2023 Preliminary Results

Pharos Energy plc, an independent energy company, announces its preliminary results for the year ended 31 December 2023.

 Jann Brown, Chief Executive Officer, commented:

“Pharos delivered on several fronts in 2023, laying the groundwork for significant momentum going into 2024. The Group had drilling success both in Vietnam, with the CNV production well coming in strongly, and in Egypt, with two discoveries from exploration wells on NBS and El Fayum. On Block 125, parallel discussions with several potential farm-in partners are ongoing and we are actively working with another operator in the region to enhance our efforts in securing a suitable rig.

“We have managed the challenges of payment delays in Egypt, thanks in part to our carry, but also by careful cost control and capital discipline. We ended the year in a strong financial position with net debt down to $6.6m and cash balances of $32.6m, from revenues of $168.1m. We are also delighted that we have now received $10m from EGPC, as they resume payments to foreign oil companies on the back of the substantial support packages committed to Egypt, putting us into a net cash position today. A strong balance sheet provides us with the foundation to continue our track record of delivering shareholder returns, adding $8.4m through a combination of share buyback programmes ($2.8m of which was completed in 2023) and dividend payments in 2023.

“Today, the Board have recommended a final dividend for the 2023 financial year of 0.77 pence per share, subject to shareholders’ approval at the Company’s 2024 AGM. This would take the 2023 full year dividend to 1.10 pence per share, an increase of 10% on the prior year.

“Looking ahead, we are advancing plans to drill the potentially transformational Block 125 in Vietnam, and we look forward to updating shareholders on progress. In the meantime, we continue to execute on our strategy, including continuing on our recently published roadmap to net zero, of delivering value for all stakeholders in 2024 and beyond.”

2023 Operational Highlights

• Group working interest 2023 production was 6,508 boepd net (2022: 7,166 boepd net), in line with 2023 guidance:
  • Vietnam 5,127 boepd (2022: 5,418 boepd)
  • Egypt 1,381 bopd (2022: 1,748 bopd)
• In Vietnam:
  • Strong performance from first new CNV lateral well, put on production in 1Q 2023
  • CNV Revised Field Development Plan (RFDP) submitted to partners for approval, with discussions ongoing
  • Continuing positive feedback received from PetroVietnam and the Ministry of Industry and Trade (MOIT) on five-year extension proposals to the TGT & CNV licences
  • On Blocks 125 & 126, two-year PSC extension granted to 8 November 2025
  • Competent Person’s Report (CPR) for Block 125 published in July 2023, confirming a range of gross unrisked prospective oil resources of between 1,178 MMstb (1U) and 29,785 MMstb (3U) with a Mean value of 13,328 MMstb
• In Egypt:
  • Three new wells (2 producers and 1 injector) put on production and injection in 2023, in line with pre-drill expectations
  • On El Fayum, exploration success with the first commitment well in the Abu Roash G and Upper Bahariya formations in July 2023. The well is set up for re-entry and testing in 2024
  • On North Beni Suef (NBS), first exploration commitment well (NBS-SW1X) declared a commercial discovery and put on production in December 2023, opening up a new area for production and development
  • Approval received from EGPC in September 2023 for the grant of a 20-year development lease for NBS-SW1X
  • 3D seismic survey acquired on time and on budget in 2H 2023

 

2023 Financial Highlights

• Group revenue of $168.1m ^1,2 (2022: $221.6m ^1,2)
• Cash generated from operations $88.8m (2022: $110.7m)
• Operating cash flow $44.9m ³ (2022: $53.4m)
• Cash operating costs of $15.70/bbl ⁴ (2022: $16.36/bbl ⁴)
• Cash balances as at 31 December 2023 of $32.6m (2022: $45.3m)
• Net debt as at 31 December 2023 of $6.6m ^4,5 (2022: $28.9m ^4,5)
• Loss for the year of $48.8m (2022: profit $24.4m)
• Net debt to EBITDAX of 0.06x ⁴ (2022: 0.23x ⁴)

 

2024 Outlook and Highlights

• Group working interest production guidance of 5,200 – 6,500 boepd net:
  • Vietnam 3,900 – 5,000 boepd
  • Egypt 1,300 – 1,500 bopd
• In Vietnam:
  • TGT RFDP approved by MOIT on 9 January 2024
  • Planning underway for a two-well TGT drilling programme, expected to commence 2H 2024
  • On Block 125, ongoing discussions with another operator to secure a well drilling slot during their multi-well drilling programme in the region
  • Parallel discussions with several potential farm-in partners for Block 125 in progress
• In Egypt:
  • Continuation of modest and measured approach to capital allocation and drilling in El Fayum and NBS, with potential to ramp up activity this year and beyond in response to the improving economic environment
  • Focus for this year’s work programme in El Fayum is low-cost recompletions and waterflood
  • Processing and interpretation of c.130km² of 3D seismic data on NBS is underway and expected to be completed in 2H 2024
  • Development drilling in the NBS SW field planned to start in 2H 2024
  • Ongoing engagement with EGPC regarding payment of receivables, and more favourable outlook following $57 billion support packages
  • Concession terms in Egypt being reviewed following award of 20-year development lease over NBS
• Forecast Group cash capex in the year is expected to be $32m ($27.1m after Egyptian carry by IPR)
• Egypt cash opex and capex expected to be substantially funded in EGP from historical receivables
• Notification of $10m to be received today from EGPC in USD against receivable balance following payment delays through 2023
• Continuation of share buyback programme, with a further $3m committed for 2024
• Interim dividend in relation to the financial year ending 31 December 2023 of 0.33 pence per share, amounting to $1.7m, paid out on 24 January 2024. Final dividend of 0.77 pence per share for the year to be paid on 19 July 2024, subject to shareholder approval
• Appointment of Dr Bill Higgs as a new independent Non-Executive Director
• Jann Brown to retire and step down from the Board, effective 30 April 2024
• Appointment of Shore Capital Stockbrokers Limited (Shore Capital) as the Company’s joint broker

 

_{1 Egyptian revenues are stated post government take including corporate taxes}

_{2 Stated prior to realised hedging loss of $0.2m (2022: loss of $22.5m)}

_{3 Operating cash flow = Net cash from operating activities, as set out in the Cash Flow Statement}

_{4 See Non-IFRS measures on page 39}

_{5 Includes RBL and National Bank of Egypt working capital drawdown}

 

 

Enquiries

Pharos Energy plc Tel: 020 7747 2000

Jann Brown, Chief Executive Officer       

Sue Rivett, Chief Financial Officer

Camarco Tel: 020 3757 4980

Billy Clegg | Andrew Turner | Rebecca Waterworth | Kirsty Duff

Notes to editors

Pharos Energy plc is an independent energy company with a focus on sustainable growth and returns to stakeholders, which is l isted on the premium segment of the London Stock Exchange. Pharos has production, development and/or exploration interests in Egypt and Vietnam. In Egypt, Pharos holds a 45% working interest share in the El Fayum Concession in the Western Desert, with IPR Lake Qarun, part of the international integrated energy business IPR Energy Group, holding the remaining 55% working interest. The El Fayum Concession produces oil from 10 fields and is located 80 km southwest of Cairo. It is operated by Petrosilah, a 50/50 joint stock company between the contractor parties (being IPR Lake Qarun and Pharos) and the Egyptian General Petroleum Corporation (EGPC). Pharos also holds a 45% working interest share in the North Beni Suef (NBS) Concession in Egypt, which is located immediately south of the El Fayum Concession. The first development lease on the NBS Concession was awarded in September 2023 and production started in December 2023. IPR Lake Qarun holds the remaining 55% working interest in the NBS Concession, with development operations on the Concession currently undertaken by Petrosilah on behalf of the newly formed joint operating company, Petro Beni Suef. The first exploration phase under the NBS Concession expired in March 2024 with all work programme commitments completed. In Vietnam, Pharos has a 30.5% working interest in Block 16-1 which contains 97% of the Te Giac Trang (TGT) field and is operated by the Hoang Long Joint Operating Company. Pharos’ unitised interest in the TGT field is 29.7%. Pharos also has a 25% working interest in the Ca Ngu Vang (CNV) field located in Block 9-2, which is operated by the Hoan Vu Joint Operating Company. Blocks 16-1 and 9-2 are located in the shallow water Cuu Long Basin, offshore southern Vietnam. Pharos also holds a 70% interest in, and is designated operator of, exploration Blocks 125 & 126, located in moderate to deep water in the Phu Khanh Basin, north east of the Cuu Long Basin, offshore central Vietnam.