Pantheon Resources Share Discussion Threads

[johnswan193] 19/12/2021 16:17

Spangle, I hope you don't mind me posting your excellent TXP post here, as it is just as relevant to PANR. I'm sure there are plenty of PANR regulars who may not have read it on the TXP board. People like Scot are the first to jump on the views of those who don't work in the O&G space and I would hope he and others like him can learn from this and reflect on it.

Spangle93 18 Dec '21 - 15:16 - 26964 of 26984

Folks

One to think about when reading about "experts" (especially on PANR, which seems to refer to them being brought on board on a regular basis).

I moved internally within a multinational company many years ago to a technical role supporting operational units, to work alongside a globally renowned figure in this field. I'd been there just over a week, and had been on a course too (in Trondheim as it happens) when I got a call on a Friday afternoon from one group, asking for quick help in an issue they were facing. As you can imagine, with limited background to help, I waffled more than Boris. After the phone was put down, I turned to my colleague with despair, and asked how the... heck they expected me to give detailed advice when I'd barely been in the post for a week? His wise reply was that it meant I'd spent a week longer on this specialism than anyone else in the company bar him, and consequently, relative to the population, I now WAS the expert.

There are a handful of proper experts in O&G space on these ADVFN boards, such as telemachus (if you follow PANR) and almsivi (SQZ). There are other like me and junky, who've earned our living in the sector, and can string words together coherently and explain things, especially competently in our own backyard disciplines. There are other who over half a lifetime of investing in this sector have gained invaluable experience and knowledge of what to look for, and there are frankly just very clever people who can pick up the essentials very quickly.

Do people with this sectoral knowledge advantage make more money than those who don't claim any technical knowledge? Well I can't speak for the others, but I don't, because in the past I have felt more comfortable focusing on the assets' quality and conversely not focused enough on, and been consequently bitten hard because of, the quality of the board and senior personnel (or lack of same), the management of the finances, the external threats, the trade patterns (e.g. a big active seller), the country and terms under which the operations are pursued, and other non-technical matters that are equally essential.

I learn a lot from people who know how to interpret trades or trading behaviours. Others follow local and internal politics, others have an encyclopaedic research capability, others post about charts, or satellite imagery, or personal correspondence, or...

So no-one should say they have nothing to add to the conversation.

[responsible investor] 19/12/2021 11:40

Good post btgman.

The value of PANR is dependent upon the RF for each zone as an average over that zone as well as the CoS for each zone. These factors will not be the same for all zones. Furthermore the value of each brl of recoverable crude will depend primarily on the average cost of extraction (with location being perhaps the most important variable factor) and the quality of the oil for each zone. Trying to use a single figure for each variable for each zone is a fool's game. But of course one can come to a value (or more importantly a range of values)if one can rationalize how one arrives at all figures. The degree of confidence in each variable for each zone will also be subjective. But $1.00 per brl seems to me baseless.

Finally the overall value (particularly for PANR whose management has indicated its preferred exit strategy) will depend upon the potential buyers (NB plural) propensity to bid for control at the time when the BoD considers it optimal to exit (late 2022 or mid 2023?)

[btgman] 19/12/2021 09:25

Having taken a few months out from Pantheon bulletin board as a lot of the same people are going round in the same circles.

What has happened over the last few weeks is truly transformational and shouldn't be underestimated in anyway. The board has done an incredible job if you had said in March we would have achieved this funding on these terms no one I repeat no one would have believed it. What this now gives us are multiple continuous events to truly asses what we have.

We have so much to asses 4 zones at Talitha 2 potential zones at Theta west (Do not be surprised if they hit further zones at Theta West) including what can only be described as the mighty Basin Floor Fan plus potentially 2 Alkaid wells which should see us on to production and income stream.

All of the above and we still have the potential for a farm in partner who would need to be in near term as once testing and drilling are underway I don't see it happening until next winter on very different terms. Already the fact that Pantheon are well funded makes higher terms likely.

As for valuation I still 100% advocate the way to value Pantheon at this time is based on each zone probability of success divided by shares in issue required to fund it. I have long held a £2 valuation using this method with 1 billion shares in issue to get the job done (currently I have it at circa 850m assuming the loan is converted at 65p) to takeover. Interesting to see brokers now touching these numbers. I am leaving my £2 as is for now as the probability of success of between 10 and 25% is a conservative view and still using Armstrong Repsol $3.10. Oil price I still see significantly higher in 2022.

Ultimately I see Pantheon taken out at higher than £2 depending on BFF this may well be multiples there of.

AIMHO
GLA
BTG

[ngms27] 19/12/2021 08:22

I agree entirely that everything under the Decker D regional seal has been oil charged. However that doesn't mean any prospective reservoir will yield a commercial result. It could be all, it could be none, it could be one or a few. Thus they ARE independent targets due to depositional history but with one MAJOR risk factor, totally removed.

Will it flow is the question.

Note I suggest you all read the Alkaid flow test Rns as the result is far from conclusive as some make out.

[ngms27] 19/12/2021 08:10

Blinded by the light as you only forsee one outcome, which is the one you desire the most.

[antique7879] 19/12/2021 07:38

Great post Olderwiser2, following which I revisited Ed Duncan’s presentation in the April 2021 webinar & Mike Smith’s in the August 2021 webinar.

In her recent book, The Scout Mindset, Julia Galef states that our motivated reasoning impacts the way in which we use information to make decisions. We think we’re being objective when we make judgements and predictions based on the information we have.
But, she argues, the motivated reasoning that we bring to play is influenced by the mindset that we have (soldier / scout mindset) – and we often don’t realise we’re doing it.
She argues the scout mindset is driven by the desire to find the truth whereas the soldier mindset tend to approach situations by defending their beliefs.

To shape my decision making, I have used information gleaned from personal research, including but not restricted to viewing all the technical update webinars, in which I have paid close attention to everything stated by the BoD and independent experts. I have also considered the opinions (factoring in the mindset of the poster) and researched the facts posted by fellow posters (some of whom have a wealth of information & I’m thankful to them for their willingness to share that information) on the ADVFN platform.

Ultimately, the reasons for my investment rest in the facts, which favour the investment case for Pantheon Resources. I’m happy with my risk / reward and I intend staying invested until the company is sold on. That’s when I see the true value of the company realised (Opinion).

[johnswan193] 18/12/2021 22:08

Excellent post olderwiser2.

Question for the board that I hope will be easy to answer.

Do we know if the Slope Fan System is included in testing at Talitha or will it just be the BFF and SMD?

Edit: no need to answer. I was reading the Feb announcement which said it wouldn’t be tested but subsequent announcements said it would be.

[olderwiser2] 18/12/2021 21:10

As an addendum to the previous post, I do see the risk that the identified "subjectivity" referred to may be in the analyst, but still contend the risking is excessive

[olderwiser2] 18/12/2021 20:33

In line with other thoughts, I see greater than $1/bbl valuation being reasonable

With Canaccord using an averaged resource valuation of $5.4/bbl in their analysis, and then discounting back to a $1/bbl in the TP basis 2022 valuation.
The discount is 81.5% to recognise subjectivity

Canaccord quote
"We recognise the subjectivity of project risking, so we now simplify our target price”

subjectivity:
The quality of being based on or influenced by personal feelings, tastes, or opinions. "he is the first to acknowledge the subjectivity of memories" the quality of existing in someone's mind rather than the external world. "the subjectivity of human perception" Definitions from Oxford Languages

Effectively they are applying an 81.5% discount for the risk that PANR are being biased in their interpretation of data.. It is overdone in my opinion, as ESIS and Baker Hughes VAS reports, provide a high degree of independence to the interpretation This seasons results if positive will answer this question, which should see the 81.5% discount dismissed, leaving the progressively derisked assessments standing on their own.
But as always a buyer will not be wanting to pay full NPV

It is hard to give credence to this risking based on subjectivity, or restated lack of objectivity, when objective third party data has also been presented.
Baker Hughes provide this in the independent blind VAS data and conclusions, blind meaning Baker Hughes analysists did not know where in the well samples came from, this removes any possible source of bias. The lab work is behind a wall of secrecy, all they know is here is sample number xx
Further more Baker Hughes are a global major in Oil services analysis, their reputation is their commercial advantage, they are not going to risk it to promote little old PANR

PANR quote
“The VAS process entailed taking samples every 10-20 ft of well depth, hermetically sealing approximately half of those samples to avoid any evaporation of hydrocarbons, with the other half of the samples tested after exposure to air. These samples are then subjected to mass spectrometry analysis in the Baker Hughes AHS VAS lab. Significantly, the VAS analysis confirmed the presence of continuous stacked oil-bearing reservoir zones over a 3,700 ft interval starting at the regional top seal above the Shelf Margin Deltaic reservoir zone down to target depth at 10,456 ft. Every single sample taken over this interval extracted oil.”

From the VAS data
Every sample (416) had oil in 3700 feet of strata below the DkrD shale

It cannot be over emphasised, EVERY SAMPLE, even the poor rock quality sections between the identified reservoirs had oil
A layman's view of this is the top seal is effective, oil has migrated here and is trapped regionally, not just in the reservoir quality sections. This play is not dependent on individual reservoir seals, the regional Decker D seal is holding it all.
It means any good reservoir below the Decker D seal is going to have oil, the defining quality is reservoir porosity and permeability.
VAS again has proven the samples taken both contain oil, and that oil flows when the pressure is lowered.
I hesitate to bring 88es Merlin 1 results in for the flack it attracts, but as a comparator it suits.
Merlin 1 took 48 samples, only 8 had oil detected, and these were all within identified reservoir, nothing at all between reservoirs, so no regional seal. They depend entirely on individual reservoir seals.
This is all getting a bit long winded, in summary.
I don't think the 81.5% discount can be justified, because the VAS data is completely independent, and highlights an oil column 3700 ft thick.
This seasons results should confirm the quantum of commercial oil.

[johnswan193] 18/12/2021 18:42

Scot I was with you on that post until you began ranting about myself and Jonny. I think there may even have been a compliment buried in there at one point.

“ I would use Rabito79's model as the foundational structure within which to insert your own personal risk variables”.

I don’t think anybody would disagree with that. I certainly don’t.

This board is lucky to have a large number of intelligent regulars, many of whom have had successful careers across a variety of backgrounds.

It is my view that a poster does not need to have a background in the O&E industry to provide valuable contribution. As long as a poster can state their basis and not make unsubstantiated claims, then I’m all ears. It doesn’t mean I’ll agree, it doesn’t mean I won’t challenge, but maybe it will change how I think, or maybe I’ll learn something new.

You spend a lot of time fact checking and pointing fingers at other people, but when a finger points at you, you throw your toys out and behave in an extremely cowardly and childish manner.

I was happy for people to challenge my assumptions and comments - I still stood by them and was willing to explain my thought process. You on the other hand have refused to do the same.

So tell us, what led you to make the statement that there were 8 independent targets where any on success would increase the market cap by $1.2bn. It was a big statement to make, but we’re now many days on and you have failed to substantiate it in any way.

We’re all shareholders here (or most of us all). Whether I’ve had run ins with people or not, I would urge my fellow shareholders never to shy away from giving your thoughts or asking a question. If people don’t like the content they should simply disregard. As far as I’m concerned a collection of different perspectives provides for better decision making. I don’t need to hate somebody for not sharing my view. It feels crazy to me that ludicrously optimistic views on here are celebrated (and mostly unchallenged) whereas people with a more conservative mindset are constantly attacked.

[spangle93] 18/12/2021 18:33

DHB - Lee Keeling Associates believes Alkaid satisfies the requirements for contingent resources, so that should provide independent confidence

[fordtin] 18/12/2021 17:30

free stock charts from uk.advfn.com


The vertical pairs of lines are intended to highlight what happened to the share price when the stochastic remained high for extend periods.

FWIW my current reading of the tea-leaves is a visit to the top of the channel within a month.

No advice given, (except maybe that a trend is only a trend until it becomes untrendy!) do your own and all other caveats you feel are appropriate.

[dhb368] 18/12/2021 16:33

Spangle, would you also consider Alkaid to be a separate case?

I have taken comfort from the fact that Alkaid flowed, albeit at a low rate from a small vertical section.
That limited flow test has given me confidence that, given the Alkaid data and how the well compares to Talitha A, the BoD have a good handle on the conditions required to flow Talitha at commercial rates, in particular the SMD which I understood to be very similar to Alkaid.

[johnswan193] 18/12/2021 15:59

Thanks Spangle, great post.

[spangle93] 18/12/2021 15:50

No, I was purely noting that the mathematical logic demands independence. I don't think bob's comments, on which all of the discussion around "60-70%" is predicated, were nuanced by locational variations.

If you look at the conventional "chance of success elements" - source, reservoir, trap, seal - we've been told from VAS that there's a continuous 3700ft of oil, so the source is present and common, and the seal is clearly secure. The shelf margin, slope, and basin floor are all elements of the same continental margin depositional system. So there must at least be some doubt that the different formations are independent.

The main factor in the calculations, at least from how the company has presented it, is the quality and continuity of the anticipated reservoir units.

Caveat - I believe the Kuparuk is indeed a separate case with its own seal, reservoir, morphology and trap etc

[johnswan193] 18/12/2021 15:35

Spangle, does that apply to LBFF, UBFF, SFSx2 and SMD-B?

And on that basis, what do you think it means for TW and probability of the other zones succeeding if the first Talitha flow test of LBFF fails? Surely the LBFF at the more optimal updip location can’t be near written off if the Talitha test fails?

[spangle93] 18/12/2021 15:26

HD/rabito/johnswan

Your maths works if the 5 zones you refer to are independent.

As they are charged by the same source, and are part of the same depositional system, it would seem a stretch to suggest that success/failure of one of them has no relation to the others.

[scot126] 18/12/2021 14:48

Definition of irony? "Rabito I think you are getting a bit too hung up on...." from the most obsessive poster active on this thread. Lol.



Addendum to my post above #20626.

Frankly, I'd be amazed if any/many of the 35m shares allocated to the GB founders'n'funders are sold prior to the results of the winter/spring/summer operations are published. I strongly suspect some individuals will have mentally/emotionally written down their value to zero so letting their much diluted positions run into the tsunami of newsflow would appear to be the obvious choice?

Far more importantly, and *delighted* to be corrected by posters I know are active on this thread, my understanding is that a group of "GB founders'n'funders" accounted for a noteworthy tranche of the equity component of the recent fundraise. By noteworthy, I was informed by a GB associated party that it was in the order of $5m, give or take. Logic therefore suggests the supreme improbability of GB associated parties looking to sell stock anytime soon. Fair?

I think I posted this previously but h/t to the GB associated parties who supported the recent fundraise. It was a real vote of confidence in the asset and in management/contractors. And it *is* a significant vote of confidence coming from a group of investors who have known about the asset for c.10 years and witnessed the progress achieved under the new corporate structure since the merger in January '19. I truly hope it works out for these folk, and then some. They deserve it - their support for the recent fundraise is quite the signal IMHO.

[johnswan193] 18/12/2021 14:21

Rabito I think you are getting a bit too hung up on the 14% post. Firstly it was in response to Scots still unsubstantiated claim that there were 8 separate targets (any of which would lead to an increase in market cap of >$1.2bn). Secondly it was a reverse engineered number based on an alternative interpretation of what Bob said, and given he declined to comment on COS of individual targets.

Even my conservative risked valuation based on only the top two targets does not use 14%. It’s making you seem bitter, time to move on from it.

[scot126] 18/12/2021 14:12

Dear All - just a point of clarification really, not a correction per se.

Farallon used the pre-raise denominator to calculate their % position in the TR-1 published on 16/12/21. They used 696m rather than the 744m post-raise denominator of total shares on issue. You can see why it happened that way because they informed the company *prior* to the fundraise settlement date/new shares issued date. So Farallon's accurate % ownership today is 8.96%, not 9.58%.

“Under 9%” sounds even better than “under 10%”, eh?!

Forgive me, I cannot remember the poster who calculated whether CHONS had sold any shares since the TR-1 published on 2/12/21. Looks to me that they sold 1,837,071 shares between 29/11/21 and 7/12/21. I have no confirmation whether it was this last small tranche of selling volume which finally satisfied the intra-party debt obligation between Farallon and GBPO. However contractual matters appear to have fully crystallised following the events of 7/12/21.

Logic suggests Farallon sold some stock in the 60s and low 70s in the time between 29/11/21-7/12/21, providing further evidence that their motivation is not the same as most/all other sizeable equity owners? It would also suggest to me that Farallon were not inside at all or were not inside for an extended period of time during the pre-raise meetings/briefings. IMO it also suggests their PANR shareholding is not seen as a long term strategic holding for Farallon. Personally, I'm more than comfy with that.

IMO the key risk associated with Farallon's 8.96% holding now is that a major oil corporate swipes it up in a oner, hoping to gain a "cheap seat" at the table when the future ownership of the asset is decided. Personally I'd be waaaayyyy more comfortable with Farallon's 66m shares being sold to regular institutions, even better if they're US institutions. That said, if Shell was to come in and buy the line it would, naturally, have an immediately positive effect! It's my intention, at time of writing, to wait until the BoD advises me to sell (via a recommended corporate or asset sale) so I'd prefer a level playing field if/when the supermajors approach PANR in a year or two!! That's the ideal situation for me anyway, fwiw.

If, therefore, we are notified of further Farallon selling between now and the data starting to arrive from Alaska in late Jan/early Feb '22 then a) for those who assess the winter operations' risk/return is in shareholders' favour, any supply of "cheap" stock from Farallon is a welcome opportunity and b) it's to be embraced if it means a potential quasi-strategic holding is reduced to a meaningless amount.

It's noticeable how infrequently the shorters/trolls now "warn" PANR shareholders that "Farallon simply *must* know more than the rest of you, how else do you explain their continuous selling throughout 2021?" Nope, that particular conspiracy theory has been well and truly blown out the water. Folk would do well to remember this forum and others have been peppered with conspiracy theories throughout 2021. I am happy to repeat my observation that post the merger with GB in January '19, PANR is a very different animal.

Great stuff.