TIDMPHAR
RNS Number : 7626Z
Pharos Energy PLC
16 January 2024
16 January 2024
Pharos Energy plc
("Pharos" or the "Company" or, together with its subsidiaries,
the "Group")
Trading and Operations Update January 2024
Pharos Energy plc, an independent energy company, issues the
following trading and operations update to summarise recent
operational activities and to provide trading guidance in respect
of the financial year to 31 December 2023 and outlook guidance for
2024. This is in advance of the Company's Preliminary Results on 27
March 2024. The information contained herein has not been audited
and may be subject to further review and amendment.
Jann Brown, Chief Executive Officer, commented:
"Pharos delivered a strong operational performance across the
portfolio in 2023 and there is significant operational momentum
going into 2024. The Group had success on drilling in both Vietnam,
with the CNV well coming in strongly, and in Egypt, with
discoveries on the first NBS exploration well and the El Fayum
exploration well. On Block 125, parallel discussions with several
potential farm-in partners are ongoing and we have joined forces
with another operator in the region to enhance our position in the
rig market.
"The Company has built solid foundations of sustainable cash
generation from a robust and diverse production base, which enabled
us to make returns of $8.4m to shareholders, invest in our assets
and reduce our net debt to c.$6.5m, despite the ongoing payment
lags in Egypt. Alongside this solid base, in Block 125 in Vietnam
we have an exploration prospect which offers significant upside
potential and we are progressing plans to drill as quickly as
possible. We continue to execute on our strategy of regular returns
to shareholders plus growth, and we look forward to delivering
value for all shareholders in 2024 and beyond."
Operational Highlights
-- Group working interest 2023 production was 6,508 boepd net
(2022: 7,166 boepd net), in line with 2023 guidance:
o Vietnam 5,127 boepd (2022: 5,418 boepd)
o Egypt 1,381 bopd (2022: 1,748 bopd)
-- In Vietnam:
o On TGT, Revised Field Development Plan ("RFDP") approved by
MOIT on 9 January 2024
o On CNV, strong performance from first new lateral well,
delivered on time and under budget and put on production in 1Q
2023
o CNV RFDP submitted to partners for approval, with discussions
ongoing
o Initial positive feedback received from PVN and MOIT on
five-year extension proposals to the TGT & CNV licences
o On Blocks 125 & 126, two-year PSC extension granted to 8
November 2025
o CPR for Block 125 published in July 2023, confirming a range
of gross unrisked prospective oil resources of between 1,178 MMstb
(1U) and 29,785 MMstb (3U) with a Mean value of 13,328 MMstb
-- In Egypt:
o Three new wells (2 producers and 1 injector) put on production
and injection in 2023 in line with expectations
o On El Fayum, exploration success with the first commitment
well in the Abu Roash G and Upper Bahariya formations in July 2023.
The well is set up for re-entry and testing in 2024
o On NBS, first exploration commitment well (NBS-SW1X) declared
a commercial discovery in April 2023 and put on production in
December 2023, opening up a new area for production and
development
o Second NBS exploration commitment well was drilled in the Abu
Roash G formation at a deeper depth and failed to encounter
oil-bearing sands. The result of this well does not hinder other
mapped prospects in the concession
o Approval received from EGPC in December 2023 for the grant of
a 20 year development lease for NBS-SW1X
o 3D seismic survey acquired on time and on budget in 2H
2023
Financial Highlights
-- Group revenue for 2023 was c.$168m with minimal hedging
losses (2022: $221.6m before hedging loss of $22.5m)
o Vietnam c.$149m
o Egyptian c.$19m (1)
-- Cash balances as at 31 December 2023 were c.$32.6m; net debt
c.$6.5m (2022: cash balances $45.3m; net debt $28.9m)
-- Egypt receivable position as at 31 December 2023 stood at
$37.3m (31 Dec 2022: $24.2m). The continuing volatility of the
macro-economic environment in Egypt and further devaluation of EGP
against USD during the year, plus the lack of ability to convert
EGP into USD, means that it remains preferable to continue to hold
USD denominated receivables, other than where they can be used to
fund ongoing expenditures on expiry of the carry from IPR
-- The December redetermination process under the RBL completed
with a principal repayment of $12.6m made in December 2023
-- Following that repayment, the remaining amount drawn under the RBL stands at $30.0m
(1) (Egyptian revenues are given post government take including
corporate taxes.)
Corporate Highlights
-- $3m share buyback programme substantially completed by year end 2023
-- Final dividend for the 2022 financial year of 1p per share,
totalling $5.6m, paid on 12 July 2023
-- Net Zero roadmap published on 6 December 2023
-- Appointment of Dr Bill Higgs as a new independent
Non-Executive Director, as announced separately today
-- Appointment of Shore Capital Stockbrokers Limited (Shore
Capital) as the Company's joint broker with immediate effect
2024 Outlook
-- Group working interest production guidance of 5,200 - 6,500 boepd net:
o Vietnam 3,900 - 5,000 boepd
o Egypt 1,300 - 1,500 bopd
-- In Vietnam:
o Planning underway for a two-well TGT drilling programme,
expected to commence 2H
o On Block 125, ongoing discussions with another operator to
secure a well drilling slot in connection with their proposed
multi-well drilling programme in the region
o Parallel discussions with several potential farm-in partners
for Block 125 in progress
-- In Egypt:
o Continuation of modest and measured approach to capital
allocation and drilling in El Fayum and NBS, with an eye on the
receivables balance
o Focus for this year's work programme in El Fayum is low cost
recompletions and waterflood
o Processing and interpretation of c.130km(2) of 3D seismic data
on NBS is underway and expected to be completed in 2H
o Development drilling in the NBS SW field planned to start in
2H
-- Forecast Group cash capex in the year is expected to be
c.$32.2m (c.$27.3m after Egyptian carry by IPR)
-- Continuation of share buyback programme, with a further $3m
committed as announced on 6 December 2023
-- Interim dividend in relation to the financial year ending 31
December 2023 of 0.33p per share declared on 6 December 2023,
amounting to c.$1.8m, to be paid out on 24 January 2024. Final
dividend, in line with the Company's policy announced in September
2022, to be paid in July 2024, subject to shareholder approval
Ed Story
The Company noted with great sadness the death of its founder,
Ed Story, in December 2023. Since retiring as CEO in March 2022, Ed
had remained active as part of the team dealing with Vietnam and
his responsibilities will now pass to Vincent Duignan, the Group
Exploration Manager & General Manager South East Asia. Vinny
will be supported at Board level by Dr Bill Higgs, whose
appointment as Non-Executive Director was announced today.
Enquiries
Pharos Energy plc Tel: 020 7747 2000
Jann Brown, Chief Executive Officer
Sue Rivett, Chief Financial Officer
Camarco Tel: 020 3757 4980
Billy Clegg | Andrew Turner | Rebecca Waterworth | Kirsty
Duff
Notes to editors
Pharos Energy plc is an independent energy company with a focus
on sustainable growth and returns to stakeholders, which is listed
on the London Stock Exchange. Pharos has production, development
and/or exploration interests in Egypt and Vietnam. In Egypt, Pharos
holds a 45% working interest share in the El Fayum Concession in
the Western Desert, with IPR Lake Qarun, part of the international
integrated energy business IPR Energy Group, holding the remaining
55% working interest. The El Fayum Concession produces oil from 10
fields and is located 80 km southwest of Cairo. It is operated by
Petrosilah, a 50/50 joint stock company between the contractor
parties (being IPR Lake Qarun and Pharos) and the Egyptian General
Petroleum Corporation (EGPC). Pharos also holds a 45% working
interest share in the North Beni Suef (NBS) Concession in Egypt,
which is located immediately south of the El Fayum Concession. The
first development lease on the NBS Concession was awarded in
September 2023 and production started in December 2023. IPR Lake
Qarun operates and holds the remaining 55% working interest in the
NBS Concession. In Vietnam, Pharos has a 30.5% working interest in
Block 16-1 which contains 97% of the Te Giac Trang (TGT) field and
is operated by the Hoang Long Joint Operating Company. Pharos'
unitised interest in the TGT field is 29.7%. Pharos also has a 25%
working interest in the Ca Ngu Vang (CNV) field located in Block
9-2, which is operated by the Hoan Vu Joint Operating Company.
Blocks 16-1 and 9-2 are located in the shallow water Cuu Long
Basin, offshore southern Vietnam. Pharos also holds a 70% interest
in, and is designated operator of, Blocks 125 & 126, located in
the moderate to deep water Phu Khanh Basin, north east of the Cuu
Long Basin, offshore central Vietnam.
Glossary of Terms
boepd
Barrels of oil equivalent per day
bopd
Barrels of oil per day
CASH or cash
Cash, cash equivalent and liquid investments
CAPEX or capex
Capital expenditure
CNV
Ca Ngu Vang field located in Block 9-2 , Vietnam
Company
Pharos Energy plc
EGP
Egyptian Pound
EGPC
Egyptian General Petroleum Corporation , an Egyptian state oil
and gas company and the industry regulator
El Fayum or the El Fayum Concession
The concession agreement for petroleum exploration and
exploitation entered into on 15 July 2004 between the Arab Republic
of Egypt, EGPC and Pharos El Fayum in respect of the El Fayum area,
Western Desert, as amended from time to time
Group
Pharos and its direct and indirect subsidiary undertakings
IPR or IPR Energy Group
The IPR Energy group of companies, including IPR Lake Qarun and
IPR Energy AG, or such of them as the context may require
IPR Lake Qarun
IPR Lake Qarun Petroleum Co, an exempted company with limited
liability organised and existing under the laws of the Cayman
Islands (registration number 379306), a wholly owned subsidiary of
IPR Energy AG
km
Kilometre
km(2)
Square kilometre
m
million
MMstb
million stock tank barrels (of oil/liquids)
MOIT
the Vietnamese Ministry of Industry and Trade
NBS, North Beni Suef or the North Beni Suef Concession
The concession agreement for petroleum exploration and
exploitation entered into on 24 December 2019 between the Arab
Republic of Egypt, EGPC and Pharos El Fayum in respect of the North
Beni Suef area, Nile Valley
Petrosilah
An Egyptian joint stock company held 50/50 between the
Contractor parties (being the Pharos Group and IPR Lake Qarun
following completion of the farm-out of the El Fayum concession)
and the Egyptian General Petroleum Corporation
PSC
Production sharing contract or production sharing agreement
PVN
PetroVietnam
RBL
Reserve Based Lending facility
Share
Ordinary Shares
TGT
Te Giac Trang field located in Block 16-1 , Vietnam
$
United States Dollar
1U
Denotes the unrisked low estimate qualifying as Prospective
Resources
3U
Denotes the unrisked high estimate qualifying as Prospective
Resources.
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