Pharos Energy plc (LON:PHAR) has received an encouraging vote of confidence in the latest research note from Auctus Advisors LLP, which has repeated its £0.50 per share target price after the company’s latest update. The note points to a business that is combining steady production guidance, active drilling in Vietnam, a stronger dividend and a cash generative profile that could become more meaningful if oil prices remain supportive.
At the heart of the positive stance is the view that Pharos is entering 2026 with a clear operational plan and several potentially important catalysts. Auctus says the company has reaffirmed FY26 production guidance of 5.2 to 6.4 mboe/d, alongside a US$50 million capital expenditure programme, with 79% of that spending directed towards Vietnam and 21% towards Egypt. The broker also notes that first quarter 2026 group production is expected to be broadly in line with first quarter 2025 at 5.9 mboe/d, which suggests a steady opening to the year.
Research analyst Stephane Foucaud neatly captured the tone of the update when he wrote, “Increasing dividend, re-iterating guidance.” That short line sums up why the latest research note feels constructive. Investors are not only being shown a business with operational momentum, they are also seeing a company that is returning more cash to shareholders.
The dividend increase is one of the most eye catching aspects of the note. Pharos has declared a final dividend of 0.9317p per share, taking total 2026 dividends to 1.331p per share, worth US$7.4 million in total. Auctus calculates that this represents an increase of around 14% year on year, while also implying a dividend yield of roughly 5% at the current share price referenced in the report. For income focused investors, that adds a useful extra layer to the investment case.
There is also plenty to watch operationally. In Vietnam, the final infill well at TGT on the H4 fault block has reached total depth and is expected to come onstream in April. The CNV-8P infill well was completed in mid March and should begin production by mid April. Beyond that, Auctus highlights well test results from TGT-18X and the drilling of CNV-5X as key near term catalysts, with the broker assigning a combined unrisked NAV of £0.28 per share to these opportunities.
Key highlights from the latest research note
- FY26 production guidance reiterated at 5.2 to 6.4 mboe/d.
- US$50 million capex programme planned for 2026, with most spending focused on Vietnam.
- First quarter 2026 production expected to be broadly in line with first quarter 2025 at 5.9 mboe/d.
- Final dividend of 0.9317p per share declared, taking total 2026 dividends to 1.331p per share.
- Total 2026 dividend payout estimated at US$7.4 million, up around 14% year on year.
- YE25 2P reserves estimated at 18.4 mmboe, including 7.2 mmboe in Vietnam.
- 2P NAV estimated at £0.31 per share, with ReNAV at £0.51 per share.
Another useful point in the note is cash flow. Auctus says its forecasts assume Brent at about US$76 per barrel in 2026 and US$70 per barrel thereafter, under which Pharos could generate roughly US$110 million of cumulative free cash flow between 2025 and 2030. At US$90 per barrel, that figure rises to around US$190 million. The note also states that EGPC has indicated that the outstanding receivable balance of about US$7.4 million for Pharos at YE25 will be settled in the second quarter of 2026.
The farm-out process for Blocks 125 and 126 remains another important area to watch. Auctus says securing a partner would be highly material for Pharos, with an update expected in mid 2026. That means the story is not just about current production and dividends, but also about optionality and future development potential.
Final Thoughts
The latest research note from Auctus Advisors presents Pharos Energy as a company with a balanced and credible investment case, steady production guidance, active drilling catalysts, a higher dividend and valuation upside to the broker’s target price. While the note makes clear that outcomes will still depend on operational delivery and market conditions, the overall message is that Pharos has entered 2026 with a solid platform and several reasons for investors to keep a close eye on progress.
