Pharos Energy Plc (LSE: PHAR): Largest Vietnam drilling programme since original development
• 1H25 production of 5,642 boe/d and net cash of US$22.6 mm at the end of June had been reported previously.• 1H25 operating cashflow was US$16.1 mm, exceeding our forecast of US$13.4 mm, driven by stable output at TGT—Pharos’ most profitable asset.
• The FY25 production guidance range has been narrowed from 5.0-6.2 mboe/d to 5.2-6.0 mboe/d. We forecast ~5.6 mboe/d.
• Egyptian receivables currently stand just above US$30 mm, down from US$33.5 mm at end-June, following a US$5.6 mm payment received post-period. Further payments are anticipated imminently.
• Pharos has declared an interim dividend of 0.3993p per share (0.0363p per share for the 2024 interim dividend).
• In October, the company will commence its largest drilling campaign in Vietnam since the initial development of the fields, targeting six wells. Results from the first two infill wells are expected before year-end. The 18X appraisal well at TGT could unlock 1–3 mmboe of additional reserves in the western part of the field, while the 5X appraisal well at CNV aims to extend production into the northern area. Overall, Vietnam production [in 2026] is expected to grow by ~20%, and contingent and prospective resources in-country now exceed 100% of Pharos’ existing 2P reserves. Our total unrisked NAV for these resources at TGT and CNV is ~£0.28 per share.
• The FY25 capex guidance has also been refined from US$33–40 mm (plus ~US$17 mm earmarked for Vietnam in 2026) to US$35 mm, with an updated 2026 allocation of US$22 mm.
• We re-iterate our target price of £0.50 per share. The dividend yield is currently ~5%.
Valuation
Our Core NAV and ReNAV are respectively £0.32 per share and £0.52 per share.
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.
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