Pharos Energy Offers Trading and Ops Update

Tuesday, May 12, 2020

Pharos Energy has issued a Trading and Operations update in advance of the Company’s AGM on 20 May 2020. The information contained herein has not been audited and may be subject to further review and amendment.

Ed Story, President and Chief Executive Officer, commented: “The health and safety of our employees, contractors and other stakeholders is always a primary focus of Pharos. As the COVID-19 pandemic continues, it remains at the forefront of our thinking as we maintain production operations. Earlier in the year in response to low oil prices, we took prompt action and cut capital expenditure by deferring some of our largely discretionary investments in Egypt. We are working closely with our partners to achieve cost reductions across the business and are managing our portfolio to ensure we remain robust in this challenging period.  We firmly believe demand for oil and gas will continue to be an important component of the global energy mix over many future decades and we are positioning ourselves to survive the low oil price environment for the medium to long term for the benefit of all our stakeholders.”

Summary

• Despite the COVID-19 pandemic, production operations continue in both Vietnam and Egypt, with strict health and safety measures in place. No reported cases of COVID-19 amongst staff, contractors or JV partners to date.
• Group working interest Q1 production 11,589 boepd net
  • Egypt Q1 production 5,596 bopd; April averaged 6,396 bopd and peaked at 7,009 bopd 23 April 2020
  • Vietnam Q1 production 5,993 boepd; April averaged 6,467 boepd
• Vietnam 2019 two-well TGT drilling campaign completed on time and under budget, and the upgrade to Gas Turbine compressors completed ahead of schedule in Q1 2020
• Group revenue for Q1 2020 was c.$35.0m before the benefit of our Q1 hedges of $5.8m;
  • A further $6.3m of hedging revenues have been booked for April
  • Mark to Market (“MTM”) value of hedges as at 30 April for the remainder of 2020 stands at $23.7m
  • Remaining eight months of the year c.52% of forecast production, hedged at an average price of c.$53/bbl
• Group Q1 cash Opex was under $12/bbl
• Cash balances as at 30 April 2020 of c.$54.5m, Net debt of c.$41.7m
• Cash capex for full year of $44m of which over 60% incurred by 30 April
• Dividend payments withdrawn for 2020 given the continued uncertainly in the macro environment
• Group is targeting an overall reduction in its cost base of c.25% across the business
• 2020 Production Guidance
  • Egypt 2020 production guidance, taking account of capex deferral programme now updated to 5,000- 6,000 bopd
  • Vietnam 2020 production guidance remains unchanged at 5,500-6,500 boepd net

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