Pharos Energy has issued a trading and operations update to summarise recent operational activities and to provide trading guidance in respect of the financial year to 31 December 2022. This is in advance of the Company's Preliminary Results on 22 March 2023. The information contained herein has not been audited and may be subject to further review and amendment.
Jann Brown, Chief Executive Officer, commented:
'2022 saw strong cash generation, allowing us to make returns to shareholders through a share buyback programme which will now be extended with a further $3m allocated. We are also fully aware of the importance of regular dividends to much of our investor base, and look forward to making the first payment under the dividend policy announced in September as a key part of our overall commitment to returning value.
Our asset investments are made where we can generate a combination of near-term cash flow and longer-term value from our portfolio. In Egypt, we continue to engage with IPR as the Operator to optimise the work programme of both the El Fayum and the North Beni Suef Concessions and we remain fully carried for the first part of the year. In Vietnam, we are focused on sustaining cash generation through development drilling, and further work to enhance value is ongoing. On the TGT and CNV production licences, we are working with partners to refresh our field development plans and extend licence periods. Finally, the scale of the opportunity on Block 125 is becoming clearer as more work is done on it and we are pushing forward with the plans for drilling here, now expected to be in 2024.'
Operational Highlights
- Group working interest 2022 production 7,166 boepd net 1 (2021: 8,878 boepd net, 7,533 boepd net on a comparative basis(1), in line with production guidance;:
- Vietnam production 5,418 boepd net (2021: 5,560 boepd net)
- Egypt production 1,748 bopd 1 net (2021: 3,318 bopd; 1,973 bopd on a comparative basis (1)
- In Vietnam, work on submitting Revised Field Development Plans (RFDPs) for two wells on TGT and one on CNV for the 2023 work programme is progressing, with all wells remaining in contingent budget until approval
- Interpretation work on the 3D Seismic in Block 125 is continuing and showing promising results. Application for extension to Block 125/126 licence submitted as no suitable rigs available for drilling in 2023
- In Egypt, seven wells were put on production in 2022, plus one additional well drilled in Q4 2022 and awaiting completion
- Multi-well development drilling programme continues in 2023, two drilling rigs commenced drilling new wells in El Fayum
- Request for a short extension on North Beni Suef (NBS) granted, with work on a further extension request underway
- Net Zero commitment on all assets by 2050, detailed roadmap coming in 2023
Financial Highlights
- Group revenue for 2022 was c.$222m before hedging loss of c.$23m (2021: $163.8m before hedging loss of $29.7m)
- Vietnam revenues for the year c.$185m
- Egyptian revenues for the year circa $37m (2)
- Cash balances as at 31 December 2022 were approx. $45m; net debt c.$29m (2021: cash balances $27.1m; net debt $57.5m)
- Completion of the initial $3m share buyback programme, with a further $3m committed for 2023
- Recommending recommencement of regular dividend payments starting in 2023, subject to shareholder approval at AGM 2023, as announced at Interim Results announcement in September 2022
2023 Guidance
- Group working interest 2023 production guidance 6,050 - 7,500 boepd net:
- Vietnam 2023 production guidance 4,700 - 5,700 boepd net
- Egypt 2023 production guidance 1,350 - 1,800 bopd net (equivalent to gross production of 3,000 - 4,000 bopd)
- Forecast cash capex for 2023 is expected to be c.$38m (c.$23m after Egyptian carry by IPR)
(1) The farm-down transaction and transfer of operatorship of Pharos' Egyptian assets to IPR completed on 21 March 2022. Working interest production for Egypt in 2022 is therefore reported as 100% through to completion and 45% thereafter. The comparative basis for 2021 also assumes 100% working interest until 21 March 2021 and then 45% for the remainder of the year.
(2) Egyptian revenues are given post government take including corporate taxes.
Farmout available in Vietnam Blocks 125/126: Pharos Energy has submitted an application for an extension of the PSC and plan to drill a deep water well in Q2/Q3 2024. Pharos is looking for a partner to support the funding of the well. A number of parties have expressed interest and have been invited to review data. Discussions are ongoing.
Click here for full announcement
Source: Pharos Energy
