Pantheon Resources plc ("Pantheon" or "the Company"), the UK based independent oil and gas exploration company focused on the U.S. Gulf of Mexico region, today announces its maiden preliminary results for the period ended 30 June 2006.

HIGHLIGHTS

• Successful placing and listing on AIM in April 2006
• Farm-into Padre Island Joint venture in south Texas with exposure to six high impact, high-quality natural gas prospects
• Exploration portfolio balanced by farm-in to Project Wharton, south Texas comprising smaller, lower risk natural gas prospects
• Commercial success registered on Project Wharton
• First well on Padre Island yields encouraging results from logging
• Pre-tax loss of £339,314

Executive Chairman, Sue Graham commented:

"Pantheon has experienced an eventful and exciting period since the Company was incorporated in 2005. A successful listing on AIM was completed in April 2006, raising £10 million before expenses. The proceeds are being used primarily to satisfy most of Pantheon's obligations under its farm-into six large, high-quality prospects within the Padre Island Project Area ("PI Project Area"). In June 2006 the Company also farmed into a natural gas venture in south Texas to provide balance to its portfolio. Both projects are consistent with the Company's strategy of focussing initially onshore or near shore the US Gulf of Mexico ("GoM").

Since the period end Pantheon has drilled on the Plum Deep prospect, one of six within the PI Project Area. The well reached target depth on November 15. Logging identified four natural gas bearing zones over a 1,000 feet interval. An extensive testing programme remains to be completed.

Preliminary results of the first stage of this programme have been received. This entailed cutting and retrieval of a conventional core in the shallowest of three potential zones. A drillstem test was also conducted in this zone. The results from this test are consistent with the Joint Venture's pre-drill view that these potential reservoirs are tight and water wet. Preliminary determination of porosity and permeability show that this zone is unlikely to be productive as a reservoir. Drilling to the next planned core point is now underway.

Pantheon has registered commercial success on its Project Wharton venture with three wells encountering natural gas. Of these, two are on-stream producing early cash flow for Pantheon. The third is due on-stream early in the New Year. This increasing natural gas production occurs at a time of improved US natural gas prices and represents an important income stream for a small company such as Pantheon. With easy access to infrastructure and the shallow depth of the wells, the near term financial returns are very attractive.

The Company has at least a further 13 prospects on its Project Wharton venture remaining to be drilled. The 75% success rate of the initial drilling campaign has provided sufficient confidence to boost exploration in the Project Wharton area. In addition to three wells in and around the recent discoveries, a further two exploration wells are currently scheduled for 2007. The current three discoveries, combined with the increased exploration efforts, hopefully will yield higher natural gas production in 2007.  

Pantheon has built an exciting portfolio in its short existence as a public company. It is well-balanced between smaller lower risk, early cash flow generating prospects (Project Wharton) and high impact, high-quality natural gas plays (PI Project Area). Moreover, Pantheon's projects are located within the energy-thirsty, geopolitically and fiscally stable market of the U.S. . With abundant infrastructure available to both projects, Pantheon would benefit from any discoveries coming on-stream quickly, affording early cash flow generation. This has already been achieved with two of the Company's three Project Wharton discoveries."

Chairman's Report

Pantheon Resources plc ("Pantheon") was formed in 2005 to be an independent UK based oil and gas exploration company focused on hydrocarbon producing basins onshore or near shore the GoM. Specifically, its initial focus was on the deep geological plays under and around Padre Island, south Texas . Pantheon entered into a Farmout Agreement which provided the right to participate initially in six specific, defined exploration targets which were ready for drilling from a geological and geophysical perspective. Importantly, the joint venture secured a drilling rig contract for one year with options to extend for a further two years.

The six prospects are considered to be large, high quality natural gas plays in an under-explored deep section of the GoM. Reserve potential is deemed significant with estimated prospect sizes ranging up to 337 bcf on a most likely basis (previously referred to as P50). Pantheon is paying 33.33% of the costs associated to casing point with each of the wells to earn a 25% working interest. These terms are considered favourable for a prolific oil and natural gas region in the current environment.

In June 2006, Pantheon expanded its operations by farming-into a natural gas exploration venture in Wharton County , south Texas , located broadly between Houston and Corpus Christi . This venture is operated by the Everest Resource Company ("Everest") which has a long and successful history in the Texas Gulf Coast Area. This farm-in was considered complementary in terms of risk to the high impact PI Project Area. The Project Wharton farm-in comprised three prospects initially. Each of these is of an order of magnitude lower in terms of estimated size and of lower risk.

Post-balance sheet events

Subsequent to the financial year-end, Pantheon commenced drilling operations for both its projects

PI Project Area

The Kindee ST 212#1 well on the Plum Deep structure commenced drilling on August 1, 2006. This well reached target depth of 16,392 feet (measure depth) on November 15, 2006. Well logging identified four natural gas bearing zones spanning 1,000 feet. Flow testing and a coring programme are now underway. The final outcome remains dependent on the testing programme.

Initial results of the first stage of the testing programme are now available. The first conventional core in the sidetrack well has been successfully retrieved and is under analysis. Initial interpretation of the core shows the interval primarily to be inter-bedded silty sandstone and siltstone, with thin beds of sand and shale.

Preliminary interpretation of the DST in the shallowest of three potential zones confirms the presence of a tight reservoir formation. This is consistent with the Joint Venture's pre-drill reservoir models. Preliminary determination of porosity and permeability show this zone to be primarily water wet, and unlikely to be productive as a reservoir.

Drilling to the next planned core point is now underway. This will initiate the collection of a second core. This second core will be taken in the deepest zone which spans over 800 gross feet. Once the second core is collected drilling will proceed to a TD of 15,450'feet ("ft") measured depth, At this stage a comprehensive logging and sampling programme will be undertaken before a 4.5inch production liner is set.

The current drilling programme for the PI Project Area is shown in table 1.

Table 1 : PI Project Area - Status

Project Wharton

Since the financial year-end, Pantheon has farmed into three more prospects and drilled four wells. T he Company is now producing from two recently discovered natural gas fields, Zebu and Mohawk. A third, Caddo, is scheduled to be commissioned early in the New Year. When combined together, these fields will make up an attractive and growing income stream for Pantheon. This increasing natural gas production occurs at a time of improved US natural gas prices. It represents an important income stream for a small company such as Pantheon with attractive near term financial returns.

This initial drilling campaign has delivered effectively a 75% success rate. This has provided sufficient confidence to boost exploration in the Project Wharton area. Pantheon has now agreed to drill two additional exploration wells, Baptist and Kant, over coming months. A further three wells in and around the recent discoveries are currently scheduled for 2007. The current three discoveries, combined with the increased exploration efforts, hopefully will yield higher natural gas production in 2007.  

The current interests and status of all prospects in which Pantheon has an interest are shown in table 2

Table 2 : Project Wharton and Pantheon's Interests

Environmental Policy Statement

While at 30 June 2006, the company is not an operator of any exploration projects, it closely monitors activities to ensure to the best of its knowledge there is no potential for any such breach. Some farm-out projects are located in the Padre Island National Seashore ("PINS") and each of these projects requires a PINS permit which involves rigorous conditions to be met. To achieve this the operator works closely with PINS.

DIRECTORS' REPORT FOR THE PERIOD ENDED 30 JUNE 2006

The Directors present their report together with the audited accounts of Pantheon Resources Plc ("Pantheon" or "the Company") and its subsidiary undertakings (together "the Group") for the period from incorporation on 8 March 2005 until 30 June 2006.

Principal activity

The Company is registered in England and Wales , having been incorporated on 8 March 2005 under the Companies Act with registered number 5385506 as a public company limited by shares.

The principal activity of the Group is mineral exploration. The Group operates in its parent undertaking and through subsidiary companies, details of which are set out in the note 8 to these accounts.

Results and dividends

The Group results for the period are set out on the following pages. The Directors do not propose to recommend any distribution by way of a dividend for the period ended 30 June 2006.

Group structure and changes in share capital

Details of movements in share capital during the period are set out in note 13 to these accounts.

Report on Directors' remuneration and service contracts

The service contracts of all the Directors are subject to a six month termination period. Under the contracts, each executive Director will be paid £50,000 per annum and each non-executive Director £25,000 per annum.

Pensions

The Group does not operate a pension scheme for Directors or employees.

Directors' remuneration

Remuneration of Directors was as follows:

Supplier payment policy

The Company's policy is that payments to suppliers are made in accordance with those terms and conditions agreed between the Company and its suppliers, providing that all trading terms and conditions have been complied with.

Political and charitable contributions

There were no political or charitable contributions made by the Company during the period ended 30 June 2006.

DIRECTORS' REPORT FOR THE PERIOD ENDED 30 JUNE 2006

Statement of directors' responsibilities

The Directors are responsible for preparing the financial statements in accordance with applicable law and International Financial Reporting Standards ("IFRSs").

Company law requires the Directors to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period. In preparing these financial statements, the Directors are required to:

• select suitable accounting policies and then apply them consistently;
• make judgements and estimates that are reasonable and prudent;
• state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements;
• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

The Directors are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 1985. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities .

So far as the Directors at the time of approval of the report are aware:

1. there is no relevant audit information of which the Company's auditors are unaware; and
2. the Directors have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditors are aware of that information.

Auditors

UHY Hacker Young were appointed auditors to the Company, and in accordance with Section 385 of the Companies Act 1985, a resolution proposing that UHY Hacker Young be re-appointed as auditors of the Company and that the Directors be authorised to fix their remuneration will be put to the next Annual General Meeting.

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF PANTHEON RESOURCES PLC FOR THE PERIOD ENDED 30 JUNE 2006

We have audited the Group and Parent company financial statements (the "financial statements") of Pantheon Resources plc for the period ended 30 June 2006 which comprise the Group income statement, the Group and Parent company balance sheets, the Group and Parent company cash flow statements and the related notes. These financial statements have been prepared under the accounting policies set out therein.

This report is made solely to the company's members, as a body, in accordance with section 235 of the Companies Act 1985. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of directors and auditors

The Directors' responsibilities for preparing the Annual Report and the financial statements in accordance with applicable law and those International Financial Reporting Standards ("IFRSs") as adopted for use in the European Union are set out in the Statement of Directors' Responsibilities.

Our responsibility is to audit the financial statements in accordance with relevant legal and regulatory requirements and International Standards on Auditing ( UK and Ireland ).

We report to you our opinion as to whether the financial statements give a true and fair view and are properly prepared in accordance with the Companies Act 1985. We also report to you whether, in our opinion, the Directors' Report is consistent with the financial statements, if the Company has not kept proper accounting records, if we have not received all the information and explanations we require for our audit, or if information specified by law regarding directors' remuneration and other transactions is not disclosed.

We read other information contained in the Annual Report and consider whether it is consistent with the audited financial statements. The other information comprises the Chairman's Statement and the Directors' Report. We consider the implications for our report if we become aware of any apparent misstatements or material inconsistencies with the financial statements. Our responsibilities do not extend to any other information.

Basis of audit opinion

We conducted our audit in accordance with International Standards on Auditing ( UK and Ireland ) issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the significant estimates and judgments made by the Directors in the preparation of the financial statements, and of whether the accounting policies are appropriate to the Group's and Company's circumstances, consistently applied and adequately disclosed.

We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements.

Opinion

In our opinion:

• the Group financial statements give a true and fair view, in accordance with IFRSs as adopted for use in the European Union, of the state of the Group's affairs as at 30 June 2006 and of its loss for the period then ended;
• the Parent Company financial statements give a true and fair view, in accordance with IFRSs as adopted for use in the European Union as applied in accordance with the provisions of the Companies Act 1985, of the state of the parent company's affairs as at 30 June 2006;
• the financial statements have been properly prepared in accordance with the Companies Act 1985;
• the information given in the Directors' report is consistent with the financial statements.

UHY Hacker Young
21 December 2006
Chartered Accountants
Registered Auditors
St. Alphage House
2 Fore Street
London EC2Y 5DH

GROUP INCOME STATEMENT FOR THE PERIOD ENDED 30 JUNE 2006

The above are the results for the period from the date of incorporation on 8 March 2005 to 30 June 2006.

All of the above amounts are in respect of continuing operations.

There are no recognised gains and losses other than those passing through the income statement.

GROUP AND COMPANY BALANCE SHEETS AS AT 30 JUNE 2006

GROUP AND COMPANY CASH FLOW STATEMENT FOR THE PERIOD ENDED 30 JUNE 2006