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Pharos Energy announces interim results for the half-year to 30 June 2021


15 Sep 2021

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Pharos Energy has announced its interim results for the six months ended 30 June 2021.

Ed Story, President and Chief Executive Officer, commented:

'We are delighted to announce the farm-out of our onshore Egypt position today. The proposed transaction will result in IPR taking over 55% working interest and operatorship in the El Fayum and North Beni Suef Concessions. IPR is a well-regarded and experienced operator in Egypt and is perfectly positioned to effect the full field development and exploration programmes. We look forward to working with them to realise the full potential of these fields.

The Infill Development Drilling Programme in TGT Field in Vietnam is well underway; the first well drilled is already on production with initial flow rate at 1,600 bopd, the second well is currently being completed, and the third well in the sequence is due to spud shortly.

The signing of the Egyptian farm-out and the infill development programme in Vietnam means that the medium term outlook for the Company is a return to free cash flow and ultimately to distributions to shareholders.'

1H 2021 Operational Highlights

  • Group working interest 1H 2021 production 9,147 boepd net (1H 2020: 12,093 boepd)
  • Vietnam
    • Vietnam 1H 2021 production 5,429 boepd net (1H 2020: 6,114 boepd net)
    • TGT 6-well Infill Development Programme commenced in July 2021; first well drilled and completed successfully ahead of both schedule and budget, second well near completion and the third well due to spud shortly
    • 3D seismic survey acquired in June/July 2021 on Block 125 fulfils the geophysical commitment on both Blocks 125 & 126. Processing results are expected 1H 2022
    • Government approval received in September 2021 for a 2-year extension on Blocks 125 & 126 Exploration Period
  • Egypt
    • Egypt 1H 2021 production 3,718 bopd (1H 2020: 5,979 bopd)
    • El Fayum Phase 1B waterflood programme commenced with one workover rig; second workover rig contracted in August to be dedicated to the maintenance programme
    • Batran-1X oil discovery
    • Signing of Egyptian farm-out

1H 2021 Financial Highlights

  • Group revenue $72.9m* prior to hedging losses of $13.7m (1H 2020: $59.0m* prior to hedging gain of $21.1m)
  • Cash generated from operations $18.2m1 (1H 2020: $55.9m)1
  • Cash operating costs $14.74/bbl2 (1H 2020: $11.13/bbl)2
  • Cash balances as at 30 June 2021 of $28.4m (30 June 2020: $37.8m)
  • Net debt as at 30 June 2021 of $32.9m2,3 (30 June 2020: $36.1m)2
  • Net profit of $6.4m (1H 2020: $268.3m loss), including non-cash impairment reversal after tax of $19.4m (1H 2020: impairment charge after tax $265.5m)
  • Forecast cash capex for the full year c.$45m of which $9.5m had been incurred by 30 June 2021 (1H 2020: $31.9m)
  • Net debt to EBITDAX of 1.26x 2 (1H 2020: 0.88x) 2

* Egyptian revenues are given post government take including corporate taxes.

1 Stated after realised hedging loss of $13.7m (1H 2020:  gain of $21.1m)

2 See Non-IFRS measures at page 27

3 Includes RBL and National Bank of Egypt working capital drawdown

1H 2021 Corporate Highlights                       

  • Completion of equity placing, subscription and retail offering in January 2021 which raised gross proceeds of approximately $11.7m; proceeds are being used to fund Phase 1B of the waterflood programme in Egypt
  • Reduction in salary of 50% from 1 April 2021 volunteered by all three executive directors in office on that date
  • Appointment of Sue Rivett to the Board as Chief Financial Officer ('CFO') effective 1 July 2021
  • Head office reorganisation and reduction in headcount to be completed by end of 2021

Outlook

  • 2021 Full year Group working interest production guidance updated to 8,700 – 9,500 boepd net
  • Vietnam
    • 2021 production guidance range narrowed to 5,500 – 6,000 boepd net
    • TGT Infill Development Well Programme ongoing. The initial four-well programme to be completed 2021, with two additional wells in 2022
    • Proactive management of the existing producing TGT reservoirs continues through an active well intervention programme
    • Submission of the revised CNV Revised Full Field Development Plan at the end of 2021, subject to partners’ approval
    • Final processed 3D seismic results over Block 125 are expected in 1H 2022
  • Egypt
    • 2021 production guidance updated to 3,200 – 3,500 bopd
    • Return to drilling with an interim 3-well programme commencing in October to accelerate production enhancement ahead of farm-out partner resuming operatorship
    • The investment funds required to develop the fields in the initial 57 well producer and injector programme will become available following completion of the farm-out to IPR Lake Qarun Petroleum Co., a wholly owned subsidiary of IPR Energy AG
    • Testing of the recently drilled Batran-1X exploration discovery well in 4Q 2021
    • Parliamentary approval on the Third Amendment to the El Fayum Concession Agreement awaited. The Amendment is expected to be backdated to November 2020 and will increase contractor revenue take by c.20%
  • Israel
    • Seismic reprocessing in order to mature prospectivity ahead of a drilling decision in 3Q 2022 concluded in 3Q 2021

Original article link

Source: Pharos Energy





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