Pharos Energy plc (LON:PHAR) is confidently advancing on multiple fronts in 2025, as the company gears up for a high-impact drilling programme and continues to demonstrate operational discipline across its diverse asset base. In a recent research note from Auctus Advisors LLP, analyst Stephane Foucaud reiterated a £0.45 target price, more than double the current share price of £0.21, citing strong production delivery, compelling resource potential in Vietnam and encouraging financial resilience.
“Operations are on track. Six well drilling programme to commence in Vietnam in 3Q25,” wrote Foucaud in the detailed update, dated 17 July 2025.
This programme marks a key turning point for Pharos, with four wells scheduled for the high-performing TGT field and two appraisal wells on CNV—all aimed at extending production and unlocking new reserves in Vietnam.
1H25 Results and Production Outlook
Pharos delivered a solid first half. Group production averaged 5,642 barrels of oil equivalent per day (boe/d), broadly in line with Auctus’ expectations of ~5,800 boe/d. Within that, Vietnam was the cornerstone, contributing 4,183 boe/d, essentially flat compared to the January to April output of 4,216 boe/d.
The company has reiterated its full-year guidance of 5.0–6.2 mboe/d, with expected capital expenditure ranging between US$33–40 million, positioning it well for both near-term delivery and long-term growth.
Vietnam: Unleashing Value from the TGT and CNV Fields
Vietnam continues to offer standout returns and scalability for Pharos. According to Auctus, the TGT four-well campaign is now scheduled to kick off in late 3Q25, earlier than the initially anticipated 4Q start.
The highlight here is the TGT-18X appraisal well, which could potentially unlock 1–3 million barrels of oil equivalent (mmboe) in the western portion of the field. At CNV, a two-well programme is planned for early 4Q25, including the 5X well designed to tap into the northern section of the field and potentially extend production life.
Foucaud highlighted the considerable upside in the country, stating:
“Overall, production is expected to grow by 20% and the contingent and prospective resources in Vietnam represent over 100% of the company’s existing 2P reserves in that country.”
Valuation: Undervalued with Significant Upside
From a valuation perspective, Pharos appears significantly undervalued. Auctus calculates a Core Net Asset Value (CNAV) of £0.27/share and a Risked Exploration NAV (RENAV) of £0.49/share, indicating a substantial disconnect between the company’s intrinsic value and market valuation.
The unrisked value attached to contingent and prospective resources in Vietnam alone equates to £0.30/share, or 140% of the current market price. This makes Pharos a standout value proposition, especially as operational progress de-risks future production.
“We re-iterate our target price of £0.45 per share,” noted Foucaud, reflecting a potential total return of 114%, including a 5% dividend yield.
Financial Foundations Remain Solid
Resilience continues to be a defining quality for Pharos. As of April 2025, cash holdings stood at a healthy US$22.6 million, slightly ahead of earlier levels. Net receivables in Egypt saw a modest uptick from US$31.7 million to US$33.5 million, and the company remains well positioned to support capital investment through a mix of internal cash flow and balance sheet flexibility.
By year-end, Pharos expects net debt to be just US$5 million, down from a net cash position of US$17 million in 2024, but forecast to swing back to a net cash position of US$37 million in 2026, as free cash flow improves with stronger output and operating leverage.
FY2025–2026: Key Financial and Operational Highlights
- FY25 Production (forecast): 5,503 boe/d, rising to 6,622 boe/d in FY26
- FY25 Capex: US$36 million
- FY26 Cash Flow from Operations: US$58 million
- FY25 Dividend Yield: 5.9%
- FY26 Net Debt: Forecast to become net cash of US$37 million
- EV/DACF multiples: 2.9x for FY25, dropping to 1.4x for FY26
- Valuation upside: RENAV of £0.49/share vs current £0.21/share
Dividend and Shareholder Value
Even in a year characterised by elevated capex, Pharos remains committed to shareholder returns. For 2025, the dividend is forecast at US$6 million, equating to 0.02 US$/share, supporting a robust yield amid growth-focused investment.
In Summary
Pharos Energy’s disciplined execution, robust drilling pipeline and underappreciated resource base paint a compelling picture for investors. With operations in Vietnam poised to unlock substantial new value and the balance sheet returning to a net cash stance, the company appears well positioned for a re-rating.
Auctus’ Stephane Foucaud summed it up clearly:
“Operations are on track. Six well drilling programme to commence in Vietnam in 3Q25.”
As oil prices stabilise and Pharos enters a period marked by production growth and resource appraisal, 2025 could prove to be a defining year for this AIM-listed independent.
