Interim results 2020 Set to thrive Pharos Energy 26 August 2020
/ 2 26 August 2020 Pharos Energy – 2020 Interim results Disclaimer Nothing in this presentation or in any accompanying management discussion of this presentation The Group undertakes no obligation to revise any such forward-looking statements to reflect any constitutes, nor is it intended to constitute: (i) an invitation or inducement to engage in any changes in the Group’s expectations or any change in circumstances, events or the Group’s plans investment activity, whether in the United Kingdom or in any other jurisdiction; (ii) any and strategy. Accordingly, no reliance may be placed on the figures contained in such forward- recommendation or advice in respect of the ordinary shares (the Shares) in Pharos Energy plc or looking statements. Forward-looking statements are not guarantees or representations of future the group of companies of which it is the ultimate holding company (together the Group); or (iii) performance. Similarly, past share performance cannot be relied on as a guide to future any offer for the sale, purchase or subscription of any Shares. performance. Even if the Group’s results of operations, financial and market conditions, and the development of the industry in which the Group operates, are consistent with the forward-looking The Shares are not registered under the US Securities Act of 1933 (as amended) (the US statements contained in the presentation, those results, conditions or developments may not be Securities Act) and may not be offered, sold or transferred except pursuant to an exemption from, indicative of results, conditions or developments in subsequent periods. or in a transaction not subject to, the registration requirements of the US Securities Act and in compliance with any other applicable state securities laws. No representation or warranty, express or implied, is or will be made in relation to the accuracy or completeness of the information in this presentation and no responsibility or liability is or will be This presentation contains certain forward-looking statements that are subject to risk factors and accepted by Pharos Energy plc or any of its respective subsidiaries, affiliates and associated uncertainties associated with the oil and gas exploration and production business generally and companies (or by any of their respective officers, employees or agents) in relation to it. All written specifically with the business, operations and financial position of the Group. These forward-looking and oral forward-looking statements attributable to the Group or to persons acting on the Group's statements can be identified by the use of forward-looking terminology, including the terms behalf are expressly qualified in their entirety by the cautionary statements above and by all other "believes", "estimates", "anticipates", "projects", "expects", "intends", "may", "will", "seeks" or cautionary statements and disclaimers contained elsewhere in the presentation. "should“, “could” or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. These forward- By attending this presentation and/or accepting a copy of it, you agree to be bound by the foregoing looking statements include all matters that are not historical facts. limitations and conditions and, in particular, will be taken to have represented, warranted and undertaken that you have read and agree to comply with the contents of this notice including, There are a number of factors that could cause actual results or developments to differ materially without limitation, the obligation to keep this presentation and its contents confidential. from those expressed or implied by these forward-looking statements and forecasts. For a detailed analysis of the factors that may affect our business, financial performance, or results of operations, we urge you to look at the Principal Risk and Mitigations section in our Annual Report and Accounts.
Introduction Ed Story President and Chief Executive Officer
/ 4 26 August 2020 Pharos Energy – 2020 Interim results Introduction COVID-19 Oil price Our Assets Opportunities Safeguarding Complementary Opportunities and Survived impact people and assets portfolio optionality of oil price crash • Safety is the highest priority • Group production 12,093 boepd net • Focus on capital discipline and • Portfolio of opportunities and in line with guidance optionality financial stability - part of the • Committed to operating safely Company’s DNA Egypt 1H production • Egypt: Onshore, low-cost o and responsibly 5,979 bopd development drilling and • Intense focus on cash cost Vietnam 1H production exploration opportunities • JOC’s in Egypt and Vietnam o savings 6,114 boepd net implemented Health & Safety • Vietnam procedures across our operations • Operational flexibility in Egypt • Initial two-year extension granted TGT: 6 firm infill wells o work programmes allowed for on TGT/ CNV licences • Business continuity and Blocks 125 & 126 quick reaction to oil price crash o operations have not been affected • 2020 Production Guidance exploration potential remains unchanged • Israel: low-cost option for Egypt 5,000-6,000 bopd material gas o Vietnam 5,500-6,500 o boepd net
A sustainable business Jann Brown Managing Director and Chief Financial Officer
/ 6 26 August 2020 Pharos Energy – 2020 Interim results Operating a sustainable business Business continuity Social investment initiatives Egypt • Despite COVID-19, operations have continued without disruption in Egypt & Vietnam • Petrosilah donated face masks, face shields, and protection suits to the El Fayum General • Business continuity plans remain effective across our Hospital locations Egypt Vietnam • Onshore operations - robust health & safety • Continued support to HLHVJOC measures in place Charitable Donation Programme • Projects in the first half include charitable Vietnam donations of medicines and food to local • Offshore operations - robust health & safety families and hospital. measures in place Governance changes Carbon Disclosure Project Task Force on Climate-related Financial Disclosures • Chair and 2 NEDs appointed Continued participation in Work to ensure we are prepared to report in line with the 2020 TCFD guidelines has begun and is progressing • Independent Board * All data correct as at 1H 2020
Finance Jann Brown Managing Director and Chief Financial Officer
/ 8 26 August 2020 Pharos Energy – 2020 Interim results 1H 2020 Financial summary (1) Production Hedging gains Revenue Net Debt 12,093 boepd $21m $80m (2) $36m 4% 13% 7% 1H 2019: loss $0.9m 1H 2019: 12,541 boepd 1H 2019: $92m 1H 2019: $34m Cash Opex Balance Sheet Cash from Operations Cash Capex Vietnam $310m $11.1/ bbl $56m $32m Egypt $62m Net Liabilities ($123m) 1% 49% 27% Total BS $249m 1H 2019: $9.4/bbl 1H 2019 : 55m 1H 2019: $22m FY 2019 Total BS $510m (1) All numbers are to 0 decimal place (2) Including the benefit of our 1H hedges of $21m (1H 2019: loss of $0.9m)
/ 9 26 August 2020 Pharos Energy – 2020 Interim results Financial Outlook Corporate Egypt Vietnam Breakeven (1) Breakeven range (2) Group expenditure reduction for the year $38-42/ bbl <$26/ bbl 25% • Incorporates ongoing reduction in: o Western Desert discount o El Fayum discount o Suez refinery handling charge Remuneration reduction • Range depends on pace of investment For Chair, NEDs and 25% Executive Directors Operating cost FY estimate Operating cost FY estimate No bonuses will be paid for the year c. $12/ boe c. $11/ bbl G&A cost reduction for the year c . 35% (3) No commitments in Vietnam or Egypt for 2H 2020 2020 dividend payments withdrawn (1) Life of field, fully capex loaded, NPV 11 | (2) Life of field, fully capex loaded, NPV 13 | (3) Commitments have been deferred
/ 10 26 August 2020 Pharos Energy – 2020 Interim results Cash sources and uses Sources $100m 2020 Capex – c.85% incurred in 1H $m 120 100 $31.9 TGT 80 $41.0 Capex $13m Spend 60 $26.1 (including $2.9 abandonment) $0.8 EGYPT 40 $37m $21m $58.5 20 $37.8 CNV $1m 0 Cash Balance at Operating CF Investing Repayment of Interest on Other Cash Balance at 31 Dec 2019 Activites - Capex borrowings borrowings 30 June 2020 125 & 126 (incl. abandonment) $2m • Generation of sustainable returns El Fayum TGT • Production Wells • TGT-15X • Balancing investment for longer term with immediate cash CNV • Abandonment funding flow generation • No drilling activity Blocks 125 & 126 • Abandonment funding • Operational Office / G&G • Balancing shorter payback/higher Capital Productivity Index
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