Pharos Energy (PHAR) H2 2024 earnings summary

Executive summary

• Achieved a debt-free, cash-generative position with $16.5 million in cash at year-end 2024, supported by stable production from core assets in Vietnam and Egypt.

• Five-year license extensions for TGT and CNV in Vietnam enable new drilling campaigns and longer-term investment, while Egypt's consolidation and improved fiscal terms are under negotiation.

• Completed a $9 million share buyback and increased the final dividend by 10% for 2024, with a sustainable dividend policy.

• Exploration upside remains in Vietnam's Blocks 125/126, with a two-year license extension requested and $5 million committed to long lead items for future drilling.

• Egypt remains self-financing, contributing to group results, with growth plans dependent on license consolidation and fiscal improvements.

Financial highlights

• 2024 group revenue reached $136.1 million, with $115.4 million from Vietnam and $20.7 million from Egypt.

• Operating cash flow was $54 million, forming the basis for dividend policy; free cash flow was $27.9 million.

• $26.1 million invested in assets, mainly in Vietnam's two-well program; Egypt also saw continued investment.

• $25.5 million received from EGPC during 2024, with $29.5 million in outstanding Egyptian receivables at year-end.

• $10 million returned to shareholders via share buybacks and dividends.

Outlook and guidance

• 2025 capital expenditure guidance ranges from $37 million to $66 million, focused on production growth and asset development, with ambition to pursue the upper end for accelerated drilling.

• Targeting a 20% production increase in 2025 and sustained growth over the next 3-4 years.

• Dividend policy remains at a minimum of 10% of operating cash flow, with a 10% increase announced for 2024.

• Egypt's production growth and investment depend on successful license consolidation and receivables recovery.

• Ongoing discussions for asset consolidation in Egypt and continued focus on organic and inorganic growth opportunities.