Pharos Energy plc, an independent oil and gas exploration and production company, announces its interim results for the six months ended 30 June 2022.

Jann Brown, Chief Executive Officer, commented: 'Our results for this half year underscore the cash generation potential of our portfolio of assets, with operating cash flow of $27.6m achieved. In Vietnam, further development drilling on both TGT and CNV is due to commence imminently, with the rig on location and preparing to spud. In Egypt, a rig on long-term contract has been secured and is due to arrive in Q4 to continue the development drilling programme. These activities are set to add to production levels and cash flow in H2 and beyond.

We continue to focus our efforts on driving efficiencies, controlling costs and making judicious investments to maximise the value of our portfolio. The share buyback programme, which we announced in July, continues as part of the Company's broader strategy to deliver value to our shareholders and is expected to run for a further four to six months.

Pharos is now in a materially improved financial position, has an accelerating programme in Egypt and significant growth potential in Vietnam. Together, these put us in a strong position and I am pleased to be able to reward shareholder patience with the announcement of a return to a regular dividend, based on operating cash flow, with the first payment set for 2023. With our strengthened balance sheet, a portfolio of cash generative assets with substantial upside in both near term developments and exploration potential plus a commitment to capital discipline, we are well placed to create sustainable shareholder value.'

Corporate Highlights

Signature of the Third Amendment to the El Fayum Concession Agreement in January 2022, increasing Contractor's share of revenue from c.42% to c.50%

Completion of farm-out transaction and transfer of operatorship of Egyptian assets to IPR in March 2022, delivering Pharos a 45% carry over its remaining interest

Reshaping of Board structure and composition from 9 to 6 Board members

Initiation of share buyback programme in July 2022, of which $1.6m has now been used

Commitment to achieve Net Zero GHG emissions from all our assets by no later than 2050 announced toda

y - Establishment of an Emissions Management Fund, under which we will set aside $0.25 for each barrel sold at an oil price above $75/bbl to support emissions management projects

Operational Highlights

Group working interest production 7,962 boepd net (1H 2021: 9,147 boepd) in line with full year guidance

Vietnam

Production 5,861 boepd net (1H 2021: 5,429 boepd net)

Drilling of first of two TGT development wells due to commence

Work on submission of TGT & CNV licence extension requests progressing within the JOCs

Work ongoing to progress well planning and to secure a partner before drilling the commitment well on Block 125 in 2023

Egypt

Production 2,101 bopd (1H 2021: 3,718 bopd)

Development activities continues in El Fayum, targeting recovery of c.17 Mbbl 2P

Four wells on production in the period

Drilling rig secured on long-term contract

North Beni Suef (NBS) first exploration commitment well planned for Q4 2022

Financial Highlights

Group revenue $129.6m prior to hedging losses of $17.3m (1H 2021: $72.9m prior to hedging losses of $13.7m)

Net profit of $54.3m (1H 2021: $6.4m profit), including non-cash impairment reversal after tax of $49.2m (1H 2021: impairment reversal after tax $19.4m)

Cash generated from operations $57.0m1 (1H 2021: $18.2m)1

Operating cash flow $27.6m4 (1H 2021: 0.1m)

Cash operating costs $15.82/bbl2 (1H 2021: $14.74/bbl)2

Cash balances as at 30 June 2022 of $47.5m (30 June 2021: $28.4m)

Forecast cash capex for the full year c.$29m of which $14.9m had been incurred by 30 June 2022

Net debt as at 30 June 2022 of $37.9m2,3 (30 June 2021: $32.9m)2

Net debt to EBITDAX of 0.51x 2 (1H 2021: 1.26x) 2

Outlook

2022 full year Group working interest production guidance remains unchange d at 6,350 - 7,800 boep d net

Vietnam

2022 production guidance range unchanged at 5,000 - 6,000 boepd net

Three well drilling programme, including two development wells at TGT and one development well at CNV, is on track to commence with the rig on location at TGT

Work ongoing to progress well planning, with discussions ongoing to secure a partner ahead of drilling the commitment well on Block 125 in 2023

Egypt

2022 production guidance range unchanged at 1,350 - 1,800 bopd (equivalent to gross production of 3,000 - 4,000 bopd)

Rig secured on a long-term contract due to start in mid-October 2022, focusing on ramping up activities in El Fayum from developed resource base

Progressing work on conventional and unconventional exploration prospects to further enhance the value of our acreage

NBS commitment well due to be drilled in Q4 2022

Request for an extension to the NBS exploration period has been submitted to EGPC

Net Zero commitment on all assets by 2050, detailed roadmap coming in 2023

Recommending recommencement of regular dividend payments starting in 2023, subject to shareholder approval at AGM 2023, returning no less than 10% of Operating Cash Flow (OCF)

Contact:

Tel: +202 2785 0023

Fax: +202 2591 8044

(C) 2022 Electronic News Publishing, source ENP Newswire