26th Aug 2020 09:35
(Alliance News) - Pharos Energy PLC on Wednesday said its swung to a loss in the first half of 2020, after a incurring a substantial property, plant and equipment impairment charge.
Shares in Pharos were down 3.1% at 14.54 pence in London in morning trading.
The oil and gas exploration and production company has assets in Egypt, Vietnam and Israel. It posted a USD317.9 million pretax loss for the six months ended June 30, swinging from a USD100,000 profit in the previous year.
This resulted predominantly from a USD294.1 million impairment charge on property, plant and equipment, compared to no such impairment a year before. Of the impairment, USD147.5 million was in south east Asia, and the other USD146.6 million was in Egypt.
The firm also recorded a USD22.9 million impairment charge on intangibles, versus no such charge the year prior.
Revenue fell 13% to USD80.1 million from USD91.8 million, while cost of sales rose 20% to USD71.0 million from USD59.4 million, resulting in a very steep drop in gross profit to USD9.1 million from USD32.4 million.
Pharos in May withdrew dividend payments for 2020 "given the continued uncertainty in the macro environment" and is keeping the decision to re-instate the dividend under review.
First half production in Vietnam was 6,114 barrels of oil equivalent per day net to Pharos, down from 7,279 boepd net, while Egypt production was 5,979 barrels of oil per day, up from 5,262 bopd between April 2 and June 30 of 2019.
Pharos has retained its annual production guidance for Vietnam at between 5,500 and 6,500 boepd and its Egypt guidance at between 5,000 and 6,000 bopd. In 2019, average net production was 7,081 boepd in Vietnam, while in Egypt production was 5,055 bopd.
Chief Executive Ed Story: "Even during these testing times, group production remains in line with guidance for 2020 and the period saw real progress for the group as we were granted an extension to our TGT and CNV licences in Vietnam, which will act as a spur for further activity in the coming years.
"In Egypt, we are continuing with our workover programme and waterflood implementation as well as appraising future targets for when drilling resumes. I am also pleased to say our focus on ESG has continued through the period with social programmes in both Egypt and Vietnam as well as positive progress in our preparation to report in line with the TCFD recommendations."
By Anna Farley; [email protected]
Copyright 2020 Alliance News Limited. All Rights Reserved.
Related Shares:
Pharos Energy