$PTHRF/£PANR - A medium-term Oil Exploration Play

$PTHRF/£PANR - A medium-term Oil Exploration Play



Pantheon Resources is an Oil and Gas exploration company listed on the London AIM as PANR and on the US OTC exchange as PTHRF. Its business is focused on an oil resource in Alaska with an estimated 16-21 billion barrels of oil.

Comparing the charts, the two stocks appear to move the same, so I will refer to them collectively.

I believe this is an asymmetric asset play with a great risk-reward ratio. Numbers I’ve seen on other blogs/DDs written by folks with far more O&G experts knowledge that I suggest that if the drilling this winter pans out as hoped for, the company would be worth between ~ £2.93 (4x) to ~£3.72 (5.3x) its current share price. One Reddit DD put a % on the likelihood of the drilling working out in full at around 75%.

The SP moves in sympathy with the price of Oil price and also based on its own circumstances (there was, for example, a share offering last month to fund this winter’s drilling. The offering did dilute the float, but was made on very favourable terms for Pantheon.)

There is a risk that the drilling comes out to nothing and shows that the oil they have isn’t as valuable as first thought. The Reddit post below lays out the scenarios where this could be the case and what the downside would be.

My position is long around 500 shares in the LSE listed ticker.

I’d be very interested in any thoughts from commodity or O&G experts in our community.