Pharos Energy (LON:PHAR) has delivered a positive operational update ahead of its AGM, with the latest research note from Progressive Equity Research highlighting steady production, a strong balance sheet and improving momentum across its assets in Vietnam and Egypt.
The note, written by Research Analyst Peter Hitchens, points to a business that is progressing well operationally while remaining financially robust despite a front loaded investment programme during the first half of 2026.
Pharos reported production of 5,561 barrels of oil equivalent per day during the first four months of the year, comfortably within its guidance range of 5,200 to 6,400 boe/day. According to Progressive, this performance reflects the benefits of recent drilling activity, particularly in Vietnam, where new wells are already contributing additional output.
Research Analyst Peter Hitchens stated: “We believe that Pharos is in a good place as it benefits from its investment programme, which should see solid growth in its production and strong balance sheet.”
Vietnam Delivering Strong Operational Performance
Vietnam continues to be a standout performer for the group. Production from the region reached 4,492 boe/day in the opening months of 2026, up from 4,095 boe/day during 2025.
The latest research note from Progressive highlighted encouraging results from several appraisal and infill wells. At the TGT field, three appraisal wells are now contributing around 830 boe/day net to Pharos. One well in particular, TGT-18X, delivered encouraging flow rates of 600 boe/day net to the company, with testing continuing.
Meanwhile, activity at the CNV field is also advancing. An infill well is currently producing 200 boe/day net, while the CNV-5X appraisal well is expected to be completed by the middle of the year.
Progressive described Vietnam as being “in excellent shape”, underlining the importance of the region to Pharos’ medium term growth outlook.
Egypt Activity Expected to Reverse Declines
In Egypt, production averaged 1,069 barrels per day, lower than the 1,303 bbl/day achieved during 2025 following a delay to investment plans while the company secured improved fiscal terms.
However, drilling activity has now restarted, with partners launching a six well programme. The drilling rig has already mobilised for the first well, Silah 8-2. Progressive believes this programme should help reverse recent production declines and could increase Egyptian production by around 20% once completed.
Pharos Energy Financial Position Remains Strong
Despite significant capital expenditure during the first half of the year, Pharos continues to maintain a healthy financial position. Net cash stood at approximately US$31 million, with no debt on the balance sheet. This compares with US$40.2 million at the end of 2025.
The reduction largely reflects the company’s planned US$50 million capital expenditure programme, of which around US$39 million is allocated to Vietnam. Progressive noted that much of this spending is nearing completion, potentially allowing cash generation and balance sheet strength to improve during the second half of the year.
The broker also reiterated its valuation of 57.9p per share, based on a Risked Exploration Net Asset Value methodology.
Key Financial and Operational Highlights
- First four month 2026 production of 5,561 boe/day
- Vietnam production increased to 4,492 boe/day
- Egypt drilling programme restarted with six wells planned
- Net cash position of approximately US$31 million with no debt
- US$50 million capital expenditure programme underway
- Progressive valuation maintained at 57.9p per share
- Forecast 2026 revenue of US$143.9 million
- Forecast 2026 adjusted EBITDA of US$82.4 million
In Summary
The latest research note from Progressive Equity Research suggests that Pharos Energy is entering an important growth phase, supported by stronger production in Vietnam, renewed drilling activity in Egypt and a solid financial position. While the company has committed substantial investment during the first half of 2026, the groundwork now appears to be in place for improving production and cash generation through the remainder of the year. With operations progressing as planned and balance sheet strength intact, Pharos appears well positioned for the next stage of its development.
