Pantheon Resources : Final Results for the Year Ended 30 June 2020

Company Number 05385506

Incorporated in England & Wales

PANTHEON RESOURCES PLC

ANNUAL REPORT AND FINANCIAL STATEMENTS

YEAR ENDED 30 JUNE 2020

PANTHEON RESOURCES PLC

CONTENTS

	Page
Directors secretary, and advisers	3
Chairman's statement	4
Chief Executive Officer's statement and operational review	5
Section 172 statement	7
Finance Director's report	9
Strategic report	11
Directors' report	14
Directors' biographies	23
Independent auditor's report	24
Consolidated Statement of Comprehensive Income	32
Consolidated and Company Statements of Changes in Equity	33
Consolidated Statement of Financial Position	36
Company Statement of Financial Position	37
Consolidated Statement of Cash Flows	38
Company Statement of Cash Flows	39
Notes to the Financial Statements	40
Glossary	67

PANTHEON RESOURCES PLC

DIRECTORS, SECRETARY AND ADVISERS

Directors	John ("Jay") Cheatham (Chief Executive Officer)
	Justin Hondris (Executive Director, Finance and Corporate Development)
	Phillip Gobe (Non-Executive Chairman)
	Robert (Bob) Rosenthal (Technical Director)
	Jeremy Brest (Non-Executive Director)
Company Secretary	Ben Harber
Registered Office	Shakespeare Martineau
	6th Floor
	60 Gracechurch Street
	London EC3V 0HR
Company Number	05385506
Auditors	UHY Hacker Young
	Quadrant House
	4 Thomas More Square
	London E1W 1YW
Solicitors	Bryan Cave Leighton Paisner LLP
	Governors House
	5 Laurence Pountney Hill
	London EC4R 3AF
Registrars	Computershare Investor Services plc
	PO Box 82
	The Pavilions
	Bridgwater Road
	Bristol BS99 7NH
Principal Bankers	Barclays Bank plc
	Level 27, 1 Churchill Place
	London E14 5HP
Nominated Adviser	Canaccord Genuity Limited
& Broker	88 Wood Street London, UK EC2V 7QR
Communications	Blytheweigh Communications Ltd
& Public Relations	4-5 Castle Court London
	EC3V 9DL

PANTHEON RESOURCES PLC

CHAIRMAN'S STATEMENT

FOR THE YEAR ENDED 30 JUNE 2020

The global petroleum industry has been heavily impacted by the COVID-19 pandemic over the past 12 months. Reduced demand for oil, coupled with factional disputes within OPEC, resulted in a severe drop in crude oil and distillate prices globally. The entire industry, including explorers, producers and service providers, suffered heavily, with project impairments and reduced appetite for new business resulting in vastly lower profits, significant redundancies, and curtailment of capital expenditures, and suffering material impairments to projects, the likes of which we have not seen for many years. Scores of E&P companies in the US and internationally have filed for bankruptcy protection and there have been a number of recent consolidations; Chevron/Noble, Devon/WPX, Conoco/Concho and Pioneer/Parsley. I'm sure more will come.

COVID-19 and the associated fallout also impacted our farm out process for a number of reasons:

• Given all potential farminees were already exposed to the oil sector, the severe fall in the oil price and global economic uncertainty caused many companies to assess how their own Company was impacted, resulting in many companies deferring capital investment/new project decisions for an indefinite period. Travel bans and enforced quarantine periods meant that our physical data room was no longer a viable option. We worked hard to transform it into a virtual data room but this was not nearly as effective as the one on one interaction achieved when technical teams are together in a physical data room.
• The severity of the oil price falls resulted in catastrophic share price falls for many companies. To ensure survival, many companies were forced to divest of projects as a source of financing, resulting in a dramatic rise in the number of competing projects for sale/farmout.
• Affordability - companies simply didn't have the budget or the ability to raise new finance in order to fund acquisitions/farmins.

Despite these challenges, Pantheon reacted swiftly and decisively to the changed landscape of the industry. We reduced staff and cut salaries from top to bottom. We appointed a larger, resource focused international broker and NOMAD and implemented a number of other initiatives. Notwithstanding these forces, and their very real impact on our company, Pantheon found itself in a situation where its understanding and belief in the prospectivity of our Alaskan projects was growing significantly. At a time when potential farm in companies could afford to pay less, Pantheon's value assessment of our projects was rising. Pantheon was determined to drill the Talitha A well in early 2021, and ultimately decided to equity fund the well itself, raising $30.2m (before costs) in late November at only 12% equity dilution; a far lower dilution than would have been achieved in a farmout. See note 27 in the Notes to the Financial Statements for more details of the equity fund raising.

In what was an extremely challenging year for the sector, I am proud that Pantheon was one of the best performing oil stocks on AIM in 2020, finishing the calendar year with a share price some 265% higher. And only last week we successfully executed the final step in our leasehold strategy, acquiring 66,000 acres contiguous to our Theta West and Talitha projects. This time last year we had a large lease position with tremendous potential, but with leases that were aging. Today, we have over 160,000 acres of contiguous leases, with even more potential, mostly covered by the recently awarded units at Alkaid and Talitha, or by leases with remaining terms of 9 to 10 years.

With all of our Alaskan leases on State land, I am very pleased to report that Pantheon is unaffected by President Biden's decision, on his first day of presidency, to impose a 60-day moratorium on all oil and gas related leasing and permitting actions on federal land.

It has been a year of great accomplishment for Pantheon.

Phillip Gobe

Chairman

26 January 2021

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PANTHEON RESOURCES PLC

CHIEF EXECUTIVE OFFICER'S STATEMENT AND OPERATIONAL REVIEW FOR THE YEAR ENDED 30 JUNE 2020

As our Chairman Phillip stated, it has been a year of accomplishment for Pantheon. During the year under review and beyond we have achieved a number of significant milestones as detailed below:

Receipt of Independent Experts Report at the Greater Alkaid Project

In January, 2020, Lee Keeling & Assoc. ("LKA") completed an Independent Expert Report and ascribed a Contingent Resource of 76.5 million barrels of oil ("MMBO") to our project, with a modelled NPV 10 of $595 million at that time (based upon a realized oil price of $55/barrel). The modelling estimates that peak production reaches 30,000 BOPD and the average EUR (Economic Ultimate Recovery) per well was estimated to be 2.25 MMBO.

Receipt of Independent Experts Report at the Talitha Project

Subsequent to year end, in September 2020, LKA completed an Independent Experts Report on the Talitha Shelf Margin Deltaic ("SMD"). Importantly, the SMD is only one of four targeted zones the Talitha #A well will penetrate. LKA ascribed a Prospective Resource of 304 MMBO to the up-dipportion only of the SMD, estimating an NPV 10 of $2.7 billion using the oil price curve current at that time. Peak average production was modelled at 85,000 BOPD and the average well EUR was estimated to be 3.32 MMBO.

Awarding of Units at Alkaid and Talitha

After working with the State of Alaska for several months, our unit applications on Alkaid (22,804 acres) and Talitha (44,373 acres) were deemed completed and were subsequently awarded in November 2020. The award of these units is a major milestone for us, providing tenure over the leases (subject to us as adhering to certain commitments as previously outlined in our RNS's at the time). This was a collaborative process with the State Department of Natural Resources who have their own geologists, geophysicists, engineers and evaluators to ensure the unit has the technical and economic merit to reach production, so awarding a unit is affirmation of our own technical and engineering work.

Spudding of the Talitha #A well

The recently spudded Talitha #A well is designed to intersect four targeted horizons; (i) the SMD, which is the primary target, and the three secondary targets: (ii) the Slope Fan System; (iii) the Basin Floor Fan and (iv) Kuparuk formations. All four of these reservoir intervals are independent and each is a huge target which management believe have the potential to contain several hundred million barrels of recoverable oil. Management believe that as a whole, the well is potentially targeting in the region of 1 billion barrels of gross prospective oil resource across those multiple stacked objectives. Whilst a formal third party resource assessment has only been provided on the SMD to date, Pantheon would anticipate updating this and commissioning further formal resource estimates across the other horizons where appropriate after drilling of the well. The stratigraphic trap that contains the SMD and Slope Fan system has a 2,000 foot oil column in the nearby Pipeline State #1 analogue well. Much of our work on Talitha is keyed off that well which was drilled in 1988 when drilling, completion, and imaging technologies were not as advanced as modern day practices.

We prioritized the location of Talitha #A to intersect our the primary SMD objective in the optimum location, structurally higher (updip) from the discovery well at Pipeline State #1. In optimizing the location of the well for the primary target, the corollary is that the well is not optimally positioned for the secondary zones, all of which are independent of one another. Nevertheless, the location should still enable assessment of the 3 secondary zones, if warranted.

Acquisition of 10.8% working interest ("WI") in Talitha, bringing Pantheon's WI to 100%

In January 2021 Pantheon announced that it had reached agreement with Otto Energy Alaska LLC to acquire 100% ownership of Borealis Alaska LLC. Borealis owns a 10.8% working interest ("WI") in all 16 leases in the

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