Pantheon Resources : Final Results for the Year Ended 30 June 2019

Company Number 05385506

Incorporated in England & Wales

PANTHEON RESOURCES PLC

ANNUAL REPORT AND FINANCIAL STATEMENTS

YEAR ENDED 30 JUNE 2019

PANTHEON RESOURCES PLC

CONTENTS

	Page
Directors secretary, and advisers	3
Chairman's statement	4
Chief Executive Officer's statement and operational review	5
Finance Director's report	9
Strategic report	11
Directors' report	14
Directors' biographies	19
Independent auditor's report	20
Consolidated Statement of Comprehensive Income	27
Consolidated and Company Statements of Changes in Equity	28
Consolidated Statement of Financial Position	31
Company Statement of Financial Position	32
Consolidated Statement of Cash Flows	33
Company Statement of Cash Flows	34
Notes to the Financial Statements	35
Glossary	58

PANTHEON RESOURCES PLC

DIRECTORS, SECRETARY AND ADVISERS

DirectorsJohn ("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
	Adelaide House
	London Bridge
	London EC4R 9HA
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	Arden Partners PLC
& Broker	125 Old Broad Street
	London EC2N 1AR
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 2019

Clearly, 2019 was a transformational year for Pantheon with the Great Bear Petroleum ("GBP") acquisition that now underpins and drives our corporate strategy. Great Bear's assets on the Alaska North Slope ("ANS" or the "North Slope") delivers an opportunity for our company to become a very significant oil and gas company in terms of reserves and production. The ANS is experiencing an oil exploration and development revival, boasting some of the world's largest onshore oil discoveries in recent times. Pantheon has a very material position in this prolific basin, which has taken a decade and over $200 million to establish, and which contains numerous discoveries of oil which we are continuing to evaluate. Of most importance is the fact that our acreage and discoveries are all located in close to proximity to the established infrastructure which includes the Trans Alaska Pipeline and the Dalton Highway. Having managed the largest oilfield in North America, less than 25 miles away at Prudhoe Bay, I can't stress highly enough the importance of our ideal geographical location of our assets in relation to the export infrastructure. This is a significant advantage over other ANS plays, allowing much quicker times to first production, materially lower capex requirements, and the possibility for year-round drilling in certain locations, all of which enhance the economics of our projects. This was a critical factor in our decision to acquire Great Bear. We haven't forgotten East Texas, but given the significant value differential between Texas and Alaska, it is clear that the Company's primary focus must now be Alaska.

As we look to Alaska, a key to unlocking the vast potential resources on the Arctic Slope is fully exploiting our existing high-quality 3D seismic data over our lease positions. Over $80 million has been spent to date on this seismic, which is proprietary to Pantheon and is not available to anyone else. This is a significant competitive advantage. As Pantheon looked to merge and process the many surveys, our Technical Director Bob Rosenthal and his team focused on the best technology and people to provide the service. Pantheon selected eSeis as the service provider due to their proprietary geophysics technology and world-class team. The eSeis team has had a hand in multiple discoveries on the North Slope, including the billion-barrel Alpine field. After reviewing the data over our blocks, eSeis elected to work as a partner on the project rather than purely on a fee basis and hence are completely aligned with the interests of all shareholders. It is also an assertive validation of the prospectivity of our acreage.

Also indicative of validation, we were pleased that the Lee Keeling and Associates report confirmed our earlier estimates of recoverable resources and excellent project economics at Greater Alkaid, which in fact lies almost directly beneath the Dalton Highway and pipeline. Jay Cheatham will give more specifics in his CEO statement below on both our Alkaid-Phecda discovery (now referred to as "Greater Alkaid") along with other exciting prospect potential on our acreage.

At East Texas, it has been a complicated and frustrating year. All of our historic wells had logged excellent reservoirs, similar to the offset wells that have been producing significant volumes of hydrocarbons for many years. Despite the apparent excellent log responses, the operator's ability to effectively complete and successfully flow hydrocarbons was unsuccessful. The death of the principal of Vision, the operator, in 2018 significantly impacted operations. This year we acquired of 66% of Vision Resources LLC, which was crucial to obtain management control to help protect the value of our assets. We have now been able to have Pantheon's technical team commence a detailed field-wide study including geological and geophysical data, historic drilling operations and completion methods. These initiatives will put us in a stronger position to continue to evaluate this project and determine a future plan for this asset. Jay will expand on this in his CEO Statement.

Finally, we strengthened our Board with the addition of Bob Rosenthal, Technical Director and Chief Geologist, who was also a founder of Great Bear, and Jeremy Brest, who was a director at Great Bear and has a wealth of experience. Jeremy has a law degree and is a specialist in structured financings. We have also retained key members of the Great Bear team, which we have supplemented with some extremely talented technical personnel. We also honour John Walmsley who we lost during the year. He was a true gentleman who we all miss greatly.

In closing, as we start a new decade your company is a very different company to where we were last financial year. With hard work and some good fortune we have emerged as a company with a focus on Alaska, where we have established an exceptional position in an area where the stakes and potential rewards are an order of magnitude greater not only than East Texas, but than in most other parts of the world.

Phillip Gobe

Chairman

24 February 2020

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PANTHEON RESOURCES PLC

CHIEF EXECUTIVE OFFICER'S STATEMENT AND OPERATIONAL REVIEW FOR THE YEAR ENDED 30 JUNE 2019

2019 has been an incredibly busy year for Pantheon.

Great Bear Acquisition

The acquisition of Great Bear Petroleum ("GBP") this year was a transformational event for Pantheon. The Alaskan North Slope ("ANS") is experiencing an oil exploration and development revival. The recent discoveries rate amongst the world's largest onshore oil discoveries which has resulted in the ANS now being rated as a "Super Basin" by the industry experts IHS Markit. The acquisition of GBP has positioned Pantheon as a major leaseholder in this world class province, where we now have large discovered oil resources and outstanding exploratory potential. The Board of Pantheon, with deep experience on large scale energy projects and important relevant experience in Alaska, understands the exciting opportunity of this portfolio as well as the challenges of operating in such a location. As our Chairman has earlier discussed, all of the Pantheon assets in Alaska are located in one core geographic location, adjacent to the Dalton Highway and the Trans Alaska Pipeline. This location enhances the commercial potential of any discoveries with reduced logistical challenges, more rapid development potential, resulting in much lower hurdles to economic viability-critically important for a small company like ours operating on the ANS, and an incredible competitive advantage when compared to other projects.

Our team began negotiations with GBP in July 2018 and completed the acquisition in January 2019. We were able to acquire the GBP assets on the North Slope at an effective valuation significantly less than the +$200 million invested in the project over the last decade. I want to again congratulate the Pantheon and GBP teams for completing this transaction and the subsequent capital raising in what were extremely challenging circumstances in December of 2018. Global equity markets were under extreme pressure due to US - China trade issues, the UK Brexit crisis, and collapsed oil prices. Despite all this, Pantheon emerged debt-free with what we view as a world class portfolio in Alaska which offers incredible upside potential. We enhanced the Board and management team with additional technical and financial skills and delivered an operational capability to progress its projects. Our two major focus projects in Alaska are Alkaid and Talitha, which both contain discovered resources and are both very large. Alkaid has been successfully tested and, after receiving an Independent Expert Report and certified Contingent Recoverable Resource as recently as last month, is being readied for pilot production testing as soon as we drill our next well. Talitha contains confirmed oil at numerous levels but is yet to be production tested. Further drilling at Talitha will delineate the resource and ascertain the productive potential across the numerous stratigraphic levels, however detailed geophysical work has been undertaken on Talitha over recent months in collaboration with our partners at eSeis. This work is ongoing, however is pointing to a very significant upgrade in management's estimate of potential resource. We are also very excited by our success at the recent lease sales where we acquired another two possible oil accumulations at Theta West and Leonis, adjoining our core acreage, which combined have multi-billion-barrel potential. It is important to stress that these projects were identified from GBP's proprietary 3D seismic, unavailable to any third parties, which has provided a significant competitive advantage in acreage selection.

As Operator and 89.2%-100% working interest owner of all its projects, Pantheon is in an enviable position. We have continued to expand our technical capabilities both in house, and by engaging additional external expertise to work with our team and assist us to evaluate and promote our current projects. We are extremely happy with the performance of our entire team which have already added significant value to our projects in Alaska our focus for this year. The high working interest provides greater control over the project area and ability to continue funding operations through farm out activities.

Lee Keeling & Associates

The Company engaged the independent experts at Lee Keeling & Associates ("LKA") to initially perform a reservoir study on the Alkaid and Phecda (now referred to collectively as "Greater Alkaid") oil discovery, and we will shortly engage them to commence work on our Talitha project. LKA is a highly regarded USA based engineering firm located in Tulsa Oklahoma that has decades of experience with great expertise in the type of projects we have at Alkaid and Talitha; horizontal multistage reservoir development.

In the past few weeks LKA completed the initial phase of their work at Greater Alkaid, and their analysis has supported our internal assessment that Alkaid and Phecda were indeed one continuous accumulation. The key takeaways were the certification of a 76.5 million barrels of oil ("MMBO") Contingent Recoverable Resource (a higher resource classification than our previous resource estimate) with a $595million NPV10 from a phase 1 field development which modelled a 44 well development of 70 MMBO over a 20 year period at a flat $55 oil

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