11th Mar 2020 09:23
(Alliance News) - Pharos Energy PLC on Wednesday suspended production and dividend guidance for 2020 and put some future work under review amid the recent crash in oil prices.
Shares were 4.1% higher on Wednesday morning in London at a price of 19.88p each, though remain down 35% over the past week.
The price of Brent oil fell 20% to nearly USD30 a barrel at the start of the week after major oil producing nations failed to agree on production cuts to prop up the price. The North Sea benchmark was quoted at USD36.84 early Wednesday.
The oil price has also been hurt by coronavirus and the expected economic slowdown from the outbreak.
Early in January, Pharos had said it would be paying a dividend of 2.75 pence per share for 2020, split into two equal halves.
However, the firm said: "Given the current uncertainties in the global economy, the board has decided to postpone these dividend payments until the macro environment becomes clearer."
Pharos also in January guided for production in Egypt to be between 6,500 barrels and 7,500 barrels of oil per day in 2020. Vietnam production guidance was for 5,500 barrels to 6,500 barrels of oil equivalent per day.
The guidance for Egypt has now been suspended, Pharos said, though the guidance for Vietnam is unchanged.
Pharos has placed its work programme for the rest of 2020 under review. The pacing of a multi-well producer and water-injector programme in Egypt will be "appropriate", while a planned 3D seismic survey in Vietnam may be pushed into 2021.
Turning to Pharos's 2019 results, revenue fell 8.3% to USD189.7 million, with pretax profit plummeting to USD11.7 million from USD80.1 million.
Profit in 2019 was hit by higher finance costs and exceptional costs, as well as 2018 having benefited from the USD38 million reversal of an impairment.
Production in Egypt between April 2 and December 31 was 5,055 barrels of oil per day. The El Fayum concession was purchased early in 2019.
Pharos's output from Vietnam was 7,081 barrels of oil equivalent per day, 2.7% lower than the year prior.
In a separate announcement Wednesday, Pharos announced the appointment of Lisa Mitchell as a non-executive director from April 1. Mitchell is currently the chief financial officer of London-listed San Leon Energy PLC, and was former CFO at another London-listed energy firm, Lekoil Ltd.
By George Collard; [email protected]
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