US focused E&P Pantheon Resources (PANR:AIM) gains 12.3% to 82p as it reveals a second positive result from its drilling in neighbouring Tyler and Polk Counties in Texas.  This extends its gains in the last month to 187.5%.

We previewed this activity in July. On 28 July, after delays caused by flooding in its areas of operation, Pantheon announced it had begun drilling operations on the VOBM#1 well. The shares really began to gather steam on 28 October when the results from testing on the well revealed a better-than-expected flow rate of 1,500 barrels of oil equivalent per day.

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This latest announcement concerns the VOS#1 well and suggests the company has made an unexpected discovery outside of its primary and secondary targeted reservoirs: the Eagle Ford and the Austin Chalk.

However the company cautions that there is no guarantee that this find is commercially viable and SP Angel highlights some concerns over future funding.

‘All in all, we believe that the company continues to make progress, and given that the existing business is solid, that there is a strong platform from which the company can grow.

‘However, to what extent the management can invest its resources to lever the company to a position of sustainability before they run short of existing cash resources and require a down round (dilutive share placing) is the key question as to whether investors should buy in now, or wait.’

Issue Date: 06 Nov 2015