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

Pharos Energy
[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:

    Oil finds footing as oversupply concerns recede

    OPEC+’s modest production increase has nudged the oil market toward a more neutral stance, as supply fears ease and inventories come under scrutiny.

    Pharos Energy’s Vietnam drilling signals a layered approach to future value

    Pharos Energy is blending steady production with appraisal upside in Vietnam, signalling a disciplined approach to growth with built-in flexibility.

    Oil prices climb as supply strains shift the balance

    Oil is rallying not from demand strength, but from a supply squeeze driven by Russia’s fuel export cuts and disruptions to refining.

    Pharos Energy Secures New Egyptian Concession, Enhancing Portfolio Value – Shore Capital

    Pharos Energy secures new Egyptian concession with improved fiscal terms, boosting reserves, production potential, and long-term portfolio value.

    Pharos Energy delivers stable production and strong cash generation in Interim Results

    Pharos Energy reported interim results for the six months to 30 June 2025, with production averaging 5,642 boepd net, in line with guidance. Revenue reached $65.6m, while cash generated from operations was $31.9m, supporting a 10% increase in the interim dividend to 0.3993 pence per share.

    Oil markets respond to shifting supply dynamics

    Oil prices moved higher as sanctions on Russian supply and OPEC’s measured stance converge to shape a tighter and more politically sensitive market.

    Search

    Search