Pharos Energy (LON:PHAR) is entering 2026 with renewed momentum and a robust operational strategy, according to the latest research note from Progressive Equity Research. The update highlights how the company’s strategic drilling programmes in Vietnam and a licence consolidation in Egypt are paving the way for potentially significant value creation.
Pharos, an exploration and production (E&P) company with assets in Vietnam and Egypt, reported production of 5,391 barrels of oil equivalent per day (boe/day) through the end of November, which is comfortably within its full-year guidance range of 5,200–6,000 boe/day.
The Vietnamese assets continue to be a major contributor to the company’s output, producing 4,074 boe/day. While this is a slight decrease from 2024’s 4,361 boe/day, this is expected to ramp up again thanks to an ambitious six-well infill and appraisal programme, underpinned by the deployment of two offshore drilling rigs. According to the research note, this drilling campaign includes the highly anticipated 18X appraisal well on the TGT field, which could unlock the western section of the block and materially boost recoverable resources.
In Egypt, the company recorded production of 1,317 boe/day. The dip from 1,440 boe/day in 2024 is attributed to delayed investment, as Pharos awaited confirmation of its licence consolidation—an approval that came in September from the Egyptian General Petroleum Corporation (EGPC). This consolidation is expected to be ratified by parliament in early 2026 and will allow Pharos to proceed with its committed work programme under improved fiscal terms.
Financially, Pharos remains on solid ground. As of 7 December 2025, the company reported a cash position of US$16.6 million and carries no debt. This capital base provides the company with ample flexibility to complete its capex programme and support future production growth.
Research analyst Peter Hitchens of Progressive noted, “Pharos is going into 2026 in a strong position. The planned programme, which is fully funded, has the ability to add significant reserves and resources, which could unlock further shareholder value.”
FY25 Financial & Operational Highlights:
- Revenue (2025E): $119.7 million (2024: $136.1 million)
- Adjusted EBITDA (2025E): $68.7 million
- Free Cash Flow (2025E): $0.3 million
- Dividend Yield (2025E): 5.9%, rising to 6.5% in 2026E
- Group Production (2025E): 5.4k boe/day, forecast to rise to 7.8k boe/day in 2026E
- RENAV maintained at: 58.1p/share
Final Thoughts
Pharos Energy’s near-term outlook appears promising, with drilling activities set to ramp up output and unlock new value from both its core operating regions. With a strong balance sheet, strategic clarity, and supportive fiscal changes in place, the company looks well positioned to deliver on its potential through 2026 and beyond.
