Quarterly Repayment of Unsecured Convertible Bonds Announced by Pantheon Resources
Pantheon Resources plc, a prominent player in the oil and gas industry with a focus on the Kodiak and Ahpun oil fields in Alaska, has recently announced a significant development concerning its financial strategies. With a vested interest in approximately 1.6 billion barrels of ANS crude and 6.7 trillion cubic feet of natural gas on Alaska’s North Slope, the company has opted for a unique approach for its latest payment on convertible bonds.
In a recent disclosure, Pantheon Resources revealed its decision to address the quarterly principal and interest payments of its unsecured convertible bonds due June 2026 through the issuance of new shares. This move involves a total disbursement of $2.45 million for the principal repayment and $0.224 million for the interest payment. In lieu of cash, the company will issue 14,244,459 new ordinary shares, aiming for the shares to be admitted to trading on AIM by 20 September 2024.
This innovative repayment strategy results in a decrease in the principal amount of the convertible bond to $17.15 million following the quarterly repayment. Post-admission, Pantheon Resources will boast an enlarged issued share capital of 1,129,998,939 ordinary shares, each carrying one vote. This adjustment in its share capital structure is poised to provide the company with enhanced financial flexibility while progressing on its development projects.
As a solely focused entity on developing the Ahpun and Kodiak fields, Pantheon Resources is strategically positioned on state land on the North Slope of Alaska. The company’s bold objective is to achieve a sustainable market valuation of $5-$10 per barrel of recoverable resources by the end of 2028. This ambition is underpinned by plans to bring the Ahpun field to Final Investment Decision (FID) and commence production into the TAPS main oil line by late 2028, coupled with leveraging natural gas production into the proposed Alaska Gasline Development Corporation’s pipeline by 2029.
One of Pantheon’s significant competitive advantages is its projects’ proximity to existing infrastructure, such as roads and pipelines. This logistical edge is expected to facilitate reduced development timeframes, lower infrastructure costs, and a minimized pre-cashflow funding requirement, setting Pantheon apart from its counterparts in the region. Moreover, the low CO2 content of the associated gas is anticipated to ease the export process into the planned pipeline from the North Slope to Southcentral Alaska.
The company’s projects have garnered validation from esteemed experts. For instance, Netherland, Sewell & Associates have estimated the Kodiak project’s 2C contingent recoverable resources at significant volumes, both in terms of ANS crude and natural gas. Similarly, Cawley, Gillespie & Associates and Lee Keeling & Associates have provided robust estimates for the contingent recoverable resources and possible reserves at the Ahpun field.
As Pantheon Resources forges ahead with its strategic initiatives and development projects, its innovative financial management strategies, such as the recent quarterly repayment through new share issuance, highlight the company’s adaptive approaches to maintain a robust financial foundation while pursuing expansive growth.
