathered indicating a measured gas oil ratio ("GOR") of 3,000 - 4,000 standard cubic
feet per barrel ("scf/bbl") and an API gravity of 35-36o. This compares to 12,000 - 13,000 scf/bbl measured in the
deeper Alkaid ZOI. This indicates success in limiting pressure drawdown and avoiding flashing gas in the
reservoir.
Working with AGDC to Accelerate Development of Alaska LNG
Pantheon is also working with the AGDC and the State of Alaska to accelerate development of Alaska LNG
Project (“Alaska LNG”) through the GSPA to address the projected supply shortfall of natural gas in South
Central Alaska in the next few years.
Phase 1 of Alaska LNG focuses on construction of the gas pipeline and does not involve construction of an LNG
plant, and as a result has a materially lower capex requirement and construction timeframe, allowing gas
transportation as early as 2029. AGDC is aiming to undertake Front End Engineering and Design ahead of their
FID planned for the middle of 2025.
The GSPA contains the key commercial terms to be incorporated into the binding take-or-pay Gas Sales
Agreement ("GSA") to take effect after FID, including:
•
Pantheon agrees to supply up to 500 million cubic feet per day ("mmcfd") of natural gas at a maximum
base price of $1 per million BTU ("mmBtu") in 2024 dollars.
•
The minimum daily contract volumes that are used to calculate the level of the take or pay obligation.
•
Plateau natural gas deliveries for 20 years, with the potential for extension beyond that initial term.
•
The State of Alaska has several options to reduce the natural gas unit price significantly by working with
Pantheon to reduce the cost of project financing and/or enable other commercial opportunities, as
specified in the GSPA.
PANTHEON RESOURCES PLC
CHIEF EXECUTIVE OFFICER’S STATEMENT
FOR THE YEAR ENDED 30 JUNE 2024
9
The initial term of the GSPA is until June 30 2025, or until the definitive GSA is executed, whichever comes first.
AGDC and Pantheon have begun working on meeting all the relevant conditions for their respective parts of the
project to proceed within the planned schedule. For Pantheon, that includes hiring several engineering firms to
help design the needed surface facilities.
Formal Award of Leases
In August 2024, Pantheon paid the remaining portion of the fees for the 46 new oil and gas leases acquired in the
State of Alaska's 2023W Areawide oil and gas lease sale held in December 2023. This formal award was
necessary before drilling the Eastern Topsets. The 46 new leases consist of an aggregate of 65,691 acres, 30 of
which are located on the western boundary of the Kodiak Field and 16 of which cover the Ahpun East topset play
(site of the Megrez -1 well).
Independent Expert Reports Highlight the Significant Potential in Pantheon’s Portfolio
In order to help with negotiations for non-dilutive funding, Pantheon commissioned Independent Expert Reports
(“IERs”) for the shallower Ahpun Topsets and the deeper Alkaid Zone from Cawley Gillespie &Associates
("CGA") and Lee Keeling & Associates ("LKA") respectively, along with Netherland, Sewell & Associates, Inc.
(“NSAI”) at Kodiak.
Netherland, Sewell & Associates – Kodiak Field
NSAI had previously completed a Kodiak Field IER, and carried out an updated report to include the additional
c.43,000 acres awarded in the updip portion of the Kodiak field. In the updated IER, NSAI's best estimates
of Kodiak's contingent recoverable resources sum to 1.2 billion barrels of ANS crude (the mixture of oil,
condensate and natural gas liquids) and 5.4 trillion cubic feet of gas ("tcf"). The new resource is a 25% increase
(963 to 1,208 million barrels ("mmbbls")) in recoverable ANS crude compared to NSAI's previous 2023 report.
Our acreage acquisition strategy during the period focused on moving structurally higher into better reservoir
rocks where porosity and permeability are substantially improved. The potential improvement in reservoir quality
in the newly acquired acreage underpins the c.40% increase in the high estimate of recoverable resources to 2,840
mmbbls of ANS crude and 11.75 tcf of natural gas. The 5.4 tcf of recoverable gas (Best Case) is important as it
provides additional support for a proposed agreement with AGDC to bring gas to southcentral Alaska markets.
Cawley Gillespie & Associates and Lee Keeling & Associates – Ahpun Topsets and Alkaid Zone
Pantheon also commissioned two further reports, covering the Alkaid horizon as assessed by Lee Keeling &
Associates (“LKA”) and additional topset horizons evaluated by Cawley Gillespie & Associates (CGA). The
combined findings indicate strong contingent resources in oil, natural gas, and natural gas liquids (NGLs),
supported by favourable economic models. Notably, in LKA’s assessment of the Alkaid horizon, the base case
includes 79 million barrels (“mmbbl”) of ANS crude and 424 billion cubic feet (“bcf”) of gas, with the NPV10
estimated to be $0.2-0.5 billion.
CGA’s analysis of the broader Ahpun field, focusing specifically on the western topsets, presents similarly
promising estimates. The best estimate (2C) includes 282 mmbbl of ANS crude along with 804 bcf of gas. Given
current assumptions, the NPV10 for CGA’s 2C contingent resources is approximately $1.7 billion, based on an
$80 per barrel price for Alaska North Slope crude. Their analysis also indicated that Ahpun’s additional horizons
have strong potential to contribute additional value and further diversify the field’s resource base.
The positive economic models provided by both reports align with strategic goals for advancing development,
with a targeted FID aimed at enabling production no later than 2028. When taken together, these assessments
reinforce the commercial viability of Ahpun and positioning it as a promising asset within the Alaska North
Slope, offering the potential for substantial long-term value creation.
Building In-House Capabilities in the U.S. to Support Stateside Operations
With an eye toward both a U.S. listing, and extensive future operations, the Company’s leadership is now U.S.
based. As announced in September, the appointment of Philip Patman, Jr. as Chief Financial Officer, based in
Houston.
PANTHEON RESOURCES PLC
CHIEF EXECUTIVE OFFICER’S STATEMENT
FOR THE YEAR ENDED 30 JUNE 2024
10
In addition, we promoted several key personnel within our organisation to lead us into the future. Pat Galvin was
promoted to General Counsel from his prior role as Chief Commercial Officer and General Counsel of our Great
Bear subsidiary. Josh McIntyre was similarly promoted from Chief Financial Officer of our GBP subsidiary to
Group Financial Controller of Pantheon. These promotions, as well as strategic new hires such as Jonathan Kurtz
as VP of Human Resources, recognise talent within and outside of the organisation as we prepare for the next leg
up in our growth trajectory.
I want to make it clear that the Company will not spend, and has not, spent, any money on new hires or
contractors until we have convinced ourselves that it is necessary and cannot be done in-house with existing
personnel.
In the coming year, we intend to complete the basis of design for the Ahpun development, complete the studies to
allow submission of documents needed for the regulatory approvals and, subject to funding availability, plan for
two appraisal wells to firm up oil, NGL and natural gas resource estimates in addition to narrowing the range of
prospective helium resources contained in Kodiak field associated gas.
Megrez-1 Well
The most significant activity of 2024 was the post-period spudding of the Megrez well on November 8th, 2024.
Before drilling, management estimated the well to have a 69% geological chance of success of encountering a 2U
Prospective Resources of 609 million barrels of ANS crude and 3.3 Tcf of natural gas – or over 1 billion BOE.
This has the potential to add significant incremental resources to our portfolio, independent of the progress we’ve
made thus far. We had expected to spud slightly sooner but were delayed by high winds. We hope to provide
additional updates on the results shortly.
Building the Foundation for Success in 2025 and Beyond
The improvement in our prospects boils down to the hard work of my colleagues throughout the organisation and
I am sure you will join me in thanking them for their efforts on your behalf. Taken together, we are proud of our
accomplishments in 2024 and the potential catalysts we are targeting in 2025.
Thank you to my fellow shareholders, partners, and staff for your support on our journey. I look forward to
another exceptional year at Pantheon.
On Behalf of the Pantheon Team,
Jay Cheatham
Chief Executive Officer
December 7, 2024
PANTHEON RESOURCES PLC
SECTION 172 STATEMENT
FOR THE YEAR ENDED 30 JUNE 2024
11
Section 172 of the Companies Act 2006 requires Directors to take into consideration the interests of stakeholders
and other matters in their decision making. The Directors continue to have regard to the interests of the
Company’s employees and other stakeholders, the impact of its activities on the community, the environment and
the Company’s reputation for good business conduct when making decisions. In this context, acting in good faith
and fairly, the Directors consider what is most likely to promote the success of the Company for its members in
the long term. We explain in this annual report how the Board engages with stakeholders.
•
The Directors are fully aware of their responsibilities to promote the success of the Company in accordance
with section 172 of the Companies Act 2006. Furthermore, the Directors have had refresher training with
their Nominated Advisor (“NOMAD”) of Director responsibilities in the application of AIM rules. This
process encourages the Board to reflect on how the Company engages with its stakeholders and to identify
opportunities for enhancement in the future and was considered at the Company’s board meetings. As
required, the Company’s external lawyers and the Company Secretary can provide support to the Board to
help ensure that sufficient consideration is given to issues relating to the matters set out in s172(1)(a)-(f).
•
As part of its ongoing business, the Board regularly considers the Company’s principal stakeholders and how
it engages with them. This is achieved through information provided by management via Regulatory News
Service announcements, corporate presentations, webinars, teleconferences, analyst roadshows, shareholder
meetings and also by direct engagement with stakeholders themselves.
•
The Company aims to work responsibly with key identified stakeholders, including shareholders, employees,
consultants, suppliers, advisors, government bodies and local communities where exploration and production
activities take place.
•
Key Board decisions made in the year are set out below:
Significant
events/decisions
Key s172
Stakeholders
Actions and Consequences affected
Advancement of
geological
understanding of the
Alaskan assets
Shareholders,
Employees, State
of Alaska, and
Business
Relationships
•
The Board continued to refine its in-depth geological review
of its Alaska North Slope assets.
•
In 2024 Pantheon received three IERs on its projects,
certifying a C2 Contingent Resource estimate of 1.56 billion
barrels of marketable liquids (oil, condensate & NGLs) and
6.6 Tcf of natural gas. This independent certification
advanced the understanding of the assets and advanced the
Group’s efforts towards development planning.
•
In 2022 the Company drilled and fracture stimulated the
Alkaid-2 well and tested the primary target of that well, the
ZOI. After encountering operational issues including sand
blockages, the ZOI ultimately produced a combination of oil,
condensate, NGLs and natural gas in quantities lower than
pre drill estimates. After extensive analysis with 3rd party
expert groups, the well was re-entered in Q3 2023 to test the
shallower and independent SMD horizon. A new frac design
was applied to great success, achieving efficiency rates
estimated at +/-50% compared to the +/- 20% efficiency
estimated in the deeper ZOI and announced to the market
earlier in 2023. Additionally, the well was brought on stream
more slowly, minimising the flashing of gas near and in the
wellbore as had occurred in the deeper ZOI, and thus
achieved a far superior gas oil ratio. The knowledge gained
has enabled the Group to make great optimisation gains in
both completion and testing practices for application in future
PANTHEON RESOURCES PLC
SECTION 172 STATEMENT
FOR THE YEAR ENDED 30 JUNE 2024
12
operations, which is common for the learning curve of new
fields as successive wells are drilled and tested.
•
The consequences of these actions were to materially increase
(i) the resource potential of the projects, (ii) 3rd party
validation of the potential, which is beneficial for future
project funding and development, (iii) knowledge of the
reservoir and of engineering design, and (iv) confidence in
development of both the Ahpun and Kodiak projects for the
potential benefit of all stakeholders through an advancement
of the project, potential for value and revenue creation to
shareholders, employees and the State of Alaska.
Growth in Resource
Shareholders,
employees, State
of Alaska, Service
Providers
•
Pantheon successfully acquired key new leases in the 2023
lease sales which were formally awarded in summer 2024.
The leases, which are all contiguous to the existing acreages
and are covered with 3D seismic, contain material resource
potential, increasing Pantheon’s resource position,
particularly on the Kodiak and Ahpun – Eastern Topset
project areas.
•
Production of all resources results in economic benefit to
shareholders through production revenues, and to the state,
through royalties.
Continued operation
of staff share option
plan
Employees, long
term consultants
•
The Company seeks to award an annual grant of share
options to every staff member and permanent consultant
pursuant to the staff share option scheme in order to attract
and retain the highest quality staff, as well as to align
interests with shareholders. That said, no share options were
issued to staff since 2022.
•
The consequence of this decision was to demonstrate an
alignment to shareholders at a time when the stock price was
not performing. This decision was made despite the
considerable other achievements made during the year.
Notwithstanding, the annual grant of share options to staff
under the scheme is considered a suitable mechanism to
retain, attract and motivate staff to achieve successful
outcomes and to provide a mechanism for staff to benefit
from future share price outperformance, aligning staff
interests with that of shareholders - and to help management
retain and attract the highest quality personnel. After the year
end, in October 2024, Pantheon announced the
implementation of an updated staff share option scheme with
an associated grant of options to Executive Directors and
Restricted Stock Units (“RSUs”), which vest over time, to
Executive Management and other staff. After a period of no
such grants, the consequence of this action was to provide
incentives aligned to share price growth.
Increased interaction
with key
stakeholders
Shareholders,
Employees, State
of Alaska, Other
Business
Relationships
•
Directors and Executive Management conducted a number of
webinar style shareholder presentations outside of the
traditional Annual General Meeting (“AGM”), which all
shareholders and non-shareholders were invited to attend, in
addition to a number of video interviews. The Group also
held a number of broker non deal roadshows and technical
presentations with industry and with the State of Alaska,
PANTHEON RESOURCES PLC
SECTION 172 STATEMENT
FOR THE YEAR ENDED 30 JUNE 2024
13
working with them to ensure they are fully apprised of the
Group’s intended plans.
•
The Group worked closely with AGDC, ultimately signing a
Gas Sales Precedent Agreement on 5 June 2024, to
collectively pursue the advancement of phase 1 of the
proposed Alaska LNG.
•
The Group interacted with departments of the State of
Alaska, presenting its geological findings from drilling
activities, as well as working on planning, permitting and
other necessary actions considered necessary for the
advancement of the project.
•
The Group utilised the services of many local service
providers for services such as development planning,
engineering design, rig hire, road construction etc, providing
material service income for those companies.
•
The Group increased the level of granularity in stock
exchange announcements and webinars, to allow stakeholders
transparency of capital requirements and targeted project
timelines.
•
The Board reaffirmed its strategy to achieve sustainable
market recognition of $5 - $10 per barrel of resource.
•
The consequence of these actions was to create a greater level
of understanding of the Group’s projects and intended
activities and to strengthen relationships with government and
stakeholders, as well as to clearly describe the ambitions in
terms of targeted value recognition for shareholders.
Implementation of
development strategy
Shareholders,
Employees, State
of Alaska, and
Business
Relationships
•
Pantheon reaffirmed in detail its strategy to bring the Ahpun
and Kodiak projects into development, targeting a final
investment decision (FID) on Ahpun by 2H 2027 and Kodiak
by 2029.
•
Pantheon has continued the process to apply for a hot-tap
directly into the TAPS, as well as completed engineering
studies related to the environmental permitting requirements
to facilitate the sale of ANS crude directly into TAPS.
•
Pantheon outlined in stock exchange announcements its
estimation of funding requirements to achieve key
milestones.
•
Pantheon continued discussions with various potential
counterparties for the possible provision of non equity
finance for the Group. A number of industry parties have
entered Pantheon’s data room as part of this process.
•
Pantheon continued work towards sourcing capital to fund
Pantheon’s future activities as well as to pursue a potential
US IPO on either NYSE or NASDAQ.
•
The consequence of these actions has been to give
shareholders and other stakeholders a clear visibility of
Pantheon’s intended project development timeframes,
milestones and capital requirements, and to put in place
necessary preparations to access project and development
capital, as the Company seeks to move into development and
production.
Increased Corporate
Governance
Shareholders,
employees,
•
In the 2024 fiscal year Pantheon appointed two new
independent non-executive directors, Allegra Hosford
PANTHEON RESOURCES PLC
SECTION 172 STATEMENT
FOR THE YEAR ENDED 30 JUNE 2024
14
This report was approved by the Board on December 7, 2024 and signed on its behalf.
Jay Cheatham
Chief Executive Officer
December 7, 2024
Business
Relationships
Scheirer and Linda Havard. Linda has decades of experience
in financial and CFO roles and became the Chair of the Audit
Committee, the forerunner to the Finance, Audit and Risk
Committee. Following this appointment Pantheon had a total
of 7 Directors. This continued until the September 2024
resignation of Justin Hondris, after which, the Board had 6
Directors.
•
In preparation for a possible US stock market listing,
Pantheon has appointed a specialist outsourced advisory firm
to assist in bringing the Group up to a Sarbanes-Oxley level
governance and compliance.
•
Pantheon retained the law firm of Orrick, Herrington &
Sutcliffe LLP (“Orrick”) to assist with advising the Group on
corporate preparations for an IPO on either NYSE or
NASDAQ.
•
The consequence of such actions is to improve the level of
governance and diversification which is to the benefit of all
stakeholders.
Addition of
incremental key
leases in the
December 2023 lease
sale
Shareholders,
Employees, State
of Alaska, and
Business
Relationships
•
Pantheon was the successful bidder for 65,691 acres of new
leases in the December 2023 lease sales which were formally
awarded after year end, in August 2024. All leases were
immediately adjacent to existing leases and add material
resource potential for shareholders.
•
The consequence of this acquisition was to build Pantheon’s
resource potential, which benefits the state in terms of future
production royalties and other economic benefits. Future
development activities will, among other things, result in
hiring additional local staff, contracting local service
providers etc.
PANTHEON RESOURCES PLC
CHIEF FINANCIAL OFFICER’S REPORT
FOR THE YEAR ENDED 30 JUNE 2024
15
Financial Review
The Group made a loss from Continuing Operations after Taxation for the fiscal year ended 30 June 2024 of $11.5m,
versus a 2023 loss of $1.5m. This result was materially impacted by the revaluation of the derivative component
of the convertible bond of a $0.3m loss in 2024, versus a profit of $11.3m in 2023. Notably, after adjusting for the
derivative revaluation of the convertible bond (and leaving aside any resulting UK tax consequence), the adjusted
loss of $11.2m in 2024 is $1.6m lower than the adjusted loss of $12.8m in 2023.
In December 2021, the Company completed a refinancing through the issuance of a $55m convertible bond. The
convertible bond is for a 5 year term, repayable in quarterly instalments in cash or shares (at the Company’s
election) and carries an interest coupon of 4% per annum. At the date of this report, the principal outstanding on
the Convertible Bond is $17.2m. A summary of the key bond terms is provided at note 15.
Impairments
In accordance with International Financial Reporting Standard 36 ‘Impairment of Assets’ (IFRS 36), exploration
and evaluation assets are reviewed for indicators of impairment. Should indicators of impairment be identified an
impairment test is performed.
The Group has reviewed these assets for indications of impairment, and that there are no indicators of impairment
in the current year. Additional details are provided in note 13 (Exploration and evaluation assets) to the financial
statements.
Capital Structure
The Company made several issuances of fully ordinary shares during the year as outlined below. During the year
the Company did not grant share options to staff under the Discretionary Share Option Plan (the “Scheme”). A
summary of movements in share-based payments is provided at note 23 (Share-based payments).
Some headline details of ordinary shares issued during the year were as follows (with additional information
provided in note 19 (Share Capital) to the financial statements:
-
In September, 2023, the Company completed an equity placing, issuing 11,905,370 new ordinary shares
at an issue price of £0.1878 pence per share, raising approximately $2.79m before expenses to IPGL
Limited, an existing supportive long term shareholder of Pantheon. The proceeds were applied towards
the payment of the September 2023 quarterly bond repayment in cash.
-
In November 2023, the Company announced an equity placing on deferred settlement terms (completed
January 2024), issuing 16,286,343 new ordinary shares at an issue price of £0.208 pence per share,
raising approximately $4.15m before expenses. The proceeds were applied towards the payment of the
December 2023 quarterly bond repayment in cash.
-
In March, 2024, the Company completed an equity placing, issuing 8,820,315 new ordinary shares at an
issue price of £0.244 pence per share, raising approximately $2.74m before expenses to IPGL Limited, an
existing supportive long term shareholder of Pantheon. The proceeds were applied towards the payment
of the March 2024 quarterly bond repayment in cash.
-
In June, 2024, the Company completed an equity placing, issuing 7,471,153 new ordinary shares at an
issue price of $0.364 per share, raising approximately $2.72m before expenses. The proceeds were
applied towards the payment of the June 2024 quarterly bond repayment in cash.
-
Also in June, 2024, the Company completed an equity placing, issuing 9,230,080 new ordinary shares at
an issue price of $0.364 per share, raising approximately $3.36m before expenses. The proceeds were
applied to general corporate purposes.
As at 30 June 2024 the total shares in issue was 960,919,660 (2023: 907,206,399).
As at 30 June 2024 the Company had 4,802,922 warrants outstanding to acquire non-voting convertible shares,
convertible into ordinary fully paid shares on a 1:1 basis. The warrants had an exercise price of £0.30 per share,
however all expired without being exercised on 30 September 2024.
PANTHEON RESOURCES PLC
CHIEF FINANCIAL OFFICER’S REPORT
FOR THE YEAR ENDED 30 JUNE 2024
16
As at 30 June 2024 the Company had 45,635,000 options outstanding to acquire ordinary shares
(2023:45,635,000) at an average exercise price of £0.477 (2023: £0.477) per share. At year end all share options
were fully vested. In September, 2024, subsequent to year end, 4,825,000 of these share options expired.
Going concern
In June 2023 Pantheon communicated to shareholders via RNS and accompanying webinar, its aggressive
strategy to target sustainable market recognition of a value of $5 - $10 per barrel of 1P/1C recoverable resource
by the end of 2028. This target is unchanged. The FID on the Ahpun project is now expected to be delayed to 2H
2027, with the FID on the Kodiak project by 2029. This impacts the date of first production, now anticipated in
2028, and coupled with increased project definition and workscope increases the funding requirement to first
production to approximately $150 million. Executing such a strategy requires significant additional capital, most
of which the Company seeks to access through non equity sources. The Group will also need to secure additional
funding for general working capital, to cover future obligations as and when they fall due to continue to progress
its key projects, and to continue its proposed US IPO preparations as planned within the next 12 months
following approval of these financial statements and the Group seeks to secure such funding by Q2 or Q3 of fiscal
year 2025 (for clarity, at latest, Q1 of calendar year 2025), in the least dilutive manner for shareholders. This
process is presently underway, and Pantheon is procuring appropriate assistance from its appointed investment
banks and other advisors. The auditors have made reference to this material uncertainty in their audit report.
We believe that Pantheon’s position has improved materially over the past 12 months as a result of the
achievement of some major milestones, all of which greatly increase the Group’s confidence in securing its
overall funding requirement to reach first production. These milestones included receipt of IERs on three of its
projects, specifically (i) Kodiak, (ii) Ahpun – Alkaid, and (iii) Ahpun – Western Topsets, which when combined
certified, in aggregate, a 2C Contingent Resource of 1.6 billion barrels of ANS Crude and 6.6 Tcf of natural gas.
Critically however, these IERs estimated a project NPV10 of $1.9 -$2.2 billion for the Ahpun – Alkaid and
Ahpun – Western Topset projects combined. An NPV estimate based on discounted net present value has not yet
been commissioned for the much larger Kodiak project, but it would clearly be materially accretive to the
intrinsic value of Pantheon’s asset base. The importance here is that Pantheon retains 100% working interest in
each of these projects, which have enormous potential value, and these large valuations and certified resources
give the Company great flexibility in raising non-equity funding. This includes the ability to leverage any
success in the Megrez-1 well and the value attributable to gas resources should Alaska LNG Phase 1 proceed. In
accessing additional capital, Pantheon’s goal is to achieve this in the least dilutive manner for shareholders,
minimising the use of equity capital and by prioritising such alternate funding sources.
The Company believes that the enormous size of the resource already appraised on Pantheon’s acreage provides
the potential for more than five hundred wells. Whilst in absolute terms this would entail cumulative investment
estimated in the billions of dollars over the lifetime of the project, and whilst the future costs and revenues are
uncertain, Pantheon currently estimates that the maximum negative cumulative outlay over the lifetime of the
project could be as high as $300 million. Once in full development, it is believed that production revenues would
have the potential to self-finance the remaining development costs, as would typically be the case in such
developments. Furthermore, the Company could fund a substantial portion of the maximum negative cumulative
outlay could through debt secured by expected future revenues from gas and other hydrocarbon sales.
The Group has no contractual obligation to drill any future wells and the only obligation is to plug and abandon
the Talitha-A test well, the estimated cost of which ($1.6m) has already been provided for in the financial
accounts. Given the quality and advancement of the assets, the Company is optimistic in its ability to raise capital
as and when required. Accordingly, the financial statements have been prepared on a going concern basis.
Taxation
The Group incurred a loss for the year and has recorded a taxation benefit of $1.8m (2023: expense of $0.1m). As
the tax credit is all reflected in the movement in deferred tax, the Company has adjusted deferred tax liability by
the same amount as the tax benefit.
Risk assessment
The Group’s oil and gas activities are subject to a variety of risks - both financial and operational - including, but
not limited, to those outlined below. These and other risks have the potential to materially affect the financial
PANTHEON RESOURCES PLC
CHIEF FINANCIAL OFFICER’S REPORT
FOR THE YEAR ENDED 30 JUNE 2024
17
performance of the Group. For additional detail see section Key Operational Risks and Uncertainties in the
Strategic Report on pages 20-22.
Liquidity Risk
As the Group did not generate material revenue from hydrocarbon production during the year (all production
revenues were generated through the sale of oil during a short term testing operation), the primary liquidity risk is
the ability to adequately source sufficient funding to meet the Company’s working capital, capital expenditures,
and operational requirements. Funding availability, and hence risk, within the capital markets and for industry
transactions remains uncertain as a result of global economic conditions, including the impact of increased
interest rates, inflation, political and environmental factors.
Oil & Gas Price Risk
Future oil and gas sales revenues are subject to the volatility of the underlying commodity prices throughout the
year. Over the past few years, the energy sector has been impacted by volatility in commodity prices, which may
continue to impact the Group going forward. Being for all practical purposes pre-production, the Group did not
engage in any commodity price hedging activity during the year.
Currency Risk
Most capital expenditures for the year (and future years), as well as possible future operational revenues from oil
sales were or will be denominated in US dollars. The Group keeps the majority of its cash resources denominated
in US dollars to minimise volatility and foreign currency risk. The Group did not engage in any foreign currency
hedging activity during the year.
Credit Risk
The Group’s credit risk is primarily attributable to its cash balances. The credit risk on liquid funds is limited
because the third parties are large banks with a minimum investment grade credit rating. The Group’s total credit
risk amounts to the total of other receivables and cash and cash equivalents. The Group’s does not have any joint
venture partners.
Financial Instruments
At this stage of the Group’s activities it has not been considered appropriate or necessary to enter into any
derivatives strategies or hedging. Once the Group’s production revenues increase substantially, such strategies
will be reviewed on a more regular basis.
Philip Patman, Jr.
Chief Financial Officer
December 7, 2024
PANTHEON RESOURCES PLC
STRATEGIC REPORT
FOR THE YEAR ENDED 30 JUNE 2024
18
Principal activity
The Company is registered in England and Wales, having been incorporated under the Companies Act with
registered number 05385506 as a public company limited by shares. The principal activity of the Group is the
investment in oil and gas exploration, appraisal and development. The Group operates in the U.K. through its
parent undertaking and in the US through subsidiary companies, details of which are set out in note 8 to these
accounts.
Review of the Business and Key Performance Indicators
2023/2024 KPI
Measurement
2023/2024 Performance
Ensure business
adequately funded
Fund raise where
appropriate
The Company completed a $22m fundraising (gross proceeds) in May 2023
shortly before the commencement of the financial year. During the financial
year the Company serviced its convertible bond quarterly repayments
through the issuance of equity, or via discreet equity placements to long term
strategic shareholders to allow the proceeds to be applied towards cash
settlement of the bond repayment. The Company completed an equity
placement in late July 2024, shortly after year end, where it raised S$29
million before costs.
Establishment of
US head office
Sourcing,
establishment and
staffing of US office.
During the year Pantheon established a head office in Houston, Texas, the
energy capital of the US. Since publication of last year’s annual report, the
Chair has relocated to Houston where Pantheon has leased office space at an
attractive rate, and shortly after the end of the fiscal year, recruited new
Houston based personnel including a Chief Financial Officer and a VP of
Human Resources.
Ensure appropriate
levels of
governance
Continue to
implement and
improve governance
standards
Following the appointment of Allegra Hosford Scheirer as an independent
Non-Executive Director (“NED”) in the previous year, in January 2024 the
Board appointed Linda Havard as an additional independent NED. At the
time of publication of this report, Pantheon has 6 directors, 3 of which are
non executive directors.
The Company has also announced its intention to prepare for a possible US
stock market listing and as part of this has engaged with a 3rd party expert
group to assist in bringing Pantheon’s governance and control systems up to
US Sarbanes-Oxley standards. This work is ongoing and is driving towards
the objective that governance and control processes will be enhanced
significantly across the Group, to the standard expected for a US-listed
company.
Operational activity
in Alaska
Drilling / testing wells During the fiscal year, the Alkaid-2 well was re-entered and the independent
and shallower SMD horizon was flow tested and an improved fracture
stimulation methodology was successfully applied, demonstrating materially
improved estimated frac efficiencies. After the fiscal year, specifically in
November, 2024, Pantheon spudded the Megrez-1 well on the Ahpun-
Eastern Topset project area. Drilling operations are ongoing as of the date of
this report.
Third party expert
validation of
Alaskan assets
Receipt of third party
expert reports
During the year, three IERs were completed on the Group’s projects:
1. Netherland Sewell & Associates published a report estimating a 2C
Contingent Resource of 1.2 billion barrels of marketable liquids (oil,
condensate, NGLs) and 5.4 trillion cubic feet (Tcf) of natural gas on the
Kodiak project.
2. Cawley & Gillespie & Associates published a report estimating a 2C
Contingent Resource of 282 million barrels of marketable liquids and 0.8
PANTHEON RESOURCES PLC
STRATEGIC REPORT
FOR THE YEAR ENDED 30 JUNE 2024
19
trillion cubic feet (Tcf) of natural gas on the Ahpun – Western Topset
project.
3. Lee Keeling & Associates published a report estimating a 2C Contingent
Resource of 79 million barrels of marketable liquids and 0.4 trillion cubic
feet (Tcf) of natural gas on the Ahpun - Alkaid project.
Consider farmout
or project
development
options
Progress towards
farmout or project
development
Pantheon’s understanding of the geological potential (and therefore
economic potential value) of the assets has increased materially. This has
been further supported by the three IERs received on the Group’s projects.
The Group’s revised strategy prioritised the Company developing the assets
on its own rather than pursuing a farmout in the short term, with FID on the
Ahpun project targeted for 2H 2027, first production of oil in 2028, and FID
on the Kodiak project targeted by 2029. The Group believes that greater
value can be generated for shareholders by following this strategy. In the
meantime, the Company has commenced the process to work towards
obtaining a hot-tap into the TAPS (Trans Alaska Pipeline System) pipeline to
enable it to sell its future production directly into the pipeline.
Additionally, in June 2024, the Group executed a GSPA with the AGDC
with the ambition of using Pantheon’s natural gas to supply the proposed
natural gas pipeline, defined as Phase 1 of Alaska LNG. Under the proposed
terms Pantheon would supply its natural gas at beneficial terms in exchange
for funding support or significant loan guarantees, estimated to be sufficient
to materially lower the Group’s capital expenditures requirement to first
production.
Ensuring continued
high-quality
technical consultant
relationships
Establish and
maintain relationships
with industry experts
and review
performance
Pantheon’s technical team enjoyed another year of continuity. Experts such
as eSeis, AHS Baker Hughes and SLB remain contracted and work with all
these partners continues. Pantheon also contracted with three independent
expert groups during the year for the provision of IERs to provide resource
estimates on the Group’s projects.
Continue to build
and refine resource
potential
Estimated resource
Pantheon successfully acquired 65,691 new acres following the lease sales of
December 2023 which were formally awarded in August 2024. The new
acreas contain material resource potential on the Ahpun Eastern Topset
Project and to the updip north western extension of the existing Kodiak
acreage in shallower depositional setting where reservoir properties are
forecast to be high quality. During the year the Company received three IERs
estimating a combined 2C contingent resource of c.1.6 billion barrels of
ANS crude and 6.6 Tcf of natural gas.
Ensure close
working
relationship with
the State of Alaska
and regulators
Monitor interaction
with regulators paying
interest to approvals
processes, timelines,
and other procedural
issues
The Group worked closely with the regulator, including detailed technical
briefings discussing the analysis of well performance and interpretation of
data sets, communication of future plans, concepts for long term production
testing, flaring of gas, environmental matters, and future development
aspirations. The Group continues to work with key stakeholders for the
purposes of obtaining a hot-tap into the main pipeline and with respect to
provision of Pantheon’s natural gas into the proposed Alaska LNG.
The State of Alaska receives a royalty on all future oil and gas production on
Pantheon’s projects.
Financial Position and Future Prospects
Please refer to the Director’s Report for additional information on strategy and the business model.
PANTHEON RESOURCES PLC
STRATEGIC REPORT
FOR THE YEAR ENDED 30 JUNE 2024
20
Key operational risks and uncertainties
The Group may be unable to meet its lease obligations
In general, the Group's properties are held under oil and gas leases. The terms of the Group's leases often provide
for yearly rental payments. Such yearly rentals may vary depending upon the particular lease and whether the
Group has commenced activities in the property. If the Group defaults on its lease payments, its leases may be
automatically terminated. If the Group is unable to make these payments and its leases are terminated, there could
be a material adverse effect on its business, financial condition and results of operations. Managing the lease
position is of material importance for the Group, and management devote considerable time to lease management,
budgeting and planning, consulting with the State of Alaska where required. Leases generally have a 10-year
initial term, $10 per acre rentals and low royalties of between 12.5% – 16.7% to the State of Alaska.
The Group may be unable to renew and/or extend its leases once they expire
The Group's lease agreements are subject to termination following their initial term, unless extended by
production or being included in a unit. Unitization recognises that the Group has established, to the State’s
satisfaction, that the unit encompasses all or part of one or more potential hydrocarbon accumulations.
Exploration and/or production activities are usually a prerequisite for unit formation. If the Group is unable
to secure unitization for some leases on a timely basis, it may lose its rights in these properties when the initial
term expires. In addition, given that it may not be able to renew certain leases unless it begins exploration or
production activities within specific timeframes, the Group may be required to invest significant funds at
timetables not optimal in order to meet the work requirements necessary to secure a unit. If the Group is unable
to extend its leases beyond their primary terms, there could be a material adverse effect on its business, financial
condition and results of operations. To mitigate this risk, the Group has successfully applied for and been
granted the Talitha and Alkaid Units that contain much of the Ahpun project and some of the
Kodiak projects. Most of Pantheon’s Kodiak project is now covered by leases of c.5 years or more of remaining
initial term.
The Group may be unable to access sufficient capital to adequately progress its projects
Continued appraisal and development of the Group’s projects requires access to additional capital. Whilst the
Group is confident that the quality of its assets should enable it to access additional capital, there can never be
guarantees that such capital will be available as and when required. To mitigate this risk the Group continues to
consider capital from various sources including equity, non-equity sources, mezzanine debt, as well as industry
transactions such as farm outs. The receipt of three independent expert reports which estimate a combined total of
c.1.6 billion barrels of ANS crude together with c.6.6 Tcf of natural gas give the Group great confidence that it
will be able to attract finance in the future. Additionally, initiatives such as the Gas Sales Precedent Agreement
executed with Alaska Gasline Development Corporation provide potential for additional non equity funding.
Our operations require the Group to obtain licensing, planning permissions and other consents
The development of its current and future leases may be dependent upon the receipt of planning permission from
the appropriate local authorities, as well as other necessary consents, such as environmental permits and
regulatory consents. Obtaining the necessary consents and approvals may be costly, and they may not be granted,
may be withdrawn or made subject to limitations and conditions. Certain permits and consents may also become
contentious in the future, which may lead to these not being granted or withdrawn. The failure to gain such
permissions or gain such permissions on terms or at a cost acceptable to the Group, may limit the Group in its
ability to develop and extract value from its leases and could have a material adverse effect on its business, results
of operations, financial conditions and prospects. To manage the risk, the Group employs experienced and
qualified personnel, supplemented by consulting firms where appropriate, who have successfully advised on or
obtained licenses and permits in the past, and who maintain working relationships with regulatory agencies.
Political conditions and government regulations could change and have a material effect on the Group’s results
or operations
Although political conditions in the Northern Slope Borough, the State of Alaska and the United States federal
government are generally stable, changes may occur in their political, fiscal and/or legal systems, which might
adversely affect the Group’s operations. The Group’s strategy has been formulated in light of the current
regulatory environment and probable future changes to the regulatory regime. In 2021 the federal government
PANTHEON RESOURCES PLC
STRATEGIC REPORT
FOR THE YEAR ENDED 30 JUNE 2024
21
adopted a more cautionary position with respect to operations on federal land, notably with respect to
ConocoPhillips’s Willow project; however, even in that case, through ongoing consultation, a suitable
compromise was reached allowing the project to be developed. Helpfully, unlike the Willow project, Pantheon’s
projects are all located on state land, not federal land, and therefore have not been negatively impacted by such
politics. Although the Group believes that its activities are currently carried out in accordance with all applicable
rules and regulations, no assurance can be given that new rules, laws and regulations will not be enacted, or that
existing or future rules and regulations will not be applied in a manner which could serve to limit or curtail
exploration or development of the Group's business or have an otherwise negative impact on its activities.
Amendments to existing rules, laws and regulations governing the Group's operations and activities, or increases
in or more stringent enforcement, implementation or interpretation thereof, could have a material adverse impact
on the Group's business, results of operations and financial condition.
Future legal proceedings could adversely affect the Group's business, results of operations or financial condition
The Group may face legal proceedings that may result in the Group having to pay material damages and/or other
remedies. While the Group would assess the merits of each legal proceeding and defend the Group accordingly, it
may be required to incur significant expenses or devote significant resources to defend against such legal
proceedings. In addition, legal proceedings are also difficult to predict, which may force the Group to enter into
settlement arrangements even in the absence of any culpability from its part. Furthermore, the adverse publicity
surrounding legal proceedings may negatively affect the Group's relation with local communities, government
and non-government organizations, which could also impact the Group's activities. As a result, legal proceedings
could have a material adverse effect on the Group's business, financial condition, results of operations and
prospects. To manage this risk the Group consults legal counsel when it faces potential legal proceedings. The
Board and management consult legal counsel when conducting activities or entering into agreements that are
viewed to have the potential to give rise to material legal proceedings.
The Company has had two of its subsidiaries involved in litigation in Texas, with the case styled Pantheon Oil &
Gas LP and Pantheon East Texas LLC v. Kinder Morgan Treating, LP, Cause No. 2021-41735, in the 113th Judicial
District Court of Harris County, Texas.
The case proceeded to trial in late October and the jury rendered a verdict in favor of Pantheon Oil & Gas on all
counts. Following the verdict, Pantheon Oil & Gas and Pantheon East Texas filed a motion for entry of final
judgment in their favor, along with a request for a discretionary award of attorney fees. Kinder Morgan Treating
has filed a motion for judgment in its favor notwithstanding the verdict and a pleading challenging Pantheon Oil
& Gas and Pantheon East Texas's claim to recover attorney fees. Those post-trial motions are set for hearing in
mid-January 2025.
Failure to manage relationships with local communities, environmental groups and non-government
organizations could adversely affect the Group's future growth potential
The activities of oil and gas companies often face scrutiny from the public and receive negative publicity.
Although the Group's operations are not located in or near large communities, the Group's ability to further
expand its operation may be hindered by communities that may regard oil and gas activities as detrimental to their
environmental, economic or social circumstances. Furthermore, oil and gas companies are also increasingly
facing scrutiny by environmental groups regarding the effect operations may have on the animal life in the region.
Negative reaction to its operations could have a material adverse impact on the cost,, profitability, ability to
finance or even the viability of an operation. Such events could give rise to material reputational damage. These
disputes are not always predictable and may cause disruption to projects or operations. Failure to manage
relationships with local communities, environmental groups and non-governmental organisations may adversely
affect the Group's reputation, as well as its ability to commence production projects in certain locations, which
could in turn affect its long-term prospects and the Group's business, financial condition and results of operations.
The Group’s current leased acreage is not in the immediate vicinity of any local community. To manage this risk
the Group ensures that it conducts operations in a legal and responsible manner and complies with applicable
rules and regulations.
PANTHEON RESOURCES PLC
STRATEGIC REPORT
FOR THE YEAR ENDED 30 JUNE 2024
22
Any change to government regulation/administrative practices may have a negative impact on the Group's ability
to operate and its future profitability
The business of oil and gas exploration and development is subject to substantial regulation under federal, state,
local laws relating to the exploration for and the development of upgrading, marketing, pricing, taxation, and
transportation of oil and gas and related products and other matters. Amendments to current laws and regulations
governing operations and activities of oil and gas exploration and development operations could have a material
adverse impact on the Group's business. In addition, there can be no assurance that tax laws, royalty regulations
and government incentive programs related to the Group’s oil and gas properties and the oil and gas industry
generally, will not be changed in a manner which may adversely affect the Group’s prospects and cause delays,
inability to explore and develop, or abandonment of these interests. Furthermore, permits, leases, licenses and
approvals are required from a variety of regulatory authorities at various stages of exploration and development.
There can be no assurance that the various government permits, leases, licenses and approvals sought will be
granted in respect of the Group's activities or, if granted, will not be cancelled, or will be renewed upon expiry.
There also can be no assurance that such permits, leases, licenses and approvals will not contain terms and
provisions which may adversely affect the Group's exploration and development activities. If any of the forgoing
were to occur, it could have a material adverse effect on the Group's business, financial condition and results of
operations. To manage the risk, the Group employs experienced personnel and contractors who have successfully
obtained licenses and permits in the past, and who maintain working relationships with regulatory agencies and
monitor changes that could impact the Group.
By order of the board.
Linda Havard
Director
December 7, 2024
PANTHEON RESOURCES PLC
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2024
23
The Directors present their report together with the audited accounts of Pantheon Resources plc (“Pantheon” or
the “Company”) and its subsidiary undertakings (together the “Group”) for the year ended 30 June 2024.
Results
The Group results for the period are set out herein beginning on page 42. The Directors do not propose to
recommend any distribution by way of a dividend for the years ended 30 June 2024, and did not for the fiscal
year 2023.
Future Developments
The Group announced a refreshed strategy in late summer 2023, where it outlined its goal of achieving FID by
end 2025, subsequently amended to 2H of 2027 on the Ahpun project and by 2029 on the Kodiak project. The
Group also announced that it was considering a listing or dual listing on a US stock exchange, possibly NYSE or
NASDAQ, and/or was also considering the merits of a listing on the main board of the London Stock Exchange
as part of its strategic thinking. This work is ongoing. The Group also announced it had commenced the process
of working towards a hot-tap into the TAPS, to allow the sale of future production directly into the pipeline.
Additionally, Pantheon has executed a GSPA with AGDC for the intended future supply of Pantheon’s natural
gas into the proposed 800 mile natural gas pipeline (Phase 1 of the Alaska LNG project) from the Alaska North
Slope to Nikiski in Alaska’s south. Southcentral Alaska is facing an impending energy crisis and is actively
evaluating its options to best resolve this near term issue. In September 2024, Wood Mackenzie published a draft
report on Alaska LNG, which concluded that gas supply via the proposed pipeline (when compared to other
alternatives such as importing LNG) provides higher economic impact, jobs and lower delivered costs by
stimulating demand, despite requiring higher capital expenditures. The commercial arrangements agreed to
between Pantheon and AGDC involve Pantheon supplying its natural gas into the pipeline at beneficial rates in
exchange for providing commercial support to reduce the cost of project financing and/or enable other
commercial opportunities, as specified in the GSPA. In November 2024, Wood Mackenzie published their final
report on Alaska LNG which concluded that the Alaska LNG project would, in their opinion, deliver material
economic benefits to the State of Alaska. These conclusions were echoed by Governor Dunleavy. In addition,
President-elect, Donald Trump, made very supportive statements in support of the proposed gas pipeline (Phase
1, Alaska LNG).
Information to shareholders – website
The Group maintains its own website (www.pantheonresources.com) to facilitate provision of information to
external stakeholders and potential investors and to comply with Rule 26 of the AIM Rules for Companies.
Group structure and changes in share capital
Details of the Group structure and the Company’s share capital during the period are set out in Notes 8 and 17 to
these accounts.
Directors
The Directors who served at any time during the year were:
Name
Role
David Hobbs
John Cheatham
Executive Chair
Chief Executive Officer
Justin Hondris
Director, Finance & Corporate Development – resigned 27 September,
2024
Robert Rosenthal
Technical Director
Jeremy Brest
Allegra Hosford Scheirer
Non-Executive Director
Non-Executive Director – appointed 3 July, 2023
Linda Havard
Non-Executive Director – appointed 1 January 2024
Directors’ interests
The beneficial and non-beneficial interests in the Company’s shares of the Directors and their families were as
follows:
PANTHEON RESOURCES PLC
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2024
24
Name
Number of Ordinary shares
of £0.01
Number of Ordinary shares
of £0.01
30-Jun-23
30-Jun-24
David Hobbs
1,717,229
3,697,684
John Cheatham
4,235,346
4,235,346
Justin Hondris(1)
1,844,753
1,844,753
Robert Rosenthal
1,353,758
1,867,821
Jeremy Brest
1,379,703
2,322,608
Allegra Hosford Scheirer
Nil
Nil
Linda Havard
Nil
Nil
(1) Some of these ordinary shares are beneficially owned by the spouse of J Hondris.
Share options and restricted stock units
The Directors held the following share options of Ordinary shares of £0.01, at the beginning and end of the year:
Director
As at 30
June 2023(1)
Granted
during the
year(2)
Exercised
during the
year
As at 30
June 2024
David Hobbs
-
-
-
-
John Cheatham
10,060,000
-
-
10,060,000
Justin Hondris
8,340,000
-
-
8,340,000
Robert
Rosenthal
6,075,000
-
-
6,075,000
Jeremy Brest
1,500,000
-
-
1,500,000
Allegra Hosford
Scheirer
-
-
-
-
Linda Havard
-
-
-
-
1. Comprising a combination of previously vested share options granted in 2014, 2020, 2021 and 2022.
2. No share options were granted or exercised during the year.
3. Subsequent to year end, in September, 2024 a total of 4.825 million 2014 series share options expired
without exercise.
4. Subsequent to year end, in October 2024, the Group issued a total of 8 million share options to Directors.
These share options vest over 5 years, are subject to additional performance based vesting conditions and
have an exercise price of $0.835, representing a 290% premium to the share price the day prior to grant.
Report on Directors’ remuneration and service contracts
The service contracts of all the Directors are subject to a three-month termination period.
PANTHEON RESOURCES PLC
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2024
25
Directors’ remuneration
Director
Fees/basic
salary
Pension
Contributions
Health
Insurance
2024 Total
2023 Total
($)
($)
($)
($)
($)
D Hobbs (1)
252,654
-
15,598
269,544
11,365
J Cheatham
427,769
-
-
433,370
525,163
J Hondris (2)
439,925
21,905
7,275
469,105
448,920
R Rosenthal
395,205
-
-
395,205
372,389
J Brest
41,481
-
-
41,481
39,931
A Hosford Scheirer
41,481
41,481
-
L Havard (3)
20,741
20,741
-
Total
1,619,256
21,905
29,766
1,670,927
1,397,768
(1) D Hobbs contract covers 3 days per week
(2) J Hondris resigned as a director subsequent to year end, on 27 September, 2024
(3) Appointed 1 January, 2024
Share Option Plan
The Company has in place a Share Option Plan for the long term benefit of all staff and permanent onsultants,
designed to incentivise staff for outperformance, and as a tool to attract and retain best quality personnel. No
share options have been awarded under the scheme since January 2022.
In October 2024 it was announced that this scheme had been replaced by a new scheme, the Employee Share
Ownership Scheme (“ESOP”) which comprises a “share award scheme” and a “Long Term Incentive Plan” of
share options for directors and certain officers. Grants of both share options and stock awards (“Restricted Stock
Units” or RSUs) were granted to directors, executive management and other staff on 23 October, 2024.
Subsequent events
Details of subsequent events can be found at Note 30.
Substantial shareholders
The Company has been notified, in accordance with Chapter 5 of the FCA Disclosure and Transparency Rules, of
the under noted interests in its ordinary shares as at 2 December 2024.
Shareholder
Ordinary
shares
% of Ordinary
shares
LYNCHWOOD NOMINEES LIMITED
136,773,097
12.00
VIDACOS NOMINEES LIMITED
120,414,356
10.57
VIDACOS NOMINEES LIMITED
90,303,966
7.93
INTERACTIVE BROKERS LLC
83,887,924
7.36
HARGREAVES LANSDOWN (NOMINEES)
LIMITED
42,011,171
3.69
PERSHING NOMINEES LIMITED
35,421,628
3.11
Political and charitable contributions
There were no political or charitable contributions during the year.
CORPORATE GOVERNANCE STATEMENT
PANTHEON RESOURCES PLC
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2024
26
The Company has adopted the Quoted Companies Alliance Corporate Governance Code 2018 (the “QCA Code”),
and observes that there is an updated QCA Code of 2023 that will apply for FY 2025. With respect to the FY
2024, the Company published a statement on 1 August 2024 setting out how it complies with the 10 principles of
the QCA Code. That statement is available at:
https://www.pantheonresources.com/images/governance/Corporate_Governance_Statement_-_Aug_2024.pdf.
The Board recognises the principles of the QCA Corporate Governance Code, which focus on the medium to long
term value for shareholders, without stifling the entrepreneurial spirit in which small to medium sized companies
such as Pantheon have been created. In addition to the QCA Code, the Company has adopted a share dealing
code for the Board and employees of the Company.
As previously announced, the Company is making preparations for a possible US stock market listing. As part of
these preparations, the Group has hired a specialist consulting firm to assist it in building its controls and
processes to meet US Sarbanes-Oxley standards. This is a very comprehensive, process which is presently
underway, and its enhancements to corporate governance will be in addition to maintaining the Company’s
current compliance with the QCA Code.
STRATEGY & BUSINESS MODEL
Pantheon's strategy is to focus on hydrocarbon exploration, appraisal and production, onshore USA, in a region of
low sovereign risk where its specialist expertise lies. Pantheon has historically structured a lean organization that
is focused on maximising the potential returns to shareholders through carefully targeted exploration, appraisal
and development activities in established and highly prospective areas underpinned by detailed geological
analysis. As the Group builds towards development of its projects and a possible US stock market listing, the
organization will naturally grow both in headcount and in operational capacity. Where appropriate, the Group will
also consider undertaking value accretive acquisitions or divestitures of assets following careful analysis and, as
appropriate, shareholder engagement. The Group, as appropriate, uses a combination of in-house expertise and
external consultants to manage operations.
Pantheon seeks to manage corporate overhead expenditures, whilst balancing the need to hire and retain the best
personnel, advisors and infrastructure in order to maximise the potential returns to shareholders in the event of
success. Given the current scale of the Group, which continues to grow, corporate and operating costs are by
necessity increasing, and are monitored by management to ensure appropriate levels of spending.
The Executive members of the Board of Directors, along with other Executive Management, participate in a
weekly video conference call, during which they discuss, inter alia, the strategic direction, regulatory obligations
and operational status of the Group, and as a result any significant deviation or change, should such occur, will be
highlighted to the remainder of the Board promptly. Once per month, Non-Executive Directors join the weekly
executive call. The Board has also met in person, four times during the 2024 financial year for detailed board and
strategy sessions running for a minimum of two days.
UNDERSTANDING AND MEETING SHAREHOLDER NEEDS AND EXPECTATIONS
Group progress on achieving its key targets are regularly communicated to investors through stock exchange
announcements which can be found under the ‘Stock Exchange Announcements’ section of the Company
website. The Company retains the services of two corporate communications firms which actively engage with
the press, investors, analysts, and with social media. The second of these firms was retained in October 2024 in
order to increase the profile to the US investment community and to the US press. The Group also retains a
Corporate Broker and Nominated Adviser (“NOMAD”), to ensure compliance with stock exchange regulations as
well as to ensure communications to shareholders are suitable for them to understand the Group’s operations and
activities. The Group will consider the use of commissioned research as a medium for shareholder education.
The Company also utilises outside legal, corporate communications, and company secretarial specialist firms to
provide advice and recommendations on various shareholder considerations where relevant. The Company hosts
PANTHEON RESOURCES PLC
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2024
27
a weekly conference call with all Executive Directors, Executive Management, and its NOMAD/Broker. During
these conference calls any shareholder considerations identified over the course of the week can be addressed and
responded to accordingly, as well as other operational, financial, strategic advice of other relevant matters. The
Company regards the AGM as an important opportunity to communicate directly with shareholders via detailed
presentations and in an open question and answer session. The AGM includes a detailed investor presentation and
Q&A session; in recent years, this has been held by a separate webinar to enable global investor participation.
Additionally, the Company also holds regular webinars as and when relevant, open to all shareholders, providing
an investor presentation and an opportunity for Q&A with management. The Company also undertakes investor
roadshows as and when appropriate, arranged through its broker. Over the past year, the Company considers that
it has communicated with a significant portion of its shareholder base and has a clear understanding of
shareholder expectations. Contact details are provided on the Company’s website and within public documents,
should shareholders wish to communicate with the Company.
TAKING INTO ACCOUNT WIDER STAKEHOLDER & SOCIAL RESPONSIBILITIES AND THEIR
IMPLICATIONS FOR LONG-TERM SUCCESS
The Directors recognise their responsibilities to stakeholders including the State of Alaska, North Slope Borough,
staff, partners, suppliers, vendors and residents within the areas it operates. Given the current size of the
Company, stakeholders are able to communicate directly with Executive Management and staff members,
allowing the Board to act appropriately on such feedback. A description of how the Group considers key
stakeholders in its decision-making is provided in its Section 172 Statement, on page 11.
The Company is conscious of its impact on the geological, archeological, cultural and bisological resources in its
operating environment, and has implemented measures to ensure that each person working on our projects,
including company personnel, contractors and subcontractors, are informed of the environmental, social and
cultural concerns that relate to that person’s job, so that we can minimise any negative impacts.
Stakeholders can contact the Company via the website, its NOMAD, or can contact the Company’s retained
corporate communications advisers when required.
EMBEDDING EFFECTIVE RISK MANAGEMENT
The Company hosts a weekly conference call with all Executive Directors, Executive Management, and its
NOMAD/Broker. Separately, the entire management team has a fortnightly ‘alignment call’, designed to provide
better integration and understanding of activities across the team, both corporately and operationally.
Additionally, the Group also has a policy of structured daily, weekly or fortnightly operational and management
conference calls during periods of operational activity to identify and discuss key business challenges and risk
areas. The Board believes that this regular program of internal communications provides an effective opportunity
for potential or real-time risks to be identified, considered and, where necessary, addressed in a timely manner.
In addition, you may refer to pages 12-13 for an additional description of how the Group considers stakeholder
interests in decision making. The Group’s oil and gas activities are subject to a variety of risks, both financial and
operational, as are described in the Chief Financial Officer’s Report and Strategic Report.
Given the Company’s current size, the Board considers that the Executive Management team, with oversight from
the Non-Executive Board of Directors and relevant advisers, to be sufficient to identify risks applicable to the
Company and its operations and to implement an appropriate system of controls. Accepting that no systems of
control can provide absolute assurance against material misstatement or loss, the Directors believe that the
established systems for internal control within the group are appropriate to the size and cost structure of the
business. Additionally, the Company has publicly stated that it is considering a possible listing on a US stock
exchange such as NYSE or NASDAQ, and in preparation for such a listing has commenced a process of
increasing the level of controls and governance of the group, to Sarbanes-Oxley standards. An internal audit
function is not considered necessary or practical due to the size of the Company and the close day-to-day control
exercised by the Executive Directors.
PANTHEON RESOURCES PLC
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2024
28
The Finance, Audit and Risk Committee meets at least two times per year (typically four times per year) where
these internal and financial controls are discussed as required, where, inter alia, budgets/forecasts and other key
financial matters are discussed.
MAINTAINING A BALANCED AND WELL-FUNCTIONING BOARD
The Directors acknowledge their responsibility for, and recognise the importance of implementing and
maintaining, high standards of corporate governance. The Board is responsible for establishing and maintaining
the system of internal controls. The effectiveness of the Group's system of internal control is considered annually
by the Finance, Audit and Risk Committee of the Board.
The Board
As at the date of this report, the Board comprises three non-executive Directors and three executive Directors.
The independent Company Secretary is a partner in a law firm who is a specialist in providing company
secretarial services to listed companies. The Board is responsible to the shareholders for the proper management
of the Group. It meets regularly to discuss operations, consider and monitor strategy, examine opportunities,
identify and consider key risks, consider budgets (and where appropriate approve) capital expenditure projects
and other significant financing and strategic matters. The Board delegates authority to the management for day-
to-day business matters including, inter alia, drilling, geological and operational matters, purchasing procedures,
contract approval procedures (within limits), accounting and administration, and the hiring of full time and
temporary staff and consultants. Matters reserved for the Board are communicated in advance of formal meetings.
In addition to formal board meetings, the executive directors hold weekly conference calls, attended by the
Company’s NOMAD, in order to keep the executive board fully informed with operational matters and potential
issues as well as regulatory obligations. The Board also considers this regular interaction with its NOMAD to be a
prudent additional layer of corporate governance. Biographical details of the Directors can be found on the
‘About Pantheon’ section of the Company’s website, at weblink https://pantheonresources.com/index.php/about-
us/board. Board members are expected to attend all formal board and applicable committee meetings, as well as
weekly informal board meetings with the Company’s NOMAD (monthly for non executive directors). The board
meets formally at least 4 times per year, with meetings usually running for a minimum of 2 days.
The QCA Code does not offer a definition of independence with respect to directors, so in forming a view on the
independence of directors the Company has sought guidance by reference to the guidelines outlined in the FCA’s
UK Corporate Governance Code. In any event, the Board exercises discretion in making the determination of
director independence which is kept under review on an annual basis. All three non-executive directors are
considered by the Board to be independent. In addition, subsequent to the end of the fiscal year 2024, each
committee was restructured such that all have a majority membership of NEDs and, with the exception of the
Nominations Committee, are chaired by an NED.
The Board has a number of committees as explained below.
Finance, Audit, and Risk Committee
During the fiscal year, The Finance, Audit and Risk Committee consisted of Linda Havard as Chair with all other
directors as members. As noted earlier, subsequent to the end of the fiscal year 2024, this committee was
restructured such that all have a majority membership of NEDs. The current members are Linda Havard, Jeremy
Brest, and Jay Cheatham, with Ms. Havard remaining as Chair. This Committee provides a forum through which
the Group's finance functions and auditors, report to the Board. Meetings may be attended, by invitation, by the
Company’s NOMAD, Company Secretary, other directors/executives and the Company’s auditors.
The Finance, Audit and Risk Committee meets at least twice per year, but typically four times per year. For the
financial year ended 30 June 2024 there were four Finance, Audit and Risk Committee meetings which were
attended by all members. Its terms of reference include the review of the Annual and Interim Accounts,
consideration of the Company and Group’s accounting policies, the review of internal control, risk management
PANTHEON RESOURCES PLC
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2024
29
and compliance procedures, and consideration of all issues surrounding publication of interim and annual
financial results and the annual audit. The Finance, Audit and Risk Committee will also interact with the auditors
and review their reports relating to accounts and internal control systems. The Finance, Audit and Risk
Committee does not have a formal policy on auditor rotation, however the individual audit partner is required to
rotate after a maximum of 5 years.
Remuneration Committee
During the fiscal year, the Remuneration Committee consists of Jeremy Brest as Chair, with all other Directors as
members. As noted earlier, subsequent to the end of the fiscal year 2024, this committee was restructured such
that it has a majority membership of NEDs. The current members are Jeremy Brest, Linda Havard, Allegra
Hosford Scheirer, and David Hobbs, with Mr. Brest remaining as Chair. The Committee met four times during
the year. Its role is to determine the remuneration arrangements and contracts of all Directors and senior
employees, and the appointment or re-appointment of Directors. Specifically, Executive Directors recommend
remuneration for Executive Management and other senior employees, and the Remuneration Committee approves
of these arrangements. In addition, the Executive Director members of the Remuneration Committee set the
remuneration for NEDs, and the NED members of the Remuneration Committee set the remuneration of the
Executive Directors. No Director, however, is involved in deciding matters of his or her own remuneration.
Nominations Committee
During the fiscal, the Nominations Committee is chaired by David Hobbs, with all other Directors being
members. As noted earlier, subsequent to the end of the fiscal year 2024, this committee was restructured such
that it has a majority membership of NEDs; however, this Committee continues to have an Executive Director as
its Chair. The current members are David Hobbs, Linda Havard, Jeremy Brest, Allegra Hosford Scheirer, and Jay
Cheatham, with Mr. Hobbs remaining as Chair. The Committee meets as and when required. Its role is to
consider and oversee board composition, recruitment and succession planning.
Conflicts Committee
During the fiscal year, the Company has established a Conflicts Committee which consists of Allegra Hosford
Scheirer as Chair, with all other Directors as members. As noted earlier, subsequent to the end of the fiscal year
2024, this committee was restructured such that it has a majority membership of NEDs. The current members are
Allegra Hosford Scheirer, Jeremy Brest, and David Hobbs, with Ms. Hosford Scheirer remaining as Chair. The
role of the Conflicts Committee is to assist the Board in monitoring actual and potential conflicts of interest under
the definitions of the Companies Act 2006. Under the Companies Act 2006 Directors are responsible for their
individual disclosures of actual or potential conflict. To follow best practice, the Conflicts Committee holds
discussions where appropriate, with the Company’s UK lawyers.
Anti-Corruption & Bribery Committee
During the fiscal year, the Company has established an Anti-Corruption & Bribery Committee Committee for
which Justin Hondris was Chair, with all other Directors as members, during the fiscal year. As noted earlier,
subsequent to the end of the fiscal year 2024, this committee was restructured such that it has a majority
membership of NEDs.
Following Mr Hondris’ resignation as a Director, Allegra Hosford Scheirer assumed the Chair role of the Anti-
Corruption and Bribery Committee. The current members are Allegra Hosford Scheirer, Linda Havard, and
David Hobbs, with Ms. Hosford Scheirer remaining as Chair. The purpose of the Anti-Corruption & Bribery
Committee is to ensure the Company’s compliance with the Bribery Act 2010.
HAVING APPROPRIATE EXPERIENCE, SKILLS AND CAPABILITIES ON THE BOARD
PANTHEON RESOURCES PLC
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2024
30
The Board of Directors has a mix of experience, skills, both technical and commercial, and personal qualities that
seek to deliver the strategy of the Company. The Company will ensure that the Directors have the necessary up-
to-date experience, skills and capabilities to deliver the Company strategy and targets. If the Company identifies
an area where additional skills are required, the Company will contract an appropriately qualified third party to
advise as required. Each Director is listed on the Company’s website and in the annual report, along with a clear
description of the Director’s role and experience.
EVALUATING BOARD PERFORMANCE
As the Company has grown, and with its stated intention of pursuing a listing on a US stock exchange, the Board
is reviewing the board performance and effectiveness and is adding additional resource if/where appropriate.
Pantheon will continue to liaise with its advisors as to the most appropriate composition and effectiveness of the
board and executive management team.
ETHICAL VALUES & BEHAVIOURS
The Company operates a corporate culture that is based on ethical values and behaviors and treats staff,
consultants, operational and financial stakeholders fairly and with respect. It will maintain a quality system
appropriate to the standards required for a Company of its size. The Board communicates regularly with staff
through meetings, team conference calls and presentations, individual telephone calls and messages and
advocates respectful dialogue with employees, consultants and other stakeholders. At the time of writing, the
board comprised four male and two female members.
ENVIRONMENTAL STATEMENT
Pantheon Resources will seek to conduct its activities in a way that keeps the environmental and social impacts to
a minimum. To that end, the Company has a target to eliminate its Scope 1 and Scope 2 greenhouse gas emissions
by the later of five years after FID or the calendar year 2030. Furthermore, it will consult with State and local
communities on the North Slope of Alaska to minimize the development footprint while seeking to maximise the
economic benefits to the state of Alaska and North Slope Borough.
Pantheon intends for the field facilities of Ahpun and Kodiak to be all electric, with CCS (carbon capture &
storage) applied to power generation exhausts, beginning from the later of five years after FID or calendar year
2030. To the extent possible, we will ensure that all electricity purchases by the company are from zero GHG
(greenhouse gas) emission sources.
Furthermore, after the later of five years after FID or calendar year 2030, the Company will work with its
suppliers in an effort to eliminate their Scope I and 2 emissions (i.e. Pantheon's scope 3 emissions) and/or acquire
suitable offsets as and when appropriate.
To minimise the physical footprint of the Company's development activities we will maximise the number of
wells drilled from each pad in order to minimise the number of pads and connecting roads.
MAINTAINING GOVERNANCE STRUCTURES AND PROCESSES
Ultimate authority for all aspects of the Company’s activities resides with the Board, with the respective
responsibilities of the Chair, the Executive Directors, the various Board Committees, and Executive Management
arising as a result of delegation by the Board. Given the constraints of balancing a small, cost-conscious
Company with a desire to maintain high standards of Corporate Governance, the Board has adopted a number of
initiatives to achieve Corporate Govenance standards. The Board engages in active, structured and regular
internal communication, including a standing weekly conference call (including non-executive directors once per
month) between the executive board and its NOMAD (Nominated Advsior to the London Stock Exchange) where
significant matters are tabled and discussed. A NOMAD has a responsibility to London Stock Exchange for
advising and guiding a company on its responsibilities in relation to its admission to AIM as well as its
PANTHEON RESOURCES PLC
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2024
31
continuing obligations of being a listed company. This is in addition to regular, formal Board meetings, at least 4
times per year. All the Executive Directors and Executive Management have designated, delegated roles and
areas of responsibility and engage with the Company’s shareholders and stakeholders in accordance with relevant
regulatory and corporate governance guidelines. There are a number of matters reserved for the Board’s review
and approval including, Group strategy, approval of major capital expenditure projects, approval of the annual
and interim results, fundraising, dividend policy and Board structure. It monitors the exposure to key business and
operational risks and reviews the strategic direction of the group and its operations. The Board delegates day-to-
day responsibility for managing the business to the Executive Directors and Executive Management team. The
Board considers its current governance structures and processes as appropriate in the context of its current size,
headcount and complexity, and is seeking to improve them further as the Group prepares itself for a possible US
stock market listing. The Finance, Audit, and Risk Committee meets at least twice per year, but typically a
minimum of four times per year, where internal and financial controls are reviewed as required and assets are also
assessed for impairment considerations.
COMMUNICATING WITH SHAREHOLDERS AND OTHER RELEVANT STAKEHOLDERS
Page 11 of this Annual Report provides a section 172 statement which discusses how the Group considers the
interests of shareholders and other relevant stakeholders in its decision making.
Additionally, under AIM Rule 26 the Company publishes historical annual reports, notices of meetings and other
publications, including regular operational news flow, over a minimum of the five previous years which can be
found under the ‘Financial Reports’ and other sections of the Company website.
The Board is committed to maintaining good communication and having dialogue with private and institutional
shareholders, as well as analysts. In addition to the Annual General Meeting, the Company endeavors to arrange
broker arranged non-deal roadshows, shareholder presentations and webinars, all of which allow shareholders to
discuss issues and provide feedback as appropriate. The Company also retains the services of two specialist
corporate communications advisors to assist in promoting awareness of the Company’s activities to its
shareholders and wider audience. The second of these was retained with the objective of improving the Group’s
profile in the US.
The Board have not published a Finance, Audit and Risk Committee or Remuneration Committee report, which
the Board considers to be appropriate given the size and stage of development of the Company.
Upon the conclusion of the AGM of the Company, the results of the meeting are released through a regulatory
news service and a copy of the announcement is posted on the Company’s website. In a situation such as where
there is a significant proportion of votes cast against a resolution, then, where relevant, an explanation would be
provided.
EU Market Abuse Regulations
The EU Market Abuse Regulation came into effect in the UK on 3 July 2016 and the Company has implemented
relevant policies and procedures to ensure compliance with the requirements of the regime. The Company
administers compliance in-house, consulting with NOMAD and legal counsel regularly.
Statement of Directors’ responsibilities
The Directors are responsible for preparing the financial statements in accordance with applicable laws and
regulations. Under that law the Directors have elected to prepare the Group and Parent Company financial
statements in accordance with UK-adopted international accounting standards which requires the Directors to
prepare financial statements for each financial period which give a true and fair view of the state of affairs of the
Group and of the Company and of the profit or loss of the Group for that period. In preparing those financial
statements, the Directors are required to:
a)
select suitable accounting policies and then apply them consistently;
b)
make judgements and estimates that are reasonable and prudent;
PANTHEON RESOURCES PLC
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2024
32
c)
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the
Group will continue in business; and
d)
state whether applicable UK adopted International Accounting Standards have been followed, subject to
any material departures disclosed and explained in the financial statements.
The Directors confirm that the financial statements comply with the above requirements.
The Directors are responsible for keeping adequate accounting records which disclose with reasonable accuracy
at any time the financial position of the Group and Company and to enable them to ensure that the financial
statements comply with the Companies Act 2006. The Directors are also responsible for safeguarding the assets
of the Group and hence for taking steps for the prevention and detection of fraud and other irregularities. The
Directors are responsible for the maintenance and integrity of the corporate and financial information included on
the Company’s website. The Company is compliant with AIM Rule 26 regarding the Company’s website.
Statement of disclosure to the auditors
So far as the Directors are aware:
a)
there is no relevant audit information of which the Company’s auditors are unaware; and
b)
all the Directors have taken all the steps that they ought to have taken to make themselves aware of any
relevant audit information and to establish that the auditors are aware of that information.
By order of the board
Linda Havard
Director
December 7, 2024
PANTHEON RESOURCES PLC
DIRECTORS’ BIOGRAPHIES
FOR THE YEAR ENDED 30 JUNE 2024
33
Biographical details of the Directors of the Company can be found on the ‘About Pantheon’ section of the
Company’s website, at weblink https://pantheonresources.com/index.php/about-us/board. Additional details now
follow:
David Hobbs, Executive Chair
David Hobbs graduated as a Petroleum Engineer from Imperial College in 1984, initially working at British Gas
as a drilling engineer before moving into commercial and business development roles at Monument Oil & Gas
and Hardy Oil and Gas, two UK listed international independent E&P companies. He joined Cambridge Energy
Research Associates (CERA), now part of S&P Global, ending up as Chief Energy Strategist, advising
Government officials, senior executives and Boards of Directors across the energy sector. He also spent six years
as part of the leadership team establishing the King Abdullah Petroleum Studies and Research Center
(KAPSARC) in Riyadh, Saudi Arabia. David is an adjunct professor at the University of Calgary, a senior Non-
Resident Fellow at the Atlantic Council’s Global Energy Center and is Chair of Proton Green, a US based helium,
food grade CO2 and carbon sequestration company.
David is Chair of the Nominations Committee, and a member of the Remuneration Committee, Finance, Audit,
and Risk Committee, Conflicts Committee, and Anti-Corruption & Bribery Committee.
Jay Cheatham, Chief Executive Officer
Jay Cheatham has more than 50 years' experience in all aspects of the petroleum business. He has extensive
international experience in both oil and natural gas, primarily for ARCO. At ARCO, Jay held a series of senior
appointments. These include Senior Vice President and District Manager (ARCO eastern District) with direct
responsibility for Gulf Coast US operations and exploration and President of ARCO International where he had
responsibility for all exploration and production outside the US Jay's most recent appointment was as President
and CEO of Rolls-Royce Power Ventures, where he had the key responsibility for restructuring the Company.
Jay also has considerable financial skills in addition to his corporate and operational expertise. He has acted as
Chief Financial Officer for ARCO's US oil and natural gas company (ARCO Oil & Gas). Moreover, he has an
understanding of the capital markets through his past position as CEO to the Petrogen Fund, a private equity fund.
Jay is member of the Nominations Committee, Remuneration Committee, Finance, Audit, and Risk Committee,
Conflicts Committee, and Anti-Corruption and Bribery Committee.
Robert (Bob) Rosenthal, Technical Director
Bob Rosenthal has over 40 years' experience in the oil and gas industry globally as an Exploration Geologist and
Geophysicist. He has held various senior exploration positions and spent a large part of his career at Exxon and at
BP, where he gained key relevant regional experience in the geology of North Slope of Alaska and of Texas.
Since 1999, Bob has run his own successful consulting business and has led the exploration efforts of a number of
private and public companies.
Bob is a member of the Company’s Nominations Committee, Remuneration Committee, Finance, Audit and Risk
Committee, Conflicts Committee and Anti-Corruption and Bribery Committee.
Jeremy Brest, Non-Executive Director
Jeremy has more than 25 years’ experience in investment banking and financial advisory. Jeremy is the founder
of Framework Capital Solutions, a boutique Singapore-based advisory firm specializing in structuring and
execution of private transactions. Prior to founding Framework, Jeremy was the head of structuring for Indonesia
at Credit Suisse and a derivatives trader at Goldman Sachs.
Jeremy is Chair of the Remuneration Committee, and a member of the Finance, Audit and Risk Committee, the
Conflicts Committee, Nominations Committee, and the Anti-Corruption and Bribery Committee.
PANTHEON RESOURCES PLC
DIRECTORS’ BIOGRAPHIES
FOR THE YEAR ENDED 30 JUNE 2024
34
Allegra Hosford Scheirer, Non-Executive Director (appointed July 2023)
Allegra Hosford Scheirer is a recognized expert in petroleum system analysis. Her degrees are from Brown
University (B.S., geology-physics/math) and the Massachusetts Institute of Technology (Ph.D., marine geology
and geophysics). Following a postdoctoral position at Woods Hole Oceanographic Institution, she spent 6.5 years
at the U.S. Geological Survey as a member of the Geophysical Unit of Menlo Park and the Energy Resources
Program, where she contributed to petroleum resource assessments of sedimentary basins. For the past 15 years,
she has been a co-director of the Basin Processes and Subsurface Modelling consortium at Stanford University,
where she also teaches and advises graduate students. She also maintains a consulting company for working with
private clients on exploration programs, short courses, and petroleum-focused field trips. Allegra is passionate
about sustainability initiatives, including carbon capture and storage and geologic hydrogen.
Allegra is Chair of the Conflicts Committee and the Anti-Corruption & Bribery Committee, and is a member of
the Finance, Audit and Risk Committee, Remuneration Committee and Nominations Committee.
Linda Havard, Non-Executive Director (appointed January 2024)
Linda Havard has more than 35 years’ experience as a financial and operating executive in public oil and gas and
entertainment companies as well as professional services firms. She most recently served as Chief Financial
Officer of Gensler, the world's largest architecture and design firm. Previously, she served for six years as Chief
Financial Officer at the global law firm of Orrick, Herrington & Sutcliffe, 13 years as Executive Vice President
and Chief Financial Officer of Playboy Enterprises and 15 years at ARCO (now BP Amoco), where she headed
Corporate Planning and Investor Relations, among other senior positions.
Linda holds an MBA in Finance from the University of California at Los Angeles and a PhD (honoris causa) in
Business from the Chicago School of Professional Psychology. She is a member of the Atlanta Federal Reserve
Board CFO Panel, the International Women's Forum, and the Governing Body of the CFO Executive Summit.
Linda is Chair of the Finance, Audit and Risk Committee and a member of the Remuneration, Nominations,
Conflicts and Anti-Corruption & Bribery Committees.
PANTHEON RESOURCES PLC
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF PANTHEON RESOURCES PLC
FOR THE YEAR ENDED 30 JUNE 2024
35
Opinion
We have audited the financial statements of Pantheon Resources Plc (the ‘parent company’) and its subsidiaries
(the ‘group’) for the year ended 30 June 2024 which comprise the Consolidated Statement of Comprehensive
Income, the Consolidated and Parent Company Statements of Changes in Equity, the Consolidated and Parent
Company Statement of Financial Position, the Consolidated and Parent Company Statements of Cash Flows and
notes to the financial statements, including significant accounting policies. The financial reporting framework that
has been applied in their preparation is applicable law and UK-adopted international accounting standards and as
regards the parent company financial statements, as applied in accordance with the provisions of the Companies
Act 2006.
In our opinion:
•
the financial statements give a true and fair view of the state of the group’s and of the parent company’s
affairs as at 30 June 2024 and of the group’s loss for the year then ended;
•
the group financial statements have been properly prepared in accordance with UK-adopted international
accounting standards;
•
the parent company financial statements have been properly prepared in accordance with UK-adopted
international accounting standards and as applied in accordance with the provisions of the Companies Act
2006; and,
•
the financial statements have been prepared in accordance with the requirements of the Companies Act
2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable
law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit
of the financial statements section of our report. We are independent of the group and parent company in accordance
with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the
FRC’s Ethical Standard as applied to listed entities, and we have fulfilled our other ethical responsibilities in
accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Material uncertainty related to going concern
We draw attention to note 1.4 in the financial statements, which indicates that further funding will be required
within the 12 months following the date of approval of the financial statements in order to meet working capital
needs and to fully fund further exploration programmes as planned. As stated in note 1.4, these events or conditions,
along with the other matters as set forth in note 1.4, indicate that a material uncertainty exists that may cast
significant doubt on the group and parent company’s ability to continue as a going concern. Our opinion is not
modified in respect of this matter.
In auditing the financial statements, we have concluded that the director’s use of the going concern basis of
accounting in the preparation of the financial statements is appropriate. Our evaluation of the directors’ assessment
of the group and parent company’s ability to continue to adopt the going concern basis of accounting included:
•
Challenging the inputs and assumptions used in the forecasts prepared by management to assess the group’s
and parent company’s ability to meet financial obligations as they fall due for a period of at least twelve
months from the date of approval of the financial statements.
•
Corroborating the committed cash flows against contractual arrangements and historic information and
compared general budgeted overheads to current run rates.
•
Identifying and evaluating subsequent events which affect going concern and evaluating the likelihood of
occurrence of forecast and impact on the future cash inflows.
PANTHEON RESOURCES PLC
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF PANTHEON RESOURCES PLC
FOR THE YEAR ENDED 30 JUNE 2024
36
•
Stress-testing the forecasted cash flows by increasing expenditures, as well as critically reviewing
committed versus non committed expenditure, in order to evaluate the likelihood of potential downside
scenarios that may have an impact on headroom.
•
Comparing actual results for the year to previous budgets to assess the accuracy of management’s
forecasting.
•
Reviewing post year end information such as minutes of board meetings and Regulatory News Service
(RNS) announcements.
•
Reviewing post year end cash position as at the end of October 2024 and compared this against the
forecasted position.
•
Discussing with management as to the strategies that they are pursuing to secure further funding if and
when required. Considering management’s past history in relation to the ability to raise funds.
•
Assessing the adequacy of the disclosures in respect of going concern including the uncertainty over the
ability to raise additional funds.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the
relevant sections of this report.
Our application of materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for
materiality. These, together with qualitative considerations, helped us to determine the scope of our audit and the
nature, timing and extent of our audit procedures on the individual financial statement line items and disclosures
and in evaluating the effect of misstatements, both individually and on the financial statements as a whole.
Based on our professional judgement, we consider net assets to be the most significant determinant of the group’s
and parent company’s financial performance used by shareholders as the group continues to bring its exploration
assets through to development and the parent company continues to support the group’s exploration activities. We
therefore applied a materiality threshold of 2% of net assets (2023: 2% of net assets) to both the group and the
parent company.
Whilst materiality applied to the group financial statements was $5,545,000 (2023: $5,000,000), each significant
component of the group was audited to a lower level of materiality. The parent company materiality was $5,267,000
(2023: $4,750,000) with the other significant components being audited to materialities ranging between
$1,099,000 - $2,637,000 (2023: $1,105,000 - $2,424,000). These materiality levels were used to determine the
financial statement areas that are included within the scope of our audit work and the extent of sample sizes during
the audit.
Performance materiality is the application of materiality at the individual account or balance level set at an amount
to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected
misstatements exceeds materiality. Performance materiality was set at 70% (2023: 70%) of the above materiality
levels for both group and parent company, equating to $3,881,000 (2023: $3,500,000) and $3,686,000 (2023:
$3,325,000), respectively, based upon our assessment of the risk of misstatement.
We agreed with management that we would report to the audit committee all individual audit differences identified
during the course of our audit in excess of $277,000 (2023: $250,000) for the financial statements as a whole and
$263,000 (2023: $237,500) for the parent company. We also agreed to report differences below these thresholds
that, in our view, warranted reporting on qualitative grounds.
Our approach to the audit
Our audit is risk based and is designed to focus our efforts on the areas at greatest risk of material misstatement,
aspects subject to significant management judgement as well as greatest complexity, risk and size.
PANTHEON RESOURCES PLC
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF PANTHEON RESOURCES PLC
FOR THE YEAR ENDED 30 JUNE 2024
37
As part of designing our audit, we determined materiality and assessed the risk of material misstatement in the
financial statements. In particular, we looked at areas involving significant accounting estimates and judgement by
the directors and considered future events that are inherently uncertain. The recoverability of intangible assets and
investments in subsidiary undertakings were assessed as areas which involved significant judgements by
management. We also addressed the risk of the valuation of the convertible bond, going concern and management
override of internal controls, including among other matters consideration of whether there was evidence of bias
that represented a risk of material misstatement due to fraud.
The accounting records of the parent company and all subsidiary undertakings are centrally located and audited by
us based upon group, parent and component materiality or risk to the group. The key audit matters and how these
were addressed are outlined below.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
financial statements of the current period and include the most significant assessed risks of material misstatement
(whether or not due to fraud) we identified, including those which had the greatest effect on: the overall audit
strategy, the allocation of resources in the audit; and, directing the efforts of the engagement team. These matters
were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon,
and we do not provide a separate opinion on these matters. In addition to the matter described in the Material
uncertainty related to going concern section, we have determined the matters described below to be the key audit
matters to be communicated in our report.
Key Audit Matter
How our scope addressed this matter
Valuation and impairment of exploration and
evaluation assets in the Group (note 13)
As disclosed in note 13 to the Group Financial
statements, the Group’s intangible asset represents
capitalised exploration expenditure on projects.
The balance as at 30 June 2024 was $293,635,128
(2023: $286,668,349). Note 1.13 discloses critical
accounting estimates and judgements in this area.
The Group has capitalised costs in respect of the
Group’s exploration interests in accordance with
IFRS 6 Exploration for and Evaluation of Mineral
Resources (IFRS 6). The Directors are required to
assess the exploration assets for indicators of
impairment and, where they are deemed to exist,
to undertake a full impairment review to assess the
need for impairment charges. This may involve
making significant judgements and assumptions
relating to the timing, amount and probability of
future cash flow.
We therefore identified the risk over impairment
of exploration and evaluation assets as a significant
risk and, due to the magnitude of the balance and
the level of management judgement involved, we
concluded this risk to be a key audit matter.
Our work in this area included:
•
Obtaining a full schedule of leases relating to
exploration assets and reviewing available
information to assess whether the leases
remained in good standing;
•
Discussing with management future plans to
develop each prospect, including
consideration of funding that may be
required to do so;
•
Challenging management’s assessment of
impairment in relation to exploration and
evaluation assets, taking into consideration
the impairment indicators outlined in IFRS 6.
Challenging and corroborating key inputs
and assumptions made by management;
•
Reviewing the minutes of Board meetings
and RNS announcements for indicators of
impairment;
•
Obtaining and reviewing reports prepared by
independent experts on the portfolio of assets
and reviewing key findings against
PANTHEON RESOURCES PLC
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF PANTHEON RESOURCES PLC
FOR THE YEAR ENDED 30 JUNE 2024
38
management’s assertions and IFRS 6
impairment indicators;
•
Substantively testing a sample of exploration
and evaluation additions during the year by
corroborating to the original source
documentation and assessing their eligibility
for capitalisation under IFRS 6; and,
•
Ensuring presentation and disclosure in the
financial statements are sufficient and in
accordance with requirements of IFRS 6.
Based on our audit procedures performed, the
carrying value of exploration assets is not materially
misstated.
Carrying value of loans due from subsidiary
companies in the parent company (note 9)
Under IAS 36 ‘Impairment of Assets’, companies
are required to assess whether there is any
indication that an asset may be impaired at each
reporting date.
The parent company has loans due from
subsidiary companies of $292,828,674 (2023:
$279,494,628) which form part of the company’s
net investment in these subsidiaries. These
balances represent the most significant account on
the company statement of financial position and
there is a risk they may be impaired as a result of
the subsidiary companies incurring losses. Note
1.13 discloses critical accounting estimates and
judgements in this area.
Key judgements and assumptions regarding the
impairment of the balances include the timing,
extent and probability of future cash flow from the
subsidiary companies.
We therefore identified the risk over the
impairment of loans due from subsidiary
companies as a significant risk in the parent
company financial statements, and, due to the
magnitude of the balance and the level of
management judgement involved, we concluded
this risk to be a key audit matter.
Our work in this area included:
•
Reviewing the loan balances for any
indicators of impairment in accordance with
IAS 36, including a review of the underlying
net asset balances in the related entities and
considering the work done in respect of the
recoverability of intangible assets within
these entities;
•
Obtaining and reviewing management’s
assessment of the recoverability of these
balances and corroborating, as well as
challenging the key inputs and assumptions
made by management in arriving at their
conclusions; and,
•
Assessing the appropriateness of
presentation and adequacy of disclosures in
the financial statements.
Based on our audit procedures performed, the
carrying value of loans from subsidiary companies in
the parent company is not materially misstated.
Other information
PANTHEON RESOURCES PLC
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF PANTHEON RESOURCES PLC
FOR THE YEAR ENDED 30 JUNE 2024
39
The other information comprises the information included in the annual report, other than the financial statements
and our auditor’s report thereon. The directors are responsible for the other information contained within the annual
report. Our opinion on the group and parent company financial statements does not cover the other information
and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance
conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other
information is materially inconsistent with the financial statements or our knowledge obtained in the course of the
audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent
material misstatements, we are required to determine whether this gives rise to a material misstatement in the
financial statements themselves. If, based on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
•
the information given in the strategic report and the directors’ report for the financial year for which the
financial statements are prepared is consistent with the financial statements; and,
•
the strategic report and the directors’ report have been prepared in accordance with applicable legal
requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent company and their environment
obtained in the course of the audit, we have not identified material misstatements in the strategic report or the
directors’ report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires
us to report to you if, in our opinion:
•
adequate accounting records have not been kept by the parent company, or returns adequate for our audit
have not been received from branches not visited by us; or
•
the parent company financial statements are not in agreement with the accounting records and returns; or
•
certain disclosures of directors’ remuneration specified by law are not made; or
•
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the statement of directors’ responsibilities, the directors are responsible for the
preparation of the group and parent company financial statements and for being satisfied that they give a true and
fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the group and parent company financial statements, the directors are responsible for assessing the
group and the parent company’s ability to continue as a going concern, disclosing, as applicable, matters related to
going concern and using the going concern basis of accounting unless the directors either intend to liquidate the
group or the parent company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with
ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error
PANTHEON RESOURCES PLC
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF PANTHEON RESOURCES PLC
FOR THE YEAR ENDED 30 JUNE 2024
40
and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures
in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is
detailed below:
•
We obtained an understanding of the group and parent company and the sector in which they operate to
identify laws and regulations that could reasonably be expected to have a direct effect on the financial
statements. We obtained our understanding in this regard through discussions with management, our
expertise in the sector and through the application of cumulative audit knowledge.
•
We determined the principal laws and regulations relevant to the group and parent company in this regard
to be those arising from
UK Companies Act 2006;
Quoted Companies Alliance (QCA) Corporate Governance Code
UK-adopted international accounting standards;
AIM Rules; and,
Local industry laws and regulations in Alaska where the group operates.
•
We designed our audit procedures to ensure the audit team considered whether there were any indications
of non-compliance by the group and parent company with those laws and regulations. These procedures
included, but were not limited to:
Making enquiries of management;
Reviewing legal expense accounts;
Reviewing minutes of board meetings and other correspondence during the year and post-year end;
and,
Reviewing RNS announcements during the year and post-year end.
•
We also identified the risks of material misstatement of the financial statements due to fraud at both the
group and parent company level. We considered, in addition to the non-rebuttable presumption of a risk of
fraud arising from management override of controls, whether key management judgements could include
management bias was identified in relation to the carrying value of exploration assets and the carrying
value of loans due from subsidiary companies in the parent company and we addressed this as outlined in
the Key Audit Matters section.
•
We addressed the risk of fraud arising from management override of controls by performing audit
procedures which included but were not limited to: the testing of journals; reviewing accounting estimates
for evidence of bias; and, evaluating the business rationale of any significant transactions that are unusual
or outside the normal course of business.
•
Compliance with laws and regulations at the subsidiary level was ensured through enquiry of management
and review of ledgers and correspondence for any instances of non-compliance.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including
those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk
increases the more that compliance with a law or regulation is removed from the events and transactions reflected
in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is
also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional
concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located on the Financial
Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our
auditor’s report.
PANTHEON RESOURCES PLC
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF PANTHEON RESOURCES PLC
FOR THE YEAR ENDED 30 JUNE 2024
41
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those
matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone, other than the company and the company's
members as a body, for our audit work, for this report, or for the opinions we have formed.
Imogen Massey (Senior Statutory Auditor)
Westferry Circus
For and on behalf of PKF Littlejohn LLP
Canary Wharf
Statutory Auditor
London E14 4HD
7 December 2024
PANTHEON RESOURCES PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2024
42
Notes
2024
2023
$
$
Continuing operations
Revenue
27
13,393
803,689
Cost of sales
(7,153)
(673,290)
Gross profit
6,240
130,399
Administration expenses
3
(8,773,748)
(3,870,673)
Share Based payments expense
23
-
(3,146,170)
Operating loss
4
(8,767,508)
(6,886,444)
Interest Expense – Convertible Bond and other
15
(4,893,640)
(6,111,118)
Convertible Bond - Revaluation of Derivative
Liability
15
(337,055)
11,321,514
Other Income
28
-
30,000
Interest receivable
6
630,371
338,205
Loss before taxation
(13,367,832)
(1,307,843)
Taxation
7
1,822,247
(138,844)
Loss for the year
(11,545,585)
(1,446,687)
Other comprehensive income for the year
Exchange differences from translating foreign
operations
29
(52,924)
(3,185,937)
Total comprehensive loss for the year
(11,598,509)
(4,632,624)
Basic and diluted loss per share
2
(1.25)¢
(0.18)¢
The loss for the current and prior year and the total comprehensive loss for the current and prior year are wholly
attributable to the equity holders of the parent company, Pantheon Resources Plc.
PANTHEON RESOURCES PLC
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2024
43
Share
Share
Retained
Currency
Share
Total
Capital
premium
losses
reserve
based
payment
reserve
equity
$
$
$
$
$
$
Group
At 1 July 2023
12,464,677
297,830,078
(49,444,331)
(2,692,860)
14,271,042
272,428,606
Loss for the year
-
-
(11,545,585)
-
-
(11,545,585)
Other comprehensive income: Foreign
currency translation
-
-
-
(52,924)
-
(52,924)
Total comprehensive income for the
year
-
-
(11,545,585)
(52,924)
-
(11,598,509)
Transactions with owners
Capital Raising
Issue of shares (note 17)
466,487
9,837,080
-
-
-
10,303,567
Issue Costs
-
-
-
-
-
-
Issue costs paid in cash
-
-
-
-
-
-
Convertible Bond – Amortisation
Issue of shares
208,228
5,561,332
-
-
-
5,769,560
Total transactions with owners
674,715
15,398,412
-
-
-
16,073,127
Balance at 30 June 2024
13,139,392
313,228,490
(60,989,916)
(2,745,784)
14,271,042
276,903,224
See note 26 for a description of each reserve account included above.
PANTHEON RESOURCES PLC
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2024
44
Share
Share
Retained
Currency
Share
Total
Capital
premium
losses
reserve
based
payment
reserve
equity
$
$
$
$
$
$
Group
At 1 July 2022
10,720,459
264,879,196
(48,466,590)
493,078
11,776,246
239,402,388
Loss for the year
-
-
(1,446,687)
-
-
(1,446,687)
Other comprehensive income: Foreign
currency translation
-
-
-
(3,185,937)
-
(3,185,937)
Total comprehensive income for the
year
-
-
(1,446,687)
(3,185,937)
-
(4,632,624)
Transactions with owners
Capital Raising
Issue of shares
1,301,769
20,828,305
-
-
-
22,130,074
Issue costs
-
(469,920)
-
-
-
(469,920)
Issue costs paid in cash
-
(501,683)
-
-
-
(501,683)
Exercise of Share Options and RSU’s
Issue of shares
58,445
1,880,003
-
-
-
1,938,448
Convertible Bond – Amortisation and
Redemption
Issue of shares (note 17)
384,005
11,032,995
-
-
-
11,417,000
Other – Reversal of over accrual
relating to previous capital raise
-
181,185
-
-
-
181,185
Transfer of previously expensed share
based payment on exercise of options
-
-
468,946
-
(468,946)
-
Share based payments expense
-
-
-
-
2,963,741
2,963,741
Total transactions with owners
1,744,219
32,950,885
468,946
-
2,494,795
37,189.899
Balance at 30 June 2023
12,464,677
297,830,078
(49,444,331)
(2,692,860)
14,271,042
272,428,607
See note 26 for a description of each reserve account included above.
PANTHEON RESOURCES PLC
COMPANY STATEMENTS OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2024
45
Share
Share
Retained
Currency
Share
Total
Capital
premium
losses
reserve
based
payment
reserve
equity
$
$
$
$
$
$
Company
At 1 July 2023
12,464,677
297,830,078
(34,369,174)
(18,993,994)
14,271,042
271,202,629
Loss for the year
-
-
(7,199,103)
-
-
(7,199,103)
Other comprehensive income: Foreign
currency translation
-
-
-
(1,130,441)
-
(1,130,441)
Total comprehensive income for the
year
-
-
(7,199,103)
(1,130,441)
-
(8,329,544)
Transactions with owners
Capital Raising
Issue of shares (note 17)
466,487
9,837,080
-
-
-
10,303,567
Issue costs
-
-
-
-
-
-
Issue costs paid in cash
-
-
-
-
-
-
Convertible Bond – Amortisation
Issue of shares
208,228
5,561,332
-
-
-
5,769,560
Total transactions with owners
674,715
15,398,412
-
-
-
16,073,127
Balance at 30 June 2024
13,139,392
313,228,490
(41,568,277)
(20,304,435)
14,271,042
278,766,212
See note 26 for a description of each reserve account included above.
PANTHEON RESOURCES PLC
COMPANY STATEMENTS OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2024
46
Share
Share
Retained
Currency
Share
Total
Capital
premium
losses
reserve
based
payment
reserve
equity
$
$
$
$
$
$
Company
At 1 July 2022
10,720,459
264,879,196
(38,237,347)
(29,882,500)
11,776,246
219,256,054
Profit for the year
-
-
3,399,226
-
-
3,399,226
Other comprehensive income: Foreign
currency translation
-
-
-
10,888,506
-
10,888,506
Total comprehensive income for the
year
-
-
3,399,226
10,888,506
-
14,287,732
Transactions with owners
Capital Raising
Issue of shares (note 17)
1,301,769
20,828,305
-
-
-
22,130,074
Issue costs
-
(469,920)
-
-
-
(469,920)
Issue costs paid in cash
-
(501,683)
-
-
-
(501,683)
Exercise of Share Options and RSU’s
Issue of shares
58,445
1,880,003
-
-
-
1,938,448
Convertible Bond – Amortisation and
Redemption
Issue of shares
384,005
11,032,995
-
-
-
11,417,000
Other – Reversal of over accrual
relating to previous capital raise
-
181,185
-
-
-
181,185
Total transactions with owners
1,744,219
32,950,885
-
-
-
34,695,104
Transfer of previously expensed share
based payment on exercise of options
-
-
468,946
-
(468,946)
-
Share based payments expense
-
-
-
-
2,963,741
2,963,741
Balance at 30 June 2023
12,464,678
297,830,081
(34,369,175)
(18,993,994)
14,271,041
271,202,629
See note 26 for a description of each reserve account included above.
PANTHEON RESOURCES PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2024
47
The financial statements were approved by the Board of Directors and authorised for issue on the December 7,
2024 and signed on its behalf by
Linda Havard
Philip Patman, Jr.
Director
Chief Financial Officer
December 7, 2024
December 7, 2024
Company Number 05385506
Notes
2024
2023
$
$
ASSETS
Non-current assets
Exploration & evaluation assets
13
293,635,128
286,668,349
Property, plant and equipment
16
129,200
38,570
293,764,328
286,706,919
Current assets
Trade, other receivables and deposits
9
2,944,543
2,559,522
Cash and cash equivalents
10
7,913,862
20,661,012
10,858,405
23,220,534
Total assets
304,622,733
309,927,453
LIABILITIES
Current liabilities
Convertible Bond – Debt
15
7,090,177
9,755,688
Trade and other payables
11
703,496
2,840,610
Provisions
12
5,921,030
6,017,238
Lease Liabilities
14
63,395
36,435
13,778,098
18,649,971
Non-current liabilities
Lease Liabilities
14
69,028
-
Convertible Bond – Debt
15
13,127,532
16,619,062
Convertible Bond – Derivative
15
744,851
407,566
Deferred tax liability
7
-
1,822,247
13,941,411
18,848,875
Total liabilities
27,719,509
37,498,847
Net assets
276,903,224
272,428,607
EQUITY
Capital and reserves
Share capital
17
13,139,392
12,464,677
Share premium
313,228,490
297,830,078
Retained losses
(60,989,916)
(49,444,331)
Currency reserve
(2,745,784)
(2,692,860)
Share based payment reserve
23
14,271,042
14,271,042
Shareholders’ equity
276,903,224
272,428,607
PANTHEON RESOURCES PLC
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2024
48
Notes
2024
2023
ASSETS
$
$
Non-current assets
Property, plant and equipment
16
25,698
38,570
Loans to subsidiaries
9
292,828,674
279,494,628
292,854,372
279,533,198
Current assets
Trade and other receivables
9
106,334
154,161
Cash and cash equivalents
10
7,543,991
19,518,284
7,650,325
19,672,445
Total assets
300,504,697
299,205,643
LIABILITIES
Current liabilities
Convertible Bond – Debt
15
7,090,177
9,755,688
Trade and other payables
11
278,864
617,425
Provisions
12
470,630
566,838
Lease Liability
14
26,431
36,435
7,866,102
10,976,386
Non-current liabilities
Convertible Bond – Debt
15
13,127,532
16,619,062
Convertible Bond – Derivative
15
744,851
407,566
13,872,383
17,026,628
Total liabilities
21,738,485
28,003,014
Net assets
278,766,212
271,202,629
EQUITY
Capital and reserves
Share capital
17
13,139,392
12,464,677
Share premium
313,228,490
297,830,078
Retained losses
(41,568,277)
(34,369,174)
Currency reserve
(20,304,435)
(18,993,994)
Share based payment reserve
23
14,271,042
14,271,042
Shareholders’ equity
278,766,212
271,202,629
In accordance with the provisions of Section 408 of the Companies Act 2006, the Company has not presented an
income statement. A loss for the year ended 30 June 2024 of $7,199,103 (2023: profit of $3,399,226) has been
included in the consolidated income statement.
The financial statements were approved by the Board of Directors and authorised for issue on the December 7,
2024 and signed on its behalf by
Linda Havard
Philip Patman, Jr.
Director
Chief Financial Officer
December 7, 2024
December 7, 2024
Company Number 05385506
PANTHEON RESOURCES PLC
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2024
49
Notes
2024
2023
$
$
Net outflow from operating activities
18
(11,365,415)
(11,395,855)
Cash flows from investing activities
Interest received
630,371
338,205
Interest paid
(757)
-
Funds used for drilling, exploration and leases
13
(6,966,779)
(48,246,055)
Property, plant and equipment
-
(3,251)
Net cash outflow from investing activities
(6,337,165)
(47,911,101)
Cash flows from financing activities
Proceeds from share issues
17
10,303,566
22,746,441
Issue costs paid in cash
-
(501,683)
Repayment of borrowing – unsecured convertible bond
29
(5,273,798)
-
Repayment of borrowing and leasing liabilities
14
(74,338)
(60,913)
Net cash inflow from financing activities
4,955,430
22,183,845
(Decrease) in cash & cash equivalents
(12,747,150)
(37,123,111)
Cash and cash equivalents at the beginning of the year
20,661,012
57,784,121
Cash and cash equivalents at the end of the year
10
7,913,862
20,661,012
Major non-cash transactions
During the year the Company / Group elected to make two quarterly principal and interest payments in relation
to the unsecured convertible bond. The details are below;
1. In March 2024 8,820,315 new ordinary shares were issued at a price of US$0.29 per share to settle the
quarterly bond repayment of US$2.7m.
2. In June 2024 7,471,153 new ordinary shares were issued at a price of US$0.36 per share to settle the
quarterly bond repayment of US$2.7m.
PANTHEON RESOURCES PLC
COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2024
50
Notes
2024
2023
$
$
Net outflow from operating activities
18
(2,800,734)
(1,507,104)
Cash flows from investing activities
Net interest received
556,626
337,894
Loans to subsidiary companies
9
(14,704,205)
(56,103,408)
Property, plant and equipment
-
(3,251)
Net cash outflow from investing activities
(14,147,579)
(55,768,765)
Cash flows from financing activities
Proceeds from share issues
17
10,303,566
22,746,441
Issue costs paid in cash
-
(501,683)
Repayment of borrowing – unsecured convertible bond
(5,273,798)
-
Repayment of borrowing and leasing liabilities
(55,748)
(60,913)
Net cash inflow from financing activities
4,974,020
22,183,845
(Decrease) / Increase in cash and cash equivalents
(11,974,293)
(35,092,022)
Cash and cash equivalents at the beginning of the year
19,518,284
54,610,306
Cash and cash equivalents at the end of the year
10
7,543,991
19,518,284
Major non-cash transactions
During the year the Company / Group elected to make two quarterly principal and interest payments in relation
to the unsecured convertible bond. The details are below;
1. In March 2024 8,820,315 new ordinary shares were issued at a price of US$0.29 per share to settle the
quarterly bond repayment of US$2.7m.
2. In June 2024 7,471,153 new ordinary shares were issued at a price of US$0.36 per share to settle the
quarterly bond repayment of US$2.7m.
PANTHEON RESOURCES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
51
1.
Accounting policies & General Information
Pantheon Resources Plc was listed on the London Stock Exchange’s AIM in 2006. Pantheon, through its
subsidiaries, has a 100% working interest in oil projects located onshore Alaska, USA. The Company is
domiciled in the United Kingdom and incorporated and registered in England and Wales, with registration
number 05385506.
A summary of the principal accounting policies, all of which have been applied consistently throughout the year,
is set out below.
1.1
Basis of preparation
The financial statements have been prepared on a going concern basis using the historical cost convention and in
accordance with the UK Adopted International Accounting Standards (“IAS") and in accordance with the
provisions of the Companies Act 2006.
The Group’s financial statements for the year ended 30 June 2024 were authorised for issue by the Board of
Directors on December 7, 2024 and were signed on the Board’s behalf by Linda Havard, Director, and Philip
Patman, Jr., Chief Financial Officer.
The Group and Company financial statements are presented in US dollars.
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. 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
Interests in joint arrangements
IFRS 11 Joint Operations defines a joint arrangement as an arrangement over which two or more parties have
joint control. Joint control is the contractually agreed sharing of control of an arrangement, which exists only
when decisions about the relevant activities (being those that significantly affect the returns of the arrangement)
require unanimous consent of the parties sharing control.
Joint operations
A joint operation is a type of joint arrangement whereby the parties that have joint control of the arrangement
have rights to the assets and obligations for the liabilities, relating to the arrangement. The Group has a 100%
working interest in all of its projects and accordingly does not have interests in joint operations at the balance
sheet date. At the present time the Group is advancing towards development of its projects on its own, aiming to
achieve FID on the Ahpun project by 2H of 2027 and FID on the Kodiak project by 2029. This is not to say that
the Company is ruling out a potential farmout notwithstanding the disparity between the market capitalisation of
Pantheon and management’s assessment of the intrinsic value of the Company’s assets. However, we believe that
materially better terms could be achieved once the development of the Company’s assets is further advanced. If
at some point the Group were to farm out, then joint interest accounting would be applicable in future periods.
PANTHEON RESOURCES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
52
1.4.
Going concern
In June 2023 Pantheon communicated to shareholders via RNS and accompanying webinar, its aggressive
strategy to target sustainable market recognition of a value of $5 - $10 per barrel of 1P/1C recoverable resource
by the end of 2028. This target is unchanged. The FID on the Ahpun project is now expected to be delayed to 2H
2027, with the FID on the Kodiak project by 2029. This impacts the date of first production, now anticipated in
2028, and coupled with increased project definition and workscope increases the funding requirement to first
production to approximately $150 million. Executing such a strategy requires significant additional capital, most
of which the Company seeks to access through non equity sources. The Group will also need to secure additional
funding for general working capital, to cover future obligations as and when they fall due, to continue to progress
its key projects, and to continue its proposed US IPO preparations as planned within the next 12 months
following approval of these financial statements and the Group seeks to secure such funding by Q2 or Q3 of fiscal
year 2025 (for clarity, at latest, Q1 of calendar year 2025), in the least dilutive manner for shareholders. This
process is presently underway, and Pantheon is procuring appropriate assistance from its appointed investment
banks and other advisors. The auditors have made reference to this material uncertainty in their audit report.
We believe that Pantheon’s position has improved materially over the past 12 months as a result of the
achievement of some major milestones, all of which greatly increase the Group’s confidence in securing its
overall funding requirement to reach first production. These milestones included receipt of IERs on three of its
projects, specifically (i) Kodiak, (ii) Ahpun – Alkaid, and (iii) Ahpun – Western Topsets, which when combined
certified, in aggregate, a 2C Contingent Resource of 1.6 billion barrels of ANS Crude and 6.6 Tcf of natural gas.
Critically however, these IERs estimated a project NPV10 of $1.9 -$2.2 billion for the Ahpun – Alkaid and
Ahpun – Western Topset projects combined. An NPV estimate based on discounted net present value has not yet
been commissioned for the much larger Kodiak project, but it would clearly be materially accretive to the
intrinsic value of Pantheon’s asset base. The importance here is that Pantheon retains 100% working interest in
each of these projects, which have enormous potential value, and these large valuations and certified resources
give the Company great flexibility in raising non-equity funding. This includes the ability to leverage any
success in the Megrez-1 well and the value attributable to gas resources should Alaska LNG Phase 1 proceed. In
accessing additional capital, Pantheon’s goal is to achieve this in the least dilutive manner for shareholders,
minimising the use of equity capital and by prioritising such alternate funding sources.
The Company believes that the enormous size of the resource already appraised on Pantheon’s acreage provides
the potential for more than five hundred wells. Whilst in absolute terms this would entail cumulative investment
estimated in the billions of dollars over the lifetime of the project, and whilst the future costs and revenues are
uncertain, Pantheon currently estimates that the maximum negative cumulative outlay over the lifetime of the
project could be as high as $300 million. Once in full development, it is believed that production revenues would
have the potential to self-finance the remaining development costs, as would typically be the case in such
developments. Furthermore, the Company could fund a substantial portion of the maximum negative cumulative
outlay could through debt secured by expected future revenues from gas and other hydrocarbon sales.
The Group has no contractual obligation to drill any future wells and the only obligation is to plug and abandon
the Talitha-A test well, the estimated cost of which ($1.6m) has already been provided for in the financial
accounts. Given the quality and advancement of the assets, the Company is optimistic in its ability to raise capital
as and when required. Accordingly, the financial statements have been prepared on a going concern basis.
1.5
Revenue
During the previous year oil sales commenced as a result of testing at Alkaid-2. There were one off FY 2024 oil
sales resulting from the re-entry and flow test of the Alkaid-2 well. This is considered to be non-recurring because
it only occurred during the testing phase and production and thus production revenues stopped once flow testing
operations ended. Once in production, revenue from contracts with customers will be recognised in accordance
with IFRS15 Revenue from Contacts with Customers, at an amount that reflects the consideration to which the
Group expects to be entitled in exchange for those goods.
Contract balances
A contract asset is the right to consideration in exchange for goods transferred to the customer. If the Group
performs by transferring goods to a customer before the customer pays consideration or before payment is due, a
PANTHEON RESOURCES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
53
contract asset is recognised for the earned consideration that is conditional. The Group does not have any contract
assets as performance and a right to consideration occurs within a short period of time and all rights to
consideration are unconditional.
Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the
financial assets.
1.6
Foreign currency translation
(i) Functional and presentational currency
The financial statements for the Group and the Company are presented in US Dollars ($) and this is the
Group’s Presentation currency. The Functional currency of all entities within the Group, excluding the
Parent Company, is $USD. The Functional currency of the Parent Company is £GBP.
(ii) Transactions and balances
Transactions in foreign currencies are translated into US dollars at the spot rate. 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 of the Parent Company are translated into US dollars at the rates of exchange ruling at
the year end. Exchange differences resulting from the retranslation of currencies are treated as movements
on reserves.
The results of the Parent Company are translated into US dollars at the average rates of exchange during the
year.
(iii) Inter-group Loans
Inter-group Loans are made from the Parent Company to the Subsidiaries. These loans are denominated in
£GBP as the Parent Company’s functional currency is £GBP. At the end of the period the Parent Company
presents these loans in $USD, as the presentation currency is $USD for the Group. Any resulting foreign
exchange gain or loss incurred by the subsidiaries is recorded at their individual entity level and these loans
are then eliminated at the consolidated level. This treatment has been adopted as these loans, in substance,
more closely resemble a net investment in that foreign operation.
1.7
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.
1.8
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.
1.9
Exploration and evaluation costs and developed oil and gas properties
The Group follows the ‘successful efforts’ method of accounting for exploration and evaluation costs. At the
point of production, all costs associated with oil, gas and mineral exploration and investments are classified into
and capitalised on a ‘cash generating unit’ (“CGU”) basis, in accordance with IAS 36. 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.
The recoverability of all exploration and evaluation 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. All balance sheet carrying
PANTHEON RESOURCES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
54
values are reviewed for indicators of impairment at least twice yearly. The prospect acreage has been classified
into discrete “projects” or, upon production, CGUs. When production commences the accumulated costs for the
specific CGU is transferred from intangible fixed assets to tangible fixed assets i.e., ‘Developed Oil & Gas
Properties’ 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.
In accordance with IFRS 3 Business Combinations, exploration assets acquired as part of a business acquisition,
and hence combination, are recorded at their fair value as opposed to the fair value of the consideration paid.
1.10
Impairment of exploration costs and developed oil and gas properties, depreciation of assets,
plug & abandonment and goodwill
In accordance with IFRS 6 ‘Exploration for and Evaluation of Mineral Resources’ (IFRS 6), exploration and
evaluation assets are reviewed for indicators of impairment. Should indicators of impairment be identified, an
impairment test is performed.
In accordance with IAS 36, the Group is required to perform an “impairment test” on assets when an assessment
of specific facts and circumstances indicate there may be an indication of impairment, specifically to ensure that
the assets are carried at no more than their recoverable amount. Where an impairment test is required, any
impairment loss is measured, presented and disclosed in accordance with IAS 36.
In accordance with IAS 36 the Group has determined an accounting policy for allocating exploration and
evaluation assets to specific CGU where applicable.
Exploration and evaluation costs
The Alaskan exploration and evaluation leasehold assets were subject to a fair value assessment as at the date of
acquisition. The carrying value at 30 June 2024 represents the cost of acquisition plus any fair value adjustment,
where appropriate, and subsequent capitalised costs, in accordance with UK adopted IAS.
Decommissioning Charges
Decommissioning costs will be incurred by the Group at the end of the operating life of some of the Group’s
facilities and properties. The Group assesses its decommissioning provision at each reporting date. The ultimate
decommissioning costs are uncertain and cost estimates can vary in response to many factors, including changes
to relevant legal requirements, the emergence of new restoration techniques or experience at other production
sites. The expected timing, extent and amount of expenditure may also change – for example, in response to
changes in reserves or changes in laws and regulations or their interpretation. Therefore, significant estimates and
assumptions are made in determining the provision for decommissioning. As a result, there could be significant
adjustments to the provisions established which would affect future financial results. The provision at reporting
date represents management’s best estimate of the present value of the future decommissioning costs required.
For all wells the Group has adopted a Decommissioning Policy in which all decommissioning costs are
recognised when a well is either completed, abandoned, suspended or a decision taken that the well will likely be
plugged and abandoned in due course. For completed or suspended wells, the decommissioning charge is
provided for and subsequently depleted over the useful life of well using unit of production method. To date no
depletion expense has been recorded on the assets currently held by the Group.
Other property, plant and equipment
Other property, plant and equipment are stated at historical 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:
Office equipment is depreciated by equal annual instalments over their expected useful lives, being 3 years.
1.11
Financial instruments
Recognition and derecognition
Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual
provisions of the financial instrument.
PANTHEON RESOURCES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
55
Financial assets, if/where applicable, are derecognised when the contractual rights to the cash flows from the
financial asset expire, or when the financial asset and substantially all the risks and rewards are transferred.
A financial liability is derecognised when it is extinguished, discharged, cancelled or expires.
Classification and measurement of financial liabilities
The Group’s financial liabilities include borrowings (unsecured convertible bond debt), trade and other payables
and embedded derivative financial instruments.
Financial liabilities are initially measured at fair value, and, where applicable, adjusted for transaction costs
unless the Group designated a financial liability at fair value through profit or loss.
Subsequently, financial liabilities are measured at amortised cost using the effective interest method except for
derivatives and financial liabilities designated which are carried subsequently at fair value with gains or losses
recognised in profit or loss.
All interest-related charges and, if applicable, changes in an instrument’s fair value that are reported in profit or
loss are included within finance costs or fair value gains/(losses) on derivative financial instruments.
Embedded derivative financial instruments
A borrowing arrangement structured as an unsecured convertible bond repayable in stock over 20 quarterly
instalments, in addition to the right of the lender to voluntarily convert part or all of the outstanding principal
prior to the maturity date of the bond, has a derivative embedded in the instrument. This is considered to be a
separable embedded derivative of the loan instrument.
At the date of issue, the fair value of the embedded derivative is estimated by considering the derivative as a
series of individual components with modelling of the fixed and floating legs to determine a repayment schedule
and derive a net present value for the forward contract embedded derivative.
This amount is recognised separately as a financial liability or financial asset and measured at fair value through
the income statement. The residual amount of the loan is then recorded as a liability on an amortised cost basis
using the effective interest method until extinguished upon conversion or at the instrument’s maturity date.
IFRS 9 Expected Credit Loss Model
IFRS 9 requires that credit losses on financial assets are measured and recognised using the “expected credit loss”
(ECL) approach. Other than cash, the only other financial assets held are $2.46m in drilling deposits lodged with
the state of Alaska. These drilling deposits are held as security to cover future obligations to the state of Alaska
for Great Bear Pantheon to perform dismantle, removal and restoration activities. Funds held by the state of
Alaska are considered to have virtually no risk of credit loss. These funds cannot be accessed or utilised by the
Group until such time as the state of Alaska releases the funds back to the Group.
1.12
Leases
All contracts entered into by the group are assessed to determine if they are either a lease contract or contain a
lease contract. Where a lease is identified, the Group recognises a right of use asset and a corresponding lease
liability with respect to all lease arrangements in which it is a lessee.
There are three key evaluations in determining a lease contract:
I.
The contract contains an identified asset, which is either explicitly identified in the contract or implicitly
specified by being identified at the time the asset is made available to the Group.
PANTHEON RESOURCES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
56
II.
The Group has the right to obtain substantially all of the economic benefits from use of the identified
assets throughout the period of use, considering rights within the defined scope of the contract.
III.
The Group has the right to direct the use of the identified asset throughout the period of use.
Lease liabilities are initially measured at the discounted present value of all future lease payments, excluding
prepayments made up to and including the commencement date of the lease. The discount rate used is either the
rate implicit in the lease, or if that is not readily determined, the incremental borrowing rate.
The lease liability is presented as a separate line item in the balance sheet.
Subsequent measurement of the lease liability includes increases to the carrying amount of the liability to reflect
the interest on the lease liability (using the effective interest method) and by reducing the carrying amount for the
lease payments made.
The Group remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset)
whenever:
A.
There is a change in the lease term. In such cases the lease liability is remeasured by discounting the
revised lease payments using the revised discount rate.
B.
Change of lease payments (due to changes in the reference index or rate) or any changes in expected
payments under a guaranteed residual value. In such instances the lease liability is remeasured using unchanged
discount rates; a revised discount rate is used where the lease payments are changed due to a change in a floating
interest rate.
C.
Where a lease modification is not accounted for as a separate lease. In such a case the lease liability is
remeasured based on the modified lease term, using the revised discount rate at the date of the modification.
The initial carrying value of a right-of-use assets consists of:
•
The corresponding lease liability
•
All and any prepayments prior to the lease commencement
•
Less: Any lease incentive received by the lessee
•
Less: Any initial direct costs incurred by the lessee
Right-of-use assets are depreciated over the shorter period of lease term and useful life of the underlying asset.
The depreciation starts at the commencement date of the lease. The asset is subsequently measured at initial
carrying value less accumulated depreciation and impairment losses.
Where an impairment indicator has been identified, an impairment test is conducted. In assessing whether an
impairment is required, the carrying value of the asset is compared with its recoverable value. The recoverable
amount is the higher of the assets fair value less the costs to sell and value in use.
1.13
Critical accounting estimates and judgements
The preparation of financial statements in conformity with UK adopted International Accounting Standards
requires the use of accounting estimates and assumptions that affect the reported amounts of assets and liabilities
at the date of the financial statements and the reported amounts of income and expenses during the reporting
period. Although these estimates are based on management’s best knowledge of current events and actions, actual
results ultimately may differ from those estimates. IFRSs also require management to exercise its judgement in
the process of applying the Group’s accounting policies.
The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are
significant to the financial statements are as follows:
Impairment of tangible and intangible exploration & evaluation assets
The first stage of the impairment process is the identification of an indicator of impairment. Such indications can
include significant geological or geophysical information which may negatively impact the existing assessment of a
project’s potential for recoverability (regional to the Alaska North Slope, or more localized to the leases held by
Pantheon or by specific data relating to the Group’s projects), significant reductions in estimates of resources (via
PANTHEON RESOURCES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
57
third-party derived analysis or internally developed analysis), significant falls in commodity prices, a significant
revision of Group Strategy or of the plan for the development of a field, operational issues which may require
significant capital expenditure to remediate, environmental, political or regulatory impacts and others. This list is
not exhaustive and management judgement is required to decide if an indicator of impairment exists. The Group
regularly assesses the tangible and non-tangible assets for indicators of impairment. When an impairment indicator
exists an impairment test is performed; next, the recoverable amount of the asset, being the higher of the asset’s fair
value less costs to sell and value in use, is compared to the asset’s carrying value. Any excess of the asset’s carrying
value over its recoverable amount is expensed to the income statement.
Impairment of loans between Parent and Subsidiaries
The carrying amount of the loans made to the subsidiaries is tested for impairment annually and this process is
considered to be key judgement along with determining whenever changes circumstances or events indicate that the
carrying amounts of those loans may not be recoverable. When assessing the recovery of these loans, the Board of
Directors considers the likelihood that the subsidiaries will be able to settle the amounts owing, either out of future
anticipated cashflows or through divestment of assets. These loans to foreign subsidiaries, for which settlement is
neither specifically planned, nor likely to occur in the near term foreseeable future is, in substance, a part of the
Company’s investment in foreign operation and impairment is assessed from this perspective.
Contingent liabilities
Pursuant to IAS 37, a contingent liability is either: (1) a possible obligation arising from past events whose existence
will be confirmed only by the occurrence or non-occurrence of some uncertain future event not wholly within the
entity’s control, or (2) a present obligation that arises from a past event but is not recognized because either: (i) it is
not probable that an outflow of resources embodying economic benefits will be required to settle the obligation, or
(ii) the amount of the obligation cannot be measured with sufficient reliability.
Share-based payments
The Group records charges for share-based payments.
For option-based share-based payments, to determine the value of the options management estimates certain
factors used in the option pricing model, including volatility, vesting date, exercise date of options and the
number of options likely to vest. At each reporting date during the vesting period, management estimates the
number of shares that will vest after considering the vesting criteria. If these estimates vary from actual
occurrence, this will impact on the value of the equity carried in the reserves.
Segment Reporting
The operating segments, namely UK (PLC administration) and US (Alaskan operations/office plus Houston
Headquarters), are reported in a way that is consistent with the internal reporting and provided to the chief
operating decision maker as required by IFRS 8 “Operating Segments.” The Board of Directors, has been
identified as the chief operating decision-maker. As such, the Board of Directors is responsible for allocating
resources and assessing performance of the operating segments.
The accounting policies of the reporting segments are consistent with the accounting policies of the Group as a
whole. The segment profit and loss represents the profit or loss earned by each segment. This is the measure of
profit that is reported to the Board of Directors for the purpose of resource allocation and the assessment of each
segment’s performance. When assessing segment performance and considering the allocation of resources, the
Board of Directors reviews each segment’s assets and total liabilities; for this purpose, all assets and liabilities are
allocated to reportable segments.
1.14
New and amended International Financial Reporting Standards adopted by the Group
New standards and interpretations not applied
At the date of authorisation of these financial statements, the following standards and interpretations relevant to
the Group and which have not been applied in these financial statements, were in issue but were not yet effective.
PANTHEON RESOURCES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
58
Standard
Impact on initial application
Effective date
IFRS 16
Lease liability in a sale and leaseback
(amendment to IFRS 16)
1 January 2024
IAS 1
Amendments to IAS 1: Classification of
Liabilities as Current or Non-current and
Classification of Non-current Liabilities
with covenants
1 January 2024
IFRS 7
Statement of Cash Flows (Supplier
Finance Arrangements) Financial
Instruments (Supplier Finance
Arrangements)
1 January 2024
IAS 21
The Effects of Changes in Foreign
Exchange Rate (Lack of Exchangeability)
1 January 2024
The Group does not anticipate that the adoption of these standards will have a material effect on its financial
statements in the period of initial adoption.
1.15 Share based payments
On occasion, the Company has made share-based payments to certain Directors, staff and consultants by way of
issue of ordinary shares and share options. In the case of share options, the fair value of these payments is
calculated by the Company using the Black-Scholes option pricing model. The expense is recognised on a
straight-line basis over the period from the date of award to the date of vesting, based on the Company’s best
estimate of the expected number of shares that will eventually vest. There were no new issues of share options
made during the year.
1.16 Translation differences
The financial statements for the Group and the Company are presented in US Dollars ($) and this is the Group’s
Presentation currency. The Functional currency of all entities within the Group, excluding the Parent Company, is
$USD. The Functional currency of the Parent Company is £GBP.
The assets, liabilities of the Parent Company are translated into US dollars at the rates of exchange ruling at the
year end. The income and expenses of the Parent Company are translated into US dollars at the average rates of
exchange during the year. Exchange differences resulting from the retranslation of currencies are shown in the
“Other Comprehensive Income for the Year” section of the Statement of Comprehensive Income and are treated
as movements on reserves. Foreign exchange gains or losses incurred by the subsidiaries on the intra-group loans
are recorded at their individual entity level and these loans and associated foreign exchange gains or losses are
subsequently eliminated upon consolidation.
2.
Loss per share
The total loss per ordinary share from continuing operations for the group is 1.25 US cents (2023: 0.18 US cents -
loss). The loss is calculated by dividing the loss for the year by the weighted average number of ordinary shares
in issue of 925,860,425 (2023: 791,082,592).
The diluted profit per share has been kept the same as the basic profit per share because as the Company reported
a loss, hence including the additional dilution would have resulted in a reduction of the loss per share.
The diluted weighted average number of shares in issue is 976,299,346 (2023: 841,521,513). Change in shares is
reflected in note 17.
PANTHEON RESOURCES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
59
3.
Segmental information
The Group’s activities involve the exploration for oil and gas. There are two reportable operating segments:
“US”, which includes the Alaskan Operation plus administration based in Alaska and Texas and “UK”; Office for
Pantheon Resources PLC.
Each reportable segment adopts the same accounting policies.
In compliance with IFRS 8 ‘Operating Segments’, the following tables reconcile the operational loss and the
assets and liabilities of each reportable segment with the consolidated figures presented in these Financial
Statements, together with comparative figures for the year ended 30 June 2024.
Year ended 30 June 2024
Geographical segment (Group)
UK
US
Consolidated
$
$
$
Revenue
-
13,393
13,393
Cost of sales
-
(7,153)
(7,153)
Administration expenses
(2,526,955)
(6,246,793)
(8,773,748)
Convertible Bond and other - Interest
Expense
(4,889,255)
(4,385)
(4,893,640)
Convertible Bond - Revaluation of
Derivative Liability
(337,055)
-
(337,055)
Interest receivable
554,162
76,209
630,371
Taxation
-
1,822,247
1,822,247
Loss by reportable segment
(7,199,103)
(4,346,482) (11,545,585)
Exploration & evaluation assets
-
293,635,128
293,635,128
Property, plant & equipment
25,698
103,502
129,200
Trade and other receivables
98,759
2,845,783
2,944,542
Cash and cash equivalents
7,543,991
369,871
7,913,862
Intercompany balances
292,828,674
(292,828,674)
-
Total assets by reportable segment
300,947,122
4,125,610
304,622,732
Total liabilities by reportable segment
(21,738,485)
(5,981,023)
(27,719,508)
Net assets by reportable segment
278,758,637
(1,855,413)
276,903,224
PANTHEON RESOURCES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
60
Year ended 30 June 2023
Geographical segment (Group)
UK
US
Consolidated
$
$
$
Revenue
-
803,689
803,689
Production royalties
-
(97,990)
(97,990)
Cost of sales
-
(575,300)
(575,300)
Administration expenses
997,106
(4,867,779)
(3,870,673)
Share based payments (Options & RSU’s)
(3,146,170)
-
(3,146,170)
Convertible Bond - Interest Expense
(6,111,118)
-
(6,111,118)
Convertible Bond - Revaluation of
Derivative Liability
11,321,514
-
11,321,514
Interest receivable
337,894
311
338,205
Other Income
-
30,000
30,000
Taxation
-
(138,844)
(138,844)
Loss by reportable segment
3,399,226
(4,845,913)
(1,446,687)
Exploration & evaluation assets
-
286,668,349
286,668,349
Property, plant & equipment
38,570
-
38,570
Trade and other receivables
154,161
2,405,361
2,559,522
Cash and cash equivalents
19,518,284
1,142,727
20,661,011
Intercompany balances
279,494,628
(279,494,628)
-
Total assets by reportable segment
299,205,643
10,721,809
309,927,452
Total liabilities by reportable segment
(28,003,014)
(9,495,832)
(37,498,847)
Net assets by reportable segment
271,202,629
1,225,978
272,428,606
4.
Operating loss
2024
2023
$
$
Operating loss is stated after charging:
Depreciation – office equipment
4,399
1,869
Depreciation Right of use assets
68,704
55,700
Auditor’s remuneration
- group and parent company audit services
172,392
133,000
5.
Employment costs
The employee costs of the Group, including Directors’ remuneration, are as follows:
2024
2023
$
$
Wages and salaries
3,224,433
2,680,169
Social security costs
214,898
170,861
Statutory pension costs
21,905
21,087
Share based payments
-
3,146,170
3,461,236
6,018,287
The summary of the directors’ remuneration is shown in the Directors’ report beginning on Page 23. The
Directors are considered to be the key management during the fiscal year.
PANTHEON RESOURCES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
61
2024
2023
Number of employees (including Executive Directors) at the end of
the year
number
number
Management and administration
12
15
6.
Interest receivable
2024
2023
$
$
Bank interest
630,371
338,205
7.
Taxation
2024
2023
$
$
Current tax
US federal corporate tax
-
-
US state and local tax
-
-
UK corporate tax
-
-
Factors affecting the tax charge for the period
-
Income (loss) on ordinary activities before taxation
(13,367,832)
(1,307,843)
Income (loss) on ordinary activities before taxation multiplied by the
standard US corporate tax rate of 21% (2023: US corporate tax rate of
21%)
(2,807,245)
(274,647)
Effects of:
State of Alaska tax benefits associated with temporary book-to-tax
differences
(448,411)
(335,421)
US federal tax benefit associated with temporary book-to-tax
differences
105,313
748,912
US federal tax benefit associated with reassessed future utilization of
loss carry forward
1,328,095
-
Total tax (credit)/charge
(1,822,248)
138,844
Factors that may affect future tax charges
The Group’s deferred tax assets and liabilities as at 30 June 2024 have been measured at 21% for items subject to
US federal income tax only, items subject to state of Alaska and US federal income tax are reflected at an Alaska
rate of 9.4% and a US federal rate, net of state of Alaska tax deduction, of 28.426%. No deferred tax has been
provided for the UK tax losses as there is no expectation of the utilisation in the near future.
At the year-end date, the Group has unused losses carried forward of $136.9m (2023: $123.6m) available for
offset against suitable future profits. Unused US tax losses incurred prior to January 1, 2018 expire in general
within 20 years of the year in which they are sustained. Losses sustained after December 31, 2017 do not expire.
The UK tax losses carried forward are approximately $16m (2023: $11.5m). A deferred tax asset in respect of the
unutilised carried forward losses has not been recognised due to the uncertainty of the timing of any future
profits.
PANTHEON RESOURCES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
62
The deferred tax liability at 30 June 2024 is $Nil (2023: $1,822,247). The deferred tax liability is comprised of
future tax benefits (deferred tax asset) primarily associated with net operating losses generated in prior years and
the estimated loss generated in the current year, combined with future tax expenses (deferred tax liability)
associated with the book gain on bargain purchase not yet recognized for income tax. Net operating losses will
offset future taxable income and reduce the tax liability that would otherwise be incurred. The tax deferred gain
on bargain purchase will result in future taxable income greater than book net income.
8.
Subsidiary entities
The Company currently has the following wholly owned subsidiaries:
Name
Country of
Incorporation
Percentage
ownership
Activity
Registered office address
Hadrian Oil & Gas LLC
United States
100%
Holding Company
5718 Westheimer, Suite
1600, Houston, Texas 77057
Agrippa LLC
United States
100%
Holding Company
5718 Westheimer, Suite
1600, Houston, Texas 77057
Pantheon Oil & Gas LP
United States
100%
Oil & Gas
exploration
5718 Westheimer, Suite
1600, Houston, Texas 77057
Great Bear Petroleum
Ventures I, LLC
United States
100%
Lease Holding
Company
3705 Arctic Blvd. # 2324
Anchorage, Alaska 99503
Great Bear Petroleum
Ventures II, LLC
United States
100%
Lease Holding
Company
3705 Arctic Blvd. # 2324
Anchorage, Alaska 99503
Great Bear Pantheon,
LLC
United States
100%
Operating Company 3705 Arctic Blvd. # 2324
Anchorage, Alaska 99503
Pantheon East Texas,
LLC
United States
100%
Holding Company
5718 Westheimer, Suite
1600, Houston, Texas 77057
Pantheon Operating
Company, LLC
United States
100%
Operating Company P.O. Box 11082
Spring, Texas 77391-1082
Borealis Petroleum LLC
United States
100%
Lease Holding
Company
3705 Arctic Blvd. # 2324
Anchorage, Alaska 99503
Pantheon Oil & Gas LP is 99% owned by Agrippa LLC as its limited partner and 1% by Hadrian Oil & Gas LLC
as its general partner.
9.
Trade, other receivables, and deposits
Group
Group
Company
Company
2024
2023
2024
2023
$
$
$
$
Amounts falling due within one year:
Prepayments & accrued income
467,026
55,199
98,759
52,500
Other receivables and deposits
2,477,516
2,504,323
7,575
101,661
Total
2,944,542
2,559,522
106,334
154,161
PANTHEON RESOURCES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
63
Group
Group
Company
Company
2024
2023
2024
2023
$
$
$
$
Amounts falling due after one year:
Loans to subsidiaries
-
-
292,828,674
279,494,628
An annual impairment review of the amount due from subsidiary undertakings (loans to subsidiaries) is
performed by comparing the expected recoverable amount of the subsidiary’s underlying tangible and intangible
assets to the carrying value of the loan in the Company’s statement of financial position. This has been assessed
in line with IFRS 9 for credit losses however recoverability is supported by the underlying assets.
On the basis of ongoing annual assessments, the lifetime expected credit losses are recognised against loans and
receivables when they are identified and are recorded in the statement of comprehensive income.
10.
Cash and cash equivalents
Group
Group
Company
Company
2024
2023
2024
2023
$
$
$
$
Cash at bank and in hand
7,913,862
20,661,012
7,543,991
19,518,284
11.
Trade and other payables
Group
Group
Company
Company
2024
2023
2024
2023
$
$
$
$
Trade creditors
50,470
251,617
49,403
250,539
Accruals
653,026
2,588,994
229,461
366,886
Total
703,496
2,840,611
278,864
617,425
12.
Provisions
Plug and Abandonment Provision
The Group recognises a decommissioning liability where it has a present legal or constructive obligation as a
result of past events, and it is probable that an outflow of resources will be required to settle the obligation, and a
reliable estimate of the amount of obligation can be made. The obligation generally arises when the asset is
installed, or the ground/environment is disturbed at the field location. A breakdown of these costs is detailed at
Note 20.
Legal Costs
Legal costs have been provided for due to an ongoing dispute with a third-party vendor as detailed in Note 25.
Provisions
Group
Group
Company
Company
2024
2023
2024
2023
$
$
$
$
Plug and Abandonment
5,200,400
5,200,400
-
-
Legal costs
250,000
250,000
-
-
Other provision – Irrecoverable VAT
470,630
566,838
470,630
566,838
Total
5,921,030
6,017,238
470,630
566,838
PANTHEON RESOURCES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
64
Provisions – Group 2024
Plug and
Abandonment
Other
Total
$
$
$
Opening balance
5,200,400
816,838
6,017,238
(Decrease) / Increase in period
-
(96,208)
(96,208)
Amounts unused
5,200,400
720,630
5,921,030
Closing balance
5,200,400
720,630
5,921,030
Provisions – Group 2023
Plug and
Abandonment
Other
Total
$
$
$
Opening balance
4,500,400
785,040
5,285,440
(Decrease) / Increase in period
700,000
31,798
731,798
Amounts unused
5,200,400
816,838
6,017,238
Closing balance
5,200,400
816,838
6,017,238
13.
Exploration and evaluation assets
Group
2024
2023
$
$
Cost
At 1 July
286,798,461
237,852,406
Additions
6,966,779
48,246,055
Additions to Asset Retirement Obligations
-
700,000
At 30 June
293,765,240
286,798,461
Impairment
As at 1 July
130,112
130,112
Charge for year
-
-
At 30 June
130,112
130,112
Net book value
At 30 June
293,635,128
286,668,349
The Group additions for the year comprise the direct costs associated with the preparation of drilling of oil and
gas wells, together with costs associated with leases and seismic acquisition and processing.
An assessment for indicators for impairment was conducted on all of the Group’s exploration and evaluation
assets. Indicators of impairment included asset specific criteria such as, but not limited to, the emergence of
negative geological/geophysical analysis, unsuccessful drilling results, a deterioration in the Group’s lease
position, and the presence of relevant regional drilling data. The successful drilling campaign over recent years,
reinforced by the external validation from third party experts on the Group’s geological data, including, amongst
other, receipt in the 2024 fiscal year of the three favorable IERs from NSAI (relating to Kodiak), CGA (relating
to Ahpun - Western Topset), and LKA (relating to Ahpun - Alkaid), has caused the Group to conclude that no
impairment was required. In making assessments for indicators of impairment other criteria were considered
such as, but not limited to, changes to commodity prices, a worsening of regulatory or environmental factors and
macroeconomic conditions. The Group considered such indicators for impairment and concluded that no
impairment was required.
PANTHEON RESOURCES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
65
14.
Leases
Right of use assets
The Group used leasing arrangements relating to property, plant and equipment. As the Group has the right of use
of the asset for the duration of the lease arrangement, a “right of use” asset is recognised within property, plant
and equipment.
When a lease begins, a liability and right of use asset are recognised based on the present value of the lease
payments.
Group
Group
2024
2023
$
$
Interest expense on lease liabilities
6,566
5,746
Total cash outflow for leases
(74,338)
(60,913)
As at 1 July
34,124
88,627
Additions to right-of-use assets
164,250
-
Depreciation charge - right of use assets
(68,704)
(55,700)
Foreign exchange movement on right of use assets
(470)
1,198
Carrying amount at the end of the year:
Right of use assets
129,200
34,124
Lease liabilities
Group
Group
2024
2023
$
$
Current
63,395
36,435
Non-current
69,028
-
132,423
36,435
Company Company
2024
2023
$
$
Interest expense on lease liabilities
2,181
5,746
Total cash outflow for leases
(55,748)
(60,913)
As at 1 July
34,124
88,627
Additions to right-of-use assets
44,054
-
Depreciation charge - right of use assets
(52,010)
(55,700)
Foreign exchange movement on right of use assets
(470)
1,198
Carrying amount at the end of the year:
Right of use assets
25,698
34,124
PANTHEON RESOURCES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
66
Lease liabilities
Company Company
2024
2023
$
$
Current
26,432
36,435
Non-current
-
-
26,432
36,435
15.
Unsecured Convertible Bond
In December 2021, the Company issued $55 million worth of senior unsecured convertible bonds to a fund
advised by Heights Capital Ireland LLC, a global equity and equity-linked focused investor. At the end of the
financial year, 30 June 2024, the notional outstanding balance is $24.5 million.
The Convertible Bonds have a maturity of 5 years, a coupon of 4.0% per annum and are repayable in 20 quarterly
repayments (“amortisations”) of principal and interest over the 5 year term of the convertible bond, with the last
repayment due in December 2026. Such quarterly amortisations are repayable at the Company’s option, in either
cash at face value, or in ordinary shares (“stock”) at the lower of the conversion price (presently USD$0.8348 per
share) or a 10% discount to volume weighted average price (“VWAP”) in the 10 or 3 day trading period prior to
election date. Additionally, the bondholder has the option to partially convert the convertible bond at its
discretion. A full summary of the terms of Convertible Bonds is detailed in the Company’s RNS dated 7
December, 2021. Note that post year end, in July 2024, Pantheon repaid the final two convertible bond
repayments in advance (in respect of the September 2026 and December 2026 repayments). Accordingly, the
final repayment on the convertible bond is now June 2026.
The bond agreement contains embedded derivatives in conjunction with an ordinary bond. As a result, and in
accordance with the accounting standards, the convertible bonds are shown in the Consolidated Statement of
Financial Position, in two separate components, namely Convertible Bond – Debt and Convertible Bond –
Derivative. At the time of recognition (Dec 2021) the $55m bonds were split, $39,175,363 for the Debt
Component and $15,824,637 for the Derivative Component.
In order to value the derivative component, Pantheon engaged a third party expert valuation specialist group to
perform the valuations, who determined that the valuation of the instrument required a Monte-Carlo simulation of
share price outcomes over the 5 year life to determine the ultimate value of the conversion option. This produced
a calculated Effective Interest Rate (“EIR”) of 20.41%. For the year end date of 30 June 2024, the third party
expert valuation group performed their Monte-Carlo simulation and valuation calculations to determine the new
value for the derivative component to be $744,851. The resulting movement of $337,055 was posted to the
consolidated statement of comprehensive income to the account “Revaluation of derivative liability”. These
amounts will be revalued every balance sheet date with the differences being accounted for in the consolidated
statement of comprehensive income.
At 30 June 2024 the Unsecured Convertible Bond is shown in the Consolidated Statement of Financial Position in
the following categories;
Convertible Bond – Debt Component (Current Liability)
7,090,177
Convertible Bond – Debt Component (Non-current Liability)
13,127,532
Convertible Bond – Derivative Component (Non-current Liability)
744,851
Total
$20,962,560
PANTHEON RESOURCES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
67
16.
Property Plant and Equipment
Group
Office
Equipment
Right of
Use
Assets
Total
$
$
$
Cost
At 1 July 2022
19,467
215,862
235,329
Exchange Difference
(1,068)
(3,216)
(4,284)
Additions
3,113
-
3,113
At 30 June 2023
21,512
212,646
234,158
Exchange Difference
-
(1,042)
(1,042)
Additions
-
164,250
164,250
At 30 June 2024
21,512
375,854
397,366
Depreciation
At 1 July 2022
16,402
127,237
143,639
Depreciation for the year
1,869
55,700
57,569
Exchange difference
(1,206)
(4,414)
(5,620)
At 30 June 2023
17,065
178,523
195,588
Depreciation for the year
4,399
68,704
73,103
Exchange difference
48
(573)
(525)
At 30 June 2024
21,512
246,654
268,166
Net book value
As at 30 June 2024
-
129,200
129,200
As at 30 June 2023
4,447
34,123
38,570
PANTHEON RESOURCES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
68
Company
Office
Equipment
Right of
Use
Assets
Total
$
$
$
Cost
At 1 July 2022
19,467
215,862
235,329
Exchange Difference
(1,068)
(3,216)
(4,284)
Additions
3,113
-
3,113
At 30 June 2023
21,512
212,646
234,158
Exchange Difference
-
(1,042)
(1,042)
Additions
-
44,054
44,054
At 30 June 2024
21,512
255,658
277,170
Depreciation
At 1 July 2022
16,402
127,237
143,639
Depreciation for the year
1,869
55,700
57,569
Exchange difference
(1,206)
(4,414)
(5,620)
At 30 June 2023
17,065
178,523
195,588
Depreciation for the year
4,399
52,010
56,409
Exchange difference
48
(573)
(525)
At 30 June 2024
21,512
229,960
251,472
Net book value
As at 30 June 2024
-
25,698
25,698
As at 30 June 2023
4,447
34,123
38,570
17.
Share Capital
2024
2023
$
$
Allotted, issued and fully paid:
960,919,660 (2023: 907,206,399) ordinary shares of
£0.01 each
13,139,392
12,464,667
Issued share capital:
Number
Issued and
fully paid
capital
$
As at 30 June 2024
960,919,660
13,139,392
960,919,660 ordinary shares of £0.01 each (2023:
907,206,399)
Total
960,919,660
13,139,392
A summary of movements in share capital is summarised in the table below.
PANTHEON RESOURCES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
69
Movement in ordinary shares
Number
Share
Capital
$
Share
Premium
$
As at 1 July 2022
767,705,537
10,720,459
264,879,194
September 22 - Convertible Bond: Third
Amortisation
2,800,813
33,893
2,857,106
December 22 - Convertible Bond: Fourth
Amortisation
3,276,374
39,649
2,826,851
September 22 - Exercise of Share Options
4,525,000
54,759 1,701,259
February 23 - Conversion of 100% of RSU
290,000
3,685
178,744
March 23 - Convertible Bond: Fifth Amortisation
9,257,328
117,645 2,724,354
May 23 - Placement - First Tranche
95,395,134
1,192,010
19,072,158
May 23 - Placement - Second Tranche
8,783,893
109,759
1,756,146
June 23 - Convertible Bond: Sixth Amortisation
15,172,320
192,816
2,624,684
Capital Raise Fees
-
-
(790,418)
As at 30 June 2023
907,206,399
12,464,677
297,830,078
September 23 - Private Placement
11,905,370
145,405
2,585,302
November 23 - Private Placement
16,286,343
203,278
4,024,904
March 24 - Convertible Bond Amortisation
8,820,315
112,874
2,949,386
June 24 - Convertible Bond Amortisation
7,471,153
95,354
2,611,946
June 24 - Private Placement
9,230,080
117,804
3,226,874
As at 30 June 2024
960,919,660
13,139,392
313,228,490
18.
Net cash outflow from operating activities
Group
Group
2024
2023
$
$
Loss for the year
(11,545,585)
(1,446,687)
Net interest received
(629,614)
(338,205)
Share Based Payments (non-cash expense)
-
3,146,170
Depreciation of office equipment
4,399
1,869
Depreciation of right of use assets
68,704
55,700
Interest Expense
4,892,883
6,111,118
Convertible Bond – Revaluation of derivative liability
337,055
(11,321,514)
(Decrease) / Increase in Provisions – irrecoverable VAT
(96,209)
7,302
Increase in trade and other receivables
(385,020)
(61,076)
Decrease in trade and other payables
(2,137,115)
(4,648,183)
Effect of translation differences
(52,666)
(3,041,194)
Taxation (Benefit) / Charge
(1,822,247)
138,844
Net cash outflow from operating activities
(11,365,415)
(11,395,855)
PANTHEON RESOURCES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
70
Company
Company
2024
2023
$
$
(Loss) / Profit for the year
(7,199,103)
3,399,226
Net interest received
(556,626)
(337,894)
Share Based Payments non-cash expense
-
3,146,170
Depreciation
4,399
1,869
Depreciation of right of use assets
52,010
55,700
Interest Expense
4,888,498
6,111,118
Convertible Bond – Revaluation of derivative liability
337,055
(11,321,514)
(Decrease) / Inrease in Other provisions – irrecoverable
VAT
(92,889)
7,302
Decrease / (Increase) in trade and other receivables
46,799
(56,878)
(Decrease) in trade and other payables
(333,593)
(1,324,123)
Effect of translation differences
52,716
(1,188,080)
Net cash outflow from operating activities
(2,800,734)
(1,507,104)
19.
Control
No one party controls the Company.
20.
Decommissioning expenditure
Plug & Abandonment
The Directors have considered the environmental issues and the need for any necessary provision for the cost of
rectifying any environmental damage, as might be required under local legislation. As at 30 June 2024 the Group
has fully provided for the future plug and abandonment charges in relation to its wells on the Alaskan North Slope.
In situations in which a well will likely be used as a future disposal well, that fact is taken into account.
The Group provides for the estimated costs of future plug/abandonment and environmental remediation and
rehabilitation for all wells drilled if not abandoned at that time, and for the estimated costs of future
decommissioning, remediation and rehabilitation costs for the gravel pad at Alkaid-2 at such time as those
wells/pad(s) come to the end of their respective useful life. By way of example, in a case where a successful well
is expected to produce hydrocarbons for a period of 15 years, then the abandonment/rehabilitation provision
would be made at the time the well is completed and comes on stream; however, the actual expenditure would not
be expected to occur when the works are performed in 15 years’ time, ie the provision is made today for work
expected in 15 years’ time. Similarly, the end of the life of the gravel pad supporting Alkaid-2 and future wells
drilled from that location would occur at such time as all producing wells have depleted and the pad would serve
no further purpose. Based on this approach, the Group estimates its future plug/abandonment and environmental
remediation liabilities as follows:
Group
Group
2024
2023
Alaska
$
$
Alkaid Well
666,000
666,000
Alkaid-2 Well
2,970,400
2,970,400
Talitha-A Well
1,564,000
1,564,000
As at 30 June
5,200,400
5,200,400
21.
Exploration and evaluation commitments
There were no firm drilling commitments at 30 June 2024. There is an obligation is to plug and abandon the
Talitha-A test well.
PANTHEON RESOURCES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
71
22.
Financial instruments
The Group’s principal financial instruments comprise cash and cash equivalents, trade and other receivables and
trade and other payables. Financial assets and liabilities are initially measured at fair value plus transaction costs.
The main purpose of cash and cash equivalents financial instruments is to finance the Group’s operations. The
Group’s other financial assets and liabilities, such as receivables and trade payables, arise directly from its
operations. It is, and has been throughout the entire period, the Group’s policy that no proprietary trading in
financial instruments for speculative purposes shall be undertaken. The Group uses treasury bills, notes and other
fixed deposits as a mechanism for earning interest income on deposits.
The main risk arising from the Group’s financial instruments is market risk. Other minor risks are summarised
below. The Board reviews and agrees policies for managing each of these risks.
Market risk
Market risk is the risk that changes in market prices, and market factors such as foreign exchange rates and
interest rates will affect the entity’s income or the value of its holdings of financial instruments.
The objective of market risk management is to manage and control market risk exposures within acceptable
parameters while optimising the return.
Sensitivity Analysis – how does foreign exchange and interest rate changes affect income
The Oil and Gas operational activities of the group are pre-production. The revenue earned this financial year was
a one-off, resulting from flow testing for a limited period of time; this testing has now ceased and is non-
repetitive. Hence, there is very limited potential impact on income and no impact on equity.
Sensitivity Analysis – how does foreign exchange and interest rate changes affect holdings in financial
instruments
Regarding the cash at bank, the interest receivable is a function of the interest rate that the depositing bank
assigns to the account. There is limited potential impact on income and no impact on equity.
Interest rate risk
The Group’s exposure to the risks of changes in market interest rates relates primarily to the Group’s cash and
cash equivalents with a floating interest rate. These financial assets with variable rates expose the Group to cash
flow interest rate risk. The Group managed its cash balance by applying certain non committed cash deposits to
higher yielding short term deposit accounts, yielding +/- 5% per annum on those deposits towards the end of the
financial year when interest rates had risen. All other financial assets and liabilities in the form of receivables and
payables are non-interest bearing. The Group does not engage in any hedging or derivative transactions to
manage interest rate risk.
In regard to its interest rate risk, the Group continuously analyses its exposure. Within this analysis consideration
is given to potential renewals of existing positions, alternative investments and the mix of fixed and variable
interest rates. The Group has no policy as to maximum or minimum levels of fixed or floating instruments.
The Convertible Bond has a fixed interest coupon rate payable of 4% per annum. This rate is fixed throughout the
life of the bond. However, due to the presence of a derivative component within the convertible bond as described
in Note 15, from an accounting perspective, an Effective Interest Rate of 20.41% has been calculated to apply to
the debt component of the convertible bond. This has in turn been charged to the Income Statement.
PANTHEON RESOURCES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
72
Interest rate risk is measured as the value of assets and liabilities at fixed rate compared to those at variable rate,
as reflected in the below table:
Financial assets
Weighted average
interest rate
2024
Fixed interest
rate
2024*
Variable
interest rate
2024*
Non-interest
bearing 2024*
%
(US$)
(US$)
(US$)
Cash on deposit
5.09%
7,593,588
320,274
Trade & other receivables
5.25%
2,000,000
944,543
*Balances as at 30 June 2024
Net fair value
The net fair value of financial assets and financial liabilities approximates to their carrying amount as disclosed in
the statement of financial position and in the related notes.
Currency risk
The functional currency for the Group’s North American operating activities and exploration activities is the US
dollar. The Group incurs general administration and advisory expenses in the Parent Company in Pounds Sterling,
which is its functional currency. The Group does not use derivative products to hedge foreign exchange risk and
has exposure to foreign exchange rates prevailing up to the dates when funds are transferred into different
currencies. The Group raises equity capital in Pounds Sterling and converts the majority of this to US dollars to
minimise currency risk. The Group continues to keep the matter under review.
The convertible bond is denominated in US dollars with all repayments paid in US dollars. Quarterly repayments
are made, at the Company’s election, either in cash or shares. When paid in shares the Relevant Share Settlement
Price of shares for the purpose of the calculation is the lower of a 10% discount to the 3 day or 10 day volume
weighted average share price (VWAP) or a predetermined reference price, currently $0.8497. For the purpose of
calculating VWAP, the daily USD/GBP exchange rate is applied, introducing a currency risk which may or may
not result in a differing number of shares being used to settle a repayment, dependent upon the exchange rate.
Financial risk management
The Directors recognise that this is an area in which they may need to develop specific policies should the Group
become exposed to wider financial risks as the business develops.
Liquidity risk
Prudent liquidity risk management includes maintaining sufficient cash balances to ensure the Group can meet
liabilities as they fall due.
In managing liquidity risk, the main objective of the Group is therefore to ensure that it has the ability to pay all
of its liabilities as they fall due. The Unsecured Convertible Bond liabilities can, at the Company’s election, be
met through the issuance of ordinary shares rather than cash. The Group monitors its levels of working capital to
ensure that it can meet its liabilities as they fall due. The Group monitors its liquidity position carefully and
considers equity fundraising, debt or farmouts when additional liquidity is required.
The table below shows the undiscounted cash flows on the Group’s financial liabilities as at 30 June 2024 and
2023, on the basis of their earliest possible contractual maturity.
PANTHEON RESOURCES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
73
Total
Payable
on
demand
Within 1-3
months
Within 3-6
months
Within 6-12
months
Greater than
1 year
$
$
$
$
$
$
As at 30 June 2024
Trade creditors
50,470
-
50,470
-
-
Accruals
653,026
-
653,026
-
-
Lease liabilities
146,376
-
22,704
22,797
26,749
74,126
Unsecured Convertible
Bond
24,500,000
-
2,450,000
2,450,000
4,900,000
14,700,000
Provisions
5,921,030
-
470,630
250,000
-
5,200,400
31,270,902
-
3,646,830
2,722,797
4,926,749
19,974,526
As at 30 June 2023
Trade creditors
251,617
-
251,617
-
-
-
Accruals
2,588,994
- 2,588,994
-
-
-
Lease liabilities
36,435
-
15,365 15,740
5,330
-
Unsecured Convertible
Bond
34,300,000
-
2,940,000 2,915,500
2,891,000
25,553,500
Provisions
6,017,238
566,838
5,450,400
43,194,284
566,838
5,795,975
2,931,240
2,896,330
31,003,900
Credit risk management
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial
loss to the Group.
The Group has adopted a policy of only dealing with what it believes to be creditworthy counterparties and would
consider obtaining sufficient collateral where appropriate, as a means of mitigating the risk of financial loss from
defaults. The Group’s exposure and the credit ratings of its counterparties are continuously monitored, and the
aggregate value of transactions concluded is spread across approved counterparties.
The maximum exposure to credit risk is $2,944,542 (2023: $2,559,522). These items are also reflected in note 9.
Capital management
The Group’s capital management objectives are:
•
To provide long-term returns to shareholders
•
To ensure the Group’s ability to continue as a going concern
The Group defines and monitors capital to ensure that the Company meets its objectives above, focussing on
long-term share price growth, long term growth in production and resources, and a short-term requirement to
ensure a going concern.
The Board of Directors monitors the available capital as well as the Group’s commitments and adjusts the level of
capital as is determined to be necessary by issuing new shares. The Group is not subject to any externally
imposed capital requirements.
These policies have not changed in the year. The Directors believe that they have been able to meet their
objectives in managing the capital of the Group.
PANTHEON RESOURCES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
74
23.
Share-based payments
Movements in share options in issue
Exercise price
Number of
options as of
30 June 2023
Issued during
year
Expired /
Exercised during
year
Number of
options as of
30 June 2024
£0.30(1)
4,825,000
-
-
4,825,000
£0.27(3)
7,000,000
-
-
7,000,000
£0.33(4)
12,430,000
-
-
12,430,000
£0.67(5)
21,380,000
-
-
21,380,000
Total
45,635,000
-
-
45,635,000
Movements in share warrants in issue
Exercise price
Number of
warrants as of
30 June 2023
Issued during
year
Expired /
Exercised during
year
Number of
warrants as of
30 June 2024
£0.30(2)
4,803,921
-
-
4,803,921
Total
4,803,921
-
-
4,803,921
(1) Fully vested. Issued 2014. Expire September 2024. Exercise price £0.30/share. Previously fully expensed.
(2) Fully vested. Issued 2019. Exercisable into non-voting shares, which are convertible into ordinary fully paid
shares on a 1:1 basis. Expire September 2024. Exercise price £0.30/share. Previously fully expensed. In 2019
the Group issued 9,607,843 warrants as part of the consideration for the acquisition of Great Bear Petroleum.
The terms of these warrants mirror the terms of the share options referenced in footnote (1) above, however
upon exercise they convert on a 1:1 basis into non-voting shares as opposed to ordinary shares. 4,803,921 of
these remain unexercised at the years end.
(3) Fully vested and expire on the 6 July 2030. Issued 2020. Exercise price £0.27/share. Previously fully
expensed.
(4) Fully vested and expire on 27 January 2031. Issued 2021. Exercise price £0.33/share. Previously fully
expensed.
(5) Fully vested and expire 14 January 2027. Issued 2022. Exercise price £0.671/share.
The Group has previously granted share options to directors, employees and consultants under the Staff share
option plan, although none have been granted since January 2022. Such share options are equity settled share-
based payments as defined in IFRS 2 Share-based payments. A recognised valuation methodology (using the
Black & Scholes valuation model) was employed to determine the fair value of options granted with the
associated charge being expensed to the Income Statement on a pro rate basis based on vesting. The weighted
average exercise price of share options outstanding and exercisable at the end of the period was £0.46 (2023:
£0.46).
The Share Option and Restricted Stock Units expense charge to the Consolidated Statement of Comprehensive
Income for the year ending 30 June 2024 is $Nil (2023: $3,146,170).
The equity reserve account represents current year expenses for unexpired options and warrants and the historical
balance on vested option and warrants.
PANTHEON RESOURCES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
75
24.
Related party transactions
During the year that a subsidiary of the Company entered into a subleasing agreement for office space in Houston
with Proton Green LLC, David Hobbs, the Company’s Executive Chairman, also served and continues to serve as
Executive Chairman of Proton Green LLC. The terms and conditions of the subleasing arrangement were in
accordance with commercial norms in the Houston, Texas office space market. The current projected annual
subleasing expenses to the Company total less than $0.1m.
25.
Contingent Liabilities
Pursuant to IAS 37, a contingent liability is either: (1) a possible obligation arising from past events whose
existence will be confirmed only by the occurrence or non-occurrence of some uncertain future event not wholly
within the entity’s control, or (2) a present obligation that arises from a past event but is not recognized because
either: (i) it is not probable that an outflow of resources embodying economic benefits will be required to settle
the obligation, or (ii) the amount of the obligation cannot be measured with sufficient reliability.
Kinder Morgan Treating L.P. (“Kinder Morgan”) initiated a dispute over an East Texas gas treating agreement
between Kinder Morgan and Vision Operating Company, LLC (“VOC”). VOC ceased making payments to the
service provider in July 2019. The service provider subsequently issued a demand to VOC and, in February 2021,
served Pantheon Resources PLC with a petition, seeking to recover not less than $3.35m in respect of this VOC
contract. Pantheon held ownership of less than 0.1% of VOC via a 66.6% interest in Vision Resources LLC. Both
Vision Resources LLC and VOC filed for Chapter 7 Bankruptcy in the United States Bankruptcy Court for the
Southern District of Texas Houston in April 2020.
No Pantheon entity was a signatory to the gas treating agreement and none are named in the agreement. Pantheon
took legal advice on the matter and believed it had no liability to the service provider. Accordingly, Pantheon
made no provision in previous Annual Statements.
In July 2021, the court dismissed Kinder Morgan’s claims against Pantheon Resources plc. Kinder Morgan then
asserted claims against two subsidiaries, Pantheon Oil & Gas, LP and Pantheon East Texas, LLC, seeking to
recover the same claimed damages under the VOC contract. The court in that lawsuit dismissed the claims
against Pantheon East Texas LLC as it was not formed until 18 months after the gas treating agreement was
signed.
Pantheon Oil & Gas, LP contested the claims asserted against it. The case proceeded to trial in late October and
the jury rendered a verdict in favor of Pantheon Oil & Gas on all counts. Following the verdict, Pantheon Oil &
Gas and Pantheon East Texas filed a motion for entry of final judgment in their favor, along with a request for a
discretionary award of attorney fees. Kinder Morgan has filed a motion for judgment in its favor notwithstanding
the verdict and a pleading challenging Pantheon Oil & Gas and Pantheon East Texas's claim to recover attorney
fees. Those post-trial motions are set for hearing in mid-January 2025.
26.
Reserves
Share Capital
The share capital account represents the consideration received for the shares issued at their nominal or par value.
Share Premium
The share premium reserve represents the excess of consideration received for shares issued above their nominal
value net of transaction costs.
Retained Earnings
Retained losses represent the cumulative profit and loss.
Currency Reserve
The currency reserve represents the foreign exchange gains and losses that have arisen on the translation of £GBP
into $USD.
Share-Based Payments Reserve
The share-based premium reserve represents the cumulative charge for the options and RSUs granted, still
PANTHEON RESOURCES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
76
outstanding, and not exercised.
27.
Revenue
For year ended 30 June 2024, the US CGU recognized gross revenue of $13,393 (2023:$803,689) from sales of
oil produced during an extended production test. Sales during a test period are recognized as revenue under IAS
16-20. Associated cost of sales including, processing, transportation, royalty, and tax totaled $7,153
(2023:$673,290).
28.
Other Income
The Employee Retention Credit (ERC) – sometimes called the Employee Retention Tax Credit or ERTC – is a
refundable tax credit for businesses and tax-exempt organizations that had employees and were affected during
the COVID-19 pandemic.
29.
Reconciliation of liabilities arising from financing activities and major non-cash transactions
Significant non-cash transactions, from financing activities in relation to unsecured convertible bond, are as
follows:
Unsecured Convertible Bond
Group
2024
$
Opening Balance 1 July 2023
26,782,316
Non-cash flow Bond amortisation
(5,769,560)
Bond amortisation – settled in cash
(5,273,798)
Non-cash flow Forex movement
230
Non-cash flow Interest
4,886,317
Non-cash flow Revaluation of Derivative Liability
337,055
Closing Balance 30 June 2024
20,962,560
Significant non-cash transactions from financing activities in relation to raising new capital are disclosed in note
17. There were no significant non-cash transactions from investing and operating activities in the current year.
30.
Subsequent events
In July 2024, Pantheon completed an equity fundraising, raising $29 million before costs through the issuance of
132,454,566 New Ordinary Shares at a price of 17 pence per Ordinary Share. As part of this fundraising,
Directors collectively subscribed for a combined 1,390,287 ordinary shares. Concurrent with the equity
fundraising, the Company made an early repayment of $4.9 million against the Convertible Bond through the
issuance of 22,380,254 New Ordinary Shares at a price of 17 pence per Ordinary Share. Pantheon had originally
borrowed $55 million through the Convertible Bond and at the time of publication of this report the balance
owing had reduced to $17.2 million.
In August 2024, Pantheon was awarded the 46 new oil and gas leases comprising 65,691 acres which were
successfully bid for in the State of Alaska's 2023 Areawide oil and gas lease sale held in December 2023. The
leases were subsequently paid for and issued to Pantheon, bringing its lease interests to 258,295 contiguous acres
on the Alaska North Slope. Pantheon has a 100% working interest in all of its leases.
PANTHEON RESOURCES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
77
In September 2024, in line with the Group’s stated objective for the consolidation of core management in the
Company's Houston headquarters and preparation for a potential US listing, It was announced the CFO role will
move to Houston and, as a result, UK based Justin Hondris has stepped down from his role as Director, Finance
and Corporate Development and has transitioned to a new role as Senior Vice President for Finance
and International Investment. Philip Patman Jr. was appointed Chief Financial Officer of the Group, based in
Houston, Texas, United States.
In October 2024, Pantheon announced the appointment of MZ Group ("MZ"), a corporate & financial
communications advisor to upgrade its USA presence. MZ Group will lead a strategic investor relations and
financial communications programme with a particular focus on North America.
In October 2024, Pantheon announced details of its replacement ESOP for all employees and a Long Term
Incentive Plant (“LTIP”) for Executive Directors and certain officers of the Company. Under the ESOP the
Company issued in aggregate 9,087,584 RSUs across all staff members (excluding NEDs). The RSUs were priced
at $0.2206, being the £0.17 price for the July 2024 equity placement, using current exchange rates, and
represented a small premium to the closing share price on the day prior to issue. Under the Share Award Scheme,
the initial RSUs, granted to all staff, vest over three years beginning in 2025. Under the LTIP a total of 9 million
deeply out of the money share options were granted, vest over a 5 year period and are subject to achievement of
challenging performance targets. The exercise price of the initial option grant, the first grant for more than two
and a half years, was $0.835 (c. £0.64), representing a 290% premium to the prevailing share price.
In October 2024 all of the NEDs of the Company, together with the Chair, subscribed for a combined 261,696
ordinary shares in the Company at £0.212 per share, being the closing share price on the prior day.
In November 2024, the Megrez-1 well was spudded. Before drilling, management estimated the well to have a
69% geological chance of success of encountering a 2U Prospective Resources of 609 million barrels of ANS
crude and 3.3 Tcf of natural gas – or over 1 billion BOE. This has the potential to add significant incremental
resources to the Company’s portfolio. We hope to provide additional updates on the results shortly.
In November 2024, Pantheon completed a private placement of 9,108,756 shares at an issue price of
$0.2878 (£0.2266) per ordinary share, raising $2.622 million. These proceeds will be applied to the full payment
of the December 2024 quarterly convertible bond repayment due on 13 December 2024.
The Company has had two of its subsidiaries involved in litigation in Texas, with the case styled Pantheon Oil &
Gas LP and Pantheon East Texas LLC v. Kinder Morgan Treating, LP, Cause No. 2021-41735, in the 113th
Judicial District Court of Harris County, Texas.
The case proceeded to trial in late October and the jury rendered a verdict in favor of Pantheon Oil & Gas on all
counts. Following the verdict, Pantheon Oil & Gas and Pantheon East Texas filed a motion for entry of final
judgment in their favor, along with a request for a discretionary award of attorney fees. Kinder Morgan Treating
has filed a motion for judgment in its favor notwithstanding the verdict and a pleading challenging Pantheon Oil
& Gas and Pantheon East Texas's claim to recover attorney fees. Those post-trial motions are set for hearing in
mid-January 2025
PANTHEON RESOURCES PLC
GLOSSARY
FOR THE YEAR ENDED 30 JUNE 2024
78
GLOSSARY
AGDC
Alaska Gasline Development Corporation
AGM
Annual General Meeting
Alaska LNG
Alaska LNG Project
ANS crude
The mixture of oil, condensate and NGL
transported through the Trans-Alaska Pipeline
System
bbls
Barrels
bcf
Billion cubic feet
CGA
Cawley Gillespie & Associates
CGU
Cash generating unit
EA
Environmental assessment
ECL
Expected credit loss
EIS
Environmental impact statement
ESOP
Employee stock ownership plan
EUR
Estimate ultimate recovery
FID
Final investment decision
G&A
General & Administrative
GOR
Gas-oil ratio
GSA
Gas Sales Agreement
GSPA
Gas Supply Precedent Agreement
IER
Independent Expert Report
LKA
Lee Keeling & Associates
LNG
Liquefied natural gas
mcf
Thousand cubic feet
mmBtu
Million British Thermal Units
mmcf
Million cubic feet
NED
Non-Executive Director
NGL
Natural gas liquids
NSAI
Netherland, Sewell & Associates, Inc.
PVT
Pressure-volume temperature analysis
RSU
Restricted stock unit
scf
Standard cubic feet
SLB
Former Schlumberger
SMD-B
Shelf Margin Deltaic B
TAPS
Trans-Alaska Pipeline System
tcf
Trillion cubic feet
ZOI
Zone of interest