Pharos Energy Plc (LSE: PHAR): Production boost expected by mid 2026
• FY25 production and YE25 net cash figures had been previously disclosed.• Pharos has reaffirmed its FY26 production guidance of 5.2–6.4 mboe/d, with a US$50 mm capex programme (79% Vietnam / 21% Egypt). Vietnam is expected to contribute 4,000–4,950 boe/d, depending on the outcome of the ongoing drilling campaign. 1Q26 group production is expected to be broadly in line with 1Q25 (5.9 mboe/d).
• Key near‑term drilling catalysts include the well test results from TGT‑18X, targeting the underexplored western flank of TGT, and CNV‑5X, which could unlock the northern extension of CNV and add reserves. TGT‑18X has now reached TD, while drilling of CNV‑5X is expected to conclude by mid‑2026. Our combined unrisked NAV for these opportunities is £0.28 per share.
• The company has declared a final dividend of 0.9317 p/share, bringing total 2026 dividends to 1.331p/share (US$7.4 mm in total), an increase of approximately 14% year‑on‑year.
• We reiterate our £0.50 per share target price, supported by a dividend yield of roughly 5%.
More on Vietnam
• The final infill well at TGT on the H4 fault block has now reached TD and is expected to come onstream in April. The CNV‑8P infill well was completed in mid‑March and should begin production by mid‑April.
• YE25 2P reserves are estimated at 18.4 mmboe, including 7.2 mmboe for Vietnam. This reflects FY25 production and a modest 0.2 mmboe negative revision for Vietnam gas, which has limited value impact.
• The farm‑out process for Blocks 125 & 126 remains ongoing. Securing a partner would be highly material for Pharos, and the company expects to provide an update on the process in mid‑2026.
Financials and valuation
Our 2P NAV stands at £0.31 per share, with a ReNAV of £0.51 per share. EGPC has indicated that the outstanding receivable balance (approximately US$7.4 mm for Pharos at YE25) will be settled in 2Q26. Our free‑cash‑flow forecasts assume Brent at ~US$76/bbl in 2026 and US$70/bbl thereafter, under which we estimate Pharos will generate roughly US$110 mm of cumulative free cash flow over 2025–2030. At US$90/bbl, this increases to approximately US$190 mm.
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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