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AGM statement on Thursday will be interesting with regards to Vietnam drilling and hopefully dividend nod at the AGM
Goes ex dividend 13 June paying 0.77p per share.
Will pop on many radars when we get the rig news. Oil revenue at premium to brent in Vietnam.
27/3 "advancing plans to drill the potentially transformational Block 125 in Vietnam"
It seems there are now two possible rigs under consideration. When they finalise one, we can expect an RNS.
So….from the AR&A, these are the approx changes in major holders since last year:
Lombard Odier……sold 30mn
Yorktown……sold 20mn
Radoff…..bought 38mn
Aberforth …..bought 4.5mn
Pharos…..bought 10mn in buyback
The only other change noted was Blue Albacore sold c 300,000 (so 1% of holding)
The other longstanding holders (Continis, Maugein estate, Story etc hold the same as last year.
Guess the main Q is what will happens to Story’s 16.2mn, but there don’t seem to be any other blocks potentially in play.
New Pharos broker research document out by Progressive Equity Research, reads really well, clearly strongly cash generative with some huge blue sky upside coning from the Vietnam asset.
I listened to that live and thought it was fair enough, especially the plans re 125……where I wait to see if Vinnie’s expectations are met.
I had a look at the Q&A write-up today, and imagine the company execs ripping their hair out at some of the lobotomised nonsense therein. For the avoidance of doubt, none of the questions were mine - I’ve had no contact with the company for several months.
But news on 125 should be a rerating catalyst, one a parter and firm well slot can be finalised.
Going to see a cash build here now and a re-rate in due course as updates flow and pile increases.
Egypt cash USD payments resumed.
Vietnam very strong cashflow on a premium to brent crude.
Brent over $90.
This will be in the 30s H2.
Pharos now in a very good place, net cash positive, high oil price churning free cash flow. 2 development Vietnam wells in H2 and dividend coming up.
Brent $91 tonight.....might trigger some action?
……..and another 1% for Brad. Now 16%+.
900,000 shares traded on Friday - biggest day for 5+ weeks - and yet thr company bout only 10k.
News coming?
They are required to notify. But have not been doing so.
Nothing the company can do about that, as they can only RNS notifications they have received.
This is not uncommon with non-UK shareholders, unfortunately.
EE. Presumably if still over the 3% threshold they need to still notify and change ? Any idea when any further news likely ? (hard work working O&G farm-outs these days !)
Not long to wait now until we get to see who has been selling her shares to Brad without notifying the market......the AR&A list comes from company inspection of the share register, and so by-passes the notification process.
.....and then it will start to get interesting....
The IMF managing director said the lender was “very close” to concluding a loan deal with Egypt widely seen as crucial for easing a foreign currency crisis that has been suffocating the economy of the heavily indebted Arab country.
There are a number of catalysts which will eventually bode well for the company. These include:
• Receipt of delayed payments from the Egyptian government.
• The company has been using water injection in Egypt to enhance recovery and should increase production within a year or so, if done correctly. Any increase will have a material impact due to the low current production rate.
• The big catalyst is any drilling in block 125 in Vietnam. This is a deep water field where drilling is expensive. That’s why Pharos is looking for a major partner to share the burden as well as potentially using a well slot on third party facilities (low cost option). If the latter results in large flows it will make it easier to attract a farm in partner and should be very positive for the share price. This may happen this year, at least the agreement.
• One thing that gets overlooked here is that Pharos is listed on the main market which may be attractive to a major producer looking to sell mature assets, in line with current industry trends.
• Bradley Radoff, an American investor, has been building a large stake in the company and will likely start taking an active role soon, most likely once third party discussions on block 125 have concluded.
The shares offer good potential if you’re looking to hold for more than 2 years. The shares are good value based on the balance sheet but not necessarily production, which is likely to fall in the short term. Hope this helps and good luck!
I believe it's mainly payments from Egypt that are being delayed. It may persist for another year or so. Egypt is undergoing financial difficulties which are are probably being made worse by the current mid east crisis. Pharos should get paid eventually and should add another 30% or so to market cap. The big downside is that it's money that Pharos could use to explore block 125 in Vietnam which is believed to hold very large reserves and could transform the company.
When dealing with developing countries it's fairly common for payments to be delayed but do eventually get paid, sometimes through the courts. It's part and parcel of the risks within the industry.
Haven't posted for a while
Do people think this has a good chance of ever moving up or more likely to move down ?
Is it all or nothing on the wells ?
Thank you in advance
It is the receivables, or rather the growth in them over the past year (50%+), that is most worrying. Does anyone have any insight as to how many people owe Pharos this money (Is it one customer or hundreds?). It would be useful to know how much focus the BOD are placing on this and just what pressure can be put on to recover the money. Growth in the debtors at that sort of rate cannot be sustained, particularly if Pharos is honouring its debts and Capex commitments. Is it time to reconsider how much focus is going into Egypt? Some companies are looking to pull out of Egypt because of the difficulty in getting money out (SDX Energy for one). One way or another the BOD should be taking a firmer stand.
Let’s look out for the new broker forecasts after they’ve had chance to digest the update. Shouldn’t be too long.
Biggest concern for me is rate of production decline - Dec corporate pres states H1 vietnam product = 5566 boepd, trading statement today states FY Vietnam production = 5127. infers a H2 production of @4700 boepd. this is dramatic and explains the disappointing guidance of 3900 - 5000 boepd. Would expect this level of decline to warrant an explanation.
On the positive, even at 3900 we are likely to make good money and the exploration opportunity is huge!
I admire your optimism Commando but I was disappointed with the update… there’s nothing happening! Nothing that’s gonna lift the price much. I hope I’m wrong with that but as I’m only a couple of pence/ share down I’m seriously considering cutting my losses. Unless the activist investor can get things moving… Fingers crossed.
Yeah, didnt blow the doors off, but if the recievables do roll in that wipes out the debt plus some, that would be a nice catalyst for the SP, plus news of a farmout deal could also generate interest.
I see this as a slow burn exploration play with decent balance sheet strength and income funding keeping things ticking over until then, not many companies have such upside potential plus production and a stable balance sheet, even if the expolarion doesnt come in that's not really in the price at the moment anyway, so shouldnt be too much lower if we bail out after it fails, as long as you wait for the dust to settle.
I'm just chucking in spare dividends as they come in for more leverage on money I didnt have to start with and see if we hit a nice surprise. Wouldnt bet the house on it of course, but far riskier stuff out there IMO.