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Pharos Energy interim production slips on Egyptian maintenance issues

Wed, 14th Jul 2021 10:09

(Alliance News) - Pharos Energy PLC on Wednesday reported a drop in production over the first half of 2021 as the oil company's operations in Egypt dragged due to well maintenance issues, though it remains upbeat looking ahead.

Pharos shares were down 2.8% to 25.47 pence each in London on Wednesday morning.

The oil & gas exploration and production firm said group working interest in the first half 2021 came in at 9,147 barrels of oil equivalent per day net.

This is down 32% from 12,093 boepd last year and a touch lower than the firm's annual guidance, which remains unchanged, at between 9,200 boepd and 10,600 boepd.

Chief Executive Ed Story said: "I am pleased to be able to report a period of progress for the group. In Vietnam, we are about to embark on a major development drilling campaign at TGT which will look to increase production by up to 40% and also begin acquiring 3D seismic in Block 125, which has the potential to show some game-changing prospectivity offshore in the Phu Khanh Basin.

"In Egypt, work on our farm-out, which will provide the investment for future development, is progressing well with all major drilling activity in the meantime having been put in abeyance until the process has been concluded."

Segmentally, Vietnam production was down 11% to 5,429 boepd from 6,114 boepd, while production in Egypt sunk 61% to 3,718 barrels of oil per day from 5,979 barrels.

In Egypt, production levels were hurt by well maintenance issues in the first half and plans are in place to accelerate production enhancement in the second half of the year, Pharos said.

Pharos expects to book revenue of around USD73 million, before hedging loss of approximately USD14 million. Last year, Pharos posted an interim revenue of USD80.1 million.

Looking ahead, Pharos said: "Our producing assets remain significantly geared to the recovery in the oil price. In Vietnam, we already benefit from attractive break-even oil prices; and in Egypt, the improvement in the fiscal terms through the ratification of the Third Amendment will enhance cash generation."

The Third Amendment agreement relates to the company's El Fayum operation in Egypt and includes the fiscal cost recovery change and the licence term extension. The amendment has been submitted to Egypt's parliamentary energy committee and will be ratified later this year, with the earliest being in September.

Results for the half are due on September 15.

By Greg Roxburgh; gregroxburgh@alliancenews.com

Copyright 2021 Alliance News Limited. All Rights Reserved.

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