Pharos Energy Plc (LSE: PHAR): Production boost expected by mid 2026
• Year‑to‑date production to 30 November 2025 averaged 5,391 boe/d, comprising 4,074 boe/d in Vietnam and 1,317 boe/d in Egypt. Pharos expects FY25 production to be broadly similar, in line with guidance of 5.2–6.0 mboe/d.• The TGT‑H1 infill well was brought onstream on 20 November. Initial performance is above management’s pre‑drill expectations. While no rate has been disclosed, we note that in 2021 Pharos reported an initial gross rate of 2.2 mbbl/d from a prior TGT well. For modelling purposes, we assume an average gross production of 1.6 mboe/d over the first three months for the new TGT wells.
• Ongoing drilling: This marks the start of a six‑well programme across the TGT and CNV fields, with two rigs operating in parallel. The second TGT infill well (H5 fault block) spudded on 2 December and is expected to take ~28 days to drill and complete. The CNV‑8P infill well commenced on 5 December with the second rig and is expected to take ~90 days.
• Upcoming drilling - Rig 1: Following TGT‑H5, the rig will drill the TGT‑18X appraisal well (~40 days) targeting the underexplored western area, before moving to the final TGT‑H4 infill well. Our unrisked NAV for the western area and remaining 2C resources at TGT is estimated at £0.21 per share.
• Upcoming drilling - Rig 2: The CNV‑5X appraisal well, designed to unlock the northern extension of the field, is scheduled to spud in 1Q26 and complete by mid‑2026. Our unrisked NAV for the 2C contingent resources at CNV stands at £0.07 per share.
• We reaffirm our target price of £0.50 per share, supported by a current dividend yield of ~6%. Looking ahead, Vietnam production could grow by ~20% in 2026, while ratification of the consolidated concession agreement in Egypt is expected to enable increased investment and production growth.
Egypt
As of 7 December, Pharos held US$16.6 mm in cash and carried no debt, a figure that compares favourably with our YE25 forecast of ~US$7 mm. The company continues to receive payments from EGPC, with receivables reduced to US$27 mm at end‑November (vs. US$33.5 mm at end‑June). On 24 October, Capricorn Energy announced receipt of US$50 mm from EGPC, reducing its receivables by nearly 30%. A similar proportional payment would add approximately US$9 mm to Pharos’ cash balance, equivalent to ~£0.02 per share.
Valuation
Our Core NAV and ReNAV stand at £0.31 and £0.51 per share, respectively.
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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