Pharos reports first half of strong progress

Pharos Energy reported group revenue of $65m in a first half update on Thursday, while cash balances stood at $31m as of 30 June, compared to $32.6m at the end of 2023.

The London-listed firm said debt was reduced to around $13m, from $39.2m at the end of 2023, resulting in a net cash position of about $18m, compared to a net debt position of $6.6m at the end of the prior year.

Its receivable position from Egypt was $31.3m, with $14.8m received in the first half and an additional $4m received from EGPC on 1 July.

Forecast cash capital expenditure for the full year remained unchanged at $32m, with $27m after the Egyptian carry by IPR, mainly settled in Egyptian pounds (EGP).

On the operational front, Pharos reported group working interest production of 5,851 barrels of oil equivalent per day (boepd) net for the first half of 2024, maintaining its full-year production guidance of 5,200 to 6,500 boepd net.

Vietnam's production stood at 4,456 boepd, with a 2024 production target of 3,900 to 5,000 boepd net.

In Egypt, production was 1,395 barrels of oil per day (bopd), with a full-year guidance of 1,300 to 1,500 bopd net.

In Vietnam, the revised field development plan (RFDP) for the TGT field was approved by the Ministry of Industry and Trade (MOIT) on 9 January, paving the way for a two-well drilling program set to begin in the third quarter.

The RFDP for the CNV field had been agreed by all partners, and awaited formal approval.

Additionally, the company said it was making positive strides towards obtaining licence extensions for both TGT and CNV fields, and was in discussions with interested parties regarding the drilling program on Block 125.

In Egypt, preparations were underway to drill an exploration commitment well on El Fayum in the third quarter.

The processing and interpretation of around 130 square kilometres of 3D seismic data on NBS was ongoing, and expected to complete in the fourth quarter.

A multi-well development drilling programme in the NBS SW field was meanwhile planned for the second half.

Pharos said it was also in discussions with its partner IPR and the Egyptian General Petroleum Corporation (EGPC) regarding an Egypt consolidation proposal.

Pharos announced several changes to its board and senior management during the period, including the appointment of Katherine Roe as the new CEO and member of the board and ESG committee, effective 1 July, and Mohamed Sayed as the new chief operating officer, also effective 1 July.

The company said it was continuing its current phase of the share buyback programme.

Shareholders approved a final dividend of 0.77p per share for the year ended 31 December, amounting to $4.1m, to be paid on 19 July.

Including an interim dividend of 0.33p per share paid on 24 January, the total dividend for the full 2023 year was 1.1p per share, amounting to $5.9m.

Ernst & Young had been appointed as the firm’s new external auditor, succeeding Deloitte, starting from the financial year started 1 January 2024, following shareholder approval at the 2024 annual general meeting.

“We are delighted to report a solid first half, both operationally and financially,” said chief executive officer Katherine Roe.

“Production remains within previously set guidance underpinning our strong net cash position and our commitment to sustainable shareholder returns through the company's dividend policy and share buyback programme.

“The positive macro environment in Egypt has seen a significant improvement in our receivables position with $19m received to date, substantially reducing our receivables balance.”

Roe said further discussions were continuing regarding outstanding payments.

“The recent ratification of five petroleum agreements for onshore and offshore acreage further demonstrates the new Government's commitment to our sector.

“In parallel, we remain focused on near-term drilling and finalisation of the licence extensions for TGT and CNV in Vietnam to enable us to prioritise future investment to deliver additional volumes.

“We also continue to progress rig and farm-out discussions for Blocks 125 and 126, our significant exploration prospects.”

At 1032 BST, shares in Pharos Energy were up 2.04% at 25p.

Reporting by Josh White for Sharecast.com.