Pharos Energy plc

Pharos said first-half revenue was just over $65 million, compared with a very similar level in 2024, even with a $12 reduction in Brent price. Net cash at half year was $22.6 million, operating cash flow was $16.1 million, capital expenditure was $8.2 million, free cash flow was $7.5 million, and Egyptian receivables were $33.5 million at half year end. The company also said it had 26% hedging coverage in the second half with a floor of $60. On capital returns, it announced a 10% increase in the prior-year dividend, to just under 0.4 per share, payable in January. For the second half, management said production guidance was being narrowed, and it expects a larger capex step-up as the Vietnam 6-well program gets underway.

Katherine Roe framed the period as a year of strategic, operational and financial delivery, emphasizing that the company has secured the license extensions, fiscal improvements and balance-sheet flexibility needed to fund growth. She said the Vietnam 6-well program is the largest investment in the existing asset base since original development and is intended to arrest decline and create production growth from next year onward. On Egypt, she said the new fiscal framework materially improves economics and should support disciplined reinvestment once receivables come down. Her tone was constructive and measured, with repeated emphasis on discipline, optionality and execution.

Sue Rivett highlighted that H1 revenue held above $65 million despite weaker Brent because inventory supported sales, while cash generation remained solid at $16.1 million of operating cash flow. She pointed to net cash of $22.6 million, a modest $8.2 million capex program in H1, and free cash flow of $7.5 million, plus $0.7 million from contingent consideration with another $2.5 million still due. She also noted 26% hedging for the second half with a $60 floor, and said Egyptian receivables stood at $33.5 million at half year end but had since improved, including $5.6 million collected in the current quarter. On shareholder returns, she referenced the 10% dividend increase and said the buyback was completed in January and not renewed at present.

Analysts pressed management on whether the Vietnam drilling campaign was too cautious, but Katherine Roe said the pace is constrained by economics, weather windows and long-lead items, and that the 6-well program is actually the first campaign of this scale in many years. They also asked about Block 125/126 timing and weak farm-out interest; management said a partner is still needed, but a formal process with a third-party adviser is widening the market and management hopes to update before year-end. On Egypt, management said it expects a material reduction in receivables soon and that the new fiscal terms only make sense alongside receivables recovery and a phased work program. Questions about buybacks and debt led management to say capital is currently better used in the assets, though buybacks remain a board option and debt could be considered for the right M&A opportunity.