Pharos Energy plc, an independent oil and gas exploration and production company, focused on sustainable growth and returns to stakeholders, announces its preliminary results for the year ended 31 December 2019.

Ed Story, President and Chief Executive Officer, commented:
"In these turbulent times of global market uncertainties we remain focused on financial discipline and are now taking appropriate measures to preserve shareholder value.  We are confident that through a combination of our low gearing, low commitments, low oil price break-evens for Vietnam and the flexibility offered by deferring some of our largely discretionary investments in Egypt, the business is well placed to weather the challenging macroeconomic conditions whilst retaining the growth opportunities. Operating a sustainable business remains a key priority for Pharos and environmental, social and governance (ESG) issues are at the heart of how we run the business. We continue to make ESG enhancements including new Independent Board appointments, social investments and reductions in greenhouse gas (GHG) emissions in our operations. We believe these prompt actions ensure the business is in the best possible position to weather the current uncertainties".

2019 Operational Highlights

• Total Group working interest production 12,136 boepd net (2018: 7,274 boepd)
• Vietnam production 7,081 boepd (2018: 7,274 boepd)
• Egypt production 5,055 bopd (2 April to 31 December 2019)
• In Egypt, expanded El Fayum operations and ESG enhancements;
• Increased drilling activity and commencement of waterflood implementation in the Greater Silah Area
• Reduced GHG emissions through the elimination of 730,000 litres of diesel use per year and associated emissions
• Achieved a 30% reduction in flared gas at the North Silah Deep site. 
• In Vietnam two firm wells approved in the 2019 work programme;
• First well TGT-H5-31I  has been completed as a producer / future water injector
• Second TGT-H1-15X appraisal/future development well is currently operating. This well will test the commercial potential of a new deeper play, discovered in early 2019, with estimated STOIIP potential of 225 million barrels across the TGT structure, discovered in early 2019.

Outlook for 2020

• Cash capital expenditure in 2020 is now expected to be up to c. $45m, with an additional c. $10m of discretionary spend in Egypt under review.  
• In light of the new global macroeconomic circumstances, Egypt production guidance issued on 8 January 2020 for the full year 2020 (Egypt: 6,500 to 7,500 bopd) is suspended whilst the scale of our discretionary work programme for the rest of the year is under review.  The production guidance for Vietnam  remains unchanged for the 2020 full year (5,500 to 6,500 boepd net)

Egypt

• Appropriate pacing of low cost multi-well producer and water-injector programme, to proceed with  waterflood implementation to increase production and recovery
• Phase Two programme of associated gas powered electrical generators is planned to reduce CO2 emissions further and the use of solar power sources for electrical generation at satellite wellsite(s) is under investigation
• The low-cost evaluation of the oil development potential of the recently awarded North Beni Suef Concession which straddles the Nile across both the Western and Eastern Deserts

Israel

• Israel low-cost activities during the first phase of the licences comprise reprocessing of existing 3D seismic data and evaluation of the acreage's potential

Vietnam

• The appraisal and production performance of the deep Oligocene  reservoir  in  the TGT-H1-15X well offshore Vietnam (Target depth reached 28 February 2020)
• Evaluation of the undrilled Phu Khanh Basin Blocks 125 & 126 offshore Vietnam will continue, but the planned 3D seismic may be deferred until 2021

Pharos maintain their commitment to paying the dividend of 2.75 pence per share during 2020, as previously announced. However, given the current uncertainties in the global economy, the Board has decided to postpone these dividend payments until the macro environment becomes clearer.