Pharos Energy Reaffirms Production Guidance and Strengthens Balance Sheet – Shore Capital

PHAR
[shareaholic app="share_buttons" id_name="post_below_content"]

Pharos Energy plc (LON:PHAR) has reiterated full-year guidance following a steady first-half performance in both Vietnam and Egypt and is positioning for medium-term growth as key drilling activity restarts later in 2025. According to a 17 July research update by Shore Capital, the company continues to manage capital prudently while progressing strategic initiatives that could enhance shareholder value.

Solid H1 Operational and Financial Metrics

Pharos delivered H1 net production of approximately 4,200boe/d from its Vietnam assets (TGT and CNV fields), in line with FY25 forecast guidance of 3,600–4,600boe/d. Production from its Egyptian assets averaged about 1,500boe/d, also within guidance.

Combined, the group maintained steady output around 5,600boe/d for H1. Revenues are expected to come in at approximately $65 million, with cash in hand increasing by $6 million year-to-date to $22.6 million. However, Egyptian receivables reached $33.5 million, up $4 million during the same period, reflecting the slower pace of oil payments from the Egyptian General Petroleum Corporation (EGPC).

Vietnam Drilling to Resume; Egypt Fiscal Discussions Ongoing

Pharos is set to restart drilling in Q3 2025, beginning with an infill production well at TGT. This campaign is expected to support a production uplift from FY26. Meanwhile, negotiations with EGPC are ongoing regarding the consolidation of Pharos’ two Egyptian concessions and to secure improved fiscal terms—critical to unlocking further investment in the region.

In the report, analyst James Hosie notes:
“Pharos Energy’s FY24 results statement outlines how the business is positioning itself for medium-term growth in both Vietnam and Egypt.”

Until more favourable terms are reached, Pharos continues to limit its investment in Egypt, managing capital exposure while waiting for higher payment reliability.

Guidance and Valuation

Shore Capital reports no changes to FY25 group guidance:

  • Production: 5,000–6,200boe/d
  • Capex: $33–40 million, weighted towards H2 due to Vietnam drilling
  • Dividend: Interim payment expected at 0.4p/share, in line with policy

Valuation remains robust, with a fair value of 38p/share, implying a 42% discount to the share price at the time of the report (21p). Shore Capital’s NAV is primarily underpinned by the company’s 2P reserves in both regions. Continued progress in Egypt and exploration on Blocks 125/126 in Vietnam are flagged as potential catalysts for reassessment.

H1 FY25 Financials – Preview Summary

MetricH1 FY25FH1 FY24AYoY Change
Net production (kboe/d)5.65.8-4%
Revenue ($m)65.365.00%
EBITDAX ($m)39.650.6-22%
Operating cash flow ($m)16.825.0-33%
Free cash flow ($m)5.119.1-73%
Net cash ($m)22.617.5+29%

Shore’s revised forecasts reflect a slower rate of receivables settlement from Egypt, reducing FY25 operating and free cash flow by $9 million versus previous estimates.

On a Final Note

Pharos Energy enters H2 2025 with confirmed capital discipline, intact production guidance, and a stronger cash position. With Vietnam drilling set to restart and Egypt fiscal negotiations continuing, the business remains positioned to unlock embedded NAV and reignite growth momentum. While short-term upside rests on resolving Egyptian receivables and drilling execution, long-term optionality remains intact with NAV-supported upside highlighted by Shore Capital.

Share on:
Find more news, interviews, share price & company profile here for:

    If our articles help you then why not add us as a preferred news source on Google.

    Ratio Petroleum Energy to acquire Pharos Energy in recommended cash offer

    Pharos Energy has agreed a recommended all-cash acquisition by Ratio, with irrevocable undertakings covering 41.76% of shares.

    Pharos Energy builds value around producing oil assets in Vietnam and Egypt

    Pharos Energy offers focused exposure to producing oil and gas assets in Vietnam and Egypt, with future value linked to drilling, field management and disciplined capital allocation.

    Pharos Energy sharpens its case for growth in Vietnam and Egypt

    Pharos Energy is building its investment case around debt-free discipline, established production and targeted growth across Vietnam and Egypt.

    Pharos Energy clears Egypt receivables and resumes drilling

    Pharos Energy has received $12.6 million year-to-date in Egypt, clearing all outstanding receivables for the first time since acquiring the assets in 2019, and has begun a six-well drilling programme.

    Oil prices gain as supply risk sharpens investor focus

    Oil prices gained as Middle East supply risk returned to focus, supporting a firmer near-term outlook despite softer demand signals.

    Pharos Energy sharpens focus on cash flow, partnerships and growth

    Pharos Energy is focusing on cash flow, balance sheet strength and partnerships to build a more valuable Vietnam and Egypt portfolio.

    Search

    Search