TIDMPHAR
RNS Number : 5830G
Pharos Energy PLC
20 July 2023
Pharos Energy plc
("Pharos" or the "Company" or, together with its subsidiaries,
the "Group")
Trading and Operations Update July 2023
Pharos Energy plc, an independent energy company, issues the
following Trading and Operations Update in advance of the Company's
Interim Results on 13 September 2023. The information contained
herein is not audited and may be subject to further review and
amendment.
Jann Brown, Chief Executive Officer, commented:
"The first half of the year has seen drilling successes in both
Egypt and Vietnam. In Egypt, the first exploration well on the
North Beni Suef Concession was declared a commercial success and is
expected to start production in Q4, while in Vietnam the
development well on the CNV field continues to deliver production
levels far in excess of pre-drill estimates. The group also
delivered in line with its overall production guidance in the first
half and expects to do the same for the full year, helped by
increasing Egyptian production in the second half reflecting the
continued focus on recompletions and new water injection
projects.
"We are delighted to publish today the independent report
prepared by ERCE on Blocks 125 & 126 in Vietnam which makes
estimates of prospective oil resources with an aggregated gross
unrisked Mean of 13,328(1) MMstb , covering those Prospects and
Leads already identified. The report supports Pharos' internal
assessments and paves the way for further work to develop new Leads
and mature Leads to Prospects. All work done to date highlights the
scale of the potential in these blocks and, with the Exploration
Period of the Blocks 125 & 126 Production Sharing Contract now
extended to November 2025, Pharos is well placed to bring in a
farm-in partner and complete all necessary work to drill the first
exploration well on this basin opening play.
"We are also delighted to have made the first payment under our
new dividend policy, the foundation of our commitment to regular
shareholder returns. "
Operational Highlights
-- Group working interest H1 production was 6,915 boepd net.
Group working interest 2023 production guidance of 6,050 - 7,500
boepd net remains unchanged from the Preliminary Results
announcement on 22 March 2023 :
o Vietnam H1 production was 5,566 boepd. Vietnam 2023 production
guidance 4,700 - 5,700 boepd net
o Egypt H1 production was 1,349 bopd. Egypt 2023 production
guidance 1,350 - 1,800 bopd net
-- In Vietnam:
o On Block 9-2 - CNV Field, well CNV-2PST1 was completed and put
on stream. Production results stabilised at c. 3,000 bopd (gross)
compared to pre-drill estimates of c. 1,000 bopd (gross), taking
overall field production to over 6,000 bopd (gross)
o TGT Revised Field Development Plan (RFDP) for two new wells
submitted to the regulator for approval. Drilling expected to
commence in H2 2024
o Application for five-year extensions to TGT & CNV
licences, including licence terms and work programme commitments
for the extension period, are being finalised between partners and
PVN
o Approval received from the Vietnamese Government for the
two-year extension to Phase One of the Exploration Period to 8
November 2025 of the Blocks 125 & 126 Production Sharing
Contract (PSC)
o Work ongoing on rig availability and securing farm-in partner
to drill the commitment well on Block 125
o An independent assessment by ERCE for Block 125 confirms a
range of gross unrisked prospective oil resources of between 1,178
MMstb (1U) and 29,785 MMstb (3U) with a Mean value of 13,328 MMstb
for the Prospects in the North West area of Block 125 currently
covered fully or partially by 3D seismic. These resources do not
include Leads already identified in Blocks 125 & 126 but not
yet covered by 3D seismic
o Additional independent work is being undertaken by ERCE to
extend the review to identify Leads and mature these into
Prospects
(1) The full ERCE report, including the analysis of the COS, can be found at https://www.pharos.energy/operations/vietnam/blocks-125-126/ and at https://www.pharos.energy/investors/results-reports-and-presentations/ .
-- In Egypt:
o In addition to drilling new wells, the operations team has
focused on recompletions to bring new zones to production and
implement new water injection projects, which have supported
production in the first half and are expected to continue to
contribute to production in the second half
o Full year guidance remains unchanged due to higher production
level expected in H2 2023 following work done to date
o Two development wells were drilled on the El Fayum Concession
and completed in Q1 before the rig was dispatched to NBS to drill
NBS-1X. The rig is now back in El Fayum where it has completed
another development well before moving to drill an exploration
commitment well
o The first exploration commitment well in the North Beni Suef
Concession (NBS-SW1X) was declared a commercial discovery after
encountering multiple pay zones in the Abu Roash G formation. The
stabilised production test rate pre-frac is 470 bopd (gross). The
operator has requested approval from EGPC for the grant of the NBS
Development Lease with a view to starting production in Q4 2023
o Acquisition of c.110 km2 of additional 3D seismic at NBS is
ongoing and the second exploration commitment well is expected to
be drilled this year
o The first exploration commitment well in the El Fayum
Concession has reached total depth and encountered oil-bearing
reservoirs in the Abu Roash G and Upper Bahariya formations. The
well will be put on test to confirm deliverability over the coming
weeks using one of the workover rigs
Financial Highlights
-- Group revenue for H1 2023 of $86m, there were no realised hedging gains or losses
-- Cash balances at 30 June 2023 of c.$36m, resulting in net
debt of c.$16m which is down from $28.9m at 31 December 2022
-- Egypt receivable position stands at $30.9m (Dec 2022: $24m).
The continuing volatility of the macro-economic environment in
Egypt and further devaluation of EGP against the US dollar since
year end means that it remains preferable to hold US dollar
denominated receivables
-- The half-yearly redetermination process under the RBL
completed with a principal repayment of $22.5m made in June
2023
-- Forecast cash capex for the Group for the full year remains
unchanged at c.$23m, with continuing benefit of IPR carry over the
Egyptian assets
Corporate Highlights
-- Continuation of $3m share buyback programme announced back in January
-- Final dividend for the 2022 financial year of 1p per share
approved by shareholders at the AGM and paid out on 12 July
2023
-- Net Zero roadmap to be published later in H2 2023
Glossary of Terms
boepd
Barrels of oil equivalent per day
bopd
Barrels of oil per day
CASH or cash
Cash, cash equivalent and liquid investments
CAPEX or capex
Capital expenditure
CNV
Ca Ngu Vang field located in Block 9-2 , Vietnam
Company
Pharos Energy plc
COS
Geological chance of success
EGP
Egyptian Pound
EGPC
Egyptian General Petroleum Corporation , an Egyptian state oil
and gas company and the industry regulator
El Fayum or the El Fayum Concession
The concession agreement for petroleum exploration and
exploitation entered into on 15 July 2004 between the Arab Republic
of Egypt, EGPC and Pharos El Fayum in respect of the El Fayum area,
Western Desert, as amended from time to time
FFDP
Full Field Development Plan
Group
Pharos and its direct and indirect subsidiary undertakings
HLJOC
Hoang Long Joint Operating Company
HVJOC
Hoan Vu Joint Operating Company
IPR or IPR Energy Group
The IPR Energy group of companies, including IPR Lake Qarun and
IPR Energy AG, or such of them as the context may require
IPR Lake Qarun
IPR Lake Qarun Petroleum Co, an exempted company with limited
liability organised and existing under the laws of the Cayman
Islands (registration number 379306), a wholly owned subsidiary of
IPR Energy AG
JOC
Joint Operating Company
km
Kilometre
km(2)
Square kilometre
m
million
mmbbl
Million barrels
mmboe
Million barrels of oil equivalent
Mmstb
Million stock tank barrel (42 US gallons measured at 14.7 pounds
per square inch and 60 degrees Fahrenheit)
NBS, North Beni Suef or the North Beni Suef Concession
The concession agreement for petroleum exploration and
exploitation entered into on 24 December 2019 between the Arab
Republic of Egypt, EGPC and Pharos El Fayum in respect of the North
Beni Suef area, Nile Valley
Petrosilah
An Egyptian joint stock company held 50/50 between the
Contractor parties (being the Pharos Group and IPR Lake Qarun
following completion of the farm-out of the El Fayum concession)
and the Egyptian General Petroleum Corporation
PSC
Production sharing contract or production sharing agreement
PVN
PetroVietnam
RBL
Reserve Based Lending facility
Share
Ordinary Shares
TGT
Te Giac Trang field located in Block 16-1 , Vietnam
$
United States Dollar
1U
Denotes the unrisked low estimate qualifying as Prospective
Resources
3U
Denotes the unrisked high estimate qualifying as Prospective
Resources.
Enquiries
Pharos Energy plc
Tel: 020 7747 2000
Jann Brown, Chief Executive Officer
Sue Rivett, Chief Financial Officer
Camarco Tel: 020 3757 4980
Billy Clegg | Georgia Edmonds | Rebecca Waterworth | Kirsty
Duff
Notes to editors
Pharos Energy plc is an independent energy company with a focus
on sustainable growth and returns to stakeholders, which is listed
on the London Stock Exchange. Pharos has production, development
and/or exploration interests in Egypt and Vietnam. In Egypt, Pharos
holds a 45% working interest share in the El Fayum Concession in
the Western Desert, with IPR Lake Qarun, part of the international
integrated energy business IPR Energy Group, holding the remaining
55% working interest. The El Fayum Concession produces oil from 10
fields and is located 80 km southwest of Cairo. It is operated by
Petrosilah, a 50/50 joint stock company between the contractor
parties (being IPR Lake Qarun and Pharos) and the Egyptian General
Petroleum Corporation (EGPC). Pharos also holds a 45% working
interest share in the North Beni Suef (NBS) Concession in Egypt,
which is located immediately south of the El Fayum Concession. IPR
Lake Qarun operates and holds the remaining 55% working interest in
the NBS Concession. In Vietnam, Pharos has a 30.5% working interest
in Block 16-1 which contains 97% of the Te Giac Trang (TGT) field
and is operated by the Hoang Long Joint Operating Company. Pharos'
unitised interest in the TGT field is 29.7%. Pharos also has a 25%
working interest in the Ca Ngu Vang (CNV) field located in Block
9-2, which is operated by the Hoan Vu Joint Operating Company.
Blocks 16-1 and 9-2 are located in the shallow water Cuu Long
Basin, offshore southern Vietnam. Pharos also holds a 70% interest
in, and is designated operator of, Blocks 125 & 126, located in
the moderate to deep water Phu Khanh Basin, north east of the Cuu
Long Basin, offshore central Vietnam.
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