(Alliance News) - Pharos Energy PLC on Tuesday said it has received provisional approval from the Egyptian General Petroleum Corp's Main Board to an amendment of the fiscal terms of its El Fayum concession.
The oil & gas exploration and production company said the terms are now subject to the approval of the Egyptian government.
Shares in Pharos Energy were up 15% at 23.90 pence in London on Tuesday.
Under the new terms, the cost recovery petroleum percentage - the share of gross revenue available for the contractor to recover its costs - will be increased to 40% from 30%, allowing Pharos a "significantly faster" recovery of all its past and future investments.
In addition, Pharos has agreed to waive its rights to recover a portion of the USD115 million past costs pool and reduce its share of Excess Cost Recovery Petroleum to 7.5% from 15%.
"We have arrived at an agreement that mutually benefits both Pharos and EGPC. The improved cost recovery terms mean past and future investments in El Fayum can be recovered thanks to a significant increase in Pharos' total share of gross revenue. Together these new fiscal terms mean an improvement of up to USD5.7 [per barrel] in the breakeven price," said Ed Story, president & chief executive.
By Zoe Wickens; zoewickens@alliancenews.com
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Pharos Energy (PHAR)