02/02/23 2:36 PM

#17718 RE: Gator44 #17717

Sorry for the late reply. I was not familiar with Pantheon. I listened to most of the 2 hr podcast they had on their recent results. Never seen a company put out such a long explanation. Obviously at 500+million market cap, this is not a small company. They obviously have some big money betting that they are right and they can bring in substantial production from the North Slope. The chart is very good since you asked about the stock. Hope you have some.

The issue that they spent hours explaining is why they hit so much gas in their latest test well. Obviously they are very sensitive to the topic otherwise they wouldn't have spent two hours going over and over it. This worries me. Any time a company has to spend so much time explaining an issue, it's obviously a worry for the markets. The North Slope is far away from user markets. Lots of ngas is NOT what they are looking for. They want light sweet crude that can fill up a mostly empty Trans Alaska Pipeline. They emphasized over and over again how close they are to the Pipeline and the Dawson Highway. So IF they can drill multiple wells and IF it's a high percentage of light sweet crude, this is a big project in a world that doesn't have many places to go besides the Permian Basin.

The cost of the wells is in the high teens of millions so this isn't going to be cheap drilling. They fracked the test well so they need service companies and infrastructure that probably isn't there. Of course if they got a big oil company to jv with them, the service companies would probably spend the time and capital to go up to the North Slope with equipment and source the sand and water.

If you look at the 1 yr chart, the market has been selling this project off. The peak price for the stock was $1.99 in early 2022 so the market cap was US$1.5 billion! versus US$500+million now. So it's not a slam dunk.

I worry about the oil/gas mix, the remote location and the need for big money to step in. I didn't hear that they intend to develop this project themselves. I think they spent all that time on the podcast because they need to convince some deep pockets that this will work. They do have 100% of these projects so that's great. They do have room to give a JV partner a significant share and still retain a decent share for themselves. I am not that familiar with the players that already are working in the North Slope so don't know who their target JV partner might be. Is the project big enough for a new player to step in? Probably. They are talking hundreds of millions of barrels.

For me, this is already fairly expensive and the market isn't terribly enthusiastic about the project. The shares have been positive this year and I do think we need more oil for the intermediate term. World use of oil isn't going away soon enough and yet big oil is paying dividends rather than spending money to look for new oil. Personally I would pass but it could turn out to be a big project but it's probably a few years away and I'm too old to wait! LOL! Good luck and again sorry for the delay in response.