London-listed junior Pharos Energy has adjusted its work programmes for the year amid growing uncertainties in the global market, by suspending production guidance in Egypt, deferring seismic work in Vietnam and postponing dividend payments to shareholders pending market clarity.
Pharos said on Wednesday that, while it maintains its commitment to paying the dividend of 2.75 pence (3.56 US cents) per share during 2020, given the current uncertainties in the global economy, “the board has decided to postpone these dividend payments until the macro environment becomes clearer”.
Ed Story, chief executive, said: “In these turbulent times of global market uncertainties, we remain focused on financial discipline and are now taking appropriate measures to preserve shareholder value”.
The company’s revenue last year was $189.7 million compared to $175.1 million in 2018. Pharos reported a loss for the year of $24.5 million compared to a profit of $27.7 million year-on-year.
The loss came despite a production boost for the 12 months period to 12,136 barrels of oil equivalent per day compared to 7274 boepd in the same period of 2018.
During the year, Pharos completed the acquisition of the El Fayum concession in Egypt and focused on building a regional portfolio through the acquisition of further prospective acreage, via the North Beni Suef onshore concession in Egypt, and eight offshore licences in Israel.
The company is also eyeing Shell’s upstream portfolio in the Western Desert in Egypt, which was recently put up for sale by the Anglo-Dutch supermajor, it previously said.
However, for the year ahead, Pharos is focused on low-cost plans in Egypt, where it aims to evaluate the oil development potential of the North Beni Suef concession, while continuing its carbon dioxide reduction programme at the El Fayum operations.
The company is planning to use associated gas powered electrical generators to reduce CO2 emissions and is investigating the use of solar power sources for electrical generation at satellite wellsite(s), it said.
“In light of the new global macroeconomic circumstances, Egypt production guidance of between 6500 to 7500 barrels per day is suspended whilst the scale of our discretionary work programme for the rest of the year is under review,” the company said.
Meanwhile, in Vietnam, Pharos is targeting the appraisal and production performance of the deep Oligocene reservoir in the TGT-H1-15X offshore well.
Evaluation of the undrilled Phu Khanh basin blocks 125 & 126 offshore Vietnam will continue, but the planned 3D seismic may be deferred until 2021, the company said.
The production guidance for Vietnam remains unchanged for the 2020 full year at between 5500 to 6500 boepd.
Capital expenditure in 2020 is now expected to be up to around $45 million, including plans for Vietnam , with an additional $10 million of discretionary spend in Egypt under review.
