As an early-stage oil exploration company, Pantheon Resources (LSE:PANR) is actively drilling a number of wells across northern Alaska. It is listed on the FTSE AIM index and has been updating the market with some regularity on the potential reserve of oil it is exploring.
I think this firm could be a good addition to my long-term portfolio as a speculative buy. Why might I purchase at the current PANR share price? Let’s take a closer look.
Recent results
The business was established in 2005 and for the years ended June, between 2020 and 2021, losses widened from $3.77m to $8.24m. Furthermore, losses-per-share increased from ¢0.56 to ¢1.17.
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During this time, the company failed to generate revenue. The firm had produced small revenues of $1.01m and $0.72m in 2018 and 2019. Given that this is an exploration business, I’m not particularly surprised or concerned about inconsistent revenues.
In December 2021, it successfully raised $96m. This will bolster Pantheon’s balance sheet and allow it to continue its operations in the remote areas of Alaska.
The popularity of this fundraise is indicative of the positive investor sentiment towards this company.
Exploration activities and the PANR share price
Looking beyond the financial history to exploration activities and reports also gives a good indication of whether the current PANR share price is attractive.
The firm received approval for drilling at Theta West and Talitha, two wells in Pantheon’s area of operation, in December 2021.
In January 2021, the company commenced spudding, the initial drilling of the well, at Theta West 1. This involved navigating the extreme cold and working around weather-related shutdowns. The big news from this venture revealed an estimated amount of 1.2bn barrels of oil on the basin floor. Given the nature of exploration, however, it is always worth noting that actual yields may be less than estimates.
The firm also announced in February 2022 that it completed flow testing at the Talitha A well. The result was that the well averaged 45 barrels of oil per day for three days. The PANR share price surged 20% in one day on this news. It currently trades at 118.2p, up 202% in the past year. As a potential investor, it is encouraging to read about these consistent flow rates.
Just this month the business carried out further testing at Theta West. The result was a further strong indication that the 1.2bn barrels of oil amount is there and that the actual amount will “likely exceed” this estimate. The flow rate during this investigation peaked at 100 barrels over 2.5 days, levelling off at 59.
Overall, Pantheon is very active in its exploration. It seems highly likely that there is a vast amount of oil at the Theta West and Talitha wells. If drilled and extracted, this could send the PANR share price significantly higher. I will be buying shares soon.
