Pharos Energy Plc (LSE: PHAR): High impact drilling in Vietnam in 4Q25. Lower capex than expected.
• Production from January to April 2025 was 5,757 boe/d, comprising 4,216 boe/d from Vietnam and 1,541 bbl/d from Egypt. This is consistent with the FY25 production guidance of 5.0-6.2 mboe/d, which has been reaffirmed.• In Egypt, receivables increased from US$29.5 million at year-end 2024 to US$31.7 mm by the end of April. However, the company has received US$4.9 mm from EGPC over the same period. Pharos held US$22 mm in cash at the end of April, in line with our expectations.
• The FY25 capex guidance has been narrowed from US$37–66 mm to US$33-40 mm, with an additional US$17 mm allocated for early 2026. This adjustment reflects lower rig rates, cost reductions at Blocks 125 & 126, and a scaled-down drilling program in Egypt, reducing the planned wells from ten to four.
• The key near term newsflow remains the drilling programme in Vietnam. The four well infill development programme (three wells at TGT and one at CNV) could boost Vietnam production by ~20% in 2026 compared to 2025. Additionally, six more development wells and further continuation of production beyond the current license expiry date at TGT could bring 5.5 mmboe of 2C contingent resources into production.
• Success at the 18X appraisal well (TGT), could add 1–3 mmboe of reserves in the western area of the field. Meanwhile, the 5X appraisal well at CNV could extend production into the northern part of the field.
• Overall, the contingent and prospective resources in Vietnam represents over 100% of the company existing 2P reserves in that country.
• As we reduce our oil price assumptions for 2Q25 and 3Q25 from US$75/bbl to US$65/bbl and delay production growth in Egypt by one year from 2026 to 2027, we have changed our target price to £0.45 per share.
Valuation
Our Core NAV and ReNAV are respectively £0.25 per share and £0.45 per share. The aggregate unrisked value for the Vietnam contingent and prospective resources is £0.31 per share, representing 150% of the current share price.
Soco International is an oil and gas exploration and production company. Co. has exploration, development and production interests in Vietnam, and exploration and appraisal interests in the Republic of Congo and Angola. As of Dec 31 2016, Co.'s commercial reserves were 33.3 million barrels of oil equivalent.
Auctus Advisors is a specialist Equity Capital Markets and Advisory business with a focus in the Energy Sector.
The partners have complementary skill sets, with decades of experience across Equity Capital Markets, Investment Banking and the Energy industry. We have worked at Société Générale, Canaccord Capital, BMO Capital Markets and Schlumberger. Most recently we have worked together for many years at GMP FirstEnergy.
Auctus has been set up at the beginning of a new decade in which we see significant opportunities in the Energy space. Globally, demand for energy is at record levels and continues to grow. Conversely, investment in traditional energy sources has been severely constrained. We believe this imbalance creates opportunities for both companies and investors.
Auctus provides Corporate Broking, Equity Research and Investment Banking services.
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