Operator: Good afternoon, ladies and gentlemen, and welcome to the Pantheon Resources investor presentation. [Operator Instructions] Given the significant attendance on today's call, the company may not be in a position to answer every question received during the meeting itself. However, the company can review questions and publish where it's appropriate to do so. Before we begin, we'd like to submit the following poll, and I'm sure the company will be most grateful for your participation. I'd now like to hand over to Senior Vice President of Investor Relations, Nathan Cherry. Nathan, good afternoon.
Nathan Cherry: Good morning from Houston, and good afternoon to those in the U.K. and elsewhere. Thank you for joining us today. Here at Pantheon, we're very excited to discuss our 2026 interim results and corporate updates. I'm Nathan Cherry, Pantheon's SVP of Investor Relations. And I'll kick things off with our agenda today. So first, I'll be handing it over to our Chairman, Michael Spencer, for his remarks and message. Then you'll hear from our CEO, Max Easley, about Alaska's importance in a globally connected energy market and recent developments as it pertains to Alaska. Erich Krumanocker, our Chief Development Officer, will walk us through today's announcement on the recently completed seismic reprocessing effort and the implications for Kodiak and its resource base. You'll hear again from Max on Pantheon's farm-out process with an update and details there. And finally, we'll close our prepared remarks with Tralisa Maraj, Pantheon's Chief Financial Officer, who will cover Pantheon's midyear results as announced this morning. We'll then close with a question-and-answer session, and you heard about those logistics from Mark at the top of the call. And before we dig in, I'll orient you to our disclaimer page shown here at the front of the presentation. Please review it. Please familiarize yourself with the concept of forward-looking statements and the like. We will be posting a replay of this webinar online, including a Q&A portion. And with that, I will hand it over to Pantheon's Chairman, Michael Spencer.
Michael Spencer: Nathan, thank you very much. And a genuine welcome to all of you who are joining this call today, whether you are in Europe or the United States, you are most welcome. As many of you know, I joined Pantheon as Chairman in the spring of this year. So I'm only in the job for 6 months. And it has been an exciting, challenging and very fulfilling role, and I've enjoyed it. One of the things I want to share with you is I'm after this period, I'm absolutely convinced as to the core value of the underlying assets we have. Indeed, this has been confirmed by the detailed seismic work that we've undertaken and mentioned indeed in our results since the spring of this year. And this gives me considerable confidence going forward and representing to you all as to the good position that Pantheon is in and the value of our business and what we ought to be able to achieve going forward. And I see my role as Chairman very much as leading our farm-out negotiations to get a really good deal for our shareholders. Many of them whom I know have been long suffering, if I might put it that way. There have been, in fairness, though, hurdles in our way this past 6 months, not least of which, by the way, has been the seismic program. Itself, obviously, all the many institute (sic) [ interested ] companies in our data room have quite sensibly been keen to see the final results of our seismic program before fully committing, why would they do otherwise, to negotiations with us and also, of course, the debate as to where we stand on the gas pipeline, which we expect will happen, by the way, and we are confident will happen, but has been delayed rather unfortunately for us because that would be a very significant bonus to our project on the Kodiak field and others. The history from Pantheon, I know, has been a volatile one, but I genuinely now believe we are coming to a pivotal and positive moment. And I urge all of you shareholders, absolutely, this is the time to stay with this project and not to lose faith and confidence in it. I now will hand on. Thank you.
Max Easley: Thank you, Michael. So this is Max, the CEO. As an Alaskan myself, native born, in and out of Alaska for 30 years now, I think I would say and agree with the world that Alaska has never been more important or active than it is right now, which is playing obviously to our benefit. So I'll quote the current governor, Governor Mike Dunleavy, a friend of the firm. 2026, Alaska is back on the map. And why do we say that? So on the left, you see NPRA. But even before that, November, a little less than a year ago, there was a state lease sale. And all the acreage around us was picked up by competitors. So notably, Repsol to the west of Kodiak and a company called Surprise Valley took a very large position to our East, 175,000 acres. Within the National Petroleum Reserve, Alaska, the federal lease sale that occurred in March of this year was record setting. So 11 companies bid there, 430 bids, 187 awards and $164 million to the state, an absolutely outstanding lease sale for the state of Alaska. What perfect timing for us. This is what's called a land grab. So there's a land grab happening right when we're trying to farm down our assets, couldn't be better. In the middle, LNG, a little bit of complexity over the summer on the last stage of legislative approval associated with property tax. But when we look at the project, and we talk to the developer in the state about this a lot, gas contracts largely in place, permits in place, contractors largely in place, labor agreements in place. This is 80% to 90% approval issue in the state of Alaska. We see this as a quick win for the new governor. The governor -- new governor will be elected in November. The current governor is term limited, but we see this as a very, very positive catalyst as we enter the new year to advance this project and a timetable that makes imminent sense for us. The one on the right, Pikka, this is a big deal for the state of Alaska. The reason I say that there's 2 things Alaskans have wanted for 30 years. One is a gas line and one is competition on the North Slope. We represent both of those, by the way, because we're a competitor and likely the first shipper in that pipeline. And competition is good. Competition creates tension among the operators to make them better and makes suppliers better and ultimately, the state better. So in this case, this is Santos and Repsol for Pikka, first time in over a decade, we had a major development in the state of Alaska. It's 80,000 barrels a day, and guess who's right behind them, likely us. So that's the context, astoundingly good year for Alaska. I don't read too much into the LNG delay. I think that will be quickly resolved by the new legislature and the governor to our benefit. But what you guys really want to hear about, and Michael alluded to it, is a year ago, Erich and I stared at this area sitting on top of Kodiak, and we looked at the quality of the seismic like what? And so it's been a big year to really interrogate this seismic information right over the best reservoir we have. So Erich, take it away.
Erich Krumanocker: Excellent. Thank you, Max, and hello, everyone. I'm Erich Krumanocker, Chief Development Officer. And today, I'm pleased to be able to share some significant progress the company has made on the technical front, particularly the seismic, as Max has just mentioned. So let's dive into it. So we previously shared the importance of proving the seismic data in the up-dip area, and we now have the data set and the results are tremendous. We have selected one of the most reputable seismic firms in the world, and we work with them closely as one team to deliver the project, and it was on time and on schedule. And despite the challenges typically presented by the geology of the North Slope of Alaska, the new data is even better than everybody expected. We have a clear 3D image of the Kodiak reservoir and can also see additional prospects in the Kuparuk formation below as well as some interesting anomalies in the shallow intervals above. In addition, the amplitude versus offset analysis called AVO for short, is providing strong hydrocarbon indicators and up-dip of the area, up-dip of Theta West-1 well, and I'll show some images in a bit to bring this a bit more to life. The results of the recent technical work have significantly increased the company's confidence in the extent and continuity of the Kodiak resource, such that an increase of at least 25% of the company's existing 2C estimate of recoverable resources for the Kodiak asset is expected. So what does the company's liquid hydrocarbon resources picture look like? So over the past few years, the resources have grown significantly. You can see this on the chart, a massive upward ramp and further additions are possible looking forward. The journey started with the Alkaid discovery, which flowed oil to surface in the Ahpun asset starting there on the left. Then came along to Talitha-A and Theta West-1 wells in 2022, and they were discovered and flow tested the Kodiak Basin floor fan. That basin floor fan, this was described by Wood Mac as the largest onshore discovery of the world that year -- in the world that year. An independent assessment in 2023 established a substantial resource number for Kodiak. That same year, the Alkaid 2 well successfully tested the shallower Shelf Margin Deltaic interval in Ahpun, adding to the resource base there. In response to that tremendous success, the company then acquired additional acreage in the Kodiak asset area to the west, and the follow-on assessment resulted in additional resources growing the picture further. Last year, the Dubhe-1 well logged additional pay across multiple intervals and confirmed things like the Slope Fan System, which we have management estimates down in the down dip of Ahpun. And today, I'm going to show you some images from the new seismic data, improving our confidence in the Northwest up-dip area of the asset -- Kodiak asset. In the coming winters, we plan to drill and test the Kodiak up-dip area, supporting possible additional resources. The Netherland, Sewell 3C best estimate of 2.8 billion barrels for Kodiak shows how substantial this resource base could be. So now let's look at the Kodiak area in a little bit more detail. So first of all, the Kodiak reservoir is just massive. It's absolutely massive. It has been penetrated multiple times in the down dip of the field and was successfully flow tested in both Talitha-A and Theta West-1. And with each penetration in the Kodiak Basin Floor Fan formation, increasing reservoir quality has been observed as you move up-dip. This is consistent with the geological models. It's consistent with regional data that we've collected and others have collected and consistent with the burial depth and how deep the reservoir is. This improving reservoir quality includes higher porosity, which simply stated is more space in the rock to hold the hydrocarbons and perhaps even more importantly, higher permeability, which is the ability for the fluids to move through the rock to the wells. That all enables the wells to produce at higher rates and deliver large ultimate recoveries. The overall objective of drilling up-dip is to identify the best area that we can commence our development. The acquisition program is being designed to provide the key technical inputs to underpin investment in the first phase of development. So with all this, why is the seismic so important? So the new seismic is really transforming our ability to target the right areas. So this slide shows a comparison between the old seismic and the new seismic. This is a cross-section starting from the far up dip in the northwest of the Kodiak area down past the Theta West-1 well in the Southeast, which you can see labeled on the right side of the 2 pictures. So let's start by looking at the old seismic image from 2016 data on the left. First of all, in the very shallow area, there's absolutely no data. It was likely so bad that it was removed from the data sets by the processing company. And even where you start to see the data below that, it's essentially uninterpretable. Any sort of mapping would be nearly impossible or require a lot of guessing to get something. Now just compare that to the right. Compare the shallower section of the new data. The new data shows clear reservoir intervals and structural shapes of the formations. This data detail provides important information for drilling operations, making sure there's no surprises and early analysis is also showing additional prospects in the shallow zones, which could be similar to fields being developed to the west of our area. There's more work to be done, but it offers some potential exciting upside. Now let's look specifically at the Basin Floor Fan, where we right now have all our resources in Kodiak. The area that's highlighted in the blue box at the bottom shows this. The new data clearly shows the structure and formation intervals. In particular, we're able to see contiguous intervals up-dip from where the Theta West-1 successfully flowed oil. Up-dip drilling can now target better reservoir properties while still maintaining that calibration with a successful test down dip. And finally, below the target zones in the basin floor fan, we are also seeing multiple Kuparuk prospects. This formation is very productive in other areas of the North Slope and the data we have from the penetrations down dip at Talitha-A and Pipeline State-1 indicate super exciting potential. So how does this look on a map rather than just a cross-section. So this image shows what is called AVO lithology. It has been used by the company, our company for quite some time, but it's also been used successfully in the North Slope to identify hydrocarbon reservoirs, some of which are development and producing today. This image shows the top of the basin floor fan interval in the up-dip area of the Kodiak. And the red essentially is consistent with hydrocarbon-filled reservoir. You can see the kind of scale on the bottom there. So what we're looking for is the red. And this is the old 2016 data. It shows the location of where Theta West-1 well is there kind of on the lower right, and up-dip to the Northwest, the old data was not very compelling. You see lots of green and yellow, which in this case, are kind of more of the shaley type intervals. But geological models suggested that we should see better properties up-dip and the seismic just wasn't supporting it that strongly, particularly for picking a future well. And you can see a future well nominally labeled in the middle of that chart. But remember the cross-section I showed earlier and the challenge of trying to map and interpret confidence, well, let's just see how this translates across to the new data. So this is 2026 data. It is completely different. You can see a possible location for an up-dip well in an area in the red. It's consistent with hydrocarbon-filled reservoir like that found at Theta West-1 and not only there, but most of that up-dip area. So now I'm going to do is I'm going to toggle back and forth between this image and the original image, just so you can kind of see it very, very jump to life right on the screen. So 2016 before, 2026 after. Look for the red. The red is where we want to target. So 2016 before, 2026 after. So as you can see, the difference is stark. They're side by side here. We've had this new data for just a short period of time, but the insights and confidence and excitement that it's generating is absolutely tremendous. And that's internally as well as some of the folks that are in our data rooms. Right now, we have more work to do, but we have an incredible foundation to build upon and with possible access to the significant upside I alluded to earlier. With that, I'll hand back to you, Max.
Max Easley: Yes. Thanks, Erich. Everyone, you can see why Erich and I were chomping at the bit to do that. We have seismic across the top of what you think is your best reservoir, and that's been certainly confirmed. Now on to the farm-in itself, given the Alaska context I shared and what you read about, I'm sure you can appreciate this has been quite a busy period. One thing I'll say upfront is this is not a commoditized asset. So if this was 10,000 acres in the Permian, you auction that because everyone knows exactly what 10,000 acres in the Permian is worth. So you have an auction, you take the highest price. This asset is unique. It's very, very large. It's on the crossroads of all infrastructure strategies, be they pipelines, data farms, egress from the National Petroleum Reserve and we're mid-appraisal. And so we're being very careful with this as we farm it down to make sure we get the best deal for everyone and not jump to something. So there's been a huge amount of interest, majors, mid-caps, independents within that data set, some are incumbents on lower slopes, some people want to enter Alaska because that's where the large resources are. Large resources are getting hard to find in the Lower 48 these days. Some are upstream, some are midstream because of the location, location, location, where again, we sit right at the crossroads of all the infrastructure strategies as well. A bit of a pause over the summer, as Michael alluded to. There's a lot of interest in what happened in the state of Alaska associated with the gas pipeline. Many, many people glued to KTOO watching the testimony and debate there. Everyone has sort of come to the same conclusion now what's going to happen there. But really, the closer we got to August, the more people said, we have to see that seismic. And that will confirm to us if this is good, bad, indifferent. And so that slowed down until now it was available. And as you can imagine, it's gotten very busy again. So we did have one offer earlier in the year. The Board and I thought we could do a lot better than that. Note that was pre new seismic. So we certainly want to take advantage of our own appraisal work in all this as well. So we moved on. And we have 10 companies shortlisted in the data room right now, as we disclosed this morning. Again, major mid-caps independents, incumbents, non, new entrants, a whole list. And everyone is taking a very, very active interest in this. But at the end of the day, for all of this, what's the best outcome for our shareholders, the least dilution, the best execution capability, the right pace for us. And as we do this, we need to be very careful with our liquidity, as we mentioned in our release. So it's an interim update, but you should take away all the context you read in Alaska about the land grab, the Alaska is back on the map, all of that applies here, but we need to be very, very cautious because we're playing with a very large and very valuable asset that our shareholders own, and we want to make sure we get the right deal in the end. So an interim update, but a very positive one, I think. So now before we close, Tralisa, we issued our midyear results as well today in addition to ridiculously good seismic and other things. So take everyone through our results.
Tralisa Maraj: Thank you. Good afternoon, everyone. As Max mentioned, we took the approach at the start of the year to ensure that we were preserving our liquidity while supporting the farm-out process and also development planning. Those results for the year that we just -- for the 6-month period that we just published is in line with that approach that we took to manage the business during the last 6 months. We undertook a huge exercise in terms of reviewing our cost structure. We did that exercise by looking at function by function and ensuring that we were being lean and that we were not -- that we were, in fact, supporting the farm-out process. We're trying to find that balance. As a result of that, you would see that our operating loss for the period actually was reduced by $1.8 million. Of that $1.8 million, $1.5 million relates to a reduction in SG&A. And those are coming from a couple of functions. One, essentially accounting and legal services have been reduced. Third-party technical services have also been reduced and just in general, our employee cost also. So finding the balance between cost and the right fit for the organization to continue to support all the processes was really key for us in the last 6 months. Also included in that $1.8 million is a $300,000 decrease in stock-based compensation. This is noncash. And so when you think about the true cash reduction, we're talking about $1.5 million. I do want to reflect -- next slide, please, sorry. Okay. I do want to talk a little bit about just our balance sheet in general because there are a couple of things that I think that is key to us as we go into the next 6 months. Our E&E assets increased by $1.7 million from December to the 30th of June. And I wanted to just talk that through for a second because we did say in prior guidance that we were not going to have any field activities. That increase actually relates to -- largely to the cost of maintaining our leases. Overall, for any 12-month period, our cost to maintain our leases in good standing is $2.2 million. So what you're seeing in that $1.7 million is an amount related to our lease costs and also costs related around keeping the optionality of the Nabors rig for future drilling, and just our general maintenance costs around the existing assets. So no genuine field activities during the period. The big item on our balance sheet that we are looking at right now is the convertible bond. As you would notice, the convertible bond sits currently in the long-term liabilities. This will become a current liability for us in March of 2027 with the principal -- initial principal of $28.5 million being due on March of 2028. We are looking at options around the settlement of this bond when it becomes due. It's an ongoing process at this time. I just wanted to acknowledge that we are -- it is at the forefront of our mind. Cash and cash runway. We ended the 6 months ended June 30 with $10.2 million. Our current cash balance as of Friday is $5.5 million. We expect that, that cash will be enough to support the company through the end of the year. We are still trying to maintain and ensure that we manage our cash runway and that the cash is actually supporting the farm-out process that's going on. We want to make sure that we use that cash to ensure that we've got financial flexibility to allow that process to continue and progress on the right terms. With that, I will hand it back to Max. Oh, sorry, to Nathan. Sorry.
Nathan Cherry: Thanks, Tralisa. So that concludes our prepared remarks. And now we will compile the questions that have been coming in. Many were pre-submitted. We have all those in hand. I also see on our live question portal, we have a lot. So that's great. Thank you. We've also received some from the research analyst community. We much appreciate those as well. So as we're getting all those lined up, I will hand the mic back over to Max to lead the Q&A. Thank you.
Max Easley: Thanks, Nathan, and thanks to everyone for the presentation. Hopefully, everyone is as excited as we are. We're in a good spot here. But I think the first question is a good one, which is why didn't the Board accept the firm offer you mentioned? Wouldn't have been a big positive for the company. Well, we happen to have the Chairman of the Board on today. So Michael, why didn't we accept that deal?
Michael Spencer: Max, we're obviously grateful to receive an offer, of course, you were. And thank you to the company named, of course, who made the offer. But -- and I respect them, and I have a very high regard for the people involved. And I -- we owe every degree of gratitude. But the reality is that we believe our asset is worth more than that they were offering. And I think rushing into the first deal is not necessarily the right thing to do. It would have made our lives a little bit easier perhaps, but it's -- I don't think it was the right deal for us to do. And I said that then, you and I agreed on it. And by the way, we still have the same view today. Of course, if they would like to reengage at a different level, then we would be very open-minded to that. But that's another matter. But we've got lots of lots -- and obviously, as I mentioned earlier, quite rationally, a large -- not a large, everybody in our data room wanted to see the full results of our seismic data before they made or put down a firm offer. And why would you not? That would be illogical to make an offer before they've seen all the information. And obviously, that's taken several months, which is one of the reasons our aspirations or our initial hopes to have a deal discussed and concluded by the end of the summer proved to be overoptimistic. All the other participants there wanted to see all the seismic data, and they now have pretty much done so. So I think the tempo of our dialogue is going to increase significantly going forward. And let us hope also that we get clarification on the gas pipeline. If that comes through, as we expect to be positive, that would be a dramatic boost to our negotiating opportunities.
Max Easley: Yes, I agree with everything you said, Michael. Well said. And the next one is probably a combination for myself and Erich. So question is, following completion of the seismic reprocessing, does Pantheon currently expect both Kodiak and Dubhe-1 production testing to form part of the 2026 winter program subject to funding? I'm sure you've noticed that there's been quite a shift in emphasis from what I call the satellites, Ahpun and Alkaid to Kodiak. There's a reason for that. I've been doing this for over 35 years now. And it's sort of an unwritten rule of oil and gas as you always develop your best reservoir first. That's where your capital efficiency is going to be, and that's where your greatest volume is going to be. And once you build the infrastructure, you can tie in and tie in satellites. I believe that Kodiak is our best asset by a mile. And Erich and I had a strong view that the up-dip was going to prove to be the best within the best. And now we've reprocessed the data that certainly has underlined that the up-dip Kodiak is the best asset we have. And so you want to develop that first. And so our first activities will be Kodiak. We haven't forgotten about Ahpun and Alkaid. Those satellites will be important in the future, but the really value creation for our shareholders starts with Kodiak. But Erich, do you want to add to that?
Erich Krumanocker: Yes, just to reinforce a couple of points and provide maybe a little bit of detail. As Max said, every good oil company drills the best rocks first, and Kodiak is that. Kodiak is our priority. And I showed on the seismic, I showed that future well. We'll be doing a bit of refinement, but I think the seismic gives us every confidence that we're -- we have line of sight to a perfect target or at least the next target for Kodiak. Kind of bringing the conversation and the question to Dubhe, we still have the rig. The rig is still sitting on the Dubhe pad right now. So whether you look on Apple Maps, which might be a little bit out of date, but you can actually see it's still sitting on Dubhe pad today. Dubhe, we still have work to do. I think there's some questions coming in live around the pressure buildup. The pressure buildup has definitely reached a point where we've gotten the information we need. We just need to get in there and recover the data. It's a memory data. So we'll get that pressure data back. That will be incredibly useful to understand the performance of that reservoir. And then we definitely intend to move forward with a flowback at the right time. We want to probably recomplete the well to get the right lift to recover some of the fluids that we put in there from the stimulation, and we just need to coordinate the right time for that. The other piece I will -- this is on the back of the seismic, the story I will recover or come back to is the seismic pictures I show, if you remember, are in the up-dip part of the Kodiak field, to the Northwest. We do have a program that will repeat similar technology over into the Dubhe area. And that will provide additional ability to really understand the whole area and its potential as well. And there's also additional work to do around understanding the stimulation techniques. We could actually potentially go in and restimulate a new part of that well. So anyway, a lot of really exciting stuff, a lot of interesting stuff that we've talked with our potential joint venture investors. So definitely not in either case, something we've given up on.
Max Easley: Excellent. The next one, this is a pre-submitted question, so we covered some of it. It's to do with the current state of farm-out discussions. So are you progressing talks with more than one party? Yes, 10. Is the deal achievable in time to progress the intensive winter drill? It's a great question. As Erich said, you can see over my shoulder, the Big Blue rig is sitting patiently on the pad. We have a location to drill. But we can't really predict when a deal will ultimately be transacted. But if we can drill a well, we will. I would say to that. Next question is one for you, Tralisa. I think you covered most of this. What's our financial situation?
Michael Spencer: Actually Max, if I could interrupt for a moment there, just saying -- refresh what we said in our data release. We will not drill a well this winter season on our own. We would only do it in the event we achieve a farm-out and that the farm-out partners and provide the financing that we can do it this winter, which is possible. Certainly, it's possible, but it's by no means, obviously, we don't know the outcome.
Max Easley: Yes. And we believe that's the best outcome for shareholder value creation. That's why we're doing that. So we have 3 questions from analysts that cover us. Let's answer those. Charlie Sharp from Canaccord Genuity. So I got a 3-part question. First one is for you, Erich. Provide more detail on why the technical confidence has increased in light of the seismic results. Why do you think it's better?
Erich Krumanocker: I think I hopefully, during the presentation, showed just 2 pictures. The first one, which is a cross-section, it just -- it does a few elements, that cross-section one, first of all, where we're looking for in the rock itself, we can -- the target zone, we can easily map what's there. And we can not only map what's there because we see it, but also because we can calibrate it to the Theta West-1 well. And even if you look further down dip, we can try to infer what the seismic might look like further down dip. So we can see the rock. The other thing when we look at the -- if you remember the red picture that we showed earlier, we actually now have evidence consistent with our geological views and all the data we collected previously that says up-dip, we're likely to find. It's all consistent with hydrocarbon filled. So for the most part, we can really target where we want to in the reservoir itself. I think the other piece as well, that shallow section, if you remember that cross-section I showed, we didn't know what we're going to go through. And there's 2 pieces of that. There's one element. One is around drilling hazards. Sometimes you go through some tricky formations, and you want to be prepared for those. So it actually helps mitigate some of the risk in terms of our drilling operations, first of all. But second of all, more importantly, as I alluded to, there is some pretty interesting stuff there. We're seeing anomalies that could be additional resources. So anyway, it gives us a chance to plan ahead, avoid the downside operational risks, but also design our program so that we can really appraise and test potentially some other zones. So pretty exciting look forward.
Max Easley: I love the second part of this question. Give a flavor on the diversity and appetite for U.S. resources in light of the macroeconomic conditions. This is one of the primary things that attracted the new management team to Pantheon. I spent the last decade in the unconventional world. So in the Permian and the Montney, everyone is running out of inventory. And a huge amount of the reserves are sitting in an area they're running out of inventory. So the question is, where is the capital going to flow? It really has 2 choices: international or Alaska. I think people are learning that geopolitical risk is as difficult or more difficult than technical risk, depending where you go around the world. Alaska is a safe haven. So again, to quote the governor, Alaska is back on the map. So capital is flowing to Alaska massively, not only for upstream operators, but also consumers because egress from Alaska is coming through a safe corridor to the Asian markets. So again, right up our alley. And his part 3 is similar. Can you expand upon your view of the gas pipeline issues? Well, there's really a singular issue there. I think Glenfarne and the Alaska Gas Development Corporation are in great shape for this project. It appears to be very commercial and everything is ready to go and satisfies domestic issues in Alaska as well as access to international markets. It's going to run its course politically. But again, this is an 80% to 90% positive issue in the state. There aren't very many people who say don't do a pipeline. They just want to make sure that the ultimate terms are in the best interest of the citizens. So we're very bullish on it. Michael, did you have any comment on that yourself from your perspective?
Michael Spencer: Personally not. Obviously, we all agree and we've agreed for a long time that Alaska is in a particularly unique position given -- particularly given what's happened, obviously, in the Middle East recently. And yes, we -- as and when we get approval for the Alaskan gas pipeline, that will absolutely underline more strongly than we could have reasonably hoped the value of our asset.
Max Easley: Okay. And here's one for you and me, Erich, actually. Does the potential -- this is from Dan Slater, Zeus Capital. Does the potential 25% resource upgrade change our development approach to Kodiak? I'll start that one. It reinforces our hypothesis, which is you always start with the best reservoir first. And we've just unveiled our best reservoir. But Erich, anything you want to add to that?
Erich Krumanocker: Yes, just a little bit. I don't want to repeat some of the comments I made earlier because a lot of those do answer the question in some way. But I think we have a reasonable confidence with -- even with the older seismic of where to target. The new seismic is just -- it's lining up. It's blowing up the story kind of like we hoped and allows us to get to that next fine level of detail. And I think the upside resource, particularly we can see it's just a pretty stark picture, that red map I showed, but also just the other upside potential we see around maybe we designed the well slightly differently, not compromising our real objective on Kodiak, but to target those shallower zones that we're seeing, potentially appraise some Kuparuk. Those could be some fascinating upside. They're definitely not the scale of Kodiak. So we won't lose sight of that #1 priority. But at the same time, there would be tremendous upside to add to our portfolio, particularly because they may be very high rate wells. So I wouldn't necessarily put all of our focus on those because the scale is not big, but the rate would be fantastic for early developments, particularly as we're just getting the infrastructure paid for at the front end.
Max Easley: Okay. So the last one from the analyst and prepared, and then we'll go to the live ones. Brendan Long from Oak Securities. Very interesting question. In the context of our farm-in process, can you provide your thinking in relation to the strategic value of retaining operatorship? That's a great question. Really, economically, you want the best operator operating. I'll start by saying that. But as usually, the majority owner is one who operates. But in our case, there's lots of options around that. When you operate, you control the activity. And as a company, you also develop your capability by operating. But we haven't considered that one or the other here. It really depends on the nature of the counterparty. We have many, but we'll get to that in due course. But it's something we are thinking about hard, obviously, as we go through this.
Michael Spencer: Can I -- I just see one of the questions that's come through from Jonathan G. The macro environment could not be better for Pantheon, which is true. I assume with seismic hand, we drive a deal and demand urgency from interested parties. When is the deadline for bids to be submitted? I mean this is a difficult issue. As you mentioned earlier, Max, we have 10 participants in the data center at the moment. They all move at different speeds. Some of them are big, some of them are smaller, some are more agile and some of them are less agile. And that's not a criticism. It's really an observation. So Jonathan, we -- it's not practical for us to say, here is a deadline. We have to make our judgment, which we have exercised already, obviously, as to what is a good and fair deal. And we've got our own parameters for that and our own confidence in that. And when any of those parties in our data room come up with a proposition that genuinely realistically represents the value that we believe we have, and we feel comfortable that we can work with them, then we will do a deal. But we are not -- we cannot -- this is not speed dating. And it would be ill-advised if we were to embark upon that. And I think it would be ill-advised if we -- if we gave deadlines because we will be cutting out many, many -- not many actually, but a small number of potential parties.
Max Easley: Yes, I agree completely. My remarks earlier, we can't auction this asset. It's too large, too unique. And so every counterparty -- we'll push the schedule, obviously, but we have to work within their constraints to get the best deal for our shareholders here. We do not want to artificially curtail this and get a bad deal.
Michael Spencer: Also, I think another thing that's worth saying, if I might, is that we have put aside the prospect of doing a drill on our own balance sheet this year. So -- and we will need to do a modest fundraising, not a large one, $10 million to $15 million, which given our market cap is over $200 million, is not overly challenging. I have, by the way, said that IPGL, my vehicle, as the largest shareholder, I will stand by and support that pro rata. So my confidence remains completely there. So we will get funding through till next year towards the end of next year. And I don't -- I think we are -- and I share this with all of you shareholders out there. I know it is frustrating that we are not here today sharing with you great news that we've got a wonderful partner as a farm-in partner, but you do not want us to undersell this asset. You really don't. We've got a gem here. And if we rush to sell it cheaply, I think we will all regret it ultimately. So if we can -- we will be able to raise those funds, and that will give us time on our side. That doesn't mean to say we are not pursuing every avenue with urgency and energy, but it means we are not going to accept the first -- well, the second proposal we will make unless it is a good one.
Max Easley: And that's related to Julian, your question. Clearly, all farm-in partners now know our cash position, can that be used against us in negotiations? It will possibly. And that's why we're being very, very careful with our liquidity position. So Tralisa watches us like a hawk. And so we live within our means, but we're also looking at what is required to sustain us to a position of strength through this process. This one requires a little bit of an Alaskan story. How does the 2016 seismic get it so badly wrong? So the Alaska story here is a tax system went in around 2010 called the Alaska Clear and Equitable Share (sic) [ Alaska's Clear and Equitable Share ], that was basically designed to promote exploration. And the predecessor private company called Great Bear lived off of that. A new governor came in and basically chose not to pay those tax credits anymore. That was 2016, and that's the exact year that 2016 would have been reprocessed. And so the bare minimum was done presumably because the contractor wasn't being paid. And that's what got Erich and my's attention when we arrived. It was like, oh my God, we have to process this data. And that is not what the data should be saying. So it's really an Alaska story, but we've overcome that. I have an answer to this one, but I'll defer it to the Chairman. Are you considering full buyout as opposed to farm out?
Michael Spencer: No, we will consider any proposal that's made to us, by the way. And if we're presented with a full buyout that we really think is unrefusable, I mean, at the end of the day, there comes a price at which you have to accept it, then of course, we'll contemplate it. But that's not what we're seeking at the moment. By the way, there's an e-mail, one of the messages here. You mentioned farm out and then you mentioned farm down. I'm sorry if I said farm down. They're all the same thing to me. Sorry if I'm clumsy. We are seeking a partner to develop our fields, and that is our primary objective. We are not seeking to sell the business. Having said that, if somebody makes an unrefusable offer, an unrefusable offer is an unrefusable offer. And there's another question here. Can you raise $10 million to $15 million at the market price rather than offering at a discount? Have a gem. Listen, we are not rushing into the raise, okay? So we've made it clear that our fund raise, we've got the liquidity to keep us going for several more months, as you know. This is not an emergency fund raise. It is merely we need to raise funds between -- at some point between now and the end of this year. And I have said, as I've already mentioned, that my company and as the largest shareholder, I will support pro rata that fund raise. And we will do it when we feel the time is right. We don't want to rush into as has happened in the past, and we're here to raise it on the best terms. And we want to see how our share price reacts to the statements we've made today. we believe they are positive. We believe they're encouraging. We believe they should give confidence to our investors. And we -- indeed, our share price has gone up modestly today, which I think is a very nice and confident and appropriate response. I would like to believe it will continue to go up anyway over the next weeks and months, and we will raise more funds. And it will be a good investment, in my opinion. Of course, I wouldn't do it myself if I didn't believe that. And that will give us time on our side so that we are not, in any sense, pushed or concertinaed by our liquidity to make a rush judgment.
Max Easley: Okay. And Lex, thank you for your accolade. That's very nice. One one for you, Erich, and a little bit about myself. Are you still confident in Kuparuk given the oil wet characteristics on Talitha? We've never included Kuparuk in our resource estimates, although we know it's there. It's deep and it's highly overpressured and very difficult to drill, but we know it's oil bearing. So the question is when do we get to that? We'll see. Yes, we're very confident of Kuparuk. It may or may not be the thing we do first because it's deep and tricky, but it's just another addition to an already vast resource inventory that we're sitting on. Erich, anything else?
Erich Krumanocker: The only thing I would say is the operations in that well and the way that it was tested just left a question mark really more than anything else. I think there are some big lessons to be learned if we go back and test it, which I think we ultimately will, given the potential, we're going to do some things differently. I think right now, it's inconclusive. As I dig into that, as Max says, there was oil there. We know there was oil there. When we did flow test, we're not sure what we tested. So just a lot more to do and a lot of potential. So I think we definitely want to go back at the right time.
Michael Spencer: A couple of questions here. I was going to answer. What's the latest deal can be done for winter drill on Kodiak. From Mick. Mick, that's a perfectly fair question. We discussed it internally. We kind of we kind of -- if we're going to drill this winter, we need to do a deal pretty damn quickly. And at this moment, I cannot represent to you that, that is likely. Our internal assumption is that there will not be a drill this year. By the way, it's possible it may change. But bear in mind, just so we know whether we drill this year or not, of course, may be exciting and exhilarating for you as a shareholder, but it's only worth doing if it's on the right terms for us. We have got a genuine, genuine first-class asset here. I don't -- and by the way, I'm a pretty big shareholder, too. I don't want to be rushed into doing a deal because we can drill sooner if we've got a much better deal if we're a bit more patient. There's another question, is there a possibility of rare earth minerals? By the way, we haven't thought about that. That's not on our agenda. Maybe it should be. But our main agenda is to find a partner so we can prove that we've got a huge prospect in oil and gas here. There's another one, I think, which suggests we complete the Dubhe-1. Kodiak is our biggest, best field. We've done the seismic on it. We can now have a truly hopefully, laser-focused approach to drilling Kodiak. We don't want to go anywhere else for our next big drill. Whether it's us alone, unlikely, but who knows, but with our farm-out partners.
Max Easley: Here's one that's useful. From Mario. Thanks, Mario. The old management team used to tell shareholders that they were targeting a $5 a barrel market recognition. Is this still valid? That was really done to demonstrate the asymmetry of the portfolio. So if you multiply a couple of billion barrels by $5, that's a very, very large number. The new management team is thinking, let's make our first development as commercial as possible. And $5 is probably a modest number actually. It really depends what the oil price is at the time. But we're not trying to sort of FID all of Kodiak at once. We're going to prove it up, do a development and generate free cash flow for our shareholders. That's what we're trying to do.
Michael Spencer: Can I just cover a couple of questions? Kevin B, can you please confirm again that a farm-in partner farm-in, farm-out for winter drill is first priority? Our first priority is to find the right farm-out partner. We haven't set a time horizon on it. Yes, if it happened quickly, we'll be thrilled. But we're not going to do a quicker deal if it turns out tomorrow if we don't think it's the right deal. As I said earlier, we'd love to drill this winter. We believe it would be a successful drill. We really do. And we really know where we think we should go. We have it pinpointed on our map. But we -- I know it's difficult in the financial world to be patient, but believe me, this is a moment where patience is the right thing to do rather than to rush into doing something prematurely. There's another question here. Thank you for your hard work. Nicholas K. When was the seismic reprocessing was completed? So far as I'm aware, Erich, is the seismic process completely completed or not completely completed?
Erich Krumanocker: Yes. So this is what we might describe the Phase 1 seismic, which was very much focused on the up-dip of Kodiak. And for those geophysicists out there, it's in time rather than depth as an alternative. And what the Phase 2 program is, as I alluded to earlier, around the Dubhe area and any of the rest of the Ahpun area as well as down to Kodiak is there's a Phase 2, which would repeat that process using all of the learning and new technology that's been applied to do that in time, and then you can convert the whole thing into depth as well. So there is more to do. I don't think it influences our ability necessarily to pick the right spot in Kodiak, but it's absolutely important as we develop these fields moving forward and having the right portfolio. It's really -- you can imagine, our newest data set was from 2016. Imagine the way digital has changed over the last 10 years. The technology has transformed, so just getting that in one piece, all integrated is going to be transformational. So anyway, kind of -- it's part of a big program, but one thing that's good is this phase program has proved that we have the right underlying data and the technology out there working with the right partner, working closely with the right partner on a day-by-day basis is going to provide huge, huge dividends.
Max Easley: And for the non-geophysicists on the call, there's a seismic data set that they give us, which has been calibrated and ready for interpretation. Then they hand it to geophysicists to interpret. And that's what our guys will be doing for some time here. But that's why we gave it to the firm so quick. We wanted them to have the raw data so they could come to their own conclusions because we think their conclusions will be our conclusions, which would accelerate transaction.
Michael Spencer: A couple of other quick questions here. Can we drill outside winter? So far as I'm aware, we can't drill outside of winter.
Max Easley: Well, we can only drill outside of the winter on gravel pads. So if we have a gravel pad, we have 3 of them, so we can drill there. But for Kodiak, that's restricted to the winter.
Michael Spencer: And another question I don't fully understand. Are you doing sufficient research in interested companies to be able to make an informed when cash becomes low towards the end of this year? I mean it's in the public domain that we have cash that takes us to the end of this year, maybe into the early part of new year. We were not rushing into a cash raise because we've been doing a lot of investor meetings recently. Max has done a load of those, and we have seen considerable offers of support, and we wanted to handle this in a courteous and professional and timely fashion, not some rush shotgun job. We clearly wanted a minimal discount to the current share price. And hopefully, the share price might go up, in my opinion, it should go up, but that's a different opinion. As I said, I'll support it personally. So obviously, we wanted our fundraise in a timely fashion. This is not a sprint. We will do it. We will do it. And I'm confident we'll get it done at the right price at the right time.
Max Easley: The other half of that question is the team we've assembled here, these are people that have worked all over the world and know all these companies. So it's not like we just fell off the back of a watermelon truck. So we know all these companies in our data room. We know all about them. So we've done a lot of research, but we actually know them very well and have worked with most of them before. Here's the last one, then we probably have closing comments. This is actually a big positive for us this year, which we didn't talk about. So Erich, any plans for the Megrez as well?
Erich Krumanocker: Yes. So kind of back to the question around where you can drill from and our pads. For those that have kind of been with us and know our infrastructure, we have the 3 pads. We have an Alkaid pad to the north, Megrez is in the middle, and then we have Dubhe in the South. One of the things that really challenged us on the Dubhe flowback, those that might remember, was how much money we were spending. And one of the biggest drivers for the cost of our flowback was around water disposal. And so one thing we were -- we wanted to do was to become self-sufficient on water disposal. So one thing when we produced the Megrez, the shallowest zone on Megrez, we didn't stimulate that. So we didn't have this confusing story of stimulation fluids coming back. We just produced it. It's extremely prolific formation, produced thousands of barrels a day equivalent with minimal effort. And so what we said is, well, let's repurpose that shallow bit for water disposal. And so we've more recently gone to public hearing with the regulator in Alaska. We think we've closed out all the actions. And so we're in the process of going through approval to be able to repurpose that well for disposal as well. So anyway, a huge financial lever for us to make things more productive. And probably the underlying question, what about the reservoirs, the deeper reservoirs, which were the target reservoirs? They're good potential. They could be a future satellite. We did get core. We did see oil shows there. When we have the infrastructure in place, this could be an additional satellite. We haven't written it off fully. But at the moment, it definitely, definitely does not compete with the other assets and particularly what we're seeing in Kodiak.
Michael Spencer: There's an interesting question here that was sent to me actually, Julian, very courteous with all due respect, I wouldn't any potential partner just wait to put the screws on us. I think the whole team overestimate the market's ability to wait Pantheon out. I don't -- this all depends on a fundamental thesis, whether we have a great asset here or not. If you don't think it's a great asset, we're in trouble. Everything I have seen and even learned in the past 6 months underscores the fact that this is a considerably valuable asset. We would not have the number of parties in our data room today and still in our data room today and still looking to our seismic if this was a waste of time. I'm sure they've got better things to do. I certainly got better things to do, too. So this is not a valueless asset. Admittedly, what you're saying, there is a component of the game of poker here. Of course, there is. We have a valuable asset. They want to buy it cheaply. We want to sell it expensively. But we will raise the cash to keep us liquid for the next 12 months. The quantum is not dramatic. We've cut our cash flow down significantly again. So we can stay at the poker table for quite a while. And Julian, and you can always try shorting the stock if you want, and we'll see if you want to give that a go. But my view is that we are unlikely to drill this year, as we've said. It's possible we do a wonderful deal in the next couple of months and we drill. That's not what we're expecting. What we are -- what we believe is the seismic has really illuminated very, very considerably the value of our asset. All of the participants in the data room now have that data and we believe that we will find one or more amongst them who are prepared to make a very commercial discussion with us. Why not? The prize is a big one. There is a hell of a lot of oil out there, a hell of a lot of oil. Why would they not want it? And not only that, gas, and there's a gas pipeline that is very highly likely to be built there. I mean this is -- if our estimates -- our beliefs are right -- sorry, our beliefs are accurate, this is a big opportunity for an organization that has the capital to see it through. I'll leave that thought with you.
Max Easley: Yes, I would agree with your thesis there, Michael. Remember what I said competition is good. If the only 2 people in our data room are the 2 incumbents on North Alaska, I would be intensely worried about that statement. 10 people in the data room. And so this competitive amongst them. And so all 10 of them are not going to collude and wait us out because then there's no honor among thieves, who gets it. So I don't worry about that at all. But just to close this out, we're a little over time. Thanks for your time, everyone. I hope you heard today, pretty massive momentum for Pantheon based on our own work, but also enabled by Alaska firmly on the map for upstream operators and access to markets. And we've told you repeatedly today that patience is important. This is a very valuable asset. Prudence and discipline are required. No shooting from the hip. Those days are over. So we're going to take our time and do what's right for the shareholders and keep you abreast along the way. So I'll close with that. And Michael, as Chairman, you get the last word, of course. So close this out.
Michael Spencer: Thank you all of you for joining us today. We really appreciate it. We really appreciate your support. And I am fully sympathetic with all those shareholders who, like me, I might add, have been there for a long time and seen the stock price go up and then down again and then down again. And let me tell you, I share your sympathies and I am with you. But as the biggest shareholder, I can tell you sitting on the inside here, I believe the story is one that you should stay with. It's still -- this is still deliverable. It will be delivered. We'll get there. Have faith. Don't lose your nerve now. Cheers, guys. Have a good day.
Max Easley: I think you've gone back to you, Mark.
Operator: Thank you, Max, Michael, the rest of the team. Thank you for updating investors. Ladies and gentlemen, please don't close this session. We'll now redirect you for your feedback in order that the management team can really better understand your views and expectations. It will only take a couple of moments to complete. I'm sure it will be greatly valued by the company. On behalf of the management team of Pantheon Resources plc, thank you for your time this evening.
