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

- Link: https://www.directorstalkinterviews.com/pharos-energy-reaffirms-production-guidance-and-strengthens-balance-sheet-shore-capital/4121208519
- Published: 2025-07-21T13:17:19+01:00
- Author: Anthony Fox

**[Pharos Energy plc](https://www.directorstalkinterviews.com/company/pharos-energy-plc/phar.l)**(
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

| Metric | H1 FY25F | H1 FY24A | YoY Change | 
| Net production (kboe/d) | 5.6 | 5.8 | -4% | 
| Revenue ($m) | 65.3 | 65.0 | 0% | 
| EBITDAX ($m) | 39.6 | 50.6 | -22% | 
| Operating cash flow ($m) | 16.8 | 25.0 | -33% | 
| Free cash flow ($m) | 5.1 | 19.1 | -73% | 
| Net cash ($m) | 22.6 | 17.5 | +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.

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