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(Alliance News) - Pharos Energy PLC on Wednesday reported a swing to a loss and a drop in revenue in 2020 as low oil prices hit the exploration and production company.
The company made a pretax loss of USD241.2 million, after a pretax profit of USD11.7 million in 2019. Revenue fell 25% to USD142.0 million from USD189.7 million.
Shares were down 2.3% to 23.90 pence in London.
Low oil prices and an impairment charge were the key drivers of the loss, Pharos said. The company recorded a USD198.1 million impairment on its Vietnam and Egypt assets, because of the reduction in long-term commodity prices.
Pharos started an intense cost-cutting programme as a result, reducing executives' wages by a quarter and shutting its London office in 2020. It further cut executive pay this month, and plans to complete a redundancy programme this year.
Pharos expects production of up to 10,600 barrels of oil per day this year, down from 11,373 last year. 42% of forecast production from April to December is hedged at an average price of USD50.60 per barrel. The company said it is focusing on near-term development drilling in Vietnam and Egypt, which both have the potential to generate free cash flow.
The reinstatement of the dividend will be kept under regular review, Pharos said, after payouts were suspended in May.
By Ivan Edwards; ivanedwards@alliancenews.com
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