Oil and gas group Pantheon falls on reports of Muddy Waters bet

Shares in Aim-listed Pantheon Resources slid on Monday after a report that short seller Muddy Waters Research had bet against the company.

Stock in Pantheon, a US-focused oil and gas explorer, fell as much as 20 per cent early on Monday in London. The stock has since pared some of its losses but remained down more than 15 per cent in afternoon trading.

The drop comes after UK newspaper The Times reported at the weekend that Muddy Waters Research, the prominent hedge fund founded and led by Carson Block, had taken a short position on the company worth £5mn.

Muddy Waters declined to comment.

The short position would be the US hedge fund’s latest bet against a UK-listed company, coming almost three years after it shorted stocks in NMC Health and raised questions over the group’s asset values, cash balance, reported profits and debt levels. NMC, which owns and operates hospitals and clinics across the Middle East, went into administration in April 2020.

Before NMC, Muddy Waters also attacked London-listed litigation financing specialist Burford Capital.

Pantheon has interests in the Alaska North Slope basin spanning more than 150,000 acres but is yet to begin commercial production. It reported a pre-tax loss of $5.9mn in the six months to the end of December.

In a filing last week it said it had acquired new North Slope leases of “approximately 40,000 acres”, with chief executive Jay Cheatham saying the acreage “adds significant resource potential to our existing management estimates of 23bn barrels of oil in place and over two billion barrels of recoverable resource”.

Shares in Pantheon remain up about 360 per cent since early 2020.

In an investor presentation in April, the company said the Alaska North Slope was a “proven major oil province” and that there was “near term commercialisation opportunity”.

Fraser Perring, founder of short selling group Viceroy Research, has also raised questions about Pantheon, describing the company on Twitter as “too good to be true”.

Pantheon said the company’s directors “believe the oil field that they have discovered to be a very exciting prospect, and they have confidence in their statements”.