Pharos Energy plc (LON:PHAR), an independent energy company with assets in Vietnam and Egypt, has announced its interim results for the six months ended 30 June 2026.
Katherine Roe, Chief Executive Officer, commented:
“It has been a busy first half of the year for Pharos as we progressed multi-rig drilling campaigns in both Vietnam and Egypt. In Vietnam, our final well completed at the end of July, concluding a six-well offshore drilling campaign which has been successfully and safely delivered by our team and partners. In Egypt, we have resumed drilling, with the first two wells of a six-well programme already completed and a second rig mobilising to drill a third. These wells are contributing to production and reserves growth, supporting our production guidance and cash flow generation.
“Underpinning our operational performance is our continued debt-free balance sheet. Our financial position strengthened further in the first half, benefitting from strong commodity prices and the collection of all outstanding Egyptian receivables. This ongoing position allows us to work with our partners in Vietnam to take advantage of our strong in-country premiums to Brent and operational momentum from the recently completed campaign to drill an additional appraisal well, TGT-20X, in late September, demonstrating an attractive opportunity to reinvest in our portfolio whilst making efficient use of supplies from the recent campaign.
“The recommended acquisition of Pharos by Ratio Petroleum, approved by shareholders on 28 August 2026, continues to progress and remains subject to the satisfaction of the remaining conditions set out in the Scheme Document and the sanction of the Scheme by the Court at the Sanction Hearing.
“Pharos continues to be cash generative, reflecting stable operations, disciplined capital allocation, and the quality of our asset base. We would like to thank our shareholders and all our stakeholders for their continued trust and support.”
Operational Highlights
- Group working interest production was 5,650 boepd net (1H 2025: 5,642 boepd net), in line with full year guidance:
- Vietnam 4,583 boepd (1H 2025: 4,183 boepd)
- Egypt 1,067 bopd (1H 2025: 1,459 bopd)
- In Vietnam:
- Six-well campaign successfully completed; current production rate is in line with pre-drill expectations and contributing to production and reserves
- TGT: All three infill wells and one appraisal well, TGT-18X, completed by April 2026; in total, the TGT drilling campaign contributed 3,800 bopd gross (1,130 bopd net) in June
- CNV: The infill well completed in March 2026 and contributed c.700 bopd gross (175 bopd net) in June; appraisal well CNV-5X commenced on 15 March and completed on 30 July. The well is undergoing production testing
- In Egypt:
- The first well of the 2026 six-well programme, Silah 8-2, completed drilling on 9 July; the second well, Aboud 1-5, completed drilling on 9 September; a third well is expected to be spud shortly following mobilisation of the rig
Financial Highlights
- Group revenue $85.5m1 (1H 2025: $65.6m)
- Cash generated from operations $50.6m (1H 2025: $31.9m)
- Operating cash flow $34.9m2 (1H 2025: $16.1m)
- Net loss $0.4m (1H 2025: $2.8m net loss)
- Cash operating costs $18.38/bbl3 (1H 2025: $17.04/bbl)
- Cash as at 30 June 2026 of $45.4m (31 Dec 2025: $40.2m)
- Egypt receivable balance at 30 June 2026 was $1.7m (31 Dec 2025: $7.4m), having received a total of $13.7m in 1H 2026
- Average realised crude oil prices:
- Vietnam: $99.10/bbl (1H 2025: $77.25/bbl), including premium over Brent, representing a 28% increase overall. Prices ranged from a low of $72/bbl in January to a high of $126/bbl in April 2026. Average premiums for 1H 2026 were $5.57/bbl for TGT and $5.83/bbl for CNV. Premiums for 2H 2026 TGT cargoes have been agreed for July to October 2026 and average $12.26/bbl. For CNV, the September 2026 cargo achieved a premium of $13.78/bbl
- Egypt: $86.36/bbl (1H 2025: $65.85/bbl), after discounts, representing an increase of 31%. Prices ranged from a low of $60/bbl in January to a high of $114/bbl in April 2026. Egypt’s average discounts to Brent for the first half of the year were $6.65/bbl for El Fayum and North Beni Suef combined
- Approximately 58% of the Group’s 2H 2026 forecast entitlement production and 20% of the Group’s 1H 2027 forecast entitlement production hedged, utilising a mix of zero-cost collars, fixed-price swaps, and put options:
- 2H 2026 hedging portfolio secures average floor and ceiling prices at $60.7/bbl and $81.5/bbl, respectively, and includes swap hedges at an average fixed price of $88.4/bbl4
- 1H 2027 hedging portfolio secures average floor and ceiling prices at $67.3/bbl and $85.1/bbl, respectively, and includes swap hedges at an average fixed price of $79.0/bbl
- Interim dividend in respect of 2025 of 0.3993 pence per share was paid in January 2026. The final dividend of 0.9317 pence per share was paid in July 2026. This took the full year 2025 dividend to 1.331 pence per share, amounting to $7.4m in total
1 Stated before realised hedging loss of $3.7m (1H 2025: no realised hedge gains or losses)
2 Operating cash flow = Net cash from operating activities, as set out in the Cash Flow Statement
3 See Non-IFRS measures on page 30
4 Due to the timing of execution, the average swap strike is higher than the zero cost collar ceiling price, as swaps were entered into following the significant Brent price increase, while zero cost collars were executed earlier at lower market prices
Corporate Highlights
- On 24 June 2026, the board of directors of each of Ratio Petroleum Energy LP and Pharos announced that they had reached agreement on the terms of a recommended acquisition by Ratio of the entire issued and to be issued share capital of Pharos, to be effected by court-sanctioned scheme of arrangement. The scheme document in respect of the Acquisition was published on 21 July 2026
- On 7 August 2026, the board of directors of each of Ratio and Pharos announced that they had agreed the terms of an increased recommended all-cash offer by Ratio for the entire issued and to be issued share capital of Pharos to be effected by way of the Scheme. The Increased Ratio Offer followed the earlier announcement of a competing offer for Pharos by Serica Energy plc on 26 July 2026, which subsequently lapsed on 13 August 2026
- On 28 August 2026, at the court-convened meeting to approve the Scheme and the associated general meeting to approve its implementation, the requisite majority of Pharos shareholders voted to approve the Scheme and pass the resolution proposed at the General Meeting
- Completion of the Acquisition remains subject to the satisfaction (or, where applicable, waiver) of the remaining conditions set out in the Scheme Document, including the remaining Regulatory Conditions and the sanction of the Scheme by the Court at the Sanction Hearing. The Company and Ratio are pursuing the required consents and approvals in both Vietnam and Egypt and will keep shareholders updated on the progress towards completion
Outlook
- 2026 production guidance range narrowed to 5,300 – 5,900 boepd from 5,200 – 6,400 boepd, reflecting increased production from the six-well programme in Vietnam and lower than expected production in Egypt
- Vietnam:
- The JOCs received approval from PetroVietnam to drill an additional sidetrack appraisal well (TGT-20X) in 2026, utilising supplies from the recently completed drilling campaign. Drilling is expected to commence in late September 2026
- Exploration farm-out process of Blocks 125 & 126 to continue with encouraging engagement from potential partners
- Egypt:
- The second rig is mobilising to NBS to drill the third well of the six-well work programme in Egypt
- Formal ratification of the consolidation of the existing assets expected in due course
- Group estimated cash capital expenditure for 2026 is c.$54m, which includes c.$4m for the additional appraisal well TGT-20X. Expenditure incurred in 1H 2026 was $29.2m, with $27.0m spent for Vietnam and $2.2m for Egypt
