Q&A

What is the latest update on the Alaska LNG Project?

Pantheon’s role in the AK LNG project is the proposed supply of gas for in-State use up to 500 million cubic feet per day (mmcfd) during the initial 20 years of operation. In January 2025, the AK LNG project sponsor, the Alaska Gasline Development Corporation (AGDC) announced that it had entered into an exclusivity agreement and term sheet with Glenfarne that, if finalized, would result in Glenfarne becoming the project lead and majority member of the project owning company, 8 Star Alaska, LLC.

In mid 2024, Pantheon announced it had entered into a Gas Sales Precedent Agreement (GSPA) with 8 Star Alaska. Under a full Gas Sales Agreement (GSA), which the parties committed to use their good faith efforts to finalise by 30 June 2025, Pantheon would provide an initial 20-year supply of its low CO2 content natural gas into the proposed 800 mile gas pipeline to transport natural gas from the Alaska North Slope down to tidewater at Nikiski, Alaska. The agreed price would be $1/mmBtu, with options under which, in exchange for additional consideration, the gas price could be reduced, potentially to zero. Phase 1 of the AK LNG project, building the pipeline from the North Slope to Southcentral Alaska, could proceed prior to commitments on subsequent LNG components in order to relieve an impending energy crisis in Southcentral Alaska (including the city of Anchorage).

Late 2024 and early 2025 saw positive momentum on the Phase 1 project with Wood Mackenzie presenting a report at the request of the Alaska Legislature where it estimated a net benefit of US$16 billion to Alaska resulting from the proposed pipeline when compared to other possible solutions, such as imported LNG. Furthermore, following President Trump’s inauguration, he immediately enacted an Executive Order titled “Unleashing Alaska’s Extraordinary Resource Potential” (https://www.whitehouse.gov/presidential-actions/2025/01/unleashing-alaskas-extraordinary-resource-potential/ ). The Order states, amongst other thing, that the USA will “prioritize the development of Alaska’s liquified natural gas (LNG) potential, including the sale and transportation of Alaskan LNG to other regions of the United States and allied nations within the Pacific region.”  Additional resources are available, including the Final Wood Mackenzie Alaska LNG Phase 1 Economic Validation Report, from the AGDC website.

Pantheon whole-heartedly supports the AK LNG project, including working with the State of Alaska to enable the commercialisation of the helium potential of the Kodiak field, for the benefit of Alaskans and to support the funding and development of Pantheon’s core oil projects on the North Slope.

Which gas is committed to the GSPA that supports Phase 1 of the Alaska LNG project, and is Megrez-1 gas also low CO2?

Gas produced from all of Pantheon’s leases (including Ahpun East leases) would be dedicated to the proposed Gas Sales Agreement with the AK LNG Project. In addition, Pantheon could sell any gas that exceeds the proposed contracted volumes that, in the highest case of 500 mmcfd for 20 years, would amount to 3,640 billion cubic feet (Bcf) out of a current estimate that exceeds 6 trillion cubic feet (Tcf). The Pantheon gas resources include Kodiak, the Ahpun West topsets, the Alkaid horizon, and any Ahpun East accumulations proven up by the upcoming Megrez-1 flow tests.

Until flow tests are completed it will be impossible to be sure about the gas composition in the Ahpun East area.

Please can you clarify the status of the US listing

With the support of our advisors, we are evaluating the optimum timing based on the results of the Megrez-1 well testing programme, potential plans for further appraisal drilling during 2025 and our strategic funding process. We will update the market when a decision is made on the timetable.

What will happen to Pantheon shares held on AIM following a US listing?

The Company has consistently said that it will seek to achieve the optimum outcome for its current shareholders and that means the owners of the shares listed on London’s AIM. Holders of PTHRF are, in fact the owners of AIM shares through the trustees that commit to hold a share of Pantheon Common Stock for each PTHRF unit held. A US listing will not mean the immediate cancellation of the UK listing because that would not benefit shareholders that are unable to hold a NASDAQ or NYSE listed share.

How can investors be confident in the independently verified resources of 1.57 billion bbls of marketable liquids and 6.6Tcf of natural gas?

These figures for Kodiak, the Ahpun western topsets and the Alkaid Horizon within the western Ahpun area are the sum of the best estimates prepared by three highly regarded independent reserve engineering firms;

1. Netherland Sewell & Associates
2. Cawley Gillespie & Associates
3. Lee Keeling & Associates

Additionally, Pantheon has benefitted from technical input of other leading experts including AHS (providers of Rock Volatiles Stratigraphy or RVS), eSeis (AVO and seismic petrophysics) and SLB (static and dynamic reservoir modelling, subsurface development planning etc) among others to support management estimates.

Furthermore, the preliminary results from the Megrez-1 well suggest a possible increase in its pre-drill management estimates. These are being upgraded to reflect additional zones in the Prince Creek formation. However, the Company will need to complete the flow testing programme before the extent of any upgrade can be more precisely determined.

What is the timetable for testing of Megrez-1?

As announced in our RNS of 3 March, 2025, we are commencing flow testing before the end of March 2025. We will be testing the six shallowest zones of the Megrez-1 well consecutively from deepest to shallowest. This will begin with the Upper Schrader Bluff TS1, followed by Prince Creek (lower), Prince Creek (upper), Lower Sag 3, Lower Sag 2, and Lower Sag 1, with each test interval requiring approximately 2 weeks of activity. The full testing programme will take up to four months, and the Company will announce the results on a horizon by horizon basis.

The Upper Schrader Bluff TS3 is both the deepest horizon and also the smallest of the horizons volumetrically. Full cores were taken over this horizon and flow testing from a single stage treatment in this wellbore would provide little additional data at this location. A multi-stage completion of a long lateral well in that horizon during future appraisal or development drilling represents a more cost-effective means of acquiring useful data. Thus, we will not be flow testing TS3, with operations occurring over the shallower six horizons, commencing with TS1.

Does your range of resource estimates for the eastern Ahpun area (of 609 mmbbls plus an additional potential uplift of 15-50%) include the three shallowest zones encountered in Megrez-1?

The three shallowest zone (Lower Sag 1, Lower Sag 2 and Lower Sag 3) are not included in any resource estimates so far. These were not primary targets in the well, however logs and cuttings analysis point to these horizons having very significant potential. As part of the Megrez-1 well flow testing programme, the Company will be testing these three horizons and will provide preliminary estimates of the prospective resources in due course.

What flow rates have been observed in analogous offset wells (vs Megrez-1)

It is important to understand that there is always a trade off between headline flow rates and maximising data gathering. Maximising initial flow may deliver impressive numbers, but can reduce the value of data gathered and obscure ultimate resource characterisation and long term recovery estimates. Megrez-1, being the first well in what is potentially a very large accumulation, Pantheon’s objective is unequivocally to maximise data gathering in order to learn as much as possible (to assist in engineering and development planning) about the various horizons in the Ahpun East area.

Management cannot predict with accuracy what flow rates will ultimately be delivered until flow testing has occurred. Nor, for that matter can management predict the CO₂ content of associated gas until representative fluid samples have been gathered. 

It is understandable that investors will wish to compare potential flow rates to other wells and fields on the North Slope and the table below is a compilation of publicly available data. However, when comparing flow rates it is important to consider other factors that have a material impact on the reported rates, including:

• Well geometry and stimulation programme;
• Choke setting;
• Duration of reported flows; and
• Whether initial production (IP), average flow or stabilized rates, etc

We summarise some key flow data showing the range of outcomes from 240 bpd (apparently average rate over a longer term test) to an initial transient rate of 4,000 bpd. Each test will have been influenced by the various factors noted above.

Source: Alaska Division of Oil & Gas, well files and company presentations

Some of the quoted test results reflect subsequent tests of the same horizon in a well, hence the reduced final rate compared to the shorter test period even when the initial rate is consistent.