www.pharos.energy
2024
ANNUAL REPORT
& ACCOUNTS
Who We Are
Pharos Energy is an independent energy company with a focus
on delivering long-term sustainable value for all stakeholders
through regular cash returns and organic growth, underpinned by
robust cash flow and a resilient balance sheet.
With a registered office in London and listed on the main
market of the London Stock Exchange, we have production,
development and exploration interests in Egypt and Vietnam.
Our purpose is to provide energy to support the development and
prosperity of the countries, communities and families wherever we
work, in line with recognised social and environmental practices.
www.pharos.energy
VIETNAM
EGYPT
4,361 boepd
Net 2024 Production
1,440 bopd
Net 2024 Production
1
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
STRATEGIC
Pharos at a glance 3
Where We Operate 5
Our Strategy and Purpose 6
Our Strategic Objectives 7
Our Investment Case 9
− 1. Capital discipline in our DNA 10
− 2. Quality assets with growth potential 11
− 3. Operational capability 13
− 4. Diverse and inclusive workforce 14
Chair’s Statement 15
Market Overview 18
Chief Executive Officer’s Statement 21
Business Model 24
Key Metrics 25
Operational Review 29
Section 172(1) 33
Chief Financial Officer’s Statement 37
Risk Management 45
Principal Risks and Mitigations 50
Viability Statement 57
Corporate Responsibility Report 59
− Governing Corporate Responsibility 60
− Business 63
− Ethics 66
− People 67
− Society 70
− Environment 73
− Corporate Responsibility Non-Financial Indicators 79
TCFD Report 80
Net Zero Roadmap 96
GOVERNANCE
Chair’s Introduction to Governance 103
Leadership and Governance 105
Board of Directors 107
UK Corporate Governance Code 109
Environmental, Social and Governance (ESG)
Committee Report 117
Reserves Committee Report 120
Nominations Committee Report 124
Audit and Risk Committee Report 128
Directors’ Remuneration Committee Report 135
− Annual Report on Remuneration (Audited section) 138
− Notes to the single figure table 139
− Unaudited Section 145
Directors’ Report 153
FINANCIAL STATEMENTS
Independent Auditor’s Report to the Members of
Pharos Energy plc 161
Consolidated Financial Statements 168
− Consolidated Income Statement 168
− Consolidated Statement of Comprehensive Income 168
− Balance Sheets 169
− Statements of Changes in Equity 170
− Cash Flow Statements 171
Notes to the Consolidated Financial Statements 172
ADDITIONAL INFORMATION
Non-IFRS Measures (Unaudited) 200
Five Year Summary (Unaudited) 202
Reserves Statistics (Unaudited) 203
Report on Payments to Governments (Unaudited) 204
Transparency Disclosure 2024 (Unaudited) 205
Glossary of Terms 206
Company Information 208
2
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Pharos at a glance
2024 KEY FIGURES
Listed on London
Stock Exchange
1997
Blocks
6
Global Employees
33
Countries
2
Acreage km
2
17,839
Oil & Gas fields
13
3
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
ADDITIONAL
INFORMATION
GOVERNANCE
REPORT
FINANCIAL
STATEMENTS
STRATEGIC
REPORT
Cash operating costs* ($/boe)
$17.80/boe
(2023: $15.70/boe)
Operating Cash Flow ($m)
$54.0m
(2023: $44.9m)
Cash & cash equivalents ($m)
$16.5m
(2023: $32.6m)
Revenue ($m) Prior to hedging loss of $0.1m
$136.1m
(2023: $168.1m, prior to hedging loss of $0.2m)
Average net production (boepd)
5,801 boepd
(2023: 6,508 boepd)
Share Buybacks F2024
$2.9m
(2023: $2.8m)
Total Dividend Payments 2024
$5.9m
(or 1.10p per share, paid on 19 July 2024)
(2023: $5.6m)
2024 Group Highlights
2024: $17.80/boe
2024: $54.0m
2024: $16.5m
2024: $136.1m
2024: 5,801 boepd
2024: $2.9m
2024: $5.9m
2023: $15.70/boe
2023: $32.6m
2023: $44.9m
2023: $168.1m
2023:
6,508 boepd
2023: $2.8m
2023: $5.6m
RETURN TO SHAREHOLDERS
* Read More |
Non-IFRS measures on page 200.
4
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Note: The remaining exploration area within the Egyptian concession was
relinquished in February 2025. The current consolidation project will seek to
reinstate exploration acreage within the consolidated concession area.
Where We Operate
PORTFOLIO WITH GROWTH
POTENTIAL
Our assets deliver stable production and robust cash
flows. We have a diversified mix of onshore and offshore
producing, development and exploration assets in two
countries - Egypt and Vietnam - both of which have great
potential to create more value.
+
+
+
+
Block 125
Block 126
Block 9-2 CNV Field
Block 16-1 TGT Field
Ho Chi Minh City
VIETNAM
+
+
El Fayum Concession
Cairo
EGYPT
North Beni Suef Concession
D: Development P: Production E: Exploration
We have high quality onshore, low-cost oil production operations, development
and exploration assets in Egypt. Pharos holds a 45% working interest share in
the El Fayum Concession in the Western Desert, with IPR Lake Qarun, part of the
international integrated energy business IPR Energy Group, holding the remaining
55% working interest. The El Fayum Concession produces oil from 10 fields
and is located 80 km southwest of Cairo. It is operated by Petrosilah, a 50/50
joint stock company between the contractor parties (being IPR Lake Qarun and
Pharos) and the Egyptian General Petroleum Corporation (EGPC). Pharos also
holds a 45% working interest share in the North Beni Suef (NBS) Concession in
Egypt, which is located immediately south of the El Fayum Concession. The first
development lease on the NBS Concession was awarded in September 2023
and oil production started in December 2023. IPR Lake Qarun operates and
holds the remaining 55% working interest in the NBS Concession.
We have valuable and long-established producing fields in Vietnam, with the
first discovery in 2004 and first oil production in 2008. Oil and gas production
is from two fields (Te Giac Trang in Block 16-1 and Ca Ngu Vang in Block
9-2) in the Cuu Long basin. There is further potential for organic growth
from a basin-opening frontier play with a number of potentially world class
prospects and leads already identified in two exploration blocks in the Phu
Khanh basin (Blocks 125 & 126).
2024 Average Production (net)
1,440 bopd
(2023: 1,381 bopd)
2024 Average Production (net)
4,361 boepd
(2023: 5,127 boepd)
EGYPT (D,P,E)
VIETNAM (D,P,E)
5
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Our Purpose
Our purpose is to provide energy to support the
development and prosperity of the countries,
communities and families wherever we work, in
line with recognised social and environmental
practices.
Our Strategy
We are committed to deliver long-term, sustainable value for all our stakeholders through
regular cash returns to shareholders and investment in our assets to generate growth,
underpinned by robust cash flow and a resilient balance sheet.
We invest in a balance of near-term potential and longer-term value, with the aim of enhancing
value creation for all stakeholders.
To achieve this, we focus on maximising reserves from existing producing oil and gas fields,
such as oil from our El Fayum and North Beni Suef concessions in Egypt and oil and gas from
TGT and CNV fields in Vietnam, through flexible capital investment across oil price cycles to
unlock reserves upside and improve operating performance. This is complemented by organic
growth activity through further extensions to the lifespan of existing producing assets, and
exploration offshore Vietnam on Blocks 125 & 126 and onshore Egypt on both the El Fayum
and North Beni Suef concessions, to unlock longer-term value.
Our Stakeholders
To our investors:
Creating and returning value to shareholders through a combination of annual dividends
and organic and inorganic growth.
To our host countries:
Creating shared prosperity and helping countries use oil and gas revenues to promote
sustainable, inclusive economic development, manage the impact of climate change
and achieve their COP and other domestic and international commitments.
To our people:
Providing an inclusive and diverse workplace, empowering people with differing
backgrounds, skills, and experiences to do meaningful work based on the Pharos
Way principles of safety and care, energy and challenge, openness and integrity,
empowerment and accountability, and pragmatism and focus.
To all stakeholders:
Engaging and dealing with stakeholders in a transparent and constructive manner in
accordance with applicable local and international laws and otherwise aspiring to the
highest ethical standards of business conduct.
ADDITIONAL
INFORMATION
GOVERNANCE
REPORT
FINANCIAL
STATEMENTS
STRATEGIC
REPORT
Our Strategy and Purpose
A FOCUSED STRATEGY TO FULFIL
OUR PURPOSE
Our strategy has positioned the business for long-term value
creation, whilst building on a track record of 20+ years of
shareholder returns.
6
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Our Strategic Objectives
OUR STRATEGIC OBJECTIVES
Diversified
portfolio
Rigorous
approach to
cost control
Operational
safety, efficiency,
and production
growth
Sustain
shareholder
returns
Financial
discipline
Mutually
beneficial
partnerships
Transparency
in sustainability
Strong
balance sheet
Provide energy to
support the development
and prosperity of the
countries, communities
and families wherever we
work
7
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
ADDITIONAL
INFORMATION
GOVERNANCE
REPORT
FINANCIAL
STATEMENTS
STRATEGIC
REPORT
Strong balance sheet
Protecting balance sheet strength is
fundamental to our business model.
Costs and the balance sheet are actively
managed through maintaining positive
operational cash flow combined with a
focused approach to capital allocation,
an active hedging programme, a mix of
debt instruments in place, and a modest
gearing level.
Financial discipline
Capital discipline and financial stability
have always been key to the Group and
continue to underpin the business. The
Board and senior management team
maintain a clear focus on our capital
allocation goals: to balance consistent
returns to shareholders with investment
in our assets to generate sustainable
value and cash flow, while preserving the
resilience of the balance sheet.
Rigorous approach to cost
control
We focus on our cost base wherever we
are. We have kept a rigorous approach
to drive down costs and created a lean
Board and organisational structure
suitable for the future. This positions us
well to thrive throughout the commodity
price cycle.
Sustain shareholder
returns
Our goal is to deliver a combination of
regular cash returns plus growth potential
for shareholders. We aim to maximise
value per share for all shareholders, and
we are not chasing scale for its own sake.
We are committed to delivering value on
all sides of the equation.
Operational safety,
efficiency, and production
growth
The health and safety of the Group’s
workforce is the highest priority for
Pharos. We apply our expertise locally with
operational teams in each region, working
closely with partners and joint operating
companies to maintain our safety record,
achieve operational efficiency, and grow
production. We encourage dialogue
and co-operation between the different
business assets to ensure new ideas
and solutions are shared. Our stable
operational performance in 2024 has
established a firm foundation for future
growth and supports the delivery of our
strategy.
Mutually beneficial
partnerships
The operational successes the Company
has had over the years would not have
been possible if not for the supportive
relationships we have with our valued
partners and stakeholders. Our assets
are operated predominantly through
JOCs, but we are actively involved in JOC
management and work collaboratively with
our partners to identify areas of mutual
sustainable benefits. A combination
of long-standing in-country presence
and focus on building relationships with
both host governments and regulatory
authorities has cultivated many successes
for the Group, our partners, the JOCs and
the local economies. We also maintain
good relationships with our valued group
of lenders to ensure financial stability in
times of uncertainties.
Diversified portfolio
Over the past years, we have built a
distinctive portfolio in the energy regions
of Asia and MENA that diversifies our risk
while providing multiple organic growth
opportunities and value-adding activities
that have potential to generate near-term
free cash flow.
Transparency in
sustainability
Sustainability is a key value in our
business. We made a formal commitment
to achieve Net Zero on our Scope 1
(direct) and Scope 2 (indirect) GHG
emissions from all our current and
future assets by no later than 2050, and
published a Net Zero Roadmap (the
‘Roadmap’) in December 2023 with
interim emission reduction targets and
decarbonisation levers to achieve our
climate target. An updated version of the
Roadmap can be found on page 96.
We recognise that the journey to Net Zero
and a more sustainable future will not be
simple nor straightforward, but we remain
committed to transparency in our reporting
and to keeping stakeholders updated on
our progress.
8
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Our Investment Case
OUR INVESTMENT CASE
T
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e
P
h
a
r
o
s
W
a
y
O
u
r
D
i
f
f
e
r
e
n
t
i
a
t
i
n
g
F
a
c
t
o
r
s
Energy &
Challenge
Openness
& Integrity
Pragmatism
& Focus
Safety &
Care
Empowerment
& Accountability
Capital
discipline in
the DNA
Portfolio of
diverse organic
opportunities
Long operational
history in
Asia-MENA
Excellent safety
record
Diverse
and inclusive
workforce
Rigorous
approach to
cost control
Operational
safety, efficiency,
and production
growth
Diversified
portfolio
Transparency
in sustainability
Mutually
beneficial
partnerships
Sustain
shareholder
returns
Financial
discipline
Strong
balance sheet
O
u
r
S
t
r
a
t
e
g
i
c
O
b
j
e
c
t
i
v
e
s
Provide energy to
support the development
and prosperity of the
countries, communities
and families wherever we
work
9
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
ADDITIONAL
INFORMATION
GOVERNANCE
REPORT
FINANCIAL
STATEMENTS
STRATEGIC
REPORT
Our Investment Case
1. CAPITAL DISCIPLINE IN OUR DNA
We have a culture of prudent financial management, capital
allocation and capital return.
1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022
4.0
3.0
2.0
1.0
0
Market
cap ($bn)
Brent price
($/bbl)
140
105
70
35
0
RV
RV
RV
RV
RV
RV
RV
RV
RV
RV
RV
Realising Value
Realising value through disposals and returns made over the decade either
through share buybacks, special distributions or dividends
Asset disposals
UK onshore
$18m
Russia
$50m
Vietnam
farm-out
Tunisia
$25m
Mongolia
$93m
Yemen
$465m
Thailand
$105m
RV
RV
RV
RV
RV
RV
RV
RV
Total since
2006 when the first
returns were made
$546.4m
FY
2006
$14m
FY
2012
$33m
FY
2014
$119m
FY
2016
$17.5m
FY
2011
$7m
FY
2013
$213m
FY
2015
$51m
FY
2017
$21m
FY
2018
$23.3m
FY
2019
$27.4m
FY
2022
$3m
2023
FY
2023
$8.4m
2024
RV
FY
2024
$8.8m
RV
* Read More | Chief Financial Officer’s Statement page 37.
We exhibit capital discipline through a focus on cost management, a part of our DNA, underpinned and enhanced by our commitment
to annual cash returns to shareholders. Capital allocation decisions are taken to make investments where they will generate risk-
adjusted full-cycle returns, with a focus on near term cash generation.
We use our expertise:
A commitment to cash returns to shareholders remains a core element of our overall allocation framework. We aim to create value per
share, not chasing scale for its own sake. It is this approach that has allowed us to return significant amounts of capital to shareholders
since 2006. As at year end 2024, we are proud to have returned $546.4m to shareholders, through a combination of dividends and
share buybacks.
To allocate capital
to those assets
which offer a
combination of
cash flow, growth
and sustainability
To assess
and develop
high grade
growth
opportunities
To focus on
our cost base
wherever we are
To provide
cash returns
to shareholders
10
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
* Read More | Operational Review page 29.
Following Pharos’ farm-down transaction
and transfer of operatorship over our
Egyptian assets to IPR in 2022, we
continue to deliver strong operational
performance in Egypt, having
development and exploration successes
in both the El Fayum and North Beni Suef
(NBS) concession in 2023 and 2024. On
El Fayum, the first exploration commitment
well was successfully drilled in 2023, and
the second exploration commitment well
encountered oil-bearing reservoirs in the
Abu Roach G formation in September
2024 and was declared a commercial
discovery after testing in February 2025.
On NBS, the first exploration commitment
well (NBS-SW1X) was declared a
commercial discovery after encountering
multiple pay zones in the Abu Roach
G formation and put on production in
2023, having been granted a 20-year
development lease by EGPC in December
2023.
The Group is also in discussion with EGPC
and our partner IPR on consolidating
the El Fayum and NBS concessions. A
Memorandum of Understanding (MOU)
with EGPC was signed in February
2025 to merge the two assets and
replace them with a new consolidated
Concession Agreement. The consolidated
Concession Agreement is expected to
unlock significant value in the Western
Desert by improving certain fiscal terms,
extending the term of the concessions
and committing the Contractor parties
to additional work programmes aimed at
increasing production from the areas.
Our strong operational performance in
2024 provides the Group with significant
operational momentum going into 2025.
Nevertheless, the continuing volatility
of the macroeconomic environment in
Egypt means that the Group continues to
monitor progress in both the concession
consolidation discussion and the payment
of its receivable balance to determine the
pace of future investment in country.
Onshore, low cost, in-fill drilling path to grow production with
proven exploration upside
Our Investment Case
2. QUALITY ASSETS WITH
GROWTH POTENTIAL
Over the past years, we have built a portfolio in the energy regions
of Asia and MENA. Our high-quality assets deliver stable production
and robust cash flow, with a range of near-term organic growth
opportunities ranging from low-cost low-risk onshore producing
assets to basin-opening world-class potential offshore exploration.
EGYPT
1,440 bopd
Net 2024 Production
(2023: 1,381 bopd)
12.4 mmboe
2P Reserves as at
Year End 2024
(2023: 14.4 mmboe)
45%
Pharos Working Interest
11
Development Leases at the El
Fayum and NBS Concessions
Catalysts in 2025
• El Fayum: testing of the successful
exploration commitment well in
February
• Application for commercial discovery
declaration and early production
permission submitted to EGPC in 1Q
• Planning underway to commence
two-well El Fayum drilling programme
in 2H
• NBS: expected completion of 3D
seismic data processing in 1H, with
interpretation and mapping to follow
• Memorandum of Understanding
(MOU) with EGPC in relation to the
Egyptian concession consolidation
signed in February 2025
11
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
The Group’s current producing interests
in Vietnam, the Te Giac Trang (TGT) and
Ca Ngu Vang (CNV) fields in the Cuu Long
basin off the southern coast, together, are
amongst Vietnam’s largest oil producers.
In December 2024, the Company
was formally granted five-year licence
extensions to the TGT and CNV fields by
the Vietnamese Government, immediately
increasing year-end 2024 2P reserves
in Vietnam by approximately 10% and
enabling further investment in both fields.
The Company also successfully completed
the two-well infill drilling programme
in October 2024 on time and under
budget, with both wells contributing to
current production. Planning is underway
for further appraisal and infill drilling
programmes in 2025 for both fields.
We have further potential for growth
from two deep-water basin-opening
exploration positions in Blocks 125
& 126 in the Phu Khanh basin off the
eastern coast of Vietnam. In July 2023,
Pharos published an independent report
prepared by ERCE on Blocks 125 &
126 in Vietnam which makes estimates
of prospective oil resources with an
aggregated gross unrisked Mean of
13,328 MMstb, covering those Prospects
and Leads already identified. The report
supports Pharos’ internal assessments
and paves the way for further work to
develop new Leads and mature Leads to
Prospects. Detailed drilling engineering
studies for the proposed well on Prospect
A commenced in 3Q 2024, with long lead
items ordered in August 2024 to progress
the opportunity on Blocks 125 & 126. All
work done to date highlights the scale of
the potential in these blocks. Pharos is
continuing its discussions with potential
farm-in partners and rig contractors to
complete all necessary work to drill the
first exploration well on this basin-opening
play. In February 2025, we have submitted
an application for a two-year PSC
exploration phase extension to the relevant
authorities, underscoring our commitment
to pursue this exciting opportunity.
ADDITIONAL
INFORMATION
GOVERNANCE
REPORT
FINANCIAL
STATEMENTS
STRATEGIC
REPORT
High net-back producing assets with further significant
exploration potential
VIETNAM
4,361 boepd
Net 2024 Production
(2023: 5,127 boepd)
8.9 mmboe
2P Reserves as at
Year End 2024
(2023: 9.1 mmboe)
25+
Years Active in Vietnam
4
Blocks in Vietnam
Upcoming catalysts in 2025
• TGT: drilling of an appraisal
commitment well in 4Q; appraisal
success would open up an undrilled
area in the field
• Three infill wells drilling programme
expected to commence in 4Q
• CNV: planning underway for the
drilling of one infill well expected to
commence in 4Q
• 3D seismic reprocessing on both
assets commenced in January 2025,
expected completion in 3Q
• Blocks 125 & 126: submitted
application for a 2-Year PSC
Exploration Phase Extension in
February 2025
• Long Lead Items expected to arrive
in 2Q 2025
• Renewed focus on farm-out strategy
to enable drilling of the prospect
12
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
* Read More | Corporate Responsibility Report page 59.
Our Investment Case
3. OPERATIONAL CAPABILITY
Amidst ongoing global uncertainty, Pharos continues to
deliver consistent operational results, thanks to the efforts of
our teams, of our partners and of the local JOCs, who have
managed to navigate the macroeconomic challenges without
compromising our operational capability.
Long operational history
in Asia-MENA
Our history with Vietnam since 1996 has been a success story
both for the company and the country. As at 2024, Pharos
has invested over $1.3 billion in the exploration, appraisal and
development of oil and gas projects located offshore Vietnam
since inception, making Pharos one of the largest British
investors in the country. In Egypt, Pharos, together with IPR,
have long-standing in-country presence and relationships
with the Egyptian government and regulatory authorities,
which position them well to support the expansion of
operational activity needed to develop the resource base.
Our long operational history provides a strong foundation
for our future work programmes to manage both the cash
generation and the growth potential of our assets, and to
deliver on our strategy.
Excellent safety record
The health and safety of the Group’s workforce is the highest
priority for Pharos. We are proud to report an exceptional
safety record of zero lost time injuries and zero fatal incidents
in our Egyptian assets in 2024, and in our Vietnam assets
since our operational inception in 1996. This is thanks to the
JOCs’ consistent effort to provide and champion workers’
health, safety and well-being.
13
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
ADDITIONAL
INFORMATION
GOVERNANCE
REPORT
FINANCIAL
STATEMENTS
STRATEGIC
REPORT
Diversity in all dimensions
We operate in a global industry, and it is vitally important to ensure that we benefit from the diverse perspectives that people can bring.
For this reason, equity, diversity and inclusion sit at the heart of our recruitment, development and promotion processes. Across all of
our assets, we acknowledge diversity in all its dimensions and welcome people with differing backgrounds, skills, nationalities, gender
and experiences to help us deliver our business strategy of long-term sustainable growth. As at year end 2024, the Board has three
female directors out of six, with both executive positions held by women. We recruit talents from diverse backgrounds across our entire
organisation.
Our Group Code of Business Conduct and Ethics, associated policies and the Pharos Guiding Principles commit us to providing a
workplace free of discrimination where all employees can fulfil their potential based on merit and ability, and we will continue to align our
Company with this ethos.
Our Investment Case
4. DIVERSE AND INCLUSIVE
WORKFORCE
Greater diversity and inclusivity helps bring deeper
understanding of people. Led by the 5 Pharos Guiding
Principles of ‘Safety and Care’, ‘Energy and Challenge’
‘Openness and Integrity’, ‘Empowerment and Capability’,
and ‘Pragmatism and Focus’, we have demonstrated our
commitment to maintaining and building a culture of diversity
and inclusion.
Regional knowledge
and experience
We apply our expertise locally with
operational teams in each region, working
closely with partners and JOCs. We
encourage dialogue and co-operation
between the different business assets to
ensure the sharing of knowledge and new
ideas. We are committed to providing
meaningful opportunities for training
and capacity building in host countries.
We have maintained a gender-neutral
recruitment process and, wherever
possible, we first look to fill any vacancy
internally with a local candidate in London,
Vietnam or Egypt.
Most notably our global team comprised
10
nationalities
of which women accounted for
c.51%
* Read More | Corporate Responsibility Report page 59.
14
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
15
For Pharos, 2024 has been a
year of significant progress, during
which we have enhanced our core
business with the licence extensions in
Vietnam, achieved financial resilience with
the repayment in full of the company’s debt
and strengthened our leadership team, laying
the foundation for the next stage of growth.
Throughout the portfolio, the team’s focus on operational
delivery was evidenced by good drilling performance
both in Vietnam, with the two TGT wells contributing
to production, and in Egypt, with exploration success
on the El Fayum commitment well. Most notably, the
Vietnam JOCs’ application for the five-year licence
extensions to the TGT and CNV fields was granted by
the Vietnamese Government in December, an important
catalyst to enable further investment in both fields. We
have continued to build on a culture of capital discipline
to transform the Group’s balance sheet, having fully paid
off all outstanding debt in September and leaving the
Company debt-free. Alongside this, the improving macro
environment in Egypt has seen our receivables position
improve with over $25m received during the year. This
performance has allowed the Board to announce today
the intention to pay a final dividend of 0.847 pence per
share for the 2024 financial year, taking the 2024 full
year dividend to 1.210 pence, a continuation of our
commitment to sustainable shareholder returns.
JOHN MARTIN
Non-Executive Chair
Chair’s Statement
STRENGTHENED FOUNDATION
FOR FUTURE GROWTH
15
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
ADDITIONAL
INFORMATION
GOVERNANCE
REPORT
FINANCIAL
STATEMENTS
STRATEGIC
REPORT
16
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
These achievements are a testament to the hard work,
dedication, and commitment of the entire Pharos team.
I would like to congratulate all of my colleagues on a year
of good performance which has positioned Pharos for a
positive future with strong operational momentum, a robust
capital structure, and excellent growth opportunities.
Board governance and
leadership changes
Over the past few years, the Board
has undergone significant changes to
strengthen Board independence and
maintain a high standard of governance.
We invest in regular Board training and
evaluations to address any skills gaps,
ensuring the Board has the right balance
of relevant skills and expertise to guide
the Company through its next phase of
growth.
I am delighted that Katherine Roe
the Pharos Board as its new Chief
Executive Officer in July 2024 following
Jann Brown’s retirement from the Board
in April. Katherine’s 20 years of senior
corporate, industry and capital markets
experience across several international
jurisdictions will be of great value to us as
she leads Pharos into our next strategic
stage. Since joining the Company in
July, Katherine has already forged strong
relationships with key stakeholders in
both jurisdictions, successfully securing
the five-year licence extensions to TGT
and CNV in Vietnam in December 2024,
and the signing of the Memorandum
of Understanding (MOU) with IPR and
EGPC for the consolidation of our
Egyptian assets in February 2025. It
is also important to recognise Jann’s
contribution throughout her tenure as CEO
during challenging times, establishing the
platform for much of the recent progress
across the business. I would like to thank
Jann for her years of service to Pharos
and wish her well in her retirement.
Another significant change the Company
made was the appointment of Bill Higgs
as Independent Non-Executive Director
in January 2024 and subsequently as
Chair of the Company’s new Reserves
Committee, an important addition to our
governance framework as his technical
expertise will be crucial to assess and
advise on growth opportunities in our
portfolio.
With the changes in 2024, the Board is
refreshed, resilient, and strong. We will
continue to evaluate opportunities to
strengthen our capabilities at Board and
senior management level with a view to
ensuring we are well-positioned for future
success.
A diverse and inclusive
culture
At Pharos, we recognise that a positive
and inclusive company culture is essential
to our long-term success. We are proud
of our small yet diverse global workforce,
whose broad range of backgrounds,
ethnicities, skills and experience help
strengthen the Company for the future. As
at year end, I am pleased to report that
the Company had three female Directors,
representing 50% of the Board. Most
notably, our global team comprised 10
different nationalities, of which women
account for c.51%.
The Board and senior management team
are dedicated to creating a safe workplace
for all, in which people are confident to
engage and contribute. During the year,
as Non-Executive Chair of the Board
and designated Non-Executive Director
responsible for workforce engagement,
I carried out various in-person town hall
meetings, during which staff were invited
to share their feedback and views about
the Company without the presence of any
Executive Directors to provide an open,
honest and safe space for all employees
to express any concerns they might
have. I am pleased to report that staff
morale remains high, and we have seen a
significant strengthening of our company
culture post COVID-19 lockdowns. We
operate in a global industry, and we
are careful to ensure that we continue
to foster an environment that is safe,
inclusive and collaborative in order to
benefit from the diverse perspectives that
our people bring.
Ongoing dialogues with
stakeholders
Pharos’ operational success and
long-standing partnerships, spanning
over 25 years, are built on a culture of
transparency and integrity. The senior
management team and I have maintained
regular and proactive dialogues with local
governments, joint-operating partners,
and shareholders. In addition to the annual
Strategy Day, where the Board focuses on
where and how we can best offer value to
our stakeholders, we also held regular ad-
hoc discussions with corporate advisers
and commercial experts in 2024 to stay
well-informed about shareholder interests
and industry challenges as the Company
develops, reviews, refines and executes its
long-term strategic plan.
The Board recognises the importance
of scale. While Pharos has consistently
delivered strong results as an independent
small-cap energy producer, we
understand that increasing our scale will
allow us to create more long-term value
for shareholders and compete more
effectively in the E&P market. The Board
remains committed to delivering returns for
shareholders, including potential organic
and inorganic opportunities that will
enhance our portfolio and strengthen the
Company’s position in the sector. In doing
so, the Board and senior management
team will continue to engage with our
stakeholders in a personal and meaningful
way. We are grateful to our shareholders
whose support during times of uncertainty
has been crucial to our growth and
transformation throughout the years.
Chair’s Statement - Continued
17
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Making a positive
difference
As Pharos explores these strategic
opportunities, we also recognise the
need for more balanced energy systems
worldwide, delivering energy sources
that have a lower climate impact and
are reliable and affordable for developed
and emerging nations alike. The
importance of energy and climate security
continues to be a key issue for global
governments, and I firmly believe that
responsible production and development
of oil and gas resources, especially in
economies transitioning from heavy
reliance on coal, can be a major driver for
economic development and alleviating
energy poverty. Our host governments
understand and appreciate Pharos’ in-
country impact that goes beyond national
revenues from oil and gas production, and
we appreciate our host nations’ trust in us
and the long-term role that we play in their
countries’ energy transition.
As the global energy landscape continues
to evolve, sustainability remains at the
heart of our business. In 2024, we
progressed our net zero strategy by
updating our 2023 Net Zero Roadmap to
outline the steps we have taken to reduce
our carbon footprint and contribute to a
more sustainable future. We are on track
to achieve our 2026 interim emissions
reduction target and remain committed to
transparency in our sustainability reporting.
We are proud of our social and community
initiatives, which have been an important
part of the Company’s philosophy
throughout its history. In 2024, in addition
to a training levy of $500,000 that goes
into a ring-fenced fund to support the
development of industry talents in Vietnam
and Egypt, we also supported a record
26 community investment projects across
Egypt, Vietnam, and the UK, investing a
total of $259,889 in education, training,
healthcare and infrastructure in our local
communities. Pharos is committed to
deploying our expertise and capital to
partner with host governments to develop
local capacity, enhance energy security
and unlock value from our host nations’
natural resources in an environmentally
sustainable and socially responsible
manner.
Looking ahead
In addition to seeing a number of important organisational changes at Board
and senior management level, 2024 was a year of delivery for Pharos. The
Company continued to deliver on its strategy, strengthened its financial health,
and built on its track record of sustainable shareholder returns. As Chair of the
Board, I would like to thank my fellow Board members, senior management and
the Pharos team as a whole for their hard work, commitment, and dedication
throughout the year. Their expertise and support have been vital in driving
Pharos forward and delivering long-term sustainable value for all shareholders.
I am also grateful to our host nations and communities for their continued trust,
our shareholders for their confidence, and our partners, suppliers and advisers
for their support.
Pharos has a leadership team that brings deep technical experience and strong
financial discipline, a clear strategy, a focused portfolio that is unique within our
sector, and a commitment to delivering value. We have the right combination to
execute the right growth opportunities at the right time, and the Board looks to
the future with great confidence in our ability to deliver growth and value in 2025
and beyond.
JOHN MARTIN
Non-Executive Chair
Market Overview
MARKET OVERVIEW
Economics and Political
1 https://www.imf.org/en/Publications/WEO/Issues/2024/07/16/world-economic-outlook-update-july-2024
2 https://www.nato-pa.int/document/2024-russia-wartime-economy-report-harangozo-052-esctd
3 https://www.imf.org/en/Publications/WP/Issues/2024/03/01/Medium-term-Macroeconomic-Effects-of-Russias-War-in-Ukraine-and-How-it-Affects-Energy-544043
4 https://energy.worldwiderecruitment.org/en/gaza-energy/
5 https://www2.deloitte.com/us/en/insights/industry/oil-and-gas/oil-and-gas-industry-outlook-2024.html
6 https://www.axios.com/2024/01/06/trump-2024-election-economy
7 https://www.iea.org/reports/oil-market-report-december-2024
In 2024, the global economic and political
landscape was significantly influenced
by the oil and gas industry, with several
key factors shaping its trajectory. Global
economic growth is projected to be
approximately 3.2%
1
, reflecting a steady
but modest pace amid persistent inflation
and geopolitical uncertainties.
The ongoing Russia/Ukraine conflict
has had profound impacts on the global
economy and the energy sector. Sanctions
on Russia have disrupted its energy
exports, leading to a reconfiguration of
global energy supply chains
2
. European
countries, heavily reliant on Russian
natural gas, have faced energy security
challenges, prompting a shift towards
alternative suppliers and accelerated
investments in renewable energy
3
. This
realignment has also contributed to
fluctuations in global oil prices, affecting
economic stability in various regions.
Similarly, the Israel/Gaza conflict has
added another layer of complexity to the
global energy market. Although Israel and
Gaza are not major oil producers, the
conflict has heightened regional instability,
impacting global oil prices due to
concerns over potential disruptions to oil
supply in the Middle East
4
. This instability
underscores the vulnerability of global
energy markets to geopolitical tensions.
The combined effects of these conflicts
have underscored the importance of
energy security. Countries are increasingly
prioritising diversification of energy sources
and enhancing strategic reserves to
mitigate risks associated with geopolitical
disruptions. Additionally, the push towards
renewable energy and low-carbon projects
has gained momentum as nations seek to
reduce dependency on volatile fossil fuel
markets
5
.
Donald Trump’s re-election as President
of the United States at the end of 2024
has introduced new uncertainties.
His administration’s stance on energy
independence and deregulation may
bolster domestic oil and gas production,
potentially affecting global energy prices
and market dynamics
6
. However, the
new administration’s policies may lead to
volatility in international markets, impacting
global economic stability.
Overall, the economic and political
landscape in 2024 is characterised by
a delicate balance between managing
immediate energy security concerns and
transitioning towards a more sustainable
energy future. The oil and gas industry
remains a critical component of this
landscape, navigating through the
challenges posed by geopolitical conflicts
and evolving global economic dynamics.
Trump’s re-election adds an additional
layer of complexity, with potential
implications for global trade, energy
policies, and economic stability.
Oil Price
Oil markets in 2024 were marginally
less volatile than 2023 but overall prices
were lower. Strong growth in global oil
production and slower growth in demand
put downward pressure on prices,
while heightened geopolitical risks and
voluntary production restrictions among
OPEC+ members supported them. These
offsetting factors kept oil prices within a
narrow range. The average Brent crude
price for the year was $80.53, $2/bbl (or
1.8%) less than in 2023.
Having risen month-by-month from the
start of the year, oil prices peaked in April
2024 at c.$91/bbl, as geopolitical unrest
persisted amid ongoing Middle Eastern
hostilities as well as the Russia/Ukraine
conflict. This increase was followed by a
sharp price correction from April into early
June, driven by concerns over the health
of the global economy and oil demand
as well as reports of progress towards a
potential truce in Gaza. Despite a bounce
back in oil prices over the course of June,
driven by OPEC+ announcing that the
unwinding of voluntary production cuts
would depend on market conditions,
prices declined towards the end of the
year, reaching a low in Sept at c.$70/
bbl, the lowest level since December
2021, driven by the prospect of an
oversupplied market in 2025. Benchmark
prices then increased in early October
due to escalating tensions between
Israel and Iran, and Saudi Arabia and its
OPEC+ allies announcing that the planned
unwinding of voluntary production cuts
would be postponed by two months.
Prices eased later in the month as market
attention once again shifted from supply
risks to concerns over the health of the
global economy. By mid-November, prices
fell to around $72/bbl as fears of an Israeli
attack on Iran’s energy infrastructure faded
and remained in a $70-75/bbl range for
the remainder of the year, with investor
sentiment weighed down by the prospect
of higher US tariffs and comfortable 2025
balances.
The average realised crude oil price
for the Group’s production in Vietnam
was $85.52/bbl (2023: $87.42/bbl),
representing a premium to Brent of over
$5/bbl on average (2023: just under $7/
bbl). For Egypt, the average realised crude
oil price was $74.83/bbl (2023: $78.18/
bbl), representing a discount of $6/bbl to
Brent for the year (2023: over $4/bbl).
Looking forward, the EIA predicts that
oil prices will be under pressure over
the next two years as global production
growth outpaces demand. According
to the EIA Brent crude oil prices are
expected to fall by 8% to an average of
$74/bbl in 2025. The IEA predicts that
the relatively subdued pace of global
oil demand growth is set to continue in
2025, accelerating only modestly from
940 kb/d in 2024 to 1.1 mb/d, with overall
consumption reaching 103.9 mb/d
7
.
Global oil supply is projected to rise by 1.8
mb/d in 2025 to 104.7 mb/d, compared
with an increase of 660 kb/d in 2024.
* Read More
For more information on the impact of
climate change on the long-term oil
prices and demand, please see page
58 of the Viability Statement.
ADDITIONAL
INFORMATION
GOVERNANCE
REPORT
FINANCIAL
STATEMENTS
STRATEGIC
REPORT
18
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Egypt
In 2024, Egypt witnessed pivotal changes
to its macro-economic environment.
In late February/early March 2024, the
Egyptian Government (i) announced a
landmark agreement with ADQ (an Abu
Dhabi sovereign wealth fund), whereby
the latter has acquired development
rights of the new coastal city of Ras El
Hekma for $35 billion, (ii) on 6 March,
raised all main interest rates by 600 basis
points; signed an expanded new loan
with the International Monetary Fund
(IMF) ($8 billion, including the original $3
billion secured in December 2022), which
facilitated additional $14 billion from other
institutional lenders including the World
Bank and the European Union; and (iii) let
the Egyptian pound (EGP) fully float, with
an immediate devaluation from c. 31 to
c. 49 EGP per USD. As a result, Egypt’s
foreign currency reserves have increased
from $35.3 billion in February 2024 to
$47.1 billion in December 2024.
Notwithstanding these improvements,
Egypt’s economic and political landscape
was also marked by significant challenges,
most notably (i) high inflation rate
throughout the year (26.3% year-on-
year in October
1
, then cooling to 24.1%
in December), with the central bank
maintaining a key interest rate of 27.75%
2
,
and (ii) a slow but continuous further
devaluation of the EGP, which ended
the year at 50.8 EGP per USD. Signs of
economic recovery are also apparent,
with growth projected at 4% for full year
2024-25.
Politically, Egypt continued to navigate
a complex landscape with the Israel/
Gaza conflict at its eastern borders. In
this context, the government focused on
maintaining stability while implementing
economic reforms. The country also
became a full member of the BRICS
economic bloc, enhancing trade and
investment opportunities with emerging
markets
3
.
Overall, while Egypt faced significant
economic challenges in 2024, the IMF’s
investment and subsequent reforms
provided a foundation for recovery and
growth. The country’s efforts to stabilise
its economy and attract foreign investment
were crucial steps toward achieving long-
term stability and prosperity.
1 https://www.oecd.org/en/publications/oecd-economic-outlook-volume-2024-issue-2_839ef1cf-en/egypt_47c3f16b-en.html
2 https://www.iea.org/reports/oil-market-report-december-2024
3 https://www.reuters.com/markets/asia/hsbc-forecasts-vietnam-2025-gdp-growth-65-inflation-30-2025-01-13/#:~:text=Register-,HSBC%20forecasts%20Vietnam%20
2025%20GDP,6.5%25%2C%20inflation%20at%203.0%25&text=HANOI%2C%20Jan%2013%20(Reuters),2024%2C%20HSBC%20said%20on%20Monday
4 https://www.reuters.com/markets/asia/hsbc-forecasts-vietnam-2025-gdp-growth-65-inflation-30-2025-01-13/#:~:text=Register-,HSBC%20forecasts%20Vietnam%20
2025%20GDP,6.5%25%2C%20inflation%20at%203.0%25&text=HANOI%2C%20Jan%2013%20(Reuters),2024%2C%20HSBC%20said%20on%20Monday
5 https://www.oxfordeconomics.com/resource/vietnam-growth-will-be-ahead-of-regional-peers-in-2025/
Vietnam
In 2024, the Vietnamese economy
demonstrated impressive resilience,
achieving a positive GDP growth of
7.09%, up from 5.05% the previous year.
Despite facing external challenges and
the adverse impact of Typhoon Yagi, the
country’s quarter-by-quarter economic
growth in 2024 highlighted its strong
recovery and adaptability.
Typhoon Yagi was one of the most
significant events to affect Vietnam’s
economy in 2024, disrupting socio-
economic activities in northern regions
and causing widespread disruptions
to production and supply chains. A
recent study by the United Nations
Development Programme (UNDP)
assessed that the total damage from the
event was estimated at nearly $1.5 billion,
approximately 0.62% of 2023 GDP.
In 2024, Vietnam reported over $38.2
billion in foreign direct investment (FDI),
reflecting a slight decrease of 3%
compared to the previous year, but
reaffirmed Vietnam’s status as a sought-
after destination for foreign capital.
Looking ahead to 2025, there is a strong
potential for sustained growth with
Vietnam’s GDP growth estimated to be
around 6.5%
4
, and expectations that it
will continue to be the standout among
the ASEAN-6
5
, growing at a faster pace
relative to its peers during the next few
years, presenting a promising investment
outlook for Vietnam.
Exploration & Production
Merger & Acquisition
activity
In 2024, the M&A activity in the oil and gas
sector saw mixed trends. While the overall
deal value dropped significantly compared
to 2023, the number of deals remained
relatively stable. Specifically, the London
market experienced a slight slowdown in
the first half of the year, but activity picked
up in the latter half, driven by strategic
consolidations and asset portfolio
balancing. The biggest deals in the E&P
sector were Harbour Energy’s acquisition
of Wintershall Dea for approx. $11.2bn
which completed in September 2024, and,
in October, Ithaca Energy’s acquisition of
Eni’s UK business for $2.5bn.
Market Overview - Continued
19
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Net Zero
2024 was the first year that average global temperatures breached the 1.5°C limit above pre-industrial levels, crossing the threshold
established in the Paris Agreement in 2015
1
. With greenhouse gases related to fossil fuel production accounting for approximately
6.6% of global emissions
2
, fossil fuel-related emissions reached a record in 2024
3
. Despite the growing adoption of net zero targets,
the world’s listed companies are on course for a rise of 2.8°C in average global temperatures this century
4
. Progress towards net zero
slowed in the past year due to a lower level of corporate and government ambition on climate change. Several companies, both within
and outside the sector, delayed and/or decreased their climate commitments.
Brent crude 2014-2024 ($bbl)
120
100
80
60
40
20
0
$bbl
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Global Crude Oil Consumption 2014-2026P
106
104
102
100
98
96
94
92
90
mmbpd
2014A 2015A 2016A 2017A 2018A 2019A 2020A 2021A 2022A 2023A 2024P 2025P 2026P
Global E&P M&A Total Transaction Value
40
80
120
160
0
$ billions
2013 2014 2015 2016 2017 2018 2019
2020 20232021 2022
200
2024
1 https://www.bbc.co.uk/news/articles/cd7575x8yq5o
2 https://www.wri.org/insights/4-charts-explain-greenhouse-gas-emissions-countries-and-sectors
3 https://globalcarbonbudget.org/fossil-fuel-co2-emissions-increase-again-in-2024/
4 https://www.msci-institute.com/wp-content/uploads/2024/11/2024-November-MSCI-Net-Zero-Tracker-111124.pdf
Source: Bloomberg
Source: EIA
Source: S&P Capital IQ
ADDITIONAL
INFORMATION
GOVERNANCE
REPORT
FINANCIAL
STATEMENTS
STRATEGIC
REPORT
20
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
21
2024 has been a year of delivery for
Pharos Energy. Amidst the challenging
global environment and ongoing
volatilities facing the industry, Pharos
achieved crucial milestones that
allowed us to emerge operationally
stronger and financially robust.
In my first Annual Report statement as Chief Executive Officer
of Pharos Energy, I am proud to report a strong performance
throughout 2024, with a solid operational business, high-quality
assets delivering stable production and robust cash flows, an
impressive and dedicated team, and a robust financial base.
KATHERINE ROE
Chief Executive Officer
Chief Executive Officer’s Statement
MAXIMISING THE VALUE OF OUR
HIGH QUALITY PORTFOLIO
21
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
ADDITIONAL
INFORMATION
GOVERNANCE
REPORT
FINANCIAL
STATEMENTS
STRATEGIC
REPORT
Financial strength
Strengthening our balance
sheet has been a pivotal
achievement for Pharos in
2024. We were proud to
report our Company moving
to a debt-free position in
September with the full
repayment of all outstanding
legacy debt since 2019.
We ended the year in a strong financial
position with cash balances of $16.5m
and revenues of $136.1m. Alongside
this, the improving macroeconomic
environment in Egypt, coupled with
our careful cost control, has seen an
improvement in our receivables position,
with year-end 2024 balance down 21%
to $29.5m and over $25m received from
EGPC during the year. The continued
progress of regular receivable payments
will determine the pace of our future
investment in country. We benefit from
having quality assets with catalysts to
extract further value and we look forward
to continuing to invest in our portfolio
within the framework of a strict and
transparent capital allocation policy.
At Pharos, we have a firm commitment
to deliver returns to shareholders. Our
established dividend programme is at
the heart of our business model, and it is
through this lens that we assess all capital
allocation goals. With a stronger balance
sheet compared to the same time last
year and disciplined fiscal management,
we continue our track record of delivering
sustainable shareholder returns in 2024,
totalling $8.8m this year through a
combination of dividend payments and
share buybacks.
Today, the Board have recommended a
final dividend for the 2024 financial year of
0.847 pence per share which, subject to
shareholders’ approval at the Company’s
2025 AGM, would take the 2024 full
year dividend to 1.210 pence per share.
Dividends continue to be a fundamental
part of the Company’s investment
proposition, and we are committed to
striking the right balance between tangible
shareholder returns with investment in
our assets to generate growth whilst
preserving the financial health of the
business.
Operational momentum
across the portfolio
The Company had an operationally busy
year in 2024. Our healthy balance sheet
allowed us to support active drilling
work programmes during the year, with
campaigns in both Vietnam and Egypt
successfully completed in the second
half. We are proud to have delivered solid
production results on time, on budget,
in line with guidance, and with zero Lost
Time Injuries (LTIs) across the Group.
In Vietnam, the Group continued to
achieve stable production rates, robust
operations, and high netback. At the TGT
field, a two infill well drilling programme
was completed in October, with both
wells producing in line with expectations.
Overall production from Vietnam was
further supported by well interventions
and production optimisation activities
throughout the year. Most notably, in
December, the HLHVJOCs’ applications
for five-year licence extensions to both the
TGT and CNV fields were granted by the
Vietnamese Government, extending the
licence for the TGT field to 7 December
2031, and CNV field to 15 December
2032. The granting of the licence
extensions is a significant achievement
for the Company, immediately increasing
our year-end 2024 2P reserves in Vietnam
by approximately 19% and allowing us
to prioritise future investments to unlock
untapped potential in both fields.
In Egypt, the Group maintains a measured
approach to funding allocation for capital
expenditure. Production throughout the
year was stable due to a strong focus
on workovers, recompletions, and water
injection to bring low-cost barrels to
production and build reservoir energy
for future drilling. On El Fayum, drilling of
the second exploration commitment well
successfully completed in September
after encountering oil-bearing reservoirs in
the Abu Roach G formation. Additionally,
one El Fayum development well was put
on production in December. On North
Beni Suef, the processing of 3D seismic
data continued, with interpretation and
mapping to follow in 2025.
We are committed to operating safely and
responsibly at all times. We are proud
to have maintained our excellent safety
record during an operationally active year
like 2024. In particular, in Vietnam, we
have maintained this record since 1997
thanks to the JOCs’ consistent efforts to
promote and champion workers’ health,
safety, and well-being; an achievement of
which we are proud. The health and safety
of our workforce remains our highest
priority, and we are careful to maintain this
going forward.
Well-positioned to develop
growth opportunities
Our operational momentum in 2024
has laid a solid foundation for Pharos to
further develop growth opportunities in
our portfolio, with options continuously
being explored and development work
progressed to maximise the potential of
each asset.
In Vietnam, our exploration blocks, Blocks
125 & 126, have significant potential
to unlock material organic value. We
are active in our discussions to source
a partner to support the funding of a
commitment well on Block 125. To
preserve our ability to drill in 2025, we
ordered Long Lead Items (LLIs) in August
2024, demonstrating our commitment
to progressing this opportunity. We have
recently submitted an application for
a two-year extension on Blocks 125 &
126 which will allow us to retain future
optionality for the prospect to be drilled,
whilst investing in near term production
growth in Vietnam.
In Egypt, we have further upside
in El Fayum and North Beni Suef,
demonstrated by the successes in
both concessions in 2023 and 2024.
The recent signing of a Memorandum
of Understanding (MOU) with IPR
and EGPC in February 2025 was a
key catalyst in the project seeking to
consolidate our two existing concessions.
The negotiations, once concluded, are
expected to result in a new consolidated
Concession Agreement for both assets
with improved fiscal terms, an extension
of the current term of the concessions
and further work programmes aimed at
increasing production from the areas.
This consolidation is expected to add
significant value to our low-cost Egyptian
asset base and deliver future growth. We
will continue to work closely with all parties
and use our best efforts to complete
negotiations as soon as possible, with
a view to the new agreement receiving
government and parliament approval and
then being signed by all parties at the
earliest opportunity.
22
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Positive partnerships for
mutual success
Since joining as CEO in July 2024, I
have been greatly encouraged by the
open and receptive dialogues we had
with key stakeholders. During the year,
I met with our regulators, government
representatives and JOC partners in both
Vietnam and Egypt, including EGPC,
IPR, the Egyptian Minister of Petroleum
and Natural Resources, PetroVietnam
(PVN), and the HLHVJOCs. Their
ongoing support has been instrumental
in delivering some of our key strategic
objectives in 2024, such as the TGT and
CNV licence extensions in Vietnam and
the signature of the consolidation MOU in
Egypt, and underscored the constructive
relationship and recognition of our long-
term commitment to the regions from our
host governments and joint operating
partners.
Our positive relationships in both
jurisdictions will continue to support our
strategy and provide a competitive edge
as we seek to unlock further value from
these assets. As we maintain a firm handle
on our existing portfolio, we also look for
inorganic opportunities that can generate
additional value for our shareholders, align
with our long-term strategy, and leverage
our existing long-standing in-country
presence and partnerships. We have an
experienced and highly dedicated team
with strong industry relations to assess
these opportunities in a disciplined and
systematic manner. Underpinned by
a debt-free balance sheet and steady
production base, we are confident in our
ability to build on our existing portfolio to
create further sustainable, value-accretive
growth for all our shareholders.
As Pharos explores these opportunities,
we remain focused on the role we play
in the socio-economic development of
our host countries. We believe that oil
and gas companies like Pharos, with
our commitment to producing safely
and responsibly, a wealth of industry
expertise, and a healthy financial base,
will continue to play an important part
in the energy transition, especially in
emerging economies like Vietnam and
Egypt. In our discussions with our host
governments, we note their recognition
of the importance of our operations and
investments to support their broader
energy security agenda and prosperity.
This is exactly what we have done in
2024, having committed to the domestic
sale of 100% of oil and gas produced from
our assets in both Egypt and Vietnam
during the year. We also progressed our
net zero strategy in 2024 by updating
our 2023 Net Zero Roadmap to outline
the steps we have taken since its original
publication to reduce our carbon footprint
and contribute to a more sustainable
future. More details of our updated
Roadmap can be found on pages 96
to 99.
Outlook
Pharos has made significant
strides in 2024, having delivered
a stabilised asset base set
for growth, a solid financial
performance, well-protected
cash flows, and an exciting mix of
opportunities to pursue in 2025
and beyond. In Vietnam, planning
is underway for the drilling of a TGT
commitment well in 4Q 2025, the
success of which could open up
an undrilled area in the field. We
also have additional infill drilling
programmes in both TGT and
CNV. We have recently submitted a
two-year extension on Blocks 125
& 126 which will allow us to retain
future optionality for the prospect
to be drilled, whilst investing in
near term production growth in
Vietnam. In parallel, we continue
active farm-out discussions with
potential partners recognising
the risk- reward balance of our
portfolio. In Egypt, a two-well
drilling programme in El Fayum
will commence in 2H 2025 and, in
parallel, discussions will continue
on the consolidated Concession
Agreement.
With capital discipline at our core,
a clear set of strategic objectives,
a portfolio of assets with catalysts,
a strong financial position, a
dedicated and diverse workforce,
and a committed leadership team,
the Company is well-positioned
to deliver long-term sustainable
value for all stakeholders. We have
a stronger than ever foundation
from which to build on and move
forward to grow value in both
Vietnam and Egypt.
I would like to take this opportunity
to thank all of our employees,
partners, and shareholders for their
continued dedication and support.
Looking ahead, I am confident in
our ability to execute our strategy
and look forward to steering
Pharos on a path towards a new
phase of growth and success.
KATHERINE ROE
Chief Executive Officer
Chief Executive Officer’s Statement - Continued
23
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
ADDITIONAL
INFORMATION
GOVERNANCE
REPORT
FINANCIAL
STATEMENTS
STRATEGIC
REPORT
Business Model
HOW OUR BUSINESS MODEL
CREATES SUSTAINABLE VALUE
We are building a business focused on generating sustainable
returns. We look to grow Pharos through the responsible
management of our current portfolio and careful selection
of opportunities, particularly those with near-term low-cost
development and exploration assets with transformative potential
within Asia and MENA.
VALUE INPUTS VALUE INPUTS VALUE INPUTS
Our people
• Extensive industry experience
• Technical expertise and commercial
acumen
• Relationship-driven
• Diverse and inclusive workforce
Our assets
• Assets delivering stable production
and robust cash flows
• Low-cost onshore drilling in Egypt
• Mature, short payback in Vietnam
• Basin-opening frontier offshore
exploration in Vietnam and proven
exploration upside in Egypt
Our capital
• Rigorous approach to cost
• Disciplined capital allocation
process, including returns to
shareholders dividend policy
• Debt-free balance sheet
• Low breakeven oil price in Vietnam
Assess Invest
Develop
& Produce
We assess opportunities which offer near
term cash generation and longer term
growth. We generate opportunities from
within our existing asset base and balance
the value of investing in the business with
the value of cash returns to shareholders.
Our investment programme will continue
to be allocated over our asset base in a
disciplined manner to deliver sustainable
returns for our stakeholders. We maintain
a culture of prudent financial management,
capital allocation, and capital returns.
Our production increases through the
development of existing discovered
resources. We seek to maximise margins
through optimising production at low
operating costs. We are committed to
responsible and safe operations at all times.
VALUE OUTPUTS VALUE OUTPUTS VALUE OUTPUTS
Growth metrics
• Safe and responsible operations
• Development of discovered
Egyptian resources through
onshore, low cost, in-fill drilling
• Continued development of
Vietnam producing assets through
licence extensions and revised
field development plans
• Farm-in partner to support the
funding of a commitment well and
develop the full potential of Blocks
125 & 126 in Vietnam
Organic growth
opportunities
• Development of existing
discovered resources
• World class exploration prospects
and leads in in Blocks 125 & 126
in Vietnam
• Conventional and unconventional
+ exploration potential
Stakeholders
• Regular cash return to
shareholders
• Net Asset Value (NAV) per share
growth
• In-country economic contribution
and social investment
• Local capability training,
local employment & trusted
partnerships
24
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Key Metrics
REPORTING ON OUR
PERFORMANCE
We use both financial and non-financial metrics to manage
long-term performance and deliver on our responsible
business plans. They are kept under review and regularly
tested for relevance against our strategy and policies.
2024 Financial Measures
LOW CASH OPERATING COST
$/BOE *
17.80
2022
2023 15.70
16.36
2024
17.80
Links to strategy
• Deliver value through
growth
Associated risks
• Partner alignment risk
• Political and regional risk
Links to Directors’ Remuneration Committee Report
(See page 135)
Description
Low operating expenditure helps deliver high margin
production revenues. The cost of producing a single barrel of
oil is influenced by industry costs, inflation, fixed costs and
production levels.
Objective
To be profitable at lower oil prices.
Performance
Pharos achieved an operating cost of $17.80/boe in 2024,
an increase of 13% over 2023, largely due to 15% fall in
production from Vietnam. Production from Egypt was 4%
higher due to the contribution from NBS.
Outlook
We continue to target improvements in 2025 and beyond
through managing costs and increasing production
CAPITAL EXPENDITURE
CASH $M (includes abandonment funding)
26.1
2022
2023 26.7
31.9
2024
26.1
Links to strategy
• Deliver value through
growth
• Investment growth
Associated risks
• Commodity price risk
• Partner alignment risk
Description
Investment in the asset base required to maintain and grow the
business and directed to the assets in Egypt and Vietnam.
Objective
To achieve returns in excess of cost of capital.
Performance
The 2024 cash capital expenditure was marginally lower by 2%
than 2023. Two new infill wells on TGT completed successfully
in October 2024 on time and under budget. On El Fayum,
a second exploration commitment well was completed in
September 2024 and a further development well was put on
production in December 2024.
Outlook
The cash capex forecast for 2025 is expected to be
c.$33m, reflecting the drilling of the TGT appraisal well, the
procurement of long lead items for drilling in Block 125 in
Vietnam and the El Fayum drilling programme in Egypt.
* Read More | Non-IFRS measures on page 200.
25
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
2024 Financial Measures
NET CASH/(DEBT)
$M
16.5
2022
2023 (6.6)
(28.9)
2024
16.5
Links to strategy
• Deliver value through
growth
• Return to shareholders
Associated risks
• Commodity price risk
• Insufficient funds to meet
commitments
Description
Pharos has a history of stable finances and a strong balance
sheet due to the prudent management of producing assets.
Objective
To maintain financial strength through preserving the balance
sheet, to invest in growth opportunities in excess of the cost of
capital and to generate sustainable returns to shareholders
Performance
Pharos has a strong net cash balance of $16.5m at year end
and is debt free, mainly driven by utilisation of cash reserves to
repay principal RBL borrowings and the National Bank of Egypt
(UK) Limited (NBE UK) credit facility.
Outlook
Capital discipline and financial stability have always been key to
the Company and continue to underpin the business.
RETURNS TO SHAREHOLDERS
PENCE PER ORDINARY SHARE
1.10
2022
2023 1.00
2024
1.10
0
Links to strategy
• Deliver value through
growth
• Return to shareholders
Associated risks
• Commodity price risk
• Climate change risk
• Sub-optimal capital
allocation risks
Description
Commitment to cash returns to shareholders remains a core
element of our overall allocation framework
Objective
To provide sustainable cash returns to shareholders.
Performance
Approval by shareholders at the 2024 AGM of a final dividend
in respect of the year ended 31 December 2023 of 0.77 pence
per share, amounting to $4.2m and paid on 19 July 2024.
Including the payment of the interim dividend of 0.33 pence
per share on 24 January 2024, the full year 2023 dividend was
1.10 pence per share, amounting to $5.9m in total.
Outlook
We are committed to delivering long term, sustainable value
to our shareholders via both regular cash returns yield and
organic growth. An annual dividend remains a key aspect of
the Company’s capital discipline and investment thesis.
ADDITIONAL
INFORMATION
GOVERNANCE
REPORT
FINANCIAL
STATEMENTS
STRATEGIC
REPORT
26
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Operational Measures
LOST TIME INJURY
FREQUENCY (“LTIF”)
PER MILLION MAN-HOURS WORKED
0
2022
2023 0
2024
0
0.42
Links to strategy
• Focus on stakeholders
Associated risks
• HSES risk
• Partner alignment risk
Links to Directors’ Remuneration Committee Report
(See page 135)
Description
Safety of our workforce remains our number one priority. The
Group is committed to operating safely and responsibly at
all times. Having a positive impact on the well-being of our
employees, our contractors and the local communities in
which we operate is a priority.
Objective
To achieve zero LTIF across the Group’s operations.
Performance
In 2024, we are pleased to report that there were zero lost
time injuries and zero fatal incidents across the Group.
Outlook
Continue to work closely with the Joint Operating Companies
to maintain high safety standards and training with the aim of
driving continuous improvement year-on-year.
GROUP NET PRODUCTION
BOEPD
5,801
2022
2023 6,508
7,166
2024
5,801
Links to strategy
• Deliver value through
growth
Associated risks
• Reserve risk
• Sub-optimal capital
allocation risks
• Commodity price risk
Links to Directors’ Remuneration Committee Report
(See page 135)
Description
Production revenues generate cash flows which are re-
invested in the portfolio of assets, new business opportunities,
and in returns to shareholders.
Objective
To optimise production from the Group’s asset base.
Performance
Vietnam 2024 working interest production was 4,361 boepd
net (2023: 5,127 boepd net) and Egypt 2024 working interest
production was 1,440 bopd net (2023: 1,381 bopd net).
Outlook
Group working interest 2025 production guidance is 5,000 –
6,200 boepd net. Vietnam 2025 production guidance is 3,600
– 4,600 boepd net, and Egypt 2025 production guidance is
1,400 – 1,600 bopd net.
Key Metrics - Continued
27
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Operational Measures
SOCIAL AND ECONOMIC
INVESTMENT $
759,889
2022
2023 747,373
698,600
2024
759,889
Links to strategy
• Focus on stakeholders
Associated risks
• Commodity price risk
• Insufficient funds to meet
commitment
• Business conduct and
bribery
Description
In Vietnam, a training levy of $150,000 for each joint operating
company goes into a fund which is ring-fenced to support the
development of future talent in the industry. In Egypt, under
the El Fayum and North Beni Suef Concession Agreements,
the Company contributes a total of $200,000 per year split
equally between the two Concessions to support training and
development within the industry.
Objective
To continue supporting local capability building and social
investments to contribute to sustainable development and
positive social impact in the UK, Vietnam and Egypt.
Performance
In 2024, in addition to the aforementioned training levy funds
(which totals to $500,000), a further $259,889 was invested
in a total of 26 healthcare, education, infrastructure and
community projects. Since inception, Pharos has contributed
c. $2.5m to charitable donations. To enhance our social
investment efforts, we established a Charity and Community
Projects committee responsible for selecting and allocating
funds to worthy causes and projects. More details can be
found in our Corporate Responsibility report on page 70.
Outlook
Build on previous work, and continuously assess and review
where the most valuable contribution to long-term social
projects, both at the local level and more widely, can be made.
EMPLOYEES UNDERTAKEN
ANTI-BRIBERY AND
CORRUPTION TRAINING %
100
2022
2023 100
100
2024
100
Links to strategy
• Deliver value through
growth
• Investment growth
Associated risks
• Partner alignment risk
• Business conduct and
bribery
Description
Our Anti-Bribery and Corruption (“ABC”) programme is
designed to prevent corruption and ensure systems are
in place to detect, remediate and learn from any potential
violations. All personnel are required to complete annual ABC
training.
Objective
To have all Group personnel complete the annual ABC
programme including training, testing and self-declaration
statement.
Performance
100% of personnel completed the ABC training as at year end
2024.
Outlook
Maintain 100% completion rate for the ABC training and
testing. Comply with new legislations and industry best
practices and ensure the training programmes are up-to-date.
ADDITIONAL
INFORMATION
GOVERNANCE
REPORT
FINANCIAL
STATEMENTS
STRATEGIC
REPORT
28
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
VIETNAM
CAMBODIA
NHA TRANG
VIETNAM
CAMBODIA
Block 125
Block 16-1 TGT Field
Block 9-2 CNV Field
Block 126
D: Development P: Production E: Exploration
Block 9-2 CNV Field (D&P)
The CNV Field is located in Block 9-2,
offshore Vietnam, in the shallow water Cuu
Long Basin. In contrast to the geology of
TGT, the CNV Field reservoir is fractured
granitic Basement.
Block 16-1 TGT Field (D&P)
The TGT Field is located in Block 16-1,
offshore Vietnam in the shallow water
Cuu Long Basin multi-stacked sandstone
reservoirs.
Blocks 125 & 126 (E)
Blocks 125 & 126 are located in moderate
to deep waters in the Phu Khanh Basin,
north east of the Cuu Long Basin.
4,361 boepd
2024 Vietnam production (net)
4
Blocks in Vietnam
Operational Review
OPERATIONAL REVIEW
The Group’s working interest 2024 production was
5,801 boepd net, in line with the Group’s production
guidance of 5,200 to 6,500 boepd.
VIETNAM
Pharos has two producing assets, Te Giac Trang (TGT) and Ca Ngu Vang
(CNV), and two exploration blocks (Blocks 125 & 126) in Vietnam.
29
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Vietnam Production
Production in 2024 from the TGT and CNV
fields net to the Group’s working interest
averaged 4,361 boepd. This is in line with
the 2024 production guidance for Vietnam
of 3,900 – 5,000 boepd net.
TGT production averaged 10,968 boepd
gross and 3,254 boepd net to the Group.
CNV production averaged 4,426 boepd
gross and 1,107 boepd net to the Group.
Vietnam Development
and Operations
TGT & CNV Fields
On Block 16-1 – TGT Field, operational
activities in the first half of 2024 focused
on adding low-cost production through
well interventions and production
optimisation opportunities. The second
half of the year saw successful completion
of the two-well infill drilling programme
from October on time and under budget.
Both wells are contributing to production.
On 20 December 2024, the applications
for our five-year licence extensions to
the TGT and CNV fields were granted
by the Vietnamese Government. The
extensions resulted in an increase to the
TGT and CNV 2024 year-end 2P reserves
of approximately 19%, with potential to
further increase reserves through appraisal
success and infill wells. As one of the
conditions of the licence extensions, the
working interest of the foreign contractor
parties will reduce with effect from the
start of the five year extension period
under each petroleum contract, being
December 2026 for TGT (Block 16-1) and
December 2027 for CNV (Block 9-2)).
The Group’s working interest for TGT
will change from 30.5% to 25.3% and
its working interest in CNV will change
from 25% to 20%. The extensions
are accompanied by an agreed work
programme commitment of 3D seismic
reprocessing and one appraisal well on
each field. Certain other licence terms
have been revised to be consistent with
precedent extensions granted to other
operators by the Vietnamese Government
and are in line with the current Vietnamese
Petroleum Law.
Vietnam Exploration
Blocks 125 & 126
On Blocks 125 & 126, discussions with
potential farm-in parties and drilling
contractors are ongoing. In 2024, the
Company continued to optimise its
prospects and leads portfolio, and
progress options to secure a drilling slot
in Block 125. Detailed drilling engineering
studies for the well on Prospect A
commenced in 3Q 2024. To preserve our
ability to drill, we have ordered Long Lead
Items (LLIs) in August 2024 for delivery
during 2025. In February 2025, we also
submitted an application for a two-year
PSC exploration phase extension to the
relevant authorities, underscoring our
commitment to pursuing this exciting
opportunity.
ADDITIONAL
INFORMATION
GOVERNANCE
REPORT
FINANCIAL
STATEMENTS
STRATEGIC
REPORT
2025 Work Programme
TGT & CNV Fields
• Vietnam production guidance for 2025 is 3,600 – 4,600 boepd net
• Following the approval of the TGT and CNV five-year licence
extensions:
− TGT: Drilling of an appraisal commitment well in 4Q; appraisal success
would open up an undrilled area in the field
− TGT: Three TGT infill wells drilling programme expected to commence in 4Q
− CNV: Planning underway for the drilling of one infill well expected to
commence in 4Q
− 3D seismic reprocessing on both assets commenced in January 2025,
expected completion in 3Q 2025
Blocks 125 & 126
• Submitted application for a 2-Year PSC Exploration Phase Extension
in February 2025
• Long Lead Items for Block 125 exploration well expected to arrive in
2Q 2025
• Renewed focus on farm-out strategy to enable drilling of the prospect
30
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
1,440 bopd
2024 Egypt production (net)
11
Development leases in El
Fayum and North Beni Suef
EGYPT
CAIRO
El Fayum Concession
Area E
CAIRO
EGYPT
North Beni Suef Concession
D: Development P: Production E: Exploration
El Fayum (D,P,E)
The El Fayum concession in the Western
Desert produces oil from 10 fields and is
located 80 km southwest of Cairo.
North Beni Suef (D,P,E)
The North Beni Suef (NBS) concession is
located immediately south of the El Fayum
concession. The first development lease
on the NBS concession was awarded in
September 2023 and production started in
December 2023.
Note:
The remaining exploration area within the Egyptian concession was relinquished in February 2025. The current consolidation project will
seek to reinstate exploration acreage within the consolidated concession area.
EGYPT
The Group has a 45% non-operating interest in two concessions in
Egypt - El Fayum and North Beni Suef.
Operational Review - Continued
31
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Egypt Production
Production in 2024 from the El Fayum
and NBS concessions net to the Group’s
working interest averaged 1,440 bopd.
This is in line with the 2024 production
guidance for Egypt of 1,300 – 1,500 bopd
net.
El Fayum production averaged 2,978
bopd gross and 1,340 bopd net to the
Group. NBS production averaged 223
bopd gross and 100 bopd net to the
Group.
Egypt Development and
Operations
El Fayum
One development well was put on
production in 2024.
North Beni Suef (NBS)
The NBS-SW1X well, which was declared
a commercial discovery and put on
production in December 2023, continued
to contribute to total production in 2024.
Egypt Exploration
El Fayum exploration
In 2024, we had continued exploration
success with a second exploration
commitment well in September
encountering oil-bearing reservoirs in the
Abu Roach G formation.
North Beni Suef exploration
On NBS, all technical commitments of
the initial exploration period have been
fulfilled with 3D seismic survey acquired
on time and on budget. The processing
of 3D seismic data is ongoing, with data
interpretation and mapping to follow.
Egypt Commercial
IPR and Pharos El Fayum (PEF), in their
capacity as the Contractor parties under
the El Fayum and NBS Concession
Agreements, submitted a request to
EGPC to merge the two assets and
replace them with a new consolidated
Concession Agreement. The consolidated
Concession Agreement is expected to
unlock significant value in the Western
Desert by improving certain fiscal terms,
extending the term of the concessions
and committing the Contractor parties
to additional work programmes aimed at
increasing production from the areas.
In February 2025, the Company
announced that PEF had entered
into a non-binding Memorandum of
Understanding (MOU) with IPR and EGPC
in relation to the proposed consolidation
of the two Concession Agreements. The
signing of the MOU is a key milestone in
the process. Under the MOU, EGPC and
the Contractor parties have agreed to use
their best efforts to conclude negotiations
on the new consolidated Concession
Agreement as soon as possible, with
a view to the agreement receiving
government and parliament approval and
then being signed by all parties at the
earliest opportunity.
ADDITIONAL
INFORMATION
GOVERNANCE
REPORT
FINANCIAL
STATEMENTS
STRATEGIC
REPORT
2025 Work Programme
El Fayum & North Beni Suef
• Egypt production guidance for 2025 is 1,400 – 1,600 bopd net
• El Fayum:
− Testing of the successful exploration commitment well completed in
February
− Application for commercial discovery declaration submitted to EGPC in 1Q
− Planning underway to commence two-well El Fayum drilling programme
in 2H
• NBS:
− Expected completion of 3D seismic data processing in 1H, with interpretation
and mapping to follow
Health, Safety and Environment (HSE)
On health and safety, we are pleased to report that in Egypt and Vietnam, we have
worked with our partners to maintain our record of zero Lost Time Injury (LTI) and zero
spillage incidents in 2024. The health and safety of our workforce remains our highest
priority, and we are committed to operating safely and responsibly at all times to provide
a safe and healthy working environment for staff and contractors.
On environmental matters, while operational activities in 2024 have increased compared
to last year, we have maintained our emissions reduction. This is driven by improved
process optimisation and monitoring, and measures to reduce the consumption of
carbon-intensive fuel in our field operations. Compared to our 2021 baseline, we are on
track to achieve our Net Zero interim short-term three-year target (2024-2026) of 5%
emissions reduction. Pharos will continue to work closely with our operating partners to
identify opportunities to reduce emissions to ensure we achieve our climate targets.
32
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
In accordance with section 172(1) of the
Companies Act 2006 (“s.172(1)"), the
Directors of the Company have a statutory
duty to promote the success of the
Company for the benefit of its members
as a whole. The Board of Pharos, as
individuals and together, consider that
they have acted in a way that would
most likely promote the success of the
Company, and deliver the goals and
objectives for the benefit of its members
as a whole in relation to all stakeholders
who may be affected by or engaging with
the Company’s activities.
Board meetings and
discussions
The Board has taken into account its
s.172(1) duty throughout the year in line
with current reporting and legislative
requirements. In fulfilling that duty, the
key decisions of the Directors have been
specifically confirmed at each Board
meeting to take into account, amongst
others, the following matters set out
specifically in section 172(1):
a) The likely consequences of any
decision in the long-term;
b) The interests of the employees;
c) The need to foster the Company’s
business relationships with suppliers,
customers, and others;
d) The impact of the Company’s
operations on the community and
environment;
e) The desirability of the Company
maintaining a reputation for high
standards of business conduct; and
f) The need to act fairly as between
members of the Company.
This has been supplemented by the
roles of the individual Directors giving
due regard and consideration of each of
these matters, amongst others, in light of
the s.172(1) duty. Illustrative examples of
how these matters have been taken into
account by the Board are set out below
and can also be found throughout the
Strategic Report of which this statement
forms part.
a) The likely consequences of
any decisions in the long-
term
During its meetings and discussions, the
Board considers decisions with keen
regard to consequences in the long
term for the business. For example, in
November 2024, the Board held its annual
Strategy Day to assess and evaluate our
strategy to deliver long-term, sustainable
value for all our stakeholders, and its
implications on our decision-making
process. This involved, amongst other
things, presentations and other inputs
from a number of key parties, including
employees and business advisers. At
all regularly scheduled meetings and
discussions of the Board and committees
of the Board (‘Board Committees’),
several papers are presented to promote
discussion and provide options for
the Board to hold an informed and
balanced debate. From time to time the
Board will also invite external advisers
and consultants to present to regularly
scheduled meetings of the Board
on matters of longer-term strategic
significance.
* Read More
For more information on how
the Board consider decisions
with regards to the long-term
consequences for the business,
in light of the principal risks to the
Company and its business, see
page 45 of the Risk Management
report. For more information on the
Strategy Day, see page 16 of the
Chair’s Statement.
Section 172(1)
S.172(1) COMPANIES ACT 2006
The duty under section 172(1) of the Companies Act 2006
is applied in addition to the other duties of a Director. Each
Director must discharge these duties in accordance with
the duty of care, skill and diligence both objectively and to a
subjective standard.
33
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
b) The interests of the
employees
Consideration of the interests of the
Company’s employees is a key element
of the Directors discharging their statutory
duty under s. 172(1). Throughout the year,
we have continued to run a dedicated
Monday weekly meeting, attended by
the Executive Directors, to ensure all
colleagues are regularly informed about
important business developments in the
Company and the Group. There are also
regular team, departmental and asset
meetings in smaller groups, allowing
all staff a greater opportunity to share
knowledge and debate issues. These
forums also act as channels through which
employees can ask questions of senior
management and Executive Directors and
contribute to the strategy and function
of the business. We have continued to
make extensive use of video conferencing
facilities during meetings to maintain
visibility and connection. At the same
time, we maintained the trend towards
an increase in the number of face-to-face
meetings, both internal and external,
which many of the team appreciate
as a collaborative environment for the
exchange of ideas, knowledge and advice.
Throughout the year, during all employee
events, John Martin, as Chair of the Board
and designated Non-Executive Director
responsible for workforce engagement,
made himself available to all employees
and encouraged all staff members to
share their concerns, feedback and views
about the Company. In December 2024,
John Martin also held year-end town hall
meetings with all employees, during which
everyone could share their feedback about
the Company without the presence of
senior management. Outcomes of these
meetings were then communicated back
to the Board on an anonymous basis.
The Executive Directors receive regular
updates on colleague engagement to
understand any complaints or troubles
from the hybrid work environment. At
the beginning and end of each calendar
year, every employee is encouraged to
set their own personal and professional
development objectives for the upcoming
year and assess their own performance
against those objectives in conjunction
with their line manager. Each employee
has at least three meetings with their
line manager during the year to discuss
and agree the objectives and to review
progress mid year and year end. Line
managers also provide additional support
where needed and assist the employee in
overcoming any difficulties they might be
facing.
Following feedback received in previous
years, in which events such as off-
site away days and in-person monthly
meetings were proposed to avoid staff
isolation and promote team culture, and
the success of the inaugural off-site
event in 2023, the Company organised
a further Group-wide off-site event in
October 2024. In the course of this event,
colleagues from Egypt, Vietnam and UK
all met in Bournemouth to exchange
ideas, provide feedback and engage
in structured team-building activities.
The event proved very successful, with
the sharing of knowledge and practical
experience having an immediate impact. It
also allowed the new CEO, Katherine Roe,
a valuable opportunity to introduce herself
face-to-face to Group staff based outside
the UK and hear their perspective on the
business directly. The Board believes
these Group-wide events are important
not only for the effective and efficient
functioning of the Company and the
business, but also for the development,
advancement and well-being of the
Group’s global workforce.
* Read More
For more information on the Board’s
engagement with employees, see
page 109 of our UK Corporate
Governance Code Report.
c) The need to foster business
relationships with the
Company’s suppliers,
customers, and others
The Group’s business relationships
with suppliers, service providers and
vendors are subject to regular review
and consideration through vendor
due diligence and active contracts
management. Vendor due diligence is
actively undertaken before a service
provider of any size is engaged. Significant
contracts, concessions and commitments
are considered by the Executive Directors
and the Board, or relevant Board
Committee, supported by papers outlining
impact and consequences of potential
decisions. All significant contracts and the
legal terms of other commitments are also
thoroughly reviewed by the Group General
Counsel and, if necessary, referred to
specialist external counsel.
Our relationships with joint venture
partners, host governments, regulatory
authorities, shareholders and analysts are
the foundation to support the success of
our business. Throughout the year, senior
management held meetings with media
journalists and analysts to foster open
and communicative relationships with key
figures in the industry. Also during the
year, the Company’s new Chief Executive
Officer, Katherine Roe, held a number of
face to face meetings with key partners,
regulators and host governments. These
included meetings with the new Egyptian
Minister of Petroleum and Mineral
Resources, EPGC, our partner in Egypt
IPR, representatives of PetroVietnam
and the Vietnamese Ministry of Industry
and Trade and all partners within the
JOCs in Vietnam The meetings with
the key stakeholders in Vietnam were
particularly valuable in the context of
the extension applications for the TGT
and CNV petroleum contracts and the
corresponding Revised Field Development
Plans. In March and September
2024, following the announcement of
full year and interim financial results
respectively, the Executive Directors and
other members of senior management
participated in roadshows coordinated
through our corporate brokers in order
to engage with a wide group of existing
shareholders and prospective investors.
We plan to continue to engage in a
personal and meaningful way with our
stakeholders, such as host governments,
suppliers, joint venture partners,
shareholders, and others in the future.
* Read More
For more information on how the
Company foster relationships with
stakeholders, see page 23 of our
CEO’s Statement and page 109 of
our UK Corporate Governance Code
Report.
d) The impact of the
Company’s operations
on the community and
environment
The organisation has provided robust
evidence of its commitment to ESG
in the sector through its Corporate
Responsibility report, TCFD report and
ESG Committee report in the 2024 Annual
Report. Pharos reports transparently on
various Corporate Responsibility metrics
such as lost time injuries, GHG emissions,
energy consumption, waste produced
and recycled, and freshwater usage in
our Annual Reports. Over the past six
years, Pharos have participated in the
CDP (formerly Climate Disclosure Project)
Climate Change Questionnaire. In 2024,
Pharos is pleased to report that we were
awarded scores of B for both our Climate
Change and Water Security disclosures,
an improvement from last year’s score of C
which was originally achieved in 2019. As
a Group, we continue to work to bring our
disclosures in line with the requirements
of the TCFD. In September 2022, the
Company made a formal commitment to
achieve Net Zero on all Scope 1 and 2
GHG emissions across all assets by no
ADDITIONAL
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REPORT
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STATEMENTS
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PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
later than 2050. In December 2023 the
Company published a Net Zero roadmap,
researched and developed in close
consultation with specialist advisors and
consultants and including interim targets
and asset-level decarbonisation levers
towards 2050. The roadmap was reviewed
and updated in 2024 to outline the steps
taken since its original publication to
reduce the Group’s carbon footprint and
contribute to a more sustainable future.
Further details of the updated Roadmap
can be found on pages 96 to 99.
In addition to this, the Company
remains committed to creating value in
a sustainable manner for host countries
and local communities as well as for staff.
During the year we sought to align our
social investment programme with the
United Nations Sustainable Development
Goals (UN SDGs). We worked closely with
our local partners and joint ventures to
ensure that our social initiatives continue
to have a positive impact on the regions
receiving the support and are relevant
to the community. In 2024, a total of
$259,889 was invested in 26 community
projects across all of our assets, and a
further $500,000 was invested in ring-
fenced funds for training to develop
future talents in the industry in Vietnam
and Egypt. In addition, to complement
this commitment to investment in
host countries and local communities,
Pharos has donated via its Charity and
Community Projects Committee, selecting
and allocating funds to worthy causes and
projects.
As originally announced in September
2022, the Company has established
an Emissions Management Fund,
reflecting that, as non-operator, the
Company has no direct control over the
facilities associated with the Group’s
producing assets. From every barrel
net to the Company sold at an oil price
above US$75, this Fund is provided
with $0.25. In line with the Net Zero
roadmap, this Fund is intended to
provide financial support for emissions
management projects that are otherwise
not economically feasible. As at 31
December 2024 the value of the fund was
c.$830,000.
The Board regularly monitors the Group’s
business activities, financial position,
cash flows and liquidity, and operating
environment through detailed forecasts.
Scenarios and sensitivities are carefully
researched and prepared by the Group’s
Commercial Manager and are regularly
presented to the Board, both at its
regularly scheduled meetings and at the
annual Strategy Day. The scenarios and
sensitivities considered including changes
in commodity prices and in production
levels from the existing assets, together
with an assessment of other factors
that could affect the Group’s future
performance and position. These factors
include the impact on the community and
environment of the Group’s operations
and any prospective project or investment
decision.
Similarly, a standing agenda item at each
regularly scheduled meeting of the Board
is a report on Group risk, which includes
a discussion of the then current principal
risks to the Group and its business, a risk
heat map showing likelihood and severity
for each such risk and a summary of the
causes and potential mitigations for each
risk. The process for assessment and
determination of the principal risks to the
Group, and the identification of measures
for their management or mitigation,
includes full consideration of the impact
of operations on the environment and on
local communities.
* Read More
For more information on the
Board’s commitment to ESG and
considerations on the community
and the environment, see pages
117 to 119 for the ESG Committee
report, pages 15 to 17 for the Chair’s
Statement, and pages 59 to 79 for
the Corporate Responsibility report.
* Read More
For more information on Board
oversight on business activities,
financial position and the
environment of the Group’s
operations, see page 45 of the Risk
Management report.
e) The desirability of the
Company maintaining
a reputation for high
standards of business
conduct
The Group’s Code of Business Conduct
and Ethics and associated policies are
reviewed and re-approved by the Board
annually, and all policies and procedures
have been followed rigorously in 2024 with
no known or reported breaches. The Code
of Business Conduct and Ethics is placed
at the forefront of our engagement with
suppliers, vendors, partners, and public
officials. It is a requirement for all Group
employees and the Board to complete
and successfully pass their Anti-Bribery
and Corruption and Criminal Finance
E-Learning modules every year to ensure
that the expected standards of business
conduct and the Company’s values are
communicated and recognised across the
organisation. Our Whistleblowing Policy
ensures that employees are protected
from possible reprisals when raising
concerns in good faith. In addition to
internal reporting channels, we have a
confidential ethics hotline supported by
NAVEX with numbers displayed in our
local offices available 24 hours a day all
year round.
In addition to the overarching Code
of Business Conduct and Ethics,
the Company has also established
governance and policy standards in
response to specific circumstances. Most
notably in recent years, the Company
adopted a new Group Sanctions
Policy, reviewed and updated annually,
in response to the Russian/ Ukraine
conflict in February 2022 and the waves
of economic and other sanctions that
have followed in response. A number
of other measures were introduced by
the Company in parallel, including the
formation of a working group monitoring
the potential impact of the conflict and
associated sanctions on the business of
the Group and the introduction of new
wording relating to sanctions compliance
in the Group’s standard form contacts.
Further information on the Group
Sanctions Policy and the activities of the
working group is contained in page 47 of
the Risk Management Report. The Board
recognises that 2024 has seen significant
geopolitical instability, something that has
impacted far reaching communities and
families, the global economy, communities
and trade. The Group continue to support
colleagues and contractors during this
difficult time, as well as ensuring that
our business can continue to function
unaffected. At an operational level, the
Group continues to work with the JOCs
and its partners on contingency planning
and mitigation in the event that these
conflicts, and any associated sanctions,
have a direct impact on the Group’s
business.
The Board has an obligation and duty
to ensure that to the Company behaves
responsibly. The Board delegates
to the management team, including
the Executive Directors, the day-to-
day execution of the business in a
responsible way. The Executive Directors
communicate regularly and openly with
the Board and the other members of the
management team.
Section 172(1) - Continued
35
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
In connection with Board deliberation and
decisions, each Board member brings
individual judgement and considerable
experience to decision-making and
carefully assesses the course of action
most likely to promote the success of the
Company. In this context reference is also
made to the discussion in point a) above
of the Board’s consideration of the likely
long-term consequences of any decision.
* Read More
For more information on the
Company’s commitment to
maintaining high standards of
business conduct, see pages 45
to 58 for the Risk Management
Report and pages 60 and 61 of the
Corporate Responsibility report.
f) The need to act fairly as
between members of the
Company.
The Board recognises that the requirement
to act fairly as between the members
of the Company is implicit in its legal
and regulatory obligations, through both
the Companies Act 2006 and related
legislation and the regulatory framework
applicable to listed companies, including
the UK Listing Rules, the Market Abuse
Regulation and the Disclosure Guidance
and Transparency Rules. The Company
currently has no “controlling shareholder”
as the term is used in the UK Listing
Rules, and there is no current member of
the Board appointed or nominated by a
significant shareholder of the Company.
There is only one class of share in the
Company (ordinary shares), and each
ordinary share in issue, other than any
held in treasury, carries the same voting
and dividend rights, and the same rights to
return of capital on liquidation. All ordinary
shares are freely transferable subject to
the Company’s articles of association.
The Board also recognises that fairness
in treatment of members also extends
to the provision of information and
access. Other than in exceptional cases
where it may be considered necessary
or expedient to “wall cross” or “bring
inside” a significant shareholder in relation
to a specific transaction or proposed
transaction, subject to imposing dealing
restrictions and the express consent of the
shareholder concerned, the Board will not
share inside information selectively with its
shareholders. The Board does however
acknowledge that, notwithstanding
the absence of inside information,
larger shareholders will typically seek
greater access to the Board and senior
management to share their views on the
Company, its business and strategy. The
UK Corporate Governance Code (the
“Code”) establishes an expectation that
the directors of listed companies are
responsive to the views of shareholders,
and will encourage their participation
and engagement in reviewing how the
company is meeting its responsibilities
to shareholders. More specifically the
Code requires that the Chair, in addition
to formal general meetings, “seek regular
engagement with major shareholders
in order to understand their views on
governance and performance against
the strategy”. In pursuance of this Code
provision, the Chair, either alone or
accompanied by member(s) of senior
management, will typically engage with
major shareholders of the Company over
the course of the year, perhaps on several
occasions if justified by circumstances.
Committee chairs are expected to perform
a similar role in relation to significant
matters within their area of responsibility.
Subject to ensuring that the Company
meets its Code obligations, the Board
is committed, so far as is reasonably
practical, to providing all shareholders,
however small their holding, with a fair
opportunity in each year to access
the Chair, other Directors and senior
management. The regular and most
established forum for this access is the
AGM, at which all shareholders may
attend and speak, with a dedicated
section for questions and answers (Q&A)
and typically an opportunity following
the meeting to speak in a more informal
context. Other engagement opportunities
for shareholders include investor
roadshows, online Q&A sessions and
email and website correspondence and
enquiries.
Conclusion
The Company is committed to good governance and will
continue to review the balance and effectiveness of the
Board with a view to maintaining the right skills, experience
and diversity to align with the Group’s strategic goals.
We will act and make decisions responsibly in the interests
of the Company, our shareholders and other stakeholders,
delivering our plan and working closely to consider the best
opportunities for the Company. Detailed Board and Board
Committee papers are carefully prepared and constructively
debated to ensure all scenarios and options are fully
considered in a timely and consistent fashion in meetings.
In accordance with s. 172(1), the Board has also continued
to consult with, and take account of, the views of our
investors, employees, partners, governments, suppliers and
other stakeholders throughout the year.
Other stakeholder engagement initiatives during the year not
mentioned above included, but were not limited to:
• Continuation of the flexible working model for UK staff,
with the option but not the obligation to work primarily
from home – protecting people, accommodating diverse
working preference and reducing overhead while
maintaining productivity
• Open and active dialogue with its institutional, private
and retail shareholders through calls, email and in person
meetings including the AGM, via the Company’s website,
and through a social media presence on X (formerly
known as Twitter) and LinkedIn
• Following announcement of the full year financial results,
an online meeting with Q&A to allow the wider public,
including prospective shareholders, a free platform to put
questions directly to the Executive Directors
• Regular liaison with proxy advisory and corporate
governance services on responsible investment, ESG and
the terms of shareholder resolutions
• A section of the agenda for each regularly scheduled
meeting of the Board being dedicated to investor relations
and stakeholder considerations
• Reports from corporate brokers and a financial PR firm on
feedback from investors and research analysts
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PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
37
We have seen a strong financial
performance from our operations and
continued strengthening of our liquidity
position, where we have moved into
a positive net cash position of $16.5m
compared to net debt of $6.6m reported
at the end of December 2023.
We have achieved solid USD cash flow from our Vietnam and Egypt
portfolios and this has enabled us to accelerate the repayment of our
borrowings. Following the farm down of the Egypt concessions in 2022,
the Company continued to benefit from a full carry of all contractor costs
for G&A, opex and the capital programme through to April 2024. In
addition, Egypt operations became profitable during 2024, reversing the
previous historical tax losses since first production, and this has led to a
gross-up of revenues and tax charge in the income statement by $1.9m.
SUE RIVETT
Chief Financial Officer
Chief Financial Officer’s Statement
ROBUST FINANCIAL POSITION
37
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
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STRATEGIC
REPORT
Returns to shareholders have been
delivered through an additional $3.0m
committed to the Company’s share
buyback programme, completed in
January 2025, and the payment of an
interim and final dividend in respect of
the year ended 31 December 2023.
The interim dividend of 0.33 pence per
share was paid in January 2024, and the
final dividend of 0.77 pence per share,
following approval at the AGM in May
2024, was paid to shareholders in July
2024. In addition, an interim dividend of
0.363 pence per share in respect of the
year ended 31 December 2024 was paid
to shareholders in January 2025, and a
final dividend of 0.847 pence per share to
be paid in July 2025 will be proposed to
shareholders at this year’s AGM.
Operating performance
Revenues
Group revenues of $136.1m, prior to
realised hedging loss of $0.1m (2023:
$168.1m prior to realised hedging loss of
$0.2m) were negatively impacted by an
18% decrease in sales volumes, leading to
an inventory build of $6m in Vietnam, and
3% fall in realised commodity prices.
Revenues for Vietnam of $115.4m
(2023: $149.2m) decreased year on
year as a result of a reduction in sales
volumes due to timing of cargoes and
maintenance shutdown at the BSR-owned
Dung Quat refinery to which TGT crude is
sold, together with lower realised prices in
general. The average realised crude oil price
was $85.52/bbl (2023: $87.42/bbl), a 2%
decrease year on year, and the premium to
Brent was over $5/bbl on average (2023:
just under $7/bbl). Production was lower
at 4,361 boepd (2023: 5,127 boepd) and,
combined with 21% fall in sales volumes,
this has led to an inventory build of $6.0m
for the Vietnam producing fields.
The revenue for Egypt of $20.7m (2023:
$18.9m) increased year on year, inclusive of
$1.9m (2023: $nil) gross-up for corporate
income taxes to be paid by EGPC on
behalf of PEF. There was lower average
realised crude oil price, down 4% to
$74.83/bbl (2023: $78.18/bbl). Production
rose to 1,440 bopd (2023: 1,381 bopd)
and this included the NBS-SW1X well
that commenced production in December
2023. There are two discounts applied to
the Egypt crude production – a general
Western Desert discount and one related
specifically to El Fayum. Both are set
by EGPC (the in-country regulator) and
combined increased to just under $6/bbl
for the year (2023: over $4/bbl).
Hedging
During 2024, the Group entered into
zero cost collar hedges to protect the
Brent component of forecast oil sales
and to ensure future compliance with
its obligations under the RBL facility
agreement secured over the Group’s
producing assets in Vietnam and to
provide downside protection to cash flows
in the event of commodity price falling.
At 31 December 2024, the commodity
hedges run until June 2025 and are
settled monthly. Our hedging positions for
the year resulted in a $0.1m realised loss
(2023: loss of $0.2m).
For full year 2024, 31% of the Group’s
total oil entitlement production was
hedged, securing average floor and
ceiling prices for the hedged volumes at
$63.4/bbl and $89.2/bbl, respectively.
The RBL facility agreement requires
the Group to hedge at least 35% of
Vietnam RBL production volumes and
the current hedging programme meets
this requirement through to June 2025,
leaving 72% of 1H 2025 Group entitlement
production unhedged as at 31 December
2024. Following the maturity of the RBL
facility in July 2025, the Group intends
to continue hedging to mitigate the risk
of commodity prices falling. As a result,
the Group placed two further hedges in
January 2025 through which the Group
has hedged 20% of total forecast group
entitlement production for 2025.
The table below sets out a summary of
the Group’s hedges outstanding as at 31
December 2024, which are all zero cost
collars.
1Q25 2Q25
Production hedge per
quarter – 000/bbls
150 90
Min. Average value of
hedge - $/bbl
63.60 64.00
Max. Average value of
hedge - $/bbl
88.94 90.17
Operating costs
Group cash operating costs, defined
in the Non-IFRS measures section on
page 200, were $37.8m (2023: $37.3m).
Vietnam increased marginally by 1% from
$28.8m to $29.1m in 2024, the equivalent
of $18.23/bbl (2023: $15.39/bbl). The
increase is partly due to costs relating to
the FPSO as a result of lower 3rd party
production throughput from the TLJOC,
which increased the HLJOC’s share of the
costs (TLJOC had 23.4% cost share in
2024 compared to 23.2% in 2023).
Cash operating costs in Egypt were $8.7m
in 2024 (2023: $8.5m), which equates
to $16.51/bbl (2023: $16.86/bbl). The
2% decrease in cash operating costs
per barrel was mainly due to 4% higher
production following full year contribution
from NBS, combined with a reduction in
fixed costs due to devaluation of the EGP
against USD.
DD&A
Group DD&A associated with the
producing assets decreased to $47.1m
(2023: $55.4m) driven by 15% decrease
in production year on year for the Vietnam
assets and lower DD&A rates per barrel
following the impairment charge recorded
on TGT in December 2023. This was
partially offset by higher DD&A from Egypt
due to the increase in production and
impairment reversal recorded on El Fayum
as at 30 June 2024.
DD&A per bbl is currently $26.38/boe for
Vietnam (2023: $27.25/boe). DD&A per
bbl for Egypt is $9.49/boe (2023: $8.73/
boe).
Administrative expenses
Administrative expenses in 2024 of $9.1m
(2023: $9.0m) were comparable to prior
year. After adjusting for non-cash share
based payment charges of $0.9m (2023:
$0.9m) the underlying administrative
expenses were $8.2m (2023: $8.1m).
Other operating expenses
Other operating expenses in 2024 of
$0.8m (2023: $nil) included $0.6m in
relation to the posthumous vesting of
share scheme awards to the former
CEO of the Company, which was
formally approved by the Remuneration
Committee, settled in cash and paid to his
estate with the agreement of the executor.
A further $0.2m related to closure costs in
respect of the US office, where the former
CEO of the Company was based.
38
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
39
Operating profit/(loss)
Operating profit from continuing
operations for the year was $38.0m
(2023: $47.3m) excluding the net
impairment reversal of $26.3m (2023:
$65.4m net impairment charge), reflecting
the combined impact of a decrease
in production volumes and a lower
commodity price environment during the
year.
Other/restructuring expenses
and gain/(loss) on fair value
movement of financial asset
Other/restructuring expenses in 2024
of $0.4m (2023: $0.6m) related to
restructuring costs for the Egypt office in
Cairo.
As part of the 2022 farm-down of 55% of
the Egypt concessions, Pharos is entitled
to contingent consideration depending
on the average Brent price each year
from 2022 to the end of 2025 (with
floor and cap at $62/bbl and c.$90/bbl
respectively). The contingent consideration
is calculated annually and is capped at
a maximum total payment of $20.0m.
The change in contingent consideration
is booked under gain/(loss) on fair value
movement of financial asset.
The gain on fair value movement of
financial assets for the year of $0.3m
(2023: $0.3m loss) is due to upwards
revision of the contingent consideration,
as there was an immaterial movement in
the assignment fee payable to EGPC.
Finance costs
Finance costs decreased to $3.9m (2023:
$10.2m), due to voluntary repayments
on the Group’s RBL facility. Following
the June 2024 redetermination, there
was a change in estimated future cash
flows. Upon full repayment of the loan in
September 2024, a credit of $1.3m was
recognised in the income statement. There
was also interest expenses and similar
fees of $2.4m, unwinding of discount on
Vietnam decommissioning provisions of
$2.2m and foreign exchange losses of
$0.6m primarily driven by devaluation of
the EGP against USD.
In 2023, following the June and December
2023 redeterminations and the $35.0m
repayment of principal in relation to the
Group’s RBL, there was a change in
estimated future cash flows. As a result,
a charge of $2.7m was recognised in
profit and loss, offset by an amortisation
adjustment of $(1.4)m. There was also
interest expenses and similar fees of
$6.4m, unwinding of discount on Vietnam
decommissioning provisions of $2.0m and
foreign exchange losses of $0.5m primarily
driven by devaluation of the EGP against
USD.
Cash operating cost per barrel*
2024
$m
2023
$m
Cost of sales
1
87.3
111.2
Less
Depreciation, depletion and amortisation
(47.1)
(55.4)
Production based taxes
(9.2)
(10.5)
Change in inventories
6.0
(4.0)
Trade receivables expected credit loss
2.5
(2.2)
Other cost of sales
(1.7)
(1.8)
Cash operating costs
37.8
37.3
Production (BOEPD)
5,801
6,508
Cash operating cost per BOE ($)
17.80
15.70
1) Includes impairment reversal/(charge) of financial asset
DD&A per barrel*
2024
$m
2023
$m
Depreciation, depletion and amortisation
47.1
55.4
Production (BOEPD)
5,801
6,508
DD&A per BOE ($)
22.18
23.32
* Cash operating cost per barrel and DD&A per barrel are alternative performance
measures. See page 200 for definitions.
Cash operating cost per barrel by Segment
Vietnam
$m
Egypt
$m
Total
$m
Cost of sales 75.6 11.7
87.3
Less
Depreciation, depletion and amortisation (42.1) (5.0)
(47.1)
Production based taxes (9.1) (0.1)
(9.2)
Change in inventories 6.0 –
6.0
Trade receivable expected credit loss – 2.5
2.5
Other cost of sales (1.3) (0.4)
(1.7)
Cash operating costs 29.1 8.7
37.8
Production (BOEPD) 4,361 1,440
5,801
Cash operating cost per BOE ($) 18.23 16.51
17.80
DD&A per barrel by Segment
Vietnam
$m
Egypt
$m
Total
$m
Depreciation, depletion and amortisation 42.1 5.0
47.1
Production (BOEPD) 4,361 1,440
5,801
DD&A per BOE ($) 26.38 9.49
22.18
Chief Financial Officer’s Statement - Continued
39
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
ADDITIONAL
INFORMATION
GOVERNANCE
REPORT
FINANCIAL
STATEMENTS
STRATEGIC
REPORT
Movements in Property, Plant and Equipment
2024
$m
2023
$m
As at 1 January
279.8
381.8
Capital spend
17.8
12.1
Transfer from intangible assets
–
2.9
Revision in decommissioning assets
(4.9)
(2.5)
DD&A – Oil and gas properties
(47.1)
(55.4)
DD&A – Other assets
(0.2)
(0.2)
Impairment reversal/(charge) – PP&E
28.3
(58.9)
As at 31 December
273.7
279.8
Property, Plant and Equipment
273.5
279.3
Right of use asset
0.2
0.5
As at 31 December
273.7
279.8
Taxation
The overall net tax charge of $37.1m (2023: $19.8m) principally relates to tax charges in Vietnam of $26.8m and the deferred tax charge
on impairment reversals of $8.4m (2023: Vietnam tax charges of $36.0m less the deferred tax credit on net impairment charges of
$16.2m).
The Group’s effective tax rate approximates to the statutory tax rate in Vietnam of 50%, after adjusting for non-deductible expenditure
and tax losses not recognised.
The Egypt concessions are subject to corporate income tax at the standard rate of 40.55%, however responsibility for payment of
corporate income taxes falls upon EGPC on behalf of PEF and the other contractor parties. The Group records a tax charge, with a
corresponding increase in revenue, for the tax paid by EGPC on its behalf. As PEF became profitable in 2024, reversing the historic tax
loss position since first production, this led to a $1.9m tax charge being recorded (2023: $nil).
One of the Group’s companies entered into commodity zero cost collars designated as cash flow hedges. In accordance with IAS 12, a
deferred tax asset has not been recognised in relation to the hedging losses of $0.1m (2023: $0.2m) recorded in the year as it is unlikely
that the UK tax group will generate sufficient taxable profit in the future, against which the deductible temporary differences can be
utilised.
Profit/(loss) post-tax
The post-tax profit for the year of $23.6m (2023: $48.8m post-tax loss) included $19.9m of restructuring expenses, re-measurements
and impairments (2023: $53.8m) which are shown in the table below. Business performance post-tax profit for the year was $3.7m
(2023: $5.0m).
Restructuring expenses, re-measurements and impairments are comprised of the following:
Financial Statements Impact:
2024
$m
2023
$m
Profit/(loss) for the year
23.6
(48.8)
Impact of restructuring expense, re-measurements
and impairments
Revenue
(0.1)
(0.2)
Realised hedging losses
Cost of sales
2.5
(2.2)
Trade receivables expected credit loss
Other operating costs
(0.8)
-
Posthumous vesting of share scheme awards and US office closure
Pre-licence costs
(0.8)
-
Write-off of pre-licence costs
Impairment charge – Intangible assets
(2.0)
(6.5)
Impairment reversal/(charge) – Property, plant and
equipment
28.3
(58.9)
Other/restructuring expenses
(0.4)
(0.6)
Egypt redundancy cost following farm down and revision of carry with IPR
Gain/(loss) on fair value movement of financial asset
0.3
(0.3)
Revision of contingent consideration in relation to Egypt farm-out
Finance costs
1.3
(1.3)
Adjustment and amortisation of capitalised borrowing costs
Income tax (charge)/credit
(8.4)
16.2
Deferred tax on impairment (reversal)/charge
Total
19.9
(53.8)
Business performance post-tax profit *
3.7
5.0
* A non-GAAP measure of underlying net profit from operations, which takes out the impact of unusual, non-recurring transactions and
the impact of non-cash re-measurements and impairments.
40
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
41
Cash flow
Operating cash flow (before movements
in working capital) was $84.3m (2023:
$103.8m). After tax charges of $35.3m
(2023: $44.3m), other/restructuring
costs of $0.4m (2023: $nil), working
capital inflow of $5.0m (2023: $15.0m
outflow) and interest received of $0.4m
(2023: $0.4m), the cash generated from
operations was $54.0m (2023: $44.9m).
Cash generated from operations, after
tax charges, exceptional expenses and
working capital movements, is the basis of
our dividend framework.
Operating cash flow (before movements
in working capital) adjusted for the impact
of the hedging positions of $0.1m loss
(2023: $0.2m loss) gives an underlying
operational performance of $84.4m (2023:
$104.0m), which is consistent with the
production decrease year on year and
reduction in realised commodity prices.
The decrease in receivables was $11.3m
(2023: increase in receivables of $19.1m).
The movement in 2024 is primarily driven
by $6.4m decrease from Vietnam (2024:
$7.4m increase) due to three cargoes
being lifted in December 2023 compared
to two cargoes in December 2024.
Payments for the December 2023 cargoes
were received in January 2024 and
December 2024 cargoes were received in
January 2025.
There was a further $4.8m decrease in
receivables from Egypt (2023: increase in
receivables of $11.4m), due to a reduction
in EGPC receivables. As of 31 December
2024, the trade receivables with EGPC
stood at $29.5m (2023: $37.4m) and
the Company received total payments of
$25.5m during 2024, following increased
recovery during the year.
In Egypt, 2024 has brought about
a general improvement of the
macroeconomic situation. In late
February/early March 2024, the Egyptian
Government (i) announced a landmark
agreement with ADQ (an Abu Dhabi
sovereign wealth fund), whereby the
latter has acquired development rights
of the new coastal city of Ras El Hekma
for $35 billion ($24 billion paid in cash
and $11 billion as conversion of UAE
deposits at the Central Bank of Egypt),
and then (ii) on 6 March 2024, raised all
main interest rates by 600 basis points;
signed a significantly expanded new loan
with the International Monetary Fund
(IMF) ($8 billion, including the original $3
billion secured in December 2022), which
facilitated an additional $14 billion from
other institutional lenders including the
World Bank and the European Union; and
let the Egyptian pound (EGP) fully float,
with an immediate devaluation from c.31
to c.49 EGP per USD, which forthwith
eradicated the parallel FX market.
As a result of these policy decisions and
diplomatic achievements, Egypt’s foreign
currency reserves increased from $35.3
billion in February 2024 to $47.1 billion in
December 2024.
While the improved macroeconomic
situation and increased FX reserves
have not yet translated into a significant
improvement in EGPC’s arrears to oil
and gas producers, the general trend
is encouraging, as is the focus that the
new Minister of Petroleum & Mineral
Resources, Karim Badawi, is placing
on the matter in order to ensure that
companies resume investing in field
activities. PEF is entitled under contract
to be paid for hydrocarbon sales in US
dollars. Until March 2024, the Group had
opted to reject payment of any part of
PEF’s receivables balance in EGP and
continued to hold USD denominated
receivables due to the devaluation of
currency against USD. Following the
carry with IPR having been fully utilised
by April 2024, the Group opted to accept
the payment of part of the receivables
balance in EGP in order to cover
operational expenditure, cash calls and
other expenses in local currencies. These
factors have accelerated the recovery of
Egyptian trade receivables during 2024
and the Group remains optimistic that its
receivable position will continue to improve
during 2025.
Capital expenditure on continuing
operations for the year was marginally
lower at $26.1m (2023: $26.7m). On
Block 16-1 – TGT Field, a two-well infill
programme completed successfully
in October on time and under budget.
In Egypt, on El Fayum, the drilling of a
second exploration commitment well
completed in September, encountering
oil-bearing reservoirs in Abu Roach G
formation. In addition, a further El Fayum
development well was put on production
in December 2024.
Net cash outflows from financing
activities of $51.6m (2023: $50.1m
outflow) included outflows in relation to
the RBL of $20.0m in May 2024 (2023:
$22.4m in June 2023 and $12.6m in
December 2023) following the half year
redetermination process, plus a further
$10.0m principal repayment in September
2024. The amount drawn stood at $nil
at year end (2023: $30.0m) and the RBL
facility, which is secured only over the
Group’s interest in the Vietnam producing
assets, matures in July 2025.
There was a net outflow of $9.2m in
relation to the NBE revolving credit facility
(2023: $nil). This facility allows PEF to
draw down 60% of the value of each El
Fayum invoice in USD. The amount drawn
under the NBE facility as at 31 December
2024 was $nil (2023: $9.2m).
The Group is now debt free.
Financing activities also included $2.9m
outflow (2023: $2.8m) in relation to the
$3.0m extension of the share buyback
programme and there was a $5.9m
outflow (2023: $5.6m) following payment
of the interim and final dividends of $1.7m
and $4.2m respectively for the 2023
financial year. The final dividend for the
2023 financial year was approved by
shareholders at the AGM in May 2024.
Tax strategy and total tax
contribution
Tax is managed proactively and
responsibly with the goal of ensuring that
the Group is compliant in all countries in
which it holds interests. Any tax planning
undertaken is commercially driven and
within the spirit as well as the letter of the
law.
This approach forms an integral part of the
Group’s sustainable business model.
The Group’s Code of Business Conduct
and Ethics seeks to build open,
cooperative and constructive relationships
with tax authorities and governmental
bodies in all territories in which it operates.
The Group supports greater transparency
in tax reporting to build and maintain
stakeholder trust. Our Tax Strategy
statement can be found on our website
at www.pharos.energy/responsibility/
policy-statements/. We have a number
of overseas subsidiaries which were set
up some time ago and the Group is now
proactively planning to bring these into the
UK tax net to ensure greater transparency
and comparability. No additional taxes
are expected to be due as a result of this
exercise.
During 2024, the total payments to
governments for the Group amounted
to $160.3m (2023: $188.0m), of which
$138.7m or 87% (2023: $166.5m or 89%)
was related to the Vietnam producing
licence areas, of which $92.9m (2023:
$110.8m) was for indirect taxes based
on production entitlement. In Egypt,
payments to government totalled $19.1m
(2023: $19.3m), of which $18.5m (2023:
$18.4m) related to indirect taxes based on
production entitlement.
Chief Financial Officer’s Statement - Continued
41
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
ADDITIONAL
INFORMATION
GOVERNANCE
REPORT
FINANCIAL
STATEMENTS
STRATEGIC
REPORT
Balance sheet
Intangible assets increased during the year to $21.8m (2023: $18.2m). Additions for the year related to Blocks 125 & 126 in Vietnam
$2.8m (2023: $3.1m) and Egypt $2.8m (2023: $8.0m), which included $2.2m in respect of the East Saad 1X exploration well drilled
on El Fayum. During the prior year, the first exploration well on NBS (NBS-SW1X) was declared a commercial discovery in September
2023 and put on production in December 2023, and exploration costs of $2.9m relating to the development lease were transferred to
property, plant and equipment. There were total Exploration and evaluation expenditure impairment charges of $2.0m in the year (2023:
$6.5m), which included $1.4m write-off of an El Fayum exploration well in the Abu Roach G and Upper Bahariya formations drilled in the
prior year.
The movements in the Property, Plant and Equipment asset class are shown above.
Impairment reversals/(charges)
As a result of previously recognised impairment losses, combined with the licence extensions, and movements in 2P reserves, we
have tested each of our oil and gas producing properties for impairment. The results of these impairment tests are summarised below.
For each producing property, the recoverable amount has been determined using the value in use method. The recoverable amount is
calculated using a discounted cash flow valuation of the 2P production profile.
Summary of Impairments - Oil and Gas properties
TGT
$m
CNV
$m
El Fayum
$m
NBS
$m
Total
$m
2024
Pre-tax impairment credit
19.8 3.6 4.9 – 28.3
Deferred tax charge
(7.1) (1.3) – – (8.4)
Post-tax impairment credit 12.7 2.3 4.9 – 19.9
Reconciliation of carrying amount:
As at 1 January 2024
158.6 65.0 54.7 1.0 279.3
Additions
12.8 1.0 3.5 0.5 17.8
Changes in decommissioning asset
1
(4.9) – – – (4.9)
DD&A
(32.7) (9.4) (4.6) (0.4) (47.1)
Impairment reversal
19.8 3.6 4.9 – 28.3
As at 31 December 2024 153.6 60.2 58.5 1.1 273.4
TGT
$m
CNV
$m
El Fayum
$m
NBS
$m
Total
$m
2023
Pre-tax impairment (charge)/credit (46.3) 0.3 (11.0) (1.9) (58.9)
Deferred tax credit/(charge) 16.5 (0.3) – – 16.2
Post-tax impairment charge (29.8) – (11.0) (1.9) (42.7)
Reconciliation of carrying amount:
As at 1 January 2023 242.4 76.4 62.5 – 381.3
Additions 1.3 3.0 7.6 – 11.9
Transfer from intangible assets – – – 2.9 2.9
Changes in decommissioning asset
1
– (2.5) – – (2.5)
DD&A (38.8) (12.2) (4.4) – (55.4)
Impairment (charge)/reversal (46.3) 0.3 (11.0) (1.9) (58.9)
As at 31 December 2023 158.6 65.0 54.7 1.0 279.3
1) Changes in decommissioning asset for TGT are due to a change in discount rate and field abandonment plan, including two new infill wells completed in
October 2024. CNV reflects a change in discount rate and field abandonment plan (2023: change in discount rate only for TGT; change in field abandonment
plan and discount rate for CNV)
42
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
43
Chief Financial Officer’s Statement - Continued
Cash is set aside into abandonment
funds for both TGT and CNV. These
abandonment funds are controlled by
PetroVietnam and, as the Group retains
the legal rights to the funds pending
commencement of abandonment
operations, they are treated as other non-
current assets in the Financial Statements.
As at 31 December 2024, the Group’s
total contribution to the funds was $56.0m
(2023: $53.7m).
Oil inventory was $9.3m at 31 December
2024 (2023: $3.3m), of which $9.1m
related to Vietnam and $0.2m to Egypt.
Trade and other receivables decreased to
$47.9m (2023: $62.3m) of which $14.5m
(2023: $19.0m) relates to Vietnam and
$32.7m (2023: $42.7m) relates to Egypt.
Egypt trade receivables include $28.1m
from EGPC, after expected credit loss
provision of $1.4m recognised under IFRS
9, where collection has been delayed
by the devaluation of EGP and ongoing
restrictions on outgoing USD transfers
by the Central Bank of Egypt previously
highlighted (2023: trade receivable from
Egypt $33.4m after expected credit loss
provision of $4.0m). For Egypt in 2023,
the closing balance included $4.9m
of carry which reflected the remaining
disproportionate funding contribution from
IPR to compensate for net cash flows
between the economic date of the farm
down transaction, 1 July 2020, and the
completion date of 21 March 2022. The
carry decreased every month by the cash
calls received from IPR and was utilised in
full by April 2024.
Cash and cash equivalents at the end of
the year were $16.5m (2023: $32.6m)
and the decrease was mainly driven by
$39.2m net repayment of borrowings
(2023: $40.5m) and $10.6m reduction in
utilisation of the carry compared to prior
year, offset by cash flows from operating
activities of $54.0m (2023: $44.9m) due to
working capital inflows.
Trade and other payables were higher at
$14.3m (2023: $12.5m), of which $5.3m
(2023: $7.9m) relates to Egypt, primarily
net JV payables in relation to operations
and Stratton royalty obligation. $5.1m
(2023: $2.2m) relates to Vietnam payables
and $3.9m (2023: $2.4m) Head Office
payables. Tax payables decreased to
$3.2m (2023: $5.8m) which relates to
Vietnam taxes on oil and gas revenues.
Borrowings were $nil (2023: $40.5m)
following voluntary repayment of the RBL
loan facility (2023: $31.3m RBL loan) and
the NBE revolving credit facility was also
repaid in full (2023: $9.2m NBE credit
facility).
Long-term provisions comprise the
Group’s decommissioning obligations for
the Vietnam fields. The decommissioning
provision decreased from $53.8m
at 2023 year end to $51.1m at 31
December 2024, as $2.2m unwind of
the decommissioning provision and
$0.9m impact of two new infill wells
on TGT, were offset by an increase in
discount rate from 3.87% to 4.58% for
both TGT and CNV ($2.4m), finalisation
of revised abandonment plans for both
fields ($0.8m) and also extension of the
production licences for both TGT and
CNV to December 2031 and December
2032 respectively ($2.6m). The amounts
set aside into the abandonment funds
total $56.0m (2023: $53.7m). No
decommissioning obligation exists under
the El Fayum and NBS Concessions.
Own shares
The Pharos Employee Benefit Trust holds
ordinary shares of the Company for the
purposes of satisfying long-term incentive
awards for senior management. At the end
of 2024, the trust held 3,784,406 (2023:
2,126,857), representing 0.89% (2023:
0.49%) of the issued share capital.
In addition, as at 31 December 2024,
the Company held 9,122,268 (2023:
9,122,268) treasury shares, representing
2.15% (2023: 2.11%) of the issued share
capital. All shares purchased under the
on-market buyback programme originally
announced in July 2022 and extended in
January 2023 and December 2023 have
been cancelled rather than retained in
treasury.
Share buyback and
dividend framework
Following a period of relatively stable
commodity prices and a strengthening
of the Group’s liquidity position, the
Company committed to shareholder
returns in the form of share buybacks
and dividends. On 6 December 2023, the
Company announced the continuation of a
further $3.0m share buyback programme
in 2024 (the Second Programme
Extension), of which $2.9m had been
incurred by the end of December 2024.
The programme subsequently completed
in full during January 2025.
Pharos has a clear sustainable policy for
regular dividend payments and this has
been set at returning no less than 10% of
Operating Cash Flow (OCF) each year in
two tranches:
• An interim dividend of 33% of the
previous year’s total dividend, payable
in January of the following year; and
• A final dividend payable in July of the
following year.
On 6 December 2023, an interim
dividend of 0.33 pence per share, $1.7m
equivalent, was declared by the Board in
respect of the year ended 31 December
2023 and paid on 24 January 2024 to
shareholders on the register at the close
of business on 22 December 2023. A
final dividend of 0.77 pence per share in
respect of the year ended 31 December
2023, $4.2m equivalent, was approved by
the shareholders at the Company’s AGM
in May 2024 and subsequently paid on 19
July 2024 to shareholders on the register
at the close of business on 14 June 2024.
This took the 2023 full year dividend to
1.10 pence per share, an increase of 10%
on the prior year.
The Board resolved to pay an interim
dividend of 0.363 pence per share, $1.8m
equivalent, in respect of the year ended
31 December 2024 and this was paid on
22 January 2025 to shareholders on the
Company’s register as at 20 December
2024.
The Board have recommended a final
dividend in respect of the year ended 31
December 2024 of 0.847 pence per share
subject to approval of the shareholders at
the Company’s 2025 AGM. Subject to this
approval, the final dividend will be paid in
full on 18 July 2025 in Pounds Sterling to
ordinary shareholders on the register at
the close of business on 13 June 2025,
with an ex-dividend date of 12 June 2025.
This would take the 2024 full year dividend
to 1.210 pence per share, which is 10%
higher than prior year.
43
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
ADDITIONAL
INFORMATION
GOVERNANCE
REPORT
FINANCIAL
STATEMENTS
STRATEGIC
REPORT
Going concern
Pharos continuously monitors its business
activities, financial position, cash flows
and liquidity through detailed forecasts.
Scenarios and sensitivities are also
regularly presented to the Board, including
changes in commodity prices and in
production levels from the existing assets,
plus other factors that could affect the
Group’s future performance and position.
A base case forecast has been considered
that utilises oil prices of $74.7/bbl in
2025 and $72.9/bbl in 2026. The key
assumptions and related sensitivities
include a “Reasonable Worst Case”
(RWC) scenario, where the Board has
taken into account the risk of an oil price
crash broadly similar to what occurred in
2020. It assumes the Brent oil price down
by a third to $49.5/bbl in April 2025 and
gradually recovers to base price in next 12
months, concurrent with 5% reductions in
Vietnam and Egypt production compared
to our base case from April 2025. Both
the base case and RWC take into account
effect of hedging that has already been
put in place at 31 December 2024 and
subsequent hedges placed in 2025, now
covering 20% of total group entitlement
production for 2025. We have therefore
secured an average floor price and ceiling
price of c. $63.5/bbl and c. $87.6/bbl,
respectively, for the entire hedged volumes
in 2025. Under the RWC scenario, we
have identified appropriate mitigating
actions, which could look to defer
uncommitted expenditure as required.
In addition, we have conducted a reverse
stress test sensitivity analysis that
indicates the magnitude of oil price decline
required to breach our financial headroom,
assuming all other variables remain
unchanged.
Our business in Vietnam remains robust,
with a low breakeven oil price. In Q4 2025
to 1Q 2026, we have three infill wells and
one appraisal well on TGT, and one infill
well on CNV planned to be drilled. The
Group voluntarily repaid the RBL loan
facility in full on 17 September 2024 and is
currently debt-free.
In Egypt, we have also focused on
economically efficient programmes,
including development wells and
recompletions on both El-Fayum and NBS
in 2025. Pharos has an extended $10m
revolving credit facility until November
2025.
On the basis of the forecasts provided
above, the Group is expected to have
sufficient financial headroom for the period
up to 31 March 2026. Based on this
analysis, the Directors have a reasonable
expectation that the Group has adequate
resources to continue its operations in the
foreseeable future. Therefore, the Financial
Statements have been prepared using the
going concern basis of accounting.
Financial outlook
We are in a strong position
as we move into 2025 with a
number of value catalysts:
• An extensive drilling
campaign in Vietnam with
the approval of the licence
extensions on our producing
assets TGT and CNV
• Look forward to approval
of the consolidation of our
concessions in Egypt with
improved fiscal terms and
increased longevity
• A strong and stable balance
sheet with improved liquidity
position.
• Continued improvement in
the economic situation in
Egypt unlocking more of our
receivables position
Stable returns to shareholders
are expected in 2025, with the
dividend policy of no less than
10% of OCF.
SUE RIVETT
Chief Financial Officer
44
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Risk Management
RISK MANAGEMENT
Effective risk management is integral to Pharos achieving its
corporate strategy to deliver sustainable value for all stakeholders
through the responsible management of our current portfolio and
the careful selection of growth opportunities, while protecting our
personnel, assets, the communities in which we operate, and our
corporate reputation and values.
Risk Management
Framework at Pharos
Pharos carried out regular and robust
risk assessments to identify and manage
its Principal and Emerging risks during
2024 and continues to monitor closely
the Egyptian economic situation and
the global macroeconomic environment.
The Group’s risk management activities
during the year focused on the Egyptian
economy, commodity price uncertainty,
and volatility in production levels and
reserves.
Our management undertook a number
of deep-dive exercises to gauge its risk
appetite and recalibrate its risk tolerance
to ensure the appropriate mitigating
actions were implemented. The Board has
closely considered the potential impact
and probability of these risks and related
events on its corporate strategy, objectives
and stakeholders’ perspectives of the
Group.
Control environment
The Group’s control environment is based
primarily on its Code of Business Conduct
and Ethics (the Code) and associated
guidance for implementation. The Code
and associated guidance enshrines
a number of fundamental values to
the Group and its business, including
openness and integrity, safety and care
and respect for human rights. The control
environment is also supported by a series
of corporate policies, which form part
of the Group’s Business Management
System (BMS).
These documents are distributed to all
employees, followed up with training as
required and are available on Pharos’
internal intranet system. As part of the
compliance programme, all employees
have to undertake and successfully
complete a training assessment at least
once a year covering anti-bribery and
corruption laws and procedures and other
financial crimes, including tax evasion and
the new UK offence of failure to prevent
fraud.
Governance, authorities
and accountability
The Board of Directors, supported by
its various Committees, ensures that
the internal control functions operate
properly. The Audit and Risk Committee
oversees the implementation by the senior
management team of the internal control
and risk management procedures based
on the risks identified to support the
Group’s objectives.
45
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Reviews and Escalation
Risk identification
and mitigations
Maintain Risk registers
Risk Owners
Oversight
Accountability
Monitoring
Deep-dive
BOTTOM UP
TOP DOWN
Pharos Risk Management Framework
Risk Governance Framework
The Board
Senior Management Team
Audit and Risk
Committee
ESG
Committee
Asset/Project/Function
Set
Strategic
Objectives
Define
Risk
Appetite
Identify
Principal
Risks
Apply Risk
Assessment
Process
Deliver
Strategic
Objectives
Risk Management Framework
The Pharos Risk Management Framework
requires that all business units within the
Group conduct on-going risk management
and report to the Audit and Risk
Committee and to the Board. The Group’s
Risk Management Policy defines the
specifics of the risk management process,
describes the risk tools (for example, the
preparation and maintenance of a Group
risk matrix and risk register) and outlines
the reporting process and responsibilities
in order to meet the Group’s Risk
Governance Framework.
Risk management and reporting is a
necessary and important activity at
Pharos. It is an internal control process
implemented by the Board, management
and all other personnel, applied throughout
the organisation and all functions,
designed to identify potential events which
may affect the business, and manage
those risks within its risk appetite. In
addition, risk management is a process
that provides reasonable assurance
regarding the achievement of the
Group’s objectives. A comprehensive risk
management approach allows Pharos to:
• Assist the Group in achieving its
corporate objectives and develop
alternate strategies
• Better manage the business by
anticipating potential risks and devise
preventive / mitigating measures
• Meet regulatory requirements
• Promote sustainability and help build
more resilient systems
Principal risks
in 2024 (*) and
Principal and
Emerging risks
in 2025
(*) reassessed as part of
the 2024 interim results
1. HSE & Social
2. Political and regional instability, including conflicts and ensuing sanctions
3. Risk of rising inflation and stagflation
4. Climate Change
5. Commodity Price volatility
6. Partner alignment
7. Sub-optimal capital allocation
8. Cyber security
9. Reserves downgrades
10. Insufficient funds to meet commitments
Managing Our Risks
ADDITIONAL
INFORMATION
GOVERNANCE
REPORT
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STATEMENTS
STRATEGIC
REPORT
46
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
The Group’s Business Management
System evolves continually at Pharos but
at its core comprises a set of policies and
standards, including the Risk Management
Policy based on ISO 31000 Risk
Management Principles and Guidelines.
The BMS is supported by procedures
and processes for each function and
business unit to control day-to-day
business activities. The internal control
framework and risk management process
under the BMS seeks to ensure that risk
identification, assessment and mitigation
are all properly embedded throughout
the organisation. Whilst the Group’s
approach to risk management is designed
to provide a reasonable assurance that
material financial irregularities and control
weaknesses can be detected, the process
does not totally eliminate that a risk could
have a material adverse effect on our
operations, earnings, liquidity and financial
outlook.
Risk is often described as an event,
change of circumstances or a
consequence. The Group’s risk reporting
will focus on identifying risk as a “potential
event”. Each event will be assessed
on its potential impact to people, the
environment, the respective asset /
financial impact on operations, and the
Group’s reputation in terms of severity and
likelihood.
An unsettled world
challenging the future -
The war in Ukraine and
conflict in the Middle East
Repercussions of the Russian invasion of
Ukraine and ensuing sanctions continue to
reverberate globally, testing the resilience
of the international financial system and
rules-based order. While the conflict
remains unresolved, ongoing geopolitical
tensions, economic sanctions, and supply
chain disruptions contribute to market
volatility and prolonged uncertainty.
Meanwhile, the situation in the Middle East
has become increasingly complex. The
escalation following the surprise attacks
on 7 October 2023 by Islamist militants in
southern Israel and the subsequent Israeli
military response in Gaza and elsewhere
has increased uncertainty and volatility on
world commodity markets.
The prolonged nature of the conflict,
coupled with the involvement of regional
and international actors, has led to
sustained instability.
Since the start of the conflict in the Middle
East, multiple ceasefires have been
implemented, but unfortunately, none have
led to a lasting resolution. This highlights
the numerous attempts made to end the
conflict.
The conflict has negatively impacted
Egyptian tourism, and a protracted war or
expansion of hostilities could further curtail
Suez Canal revenues and disrupt energy
supplies, particularly through reduced
imports of Israeli gas.
International sanctions
The extensive sanctions and export
controls introduced by the US, EU and
UK on key Russian and Russia-connected
industries, entities and individuals following
the invasion of Ukraine on the 24 February
2022 remain an important consideration
for the Group and its approach to risk
management.
Throughout 2022, 2023 and 2024,
and continuing into 2025, the scope of
international sanctions and controls related
to the Russian invasion has continued
to expand. To date, neither the conflict
in Ukraine nor the sanctions themselves
have had a material impact on the
Group’s business. Despite this, the Group
continues to be prepared to act swiftly in
the event that an existing counterparty
were to become a sanctioned entity or
otherwise affected. The dedicated cross-
functional Pharos working group covering
sanctions and the impact of the conflict
in Ukraine established in March 2022
remains active. The working group reports
to the Audit and Risk Committee and also
contributes to regular risk management
reporting. The Group Sanctions Policy,
originally adopted in May 2022, is updated
and renewed annually, or as required in
response to circumstances. The Policy
is available on the Pharos website with
the Group’s other principal corporate
policies. At an operational level, the Group
continues to work with the JOCs on
contingency planning and mitigation.
The conflict in the Middle East since the
attacks in southern Israel on 7 October
2023 has materially increased regional
political and economic instability, in
addition to creating a widespread
humanitarian crisis in Palestinian territory.
Although some organisations have
advocated for a substantial international
response to Israel’s actions in the
region, no major economic or other
sanctions have been imposed on Israel
or Israeli state actors at the time of
writing. In November 2024, however,
the International Criminal Court (ICC)
issued a warrant for the arrest of Israeli
Prime Minister Benjamin Netanyahu and
former Defence Minister Yoav Gallant,
alleging responsibility for the war crimes
in the region. The 125 member states of
the ICC, including the United Kingdom,
are now required to arrest Netanyahu or
Gallant if either enters their territory. The
Group continues to regard the likelihood of
UK, US or EU economic sanctions against
Israel as low, but will continue to monitor
the situation and, in particular, diplomatic
efforts aimed at a longer-term ceasefire.
The Group is also monitoring carefully the
wider geopolitical impact and perception
of the conflict in Egypt, in connection with
its assets and operations.
Serious impacts on the
Egyptian economy
After a period of strong post-pandemic
recovery in late 2021 and early 2022,
Egypt’s economic growth was significantly
impacted by the repercussions of the
Russia-Ukraine war. The country has since
faced persistent economic and financial
difficulties, including:
• limited access to USD cash revenues
for repatriation to the UK
• restrictions on converting EGP to USD
• continued depreciation of the Egyptian
pound
In early 2024, Egypt took several
significant steps to stabilise its economy
and secure much needed foreign
investment: (i) Landmark Foreign
Investment – In mid-February, the Egyptian
government announced a major $35
billion investment agreement with ADQ
(an Abu Dhabi sovereign wealth fund)
for the development of the new coastal
city of Ras El Hekma ($24 billion paid
in cash and $11 billion as conversion
of UAE deposits at the Central Bank of
Egypt); (ii) International Financial Support
– (a) an expanded $8 billion IMF loan,
building on the original $3 billion secured
in December 2022; (b) $8 billion package
from European Union, consisting of loans,
grants and investments; (c) $6 billion
from the World Bank, over the next three
years; and (iii) EGP Devaluation and FX
Market Reform – In March 2024, Egypt
allowed the Egyptian pound (EGP) to float,
leading to an immediate devaluation from
approximately 31 to 49 EGP per USD,
before strengthening to around 46.5 EGP
per USD. This move effectively eliminated
the parallel foreign exchange market,
increasing transparency and improving
liquidity.
Overall, out of the total of $57 billion
pledged to Egypt, we understand that
$38 billion has been received.
These measures have provided a short-
term boost to confidence, but structural
challenges remain, particularly regarding
inflation, debt sustainability, and long-term
foreign currency liquidity.
Risk Management - Continued
47
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Pharos considers it preferable to continue
holding USD-denominated receivables
and accept part-payments of its
receivables balance in EGP to fund the
Group’s working interest share of the cost
of operations, following the expiry of the
carry with IPR early 2024.
In the event of continued delays in the
payment of its invoices, the Company has
access to a $10m revolving credit facility
with the National Bank of Egypt (UK)
Limited (NBE UK), which allows it to draw
down 60% of the value of each invoice in
USD. The NBE UK facility currently runs to
5 November 2025 but has been extended
by agreement on a number of occasions
since its original grant in 2021.
Climate Change risks
The 29
th
Conference of the Parties
(COP29) to the UN Framework Convention
on Climate Change, held in Baku,
Azerbaijan, concluded on 24 November
2024. The conference established a new
climate finance goal aimed at supporting
countries in protecting their populations
and economies from climate disasters
while also enabling them to benefit from
the opportunities presented by the clean
energy transition.
With climate finance at its core, COP29
brought together nearly 200 nations in
Baku and achieved a landmark agreement
to:
• Triple financial support for developing
countries, increasing the previous
target of $100 billion per year to $300
billion annually by 2035
• Mobilise efforts across all sectors to
scale up finance for developing nations
from both public and private sources,
reaching $1.3 trillion per year by 2035
The new financial commitment at COP29
builds on key milestones from previous
climate summits, including COP27’s
historic agreement on a Loss and Damage
Fund and COP28’s landmark pledge to
transition away from fossil fuels, triple
renewable energy capacity, and enhance
climate resilience.
In addition, COP29 reached a long-
awaited agreement on carbon markets,
a breakthrough that had eluded several
previous summits. These agreements
will enable countries to implement their
climate strategies more efficiently and
cost-effectively, accelerating progress
towards halving global emissions this
decade, in line with scientific imperatives.
Climate risk and resilience
Climate change risks, both arising from
energy transition and the physical effects
of changes in climate, are identified and
assessed as part of the Group’s integrated
risk management approach and mitigated
within the remit of a diverging set of key
stakeholders’ aspirations and calibrated
within the Group’s risk appetite and
corporate strategy. Climate change and
the transition to a low carbon economy
were also considered in preparing the
consolidated financial statements, more
details of which can be found on page 58
of our Viability Statement and Note 2 (a) of
the financial statements.
Pharos continue to aim to align
our disclosure with the TCFD
recommendations on Governance,
Strategy, Risk Management and Metrics
and Targets. A detailed analysis was
commissioned to a TCFD specialist
consultancy in December 2023 which
produced in-depth assessments of the
transition and physical climate risks
followed by a hi-grading risk exercise
based on the Group internal risk matrix.
These assessments were then discussed
with the Senior Management team and
submitted to the ESG committee of the
Board. Throughout the year, these risks,
along with other principal and emerging
risks presented on page 46 of the Risk
Management Report, are discussed and
reviewed by the Audit and Risk Committee
every quarter to ensure they are up to
date and remain dynamic to the changing
nature of the macroeconomic environment
and the business.
For a full list of our transitional and
physical climate risks, please see page 80
for our TCFD disclosures.
The physical risk assessment focused
on screening our operational interests in
Vietnam and Egypt using the consultant’s
physical risks datasets to quantify
changes in key climate variables (e.g.
drought, rainfall, wave height) over a 5
and 10 year timeframe under the three
emissions scenarios – Representative
Concentration Pathways (RCPs). The
transition analysis focused on the potential
impacts of different future scenarios on the
key transition risks facing the Group and
the oil and gas sector more broadly over
the next 5-10 years. By undertaking these
assessments, Pharos is in a better position
to formulate strategies which will increase
its resilience to climate related risks – and
better cope with the uncertainty, speed
and extent of the energy transition.
The transition risk analysis conducted
by the TCFD specialist consultant in
December 2023 was assessed under
the International Energy Agency (IEA),
Sustainable Development Scenario (SDS)
and Stated Policies Scenario (STEPS).
Additionally, Pharos has considered the
risk that climate change pressures could
reduce oil prices during the three-year
Viability Statement window under the
recommended IEA’s Net Zero Emissions
scenario. For more information, please
see pages 57 and 58 for the Viability
Statement and pages 80 to 95 for our
TCFD disclosures.
Commodity Price risk
Oil markets in 2024 were slightly less
volatile than in 2023. However, oil prices
were lower. Strong global oil production
growth and slower demand growth put
downward pressure on prices. In the
second half of the year, prices fluctuated in
a relatively narrow range between c.$91/
bbl and c.$70/bbl, affected by growing
concerns over geopolitical tensions
in the Middle East, instability in global
political environment, and a slowdown
in economic growth. However, voluntary
production cuts from OPEC+ helped to
support the prices.
Carbon Tracker, a London-based not-for-
profit think tank researching the impact
of climate change on financial markets,
warned oil producers they should not let
high prices today lure investments into
pricey new projects that will lose money
when the fever breaks and the energy
transition cripples fossil fuel demand in the
future.
Commodity price uncertainty persists and
is factored into all stages of the planning
process. Please refer to the Viability
Statement on pages 57 and 58 for more
details of how the Group has stress
tested its assets and projected cash flows
against its principal risks.
ADDITIONAL
INFORMATION
GOVERNANCE
REPORT
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PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Insurance costs
Energy insurance premiums for the 2024
renewal of the Group’s cover increased
broadly in line with inflation, as was the
case with the 2023 and 2022 renewals.
As with the 2023 renewal, the cost of
the Group’s insurance premiums in 2024
actually reduced in real terms in certain
areas. Concerns that the energy insurance
markets are increasingly difficult to access
for oil and gas exploration and production
businesses have subsided, at least in
the short term, with new entrants to the
market replacing those withdrawing from,
or restricting further business relating to,
fossil fuels, such as Munich Re, Zurich
and Aviva. Nonetheless, according to
Global Data's Future Outlook of Financial
Services 2024 report, 18 insurers have
adopted restrictions on underwriting
fossil fuels since 2020, and looking
ahead it is likely that climate change risks
and broader environment, social and
governance (ESG) objectives remain at the
forefront of insurers’ attitudes to oil and
gas assets.
The Group continues to believe that in the
longer term the trend of reducing access
to the insurance market for oil and gas
exploration and production businesses
will be maintained, with the expectation
of significant premium increases ahead of
inflation over time. While the Group may
be able to mitigate the impact of premium
increases by agreeing to more restrictive
terms of cover or reduced financial cover
limits, this strategy will inevitably result in
increased exposure to risk elsewhere.
Operational Cost risk
Rising operational costs may become
a big risk because they are directly
impacted by the other factors, and
can impact our ability to meet capital
commitments. Generally speaking, the
larger a project, the greater the legal and
regulatory burden and associated costs. In
addition, higher oil prices result in services
companies increasing prices, creating
further inflationary pressure. With the
unpredictability of oil and other commodity
prices and owing to global manufacturing
beyond any one company’s control, there
are genuine cost concerns.
Additionally, many oil and gas firms
struggle to find and keep skilled
employees during boom periods. Thus
payroll can rapidly grow to add another
expense to the total picture. The cost
of training employees in the oil and
gas sector has increased, reducing
the number of firms in the industry and
specialised industry professionals, as
older generations reach retirement age.
As a result, oil and gas has become a
very capital-intensive business with fewer
participants each year.
Out-sourcing is becoming more common
in the industry, and while this offers
flexibility to operators, it also results in
greater exposure to increases in daily rates
for essential services, such as drilling and
well services, when the oil price rises.
With heightened scrutiny on ESG
transparency, there will be continuous and
more onerous regulatory challenges which
oil and gas companies must handle to
sustain their growth and purpose.
Emerging Risks
Areas of emerging risks will be around
regulatory changes, digital transformation,
and risks of social disorder.
Similar to our principal risks, emerging
risks are identified using our bottom-up
approach with regular risk assessments
with risk owners, and by reporting to and
discussing the emerging trends at the
quarterly management risk meetings and
the Audit and Risk Committee meetings.
Pharos is engaged with the industry
through organisations such as BRINDEX
and assesses news alerts from such
sources as Oil & Gas UK, Financial Times,
Refinitiv (Eikon and Worldcheckone)
Bloomberg Green and the World
Economic Forum. Pharos also conducts
internal benchmarking analyses with
its industry peers to better understand
emerging trends in the sector.
Opportunities
For the oil and gas sector, the lack of
liquidity and increased scrutiny from
investors on fossil fuel producers to
decarbonise may create investment
opportunities for oil and gas independents
with a lower cost base than the oil majors
and which are more able to adapt to a
rapidly changing risk landscape. In the
short term, capital allocation and discipline
will be rigorously maintained while at the
same time exploring opportunities to
reduce our carbon footprint by adopting
different methods / processes to power
our operations, including the possibilities
of solar power, wind power and other
carbon reduction technologies in the
longer term. Our asset base is operated
by separate independent Joint Operating
Companies, leaving our role in both Egypt
and Vietnam one of joint, rather than
unilateral, control.
Board Responsibility
The Board fulfils its role in risk oversight
by developing policies and procedures
around risk that are consistent with the
organisation’s strategy and risk appetite,
taking steps to foster risk awareness
and encouraging a company culture of
risk adjusting awareness throughout the
Group. The Audit and Risk Committee
reports back to the Board regarding the
adequacy of risk management measures
so that the Board has confidence that
management can support them. The
Board regularly reviews the principal
and emerging risks facing the business,
including an annual review of the
effectiveness of the risk management
process in identifying, assessing and
mitigating any significant risks which may
affect the Group’s business objectives.
Risk management and the principal
financial risks and uncertainties facing the
Group are discussed in Note 36 to the
Financial Statements. The Group’s Risk
Management Framework, Policy and
associated procedures are further
discussed in the UK Corporate
Governance Code Report on pages 109
to 116 and in the Audit and Risk
Committee Report on pages 128 to 134,
where the significant issues related to the
2024 Financial Statements are also
reported. The Group’s Business
Management System, which includes the
Health, Safety, Environmental and Social
Responsibility (HSES) Management
System, incorporating the Group’s internal
control mechanisms of policies,
procedures and guidelines through which
it assesses, manages and mitigates its
HSES risks and impacts, is described
more fully in the Corporate Responsibility
Report on pages 59 to 79.
The Board has carried out a review
of the uncertainties surrounding the
Group’s principal and emerging risks
and recognised that a potential adverse
event can have a material impact on the
Group’s future earnings and cash flows.
The fluctuating prices of crude oil and gas
remain a significant variable to monitor
closely for the Group. Flash events
are happening more frequently from
international trade tensions, geopolitical
tensions, sudden outbreak of diseases,
speed of climate change transition and
physical risks which may require changes
to our corporate price assumptions and
productions outlook which, in turn may
trigger impairment of assets.
Risk Management - Continued
49
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Principal Risks and Mitigations
PRINCIPAL RISKS AND MITIGATIONS
A summary of the key risks affecting Pharos and how these
are mitigated to enable the Company to achieve its strategic
objectives is as follows:
Key to change in
likelihood during the year
Increase No Change Decrease New Risk
N
Principal risks
Change in
likelihood Causes Risk Mitigation
STRATEGIC
1. Growth in
CNV and TGT
• Loss of NPV and
impairments
• Not moving forward with the work
programme
• Production below expectation
• Continue building strong relationship with
partners and key government stakeholders
• Technical work and operational planning
2. Not testing
Prospect A
(Block 125)
• Reputational
• Inability to secure the drill ship
• Failure to secure farm-in-partner
• Insufficient funds to meet
commitments
• Seek extension of current PSC exploration
phase
• Work with another operator to secure a Drill
Slot in a multi-well Drilling Contract
• Secured Long Lead Items
• Cost carry by farm-in partner(s)
3. Growth in
Egypt
• Loss of overall value
driving impairments and
reserve write offs
• Reputational
• Slow drilling process
• Production below expectation
• Delay in signing the consolidation
project
• Continue building strong relationships with
partners and key government stakeholders
• Active participation and collaboration with
our partner
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PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Principal risks
Change in
likelihood Causes Risk Mitigation
STRATEGIC
4. Health, Safety,
Environmental
and Social Risk
• Reputational
• Operational outages
leading to lower
production
• Health and safety and
environmental risks of major
explosions, leaks or spills
• High-risk operating conditions
and HSES risks
• Climate change impacts on
the sector, such as extreme
weather, sea level rise and
water availability affecting
production
• Gas venting and flaring hazards
and risks - well blow outs, land/
water contamination
• Non-alignment of new
acquisitions HSES practices
with Pharos Corporate
standards
• Increased disparities and
societal risks in health,
technology or workforce
opportunities
• Improve structural and asset integrity
through strong operational and maintenance
processes which are critical to preserving a
safer environment
• Comply with all legislative / regulatory
frameworks and transitioning to a goal-based
approach focused on improving safety
• Promote a positive health and safety culture
where workers are given proper training and
incentives to work safely with a zero tolerance
for non-compliance
• Environmental and Social Impact
Assessments relating to, for example:
− climate impacts and the need to adapt to
changing climate conditions over the life of
the assets
− regulatory developments
• Enhance emergency preparedness and spill
prevention plan:
− Controlled venting
− Control and management of pressurised oil
and gas from boreholes
− Use of low impact extraction chemicals where
alternatives exist
− Water management - securing of a
sustainable water supply, recycling and
reusing wastewater
− Marine management plan - especially for
offshore drilling
− Carry out scenario exercises to improve
preparedness
− Active participation in dialogue with JOC to
influence them on best work practices
• Maintaining adequate energy insurance for
our assets and operations
Principal Risks and Mitigations - Continued
51
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Principal risks
Change in
likelihood Causes Risk Mitigation
STRATEGIC
5. Climate
Change –
transition and
physical risks
• Commodity price
volatility
• Restrictions of use of
carbon intensive assets
• Lack of portfolio
diversification
• Accelerating
electrification
• Carbon pricing
• Reduced water
availability
• Increased temperature
and heat stress
• Storm frequency
• Pressure on investors to divest
/ avoid fossil fuel companies /
projects
• Inability to find economically
viable CO
2
reduction solutions
• Lack of alignment between our
key stakeholders’ priorities and
climate change concerns
• Global transition to a lower
carbon intensity economy
• Increased climate regulation and
disclosure
• Increase in carbon taxes /
decarbonisation charges
• Transformational shifts leading
to reduced demand for fossil
fuels
• Climate activists pressing
prominent institutions and
investors to abandon fossil
investments - “greening” the
financial system
• Increased frequency of extreme
weather events
• Supply chain disruptions
causing delay / shutdowns to
operations
• Lack of partner alignment on
decarbonisation initiatives
• Reduced access to insurance
market
• Net Zero commitment on all assets by 2050,
detailed roadmap published in December
2023 and updated in 2024
• Emission Management Fund, under which
we set aside $0.25 for each barrel sold at an
oil price above $75/bbl to support emissions
management projects
• Transparent reporting and participation in
Carbon Disclosure Project (CDP)
• Continue alignment with TCFD
recommendations
• Further integrate climate risk management
within Pharos Risk Management Framework
• Stress test our Viability Statements under
a Net Zero Emissions price scenario and
carbon tax
• Embed climate change scenarios and
evaluate decisions on key business
operations / directions
• Continuous improvement of GHG emissions
management and get JOCs to support CO
2
emissions reduction initiatives
• Annually review, update and renew
Group Climate Change Policy to keep it
fit for purpose and in line with evolving
decarbonisation developments
• Comprehensive insurance cover for
Physical Damage to oil and gas assets and
infrastructure
• Close monitoring of regional extreme weather
developments so that evacuation or shut-
down are activated in good time
• Regular and timely control of inventories
to ensure essential spares are sourced in
advance
• Prepare business cases or studies to support
decarbonisation initiatives
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PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Principal risks
Change in
likelihood Causes Risk Mitigation
FINANCIAL
6. Commodity
Price risk
• Uncertainty on planning
• Inability to fund work
programme / dividend
• Geo-political factors and
international conflicts
• Pressure on investors to divest
/ avoid fossil fuel companies /
projects
• Lower long-term prices
tighten the margin of error for
investments
• Market speculation and trading
in oil futures
• Repercussions of the Russian
invasion of Ukraine
• Repercussions of the conflict
in Gaza
• Oil commodity hedging
− Comply with RBL requirements
− Maintain robust processes around treasury,
governance, forecasting, credit and risk
• Close monitoring of business activities,
financial position cash flows
• Control over procurement costs / effective
management of supply chains derived from
third parties - suppliers, joint venture partners,
investors, and contractors
• Stress test scenarios and sensitivities via
principal compound risk analysis to ensure
a level of robustness to downside price
scenarios
• Capital discipline with focus on controlling
and managing costs
• Discretionary spend actively managed
• Maintain and cultivate good relationships with
lenders
7. Rising
operational
costs
• Reduced profits
• Strain on cash flows
• Shortages in skilled
labour
• Global inflation
• Turmoil in the energy markets
causing sharp price hikes
• Regular updates to yearly budgets and
forecasts
• Focus in discretionary spend
• Secure long-term contracts where
appropriate without lock-ins
• Explore applying new technological advances,
focus on prevention and early detection
8. Egyptian
economy
• Inability to repatriate
cash earned from Egypt
• Further devaluation of the
Egyptian pound
• The impact of the war in
Ukraine on Egypt’s economy is
especially significant
• The impact of the conflict in
Gaza
• Revolving credit facility with NBE UK, which
allows us to draw down 60% of the value of
each oil sales invoice in USD ($10m facility
until 5 November 2025, with further renewals
by agreement)
• Accepting payments in EGP, to be reinvested
in field operations
• Regular dialogue with EGPC
Principal Risks and Mitigations - Continued
53
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Principal risks
Change in
likelihood Causes Risk Mitigation
OPERATIONAL
9. Reserves Risk
• Future cash flows
and value depend on
producing our reserves
• Earlier impairment triggers due to
low commodity price
• Capital constraints jeopardise
planned exploration / development
initiatives
• Inherent uncertainties in the
evaluation techniques to estimate
the 2P reserves
• Lower than expected well
performances and drilling results
• Slower drilling programmes
• On-going evaluation of projects in existing
and potential new areas of interest and
pursue development opportunities
• Regular reviews of reserves estimates by
independent consultants
• Ensure continuing adherence to industry
best practice regarding technical
estimates and judgements
10. Partner
Alignment Risk
• Adverse impact on
Production and Cash
flow
• Technical disagreement caused by
quality of JV staff, work ethic, low
productivity, competency issues
• Geological Modelling differences
resulting in sub-optimal well
locations
• JOC partners divergent views on
investments, and difference in
value-drivers.
• Active participation in JOC management
• Direct secondment
• Build Senior Management level
relationship with local Partners
• Continue good relationship with other
foreign Partners
• Close collaboration with JOC partners
• Support JV training initiatives
11. Cyber risk
• Major cyber security
breach may result in
loss of key confidential
data
• Unavailability of key
systems
• Sophistication and frequency of
cyber-attacks increasing
• Heavy reliance on and disruption to
critical business systems
• Infiltration of spam emails
corrupting our systems
• Critical reliance on remote working
in light of demand for longer-
term hybrid and flexible working
practices
• Update service level agreement with IT
providers, including regular meetings and
other interfaces to raise any issues and
review performance
• Offsite Installation of back-up system and
Business Recovery / Continuity Plan in
place
• Enhance our Cloud back-up data and
solutions
• Prevention and detection of cyber threats
via a programme of effective continuous
monitoring
• Plan upgrade of IT systems
12. Human
Resource Risk
• Good skilled people
are essential to ensure
success
• Failure to recruit and retain high
calibre personnel to deliver on and
implement growth strategy
• Challenges in the recruitment and
integration of additional technical
expertise for any new acquisition
• Negative view of the oil and
gas industry amongst younger
professionals, particularly in light of
climate change impacts, resulting
in fewer entrants to the industry to
replace retiring professionals
• High costs of recruiting
experienced workforce
• Weakened corporate culture and
collegiate responsibility due to
remote working
• Board re-composition and
retirements
• Remuneration Committee retains
independent advisors to test the
competitiveness of compensation
packages for key employees
• On-going succession planning
• Maintain a competitive remuneration mix
re bonus, long-term incentive and share
option plans
• Build and use people networks in each
country and advertise vacancies in these
networks
• Maintain a programme for staff well-being
• Facilitate and encourage workforce
communication via Group-wide offsite
events and quarterly video conferences,
employee surveys and shared feedback
• Ensure staff have regular access to
Director with responsibility for workforce
engagement and are free to share
concerns, feedback and views
ADDITIONAL
INFORMATION
GOVERNANCE
REPORT
FINANCIAL
STATEMENTS
STRATEGIC
REPORT
54
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Principal risks
Change in
likelihood Causes Risk Mitigation
REPUTATION
13. Sub-optimal
capital
allocation
• Adverse reaction
from current / future
stakeholders
• Scarcity of capital for
investment projects
• Pressure to invest and
produce growth and
returns in the short term
to maintain dividend
payments
• Shareholder focus
on increasing returns
in conflict with wider
strategic considerations
• Inability to “switch-off”
drilling / investment
commitments if economic
assumptions change
rapidly
• Carry out robust economic analyses based on
opportunities high-grading to support capital
allocation
• Key KPIs such as NPV, IRR and payback used to
compare across many project scenarios
• Rig count investment scenarios are stress-tested
against a range of Brent oil price
• Seeking to maximise influence to promote best
practice in non-operated ventures
• Seek the views of stakeholders through direct and
indirect engagement
• Maintain a balanced investment portfolio which
allows a degree of resilience in adjusting short-term
investment commitments
• Prepare business case or pay-back study to
support decarbonisation initiatives
14. Political and
Regional risk
• Energy sector exposed
to a wide range of
political developments
which may impact
adversely on operating
costs, compliance and
taxation
• Operations in challenging
regulatory and political
environments
• Changes to fiscal
regimes without robust
stabilisation protections
• Protracted approval
processes causing delays
• Government reform,
political instability and/or
civil unrest
• Impact of financial
sanctions, export
controls and other
trading restrictions on
industry counterparties
and sectors (in particular,
sanctions on entities or
individuals arising from
the continuing conflict
in Ukraine and other
international conflicts)
• Canvas support in risk management by using both
international and in-country professional advisors
• Engage directly with the relevant authorities on a
regular basis
• Assess country risk profiles, trend analyses and on-
the-ground reports by journalists / academics
• Thoroughly evaluate the risks of operating in specific
areas and assess commercial acceptability
• Maintain political risk insurance at appropriate levels
of cover
• Active working group monitoring sanctions arising
from conflict in Ukraine and assessing/managing
associated risk to Group
• Annual review and renewal of a standalone Group
Sanctions Policy, to supplement existing Group
Code of Business Conduct and Ethics
• Develop and maintain mitigation planning in relation
to certain counterparties with potential to come
within the future scope of sanctions
15. Business
Conduct and
Bribery
• Reputational damage
and exposure to
criminal charges
• Presence in countries
with below average score
on the Transparency
International Corruption
Index
• Lack of transparent
procurement and
investment policies
• Non-compliance with
Criminal Crime Offences
(CCO) and/or UK Bribery
Act
• Corruption and human
rights issues
• Ensure adequate due diligence prior to on-boarding
with a risk-based approach, including independent
“Red flags” checks
• Annual training, testing and compliance certifications
by all associated persons
• Increase awareness of, and ensure regular training
in, the Group’s Code of Business Conduct and
Ethics and associated guidance and other corporate
policies for all employees and associated persons
• Mandatory Gifts and Hospitality declaration and
register
• Group Whistleblowing Policy and confidential
anonymous ethics 24 hour hotline with numbers
displayed in all offices
• CCO risk assessment and on-going implementation
of adequate procedures to prevent facilitation of tax
evasion across all operations
• Comply with the principles of the Extractive
Industries Transparency Initiative
Principal Risks and Mitigations - Continued
55
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Viability Statement
VIABILITY STATEMENT
In accordance with the UK Corporate
Governance code, the Board has
assessed the prospects of the company
over a period longer than the twelve
months required to support the Going
Concern Statement on page 172 of the
Financial Statements. The Audit and Risk
Committee reapproved in December
2024 that the appropriate length, which
the Viability Statement (VS) should cover,
is three years. A significant factor in the
Group’s forward cash position is the oil
price assumption, and as most of the
source data relates to a three-year period
this is considered as the appropriate
lookout period for the VS.
In undertaking this assessment, the Board
has carried out a robust review of the
principal and emerging risks facing the
Group, including those that would threaten
its business model, future performance,
solvency or liquidity, with particular
attention given to the principal and
emerging risks.
Our strategy and associated principal and
emerging risks underpin both the Group’s
three-year base forecast and scenario
testing, as well as our longer term
prospects and position.
Group’s current position
• Production assets in Vietnam and
Egypt with low operating cost base
• Flexibility in the capital expenditure
programme
• Operating cash flows in line with oil
prices and supported by hedging
programme
• Focus on capital discipline
• Excellent HSES standards in Vietnam
• No outstanding RBL or NBE UK loan
balance
Strategy and business model
• Business model drawing on
geoscience, engineering, financial and
commercial talent
• Responsible and flexible stewards of
capital
• Focus on stakeholders
The principal and emerging risks, which
are considered in assessing the Group’s
prospects, are the same as those used to
stress test our viability over the three-year
period.
How we assess our
viability
Our forecast is built on an asset-by-asset
basis using a bottom-up model and is
stress tested by compounding downward
scenarios.
The three-year period selected for testing
covers the Group’s medium term capital
plans and projections, in particular oil
price projections, a fundamental driver of
the groups operating cash flows, where
market consensus data becomes less
reliable for periods further ahead than
three years.
Although individual assets are often
modelled for periods longer than three
years, to reflect the return on investments
being considered over the life of field, the
three-year period has been selected by
the Board as most appropriate for the
group as a whole. It provides management
and the Board with sufficient and realistic
visibility of the future industry environment
whilst capturing the Group’s future
expenditure commitments on its licences,
its near term drilling programmes and Field
Development Plans.
In assessing the Group’s viability over
the next three years, it is recognised that
all future assessments are subject to a
level of uncertainty which increases with
time and that future outcomes cannot be
guaranteed.
Key Assumptions
During the three-year period, the
working assumption is that Group will be
dependent on its cash generating assets
TGT and CNV in Vietnam, and El Fayum
and North Beni Suef in Egypt.
The underlying oil and gas reserves in both
Vietnam and Egypt have been certified
by Reserves Auditors, McDaniel (for both
Vietnam and Egypt). In our model, we
have used management’s best estimate
of future commodity prices. This results
in a base oil price of $74.2/bbl in 2025,
$72.9/bbl in 2026 and $74/bbl in 2027,
prior to scenario testing. The base model
also includes the Group’s latest life of
field production models and expenditure
forecasts.
The company has a Reserves Based
Lending (RBL) facility over its Vietnam
producing assets which matures in July
2025 and was fully repaid in September
2024. As of December 2024, there is no
outstanding balance against this loan.
Pharos El Fayum has an uncommitted
revolving credit facility through to 5
November 2025 for up to $10m with the
National Bank of Egypt (UK) Limited. This
facility was implemented to help mitigate
the risk of late payment from debtors.
Under this arrangement, Pharos is able to
access cash from the facility for up to 60%
of the value of each El Fayum oil sales
invoice.
57
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Stress testing linked to Principal Risks
As well as the base model, the Group also evaluates other scenarios and has stress-tested the forecast for a combination of severe but
plausible events (linked to the majority of the Group’s principal risks) that could potentially impact its ability to fund planned activities
and/or comply with the covenants and undertakings within its RBL facility agreement. These events include:
• A material reduction in the oil price putting pressure on the Group’s capital available for investment
• A material reduction in production
• An unfavourable event resulting in lost production and oil price shock
Base Forecast flexed for combinations of
the following scenarios
Link to Principal Risks
and Uncertainties Level of Severity Tested Conclusion
Sustained and sharp drop in oil price
2,3,4,5
Sharp drop in the oil price, down
by a third to $49.5/bbl in April
2025, then rising gradually over a
year till in line with base price
Company remains viable
with mitigating actions
Reduction in production
2,3,6,7,9,10
5% drop in production from April
2025 throughout the testing
period, and dry hole assumption
with TGT appraisal well 18X
Company remains viable
with mitigating actions
Unfavourable event leading to lost
production and price shock
2,3,4,5,6,7,9,10 Combination of tests above
Company remains viable
with mitigating actions
Climate Change
We have also factored in the risk of
potential price reductions due to climate
change pressures during the three-
year VS window. We have therefore
considered the price curve as an output
of a Net Zero Emissions by 2050 (NZE)
based on IEA’s World Outlook 2024
report, which is consistent with achieving
1.5 °C stabilisation in global average
temperatures and a net zero CO
2
emission
by 2050. The nominal Brent prices used
in this scenario are comparable to our
base case oil price assumptions over the
three-year VS period. But in connection
with the licence extensions for Blocks
9-2 and 16-1 in Vietnam, the Group has
committed environmental fees in both
TGT and CNV assets from December
2026 and December 2027 onwards. The
environmental fees of $0.24/bbl on the
company’s oil production, and $0.071/
cf the gas production in Vietnam have
been included in our Base Case and RWC
testing. Nevertheless, we have concluded
that the stress testing outlined above
adequately accounts for the potential
downside risks to our revenue base over
the three-year VS period, due to climate
change pressures.
To date, there is no official carbon tax
established in either of jurisdictions where
our operations are located i.e. Vietnam
and Egypt. Furthermore, the imposition
of carbon taxes would likely to uplift the
Brent prices, as some of the burden will
be passed to consumers. As a sensitivity
test, we have run the effect of carbon
tax from 2027 on Base Case without
assuming any increment in Brent price and
the Group remains viable over the three-
year VS period. Please see our TCFD
report on pages 80 to 95.
The existing revolving facility with NBE
UK provides us certain level of protection
against the risk of capital availability being
constrained by concerns related to climate
change.
In all combinations of scenarios that
were tested, the Group had implemented
mitigating actions including hedging and
deferring non-committed expenditure
beyond the three-year window of VS.
Directors have reviewed the realistic
mitigating actions that could be taken
to reduce the impact of the underlying
risk. The forecast cash flows are regularly
monitored and reviewed to provide
early warnings of any issues and to give
sufficient time to undertake any necessary
mitigating actions.
The potential impact of the other principal
risks on the group’s viability during the
assessment period were also considered.
The Board has reviewed the risk mitigation
strategies for all listed risks and believes
that the existing mitigation strategies in
place are sufficient to reduce the impact of
each risk, making it unlikely to jeopardise
the Group’s viability during the three-year
period.
Based on all of these assessments,
including the availability of actions which
could be taken in the event of plausible
negative scenarios occurring, the Directors
confirm that they hold a reasonable
expectation that the Group will continue
to operate and meet its liabilities as they
fall due for the three year period to 31
December 2027.
ADDITIONAL
INFORMATION
GOVERNANCE
REPORT
FINANCIAL
STATEMENTS
STRATEGIC
REPORT
58
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Corporate Responsibility Report
CORPORATE RESPONSIBILITY
REPORT
2024 PERFORMANCE
BUSINESS
ETHICS
PEOPLE
100%
EL FAYUM OIL
100%
TGT & CNV OIL
Oil sold domestically in Egypt and Vietnam in 2024,
contributing to host country development goals and access to energy
(2023: 100%)
(2023: $188.0m)
(2023: 0 LTI) (2023: c.51%)
(2023: 100%)
(2023: 100%)
$160.3m
Taxes and royalties to host governments,
includes host governments share of
production entitlements in 2024
100%
Percentage of staff receiving
anti-bribery and corruption training
by 31 December 2024
0 LTIs
Zero Lost Time Injury
events across Group operations in 2024
c.51%
Female employees across
the Group in 2024
ENVIRONMENT
(2023: 273) (2023: 2)
302
Tonnes CO
2
e per 1,000 tonnes
of hydrocarbon produced in 2024
0
Oil/chemical spills
(quantities greater than 100 litres) in 2024
SOCIETY
(2023: $500,000) (2023: $247,373)
$500,000
Combined total training levies
in Vietnam and Egypt for investment in
industry capacity building in 2024
$ 259,889
Community investments supporting
26 social projects in Egypt, Vietnam
and UK in 2024
59
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Corporate Responsibility Report
GOVERNING CORPORATE
RESPONSIBILITY
Our aim is to add value in everything we do through
responsible, efficient and safe energy production.
We take our role in society very seriously. We are committed to open, transparent communication, and taking a rigorous, conscientious
approach to the environment, our role in society, our business practices and ethics, and how we relate to people. That includes all our
stakeholders: the people who work with us directly and indirectly, those who live where we operate, and the host governments and
authorities that regulate our activities.
The Group’s Corporate
Responsibility standards,
policies and HSES
Management System
1. Code of Business Conduct
and Ethics
2. Key Corporate Responsibility
/HSES policies supporting
the Code
Climate Change Policy
Code of Business Conduct and Ethics
Human Rights Policy
Security Policy
HSE Policy
Social Responsibility Policy
Biodiversity Conservation Policy
Water Resource Management Policy
Prevention of Slavery and Human
Trafficking Policy
Sanctions Policy
Tax Strategy Statement
Non-Audit Services
3. Standards, procedures and
guidance support the policies
See www.pharos.energy/
responsibility/policy-statements/ for
the full text of the current versions of
each of these policies.
Corporate Responsibility governance & management
A long-term goal of the Group is to be a
positive presence in regions in which it
operates by providing responsible and
sustainable development. The objective
of sustainability will apply equally to the
Company’s traditional reputation for
financial discipline and return of value
to shareholders as it will to the Group’s
objective of striving towards the goal
of establishing and maintaining the
highest operating standards across
Environmental, Social and Governance
(“ESG”) matters.
The Board is also fully committed to
effective compliance with the 2018
UK Corporate Governance Code (the
2018 Code), applicable to the current
financial year of the Company ending 31
December 2024. The Board’s objective
is to be recognised for its high standard
for governance, with a considerate and
pragmatic approach to its business. This
will be the final annual report in which the
Company reports against compliance
with the 2018 Code. As noted in last
year’s report, the Company has no
material concerns over compliance with
the provisions of the 2024 UK Corporate
Governance Code, under which the
majority of provisions will apply from
the Company’s next financial year,
commencing 1 January 2025.
Corporate Responsibility
objectives are defined
annually and reviewed
quarterly in relation to: our
business, our ethics, our
people, environment and
society.
In terms of corporate responsibility and
community engagement, the Board is
committed to treating all stakeholders in
every area of operations with honesty,
fairness, openness, engagement and
respect, and to conducting all business
ethically and safely. The Group will
only work with parties that share these
values.
Our Code of Business Conduct and
Ethics (“our Code”) sets out our
expectations for how we do business,
clarifying our commitments to ethical,
social and environmental performance.
Our Group Corporate Responsibility
(“CR”) and Health, Safety, Environmental
and Social Responsibility (“HSES”)
policies described above support our
Code.
Our corporate standards, procedures
and guidelines support the policies.
Project-specific operational plans,
programmes and procedures set out
the specific approach to CR and HSES
issues and risks within each project.
The Pharos Health, Safety, Environmental
and Social Responsibility Management
System (“HSES MS”) describes
the Group’s internal processes to
manage risks and is consistent with
the requirements of internationally
recognised standards (ISO 14001, ISO
45001) and aligned with the World
Bank’s International Finance Corporation
(“IFC”) Environmental and Social
Performance Standards.
ADDITIONAL
INFORMATION
GOVERNANCE
REPORT
FINANCIAL
STATEMENTS
STRATEGIC
REPORT
60
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Corporate Responsibility Report | Governing Corporate Responsibility - Continued
Climate-related
governance &
management
Pharos has a multi-layered governance
structure that aligns our operating model
with our net zero ambition.
The Board takes overall responsibility
for our Net Zero ambition, corporate
responsibility strategy and climate-
related risk and opportunities. Given the
wide-ranging remit of climate-related
matters, Pharos integrated management
responsibilities into various business and
functional areas within the Group, and
climate-related activities are managed
and held accountable by a combination of
different committees:
• The ESG Committee oversees the
Group’s management and compliance
with climate-related reporting and
disclosure requirements, as well as
assists the Board in defining and
implementing the Group’s corporate
responsibility strategy.
• The Audit and Risk Committee
(ARC) oversees all principal and
emerging risks in our risk management
process, in which climate risk
is considered a principal risk. It
also oversees the adequacy and
effectiveness of our policies, standards
and management system for HSES.
• The Remuneration Committee
oversees the level of management
incentives attached to improvements
in climate-related performance in order
to further encourage action on this
agenda.
For the current version of each
Committee’s terms of reference, please
visit www.pharos.energy/about-us/
governance/committees/.
Progress against our Net Zero ambition,
ESG targets and updates on GHG
performance are reviewed at quarterly
Board and Committee meetings.
Our senior leadership team manage our
climate progress and are responsible
for the delivery of our Net Zero strategy.
The Board and Executives are supported
by the Net Zero Working Group, which
was set up in May 2022 and include
representatives from various business
functions across Pharos, and drives
progress towards Pharos’ Net Zero
targets.
Stakeholder engagement &
materiality screening
We engage with our stakeholders on
a regular basis and receive feedback
through a range of formal and informal
processes, which we set out in more
detail in the UK Corporate Governance
Code report on pages 109 to 116 of our
Governance Report. We listen to their
concerns and feedback when determining
our corporate responsibility framework
and use the information they provide us to
identify the issues that are most important
to the successful delivery of our corporate
objectives and most important to our
stakeholders.
The Board, the ARC and the ESG
Committee also regularly discuss at each
quarterly Board and Committee meetings
the new and existing themes and issues
that matter to our stakeholders. Our
management team then uses this insight
and other applicable disclosure laws and
regulations to choose what we measure
and publicly report in our Annual Report.
In 2024 Pharos has continued to
refer to the Sustainability Accounting
Standards Board (SASB) materiality
map for Oil & Gas - Exploration and
Production, to ensure that the material
issues of importance to its activities are
appropriately managed and reported.
Our approach on environmental and
social reporting in 2024 has taken into
account the Voluntary Sustainability
Reporting guidance issued by IPIECA, the
global not-for-profit oil and gas industry
association for environmental and social
issues, in partnership with the American
Petroleum Institute and the International
Association of Oil and Gas Producers.
We report on joint operating companies in
Egypt and Vietnam.
The Group consider ’materiality’ to be the
threshold at which ESG issues become
sufficiently important to our investors and
other stakeholders. We are also informed
by the Financial Conduct Authority and
London Stock Exchange listing and
disclosure rules in areas where we have
operations, and are held accountable by
our auditors and Company Secretary.
The Board will further reinforce the
integration of climate considerations
into its governance frameworks by
implementing the principles stated in our
Climate Change Policy and continuing
the Company’s alignment with TCFD
recommended disclosures.
We know that what is
important to our stakeholders
evolves over time and we
plan to continue to assess
our approach to ensure we
remain relevant in what we
measure and publicly report.
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PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Stakeholder groups and corporate responsibility topics
Stakeholder group
How we engage with them and
understand any concerns
Key areas of concern
for stakeholder groups
Local
communities
Environmental and social impact
assessments and grievance
mechanisms at project level
• Community investment
• Effluents and waste management
• Biodiversity
• Transparency
National and
host governments
Regular dialogue
• Payments to governments
• Local capability building
• Environmental management and
net zero commitment
• Health and safety
Employees and
contractors
• Promote adherence to local
government’s health and
safety guidelines
• Regular dialogue and
grievance mechanisms
• Annual feedback sessions
with all staff members
• Keep workforce safe
• Local capacity building
• Contractor management
• Staff well-being
Shareholders
Regular dialogue
• Climate risk/energy transition and
other ESG risks
• HSES Health and Safety
• HSES Management System
• Preventing corruption
International
community
Responding to inquiries and
media scanning
• Climate risk, energy transition and
net zero commitment
• GHG emissions
• Preventing corruption
• Human rights and Modern Slavery
ADDITIONAL
INFORMATION
GOVERNANCE
REPORT
FINANCIAL
STATEMENTS
STRATEGIC
REPORT
62
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Corporate Responsibility Report
BUSINESS
Focusing on supply chain impacts.
Our objective is to contribute to
responsible and sustainable development
throughout our operations.
Climate risks and global energy transition
Climate change is considered a principal
risk to the Group and its business over
the medium and long term, and this
is discussed in more detail in the Risk
Management report and in our TCFD
report on pages 80 to 95.
Our overall risk management framework
integrates climate-related risks into
business decision by carrying out regular
and robust risk assessment, conducting
deep-dive exercises to gauge risk
appetite, monitoring macroeconomic
environment and regulatory landscape,
and using scenario analyses to stress-
test principal risks on key variables for
the Going Concern and Viability Testing.
Our Net Zero Roadmap, which was
initially published in December 2023 and
updated in this Annual Report on pages
96 to 99, sets out interim targets towards
our net zero by 2050 commitment and
decarbonisation levers to reduce our
carbon emissions, and is a key part of our
climate risk management and business
decision.
Pharos is cognisant of the potential
diminished role of fossil fuels in the
global energy mix as depicted in the IEA
Sustainable Recovery Plan. However, we
also recognise that that oil and gas will
continue to play an essential role in the
global energy mix for the next decade,
and that the importance of producing
this energy in a safe, environmentally
sustainable and socially responsible
way will continue to grow. We believe
that there are real opportunities in the
energy transition, especially for countries
such as Egypt and Vietnam, to benefit
from the responsible and sustainable
development of their natural resources.
Pharos stands ready to play our part in
this transition and will continue to support
our host governments as they seek to
use oil revenues to promote sustainable,
inclusive economic development, manage
the impact of climate change and achieve
their COP commitments.
We report transparently and have
participated in the CDP (formerly Climate
Disclosure Project) Climate Change
Questionnaire over the past six years. In
2024, Pharos is pleased to report that
we were awarded scores of B for both
our Climate Change and Water Security
disclosures, an improvement from last
year’s score of C which was originally
achieved in 2019. Our greenhouse gas
emissions (GHG) are reported in the
Environment section on page 76. Our
commitment to align our reporting to
TCFD recommended disclosures are set
out on page 80.
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PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Business partners and influence
Relationships with business partners, host governments and local communities where we operate are critical for our business. Our
Code sets out our commitment to doing business honestly and ethically and to complying with all applicable laws and regulations. It
sets out our expectations to take steps to only do business with others who share our values.
Our ability to influence our business partners and JOCs depends on our degree of ownership and operatorship. Where we are the
designated operator, we fully apply the Pharos HSES MS. Where we are a joint operating partner or part of a JOC, we seek to influence
and ensure alignment with our systems. Where we have a minority interest, we seek to make our views heard and ensure that minimum
standards are met in accordance with our commitment to the IFC Performance Standards.
Vietnam interests and operations
(1)
Degree of
influence Blocks Country
Pharos
ownership
Pharos
role
2024
field activity
Target HSES
outcome
High
Blocks 125
& 126
Vietnam 70% Operator
Detailed drilling engineering
studies for the proposed well on
Prospect A commenced in 3Q
2024. Orders placed for long
lead item in August 2024.
Full application of
the Pharos HSES
MS
Moderate
Block 16-1 Vietnam 30.5%
(1)
Joint operating partner
(in Hoang Long Joint
Operating Company)
Successful completion of two-
well infill drilling programme
in October on time and under
budget. Applications for five-
year licence extension to the
TGT field formally granted by
the Vietnamese Government in
December 2024.
Influence to bring
alignment to the
Pharos HSES MS
Moderate
Block 9-2 Vietnam 25%
(1)
Joint operating partner
(in Hoan Vu Joint
Operating Company)
Applications for five-year
licence extension to the CNV
field formally granted by the
Vietnamese Government in
December 2024.
Influence to bring
alignment to the
Pharos HSES MS
1) Pharos currently has a 30.5% working interest in Block 16-1 which contains 97% of the Te Giac Trang (TGT) field. Pharos’ unitised interest in the TGT field
is 29.7%. Pharos also currently has a 25% working interest in the Ca Ngu Vang (CNV) field located in Block 9-2. Following the announcement by Pharos in
December 2024 of approval a five year extension to the terms of the petroleum contracts for Blocks 16-1 and 9-2, Pharos will hold a revised working interest
in Block 16-1 (TGT) of 25.33% with effect from 8 December 2026 and a revised working interest in Block 9-2 (CNV) of 20% with effect from 16 December
2027.
Egypt interests and operations
Degree of
influence Blocks Country
Pharos
ownership
Pharos
role
2024
field activity
Target HSES
outcome
Moderate
El Fayum
Concession
Egypt 45%
Joint operating
partner (in
Petrosilah)
Successful drilling of second
exploration commitment well
in September, encountering oil
bearing reservoirs in Abu Roach
G formation. One El Fayum
development well put on production
in December 2024.
Influence to bring
alignment to the
Pharos HSES MS
Moderate
North
Beni Suef
Concession
Egypt 45%
Joint operating
partner (in
Petrosilah, to
which operating
functions are
subcontracted by
PetroBeniSuef)
Ongoing processing of 3D seismic
data. Discussions with EGPC and
our partner on the consolidation
of our Egyptian concessions
(El Fayum and North Beni Suef)
ongoing in 2024.
Influence to bring
alignment to the
Pharos HSES MS
ADDITIONAL
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STRATEGIC
REPORT
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Corporate Responsibility Report | Business - Continued
HSES Management System
We undertake a range of activities to continuously improve our
HSES MS to ensure that the Company’s policy commitments
are applied. We may work in countries that have different
standards and we review any potential gaps to ensure adherence
to our policies in dialogue with our business partners. Routine
monitoring is undertaken to assess and improve performance and
periodic audits are conducted.
HSE trainings and exercises
In Vietnam, the HLHVJOCs continued HSE induction to new staff,
maintained its HSE Training Matrix such as travel safely by boat,
firefighting and rescue, working at height, arranged refreshing
BOSIET/FOET and other training courses such as T-HUET,
travel safely by boat, fire fighting and rescue, lead auditor and
greenhouse gas practitioner. The HLHVJOCs also conducted
training for the offshore production team such as Personal
Protective Equipment training, refresh safety induction for
contractors, emergency response, permit to work and confined
space entry procedures, behavioural safety, refresh facility
induction, medical training and tank inspection procedure.
In Egypt, HSES training focused on increasing the staff’s
capabilities and competence on ISO 14001 and 45001
management systems, land transport, safety at rig, firefighting,
lifesaving rules, permit to work, hot work hazards and safety
requirements in confined space entry and working at heights.
Key Performance Indicators
KPI Target
2024
2023 2022
HSES regulatory
non-compliances
Zero 0
0 0
Supply chain management
Contractors are used throughout all aspects of our business.
Our Contractor Management Procedure sets out requirements
through all stages from selection through to management and
service delivery.
In HSES critical activities, bridging documents are put in place to
ensure Pharos and contractor alignment with our requirements.
Hours worked in Vietnam and
Egypt assets Percentage of total
Company staff: 684,524
21%
Contractors: 2,576,956
79%
Overall objective
To provide responsible and sustainable development
2024 Objectives 2024 Outcomes 2025 Objectives
Further alignment with
Pharos HSES
Management System.
Pharos Energy continued to work
towards full implementation of our
HSES Management System across our
business.
Further alignment with Pharos HSES
Management System.
Work closely with partner’s
HSES department to achieve
good alignment between our
respective HSES Management
Systems.
In Egypt, Petrosilah obtained the ISO
45001:2018 and ISO 14001:2015
certificates for Health and Safety
Management and Environmental
Management. Equally, the Hoang Long
Hoan Vu Joint Operating Company
(HLHVJOC) obtained the ISO 14001:2015
certificate.
Work closely with partner’s HSES
department to achieve good
alignment between our respective
HSES Management Systems.
Review implementation of
updated HSES Management
System across business
functions.
HSES Management System policies
and procedures have been updated and
will be submitted to the Executive for
approval.
Review implementation of updated
HSES Management System across
business functions.
Further training on crisis
management and emergency
response to be held in 2024.
The learnings from the previous crisis
management and emergency response
training were captured and included in
a revised Crisis Management Plan to be
released during 2025.
Issue revised Crisis Management
Plan and train staff on changes to
emergency response procedures.
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PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Overall objective
To conduct our business in an honest and ethical manner.
2024 Objectives 2024 Outcomes 2025 Objectives
All personnel to complete the annual
ABC programme including training,
testing and self-declaration statement.
Completed.
All personnel to complete the
annual ABC programme including
training, testing and self-declaration
statement.
Continue to review ABC programme
and update as required.
No updates required.
Continue to review ABC programme
and update as required.
Update and republish the Modern
Slavery annual statement and all other
corporate policy statements.
The annual statement on Modern
Slavery has been reviewed by the
Board and republished on the
Pharos website.
Update and republish the Modern
Slavery annual statement and all
other corporate policy statements.
Corporate Responsibility Report
ETHICS
Our objective is to conduct our business
in an honest and ethical manner.
100%
Employees and relevant contractors have
undertaken anti-bribery and corruption
training by 31 December 2024.
Preventing corruption
Pharos currently operates in Vietnam,
which is allocated a low score on
Transparency International’s most recently
published Corruption Perception Index
(“CPI”), and is ranked number 88 (83 in
2023) out of 180 countries in the 2024
CPI. Egypt is ranked at 130 on the same
CPI (108 in 2023). We recognise that,
with both areas of operation having a
reputation for a lack of transparency and
relatively high risk of corruption, it is vital
that the Group’s policies, procedures
and working practices are fit for purpose.
Pharos maintains internal control systems
to guide and ensure that our ethical
business standards for relationships with
others are achieved. The Audit and Risk
Committee and the Board have carried
out a review of the effectiveness the
Group’s risk management and internal
control systems, see the Audit and Risk
Committee report on page 128. Bribery
is prohibited throughout the organisation,
both by our employees and by those
performing work on our behalf. The Code
of Business Conduct and Ethics supports
all businesses that are conducted in
an honest and ethical manner across
the organisation. Our Anti-Bribery
and Corruption (“ABC”) programme is
designed to prevent corruption and ensure
systems are in place to detect, remediate
and learn from any potential violations.
This includes due diligence on new
vendors, annual training for all personnel,
requisite compliance declarations
from all associated persons, Gifts and
Hospitality declaration and comprehensive
‘whistleblowing’ arrangements.
Our Whistleblowing Policy and associated
procedures ensure that employees are
protected from possible reprisals when
raising concerns in good faith. In addition
to internal reporting channels, we have a
dedicated, anonymous and confidential
ethics hotline supported by NAVEX with
numbers displayed in our local offices
available 24 hours a day all year round.
Zero calls were made to the NAVEX hotline
in 2024.
Payments to host
governments
Wealth generated by natural resources
plays an important part in the growth
and development of countries in which
we operate. Revenues to governments
become payable by the Group due
to oil production entitlements, taxes,
royalties, licence fees and infrastructure
improvements.
During 2024, the total payments to
governments for the Group amounted
to $160.3m (2023: $188.0m), of which
$138.7m or 87% (2023: $166.5m or 89%)
was related to the Vietnam producing
licence areas, of which $92.9m (2023:
$110.8m) was for indirect taxes based
on production entitlement. In Egypt,
payments to government totalled $19.1m
(2023: $19.3m), of which $18.5m (2023:
$18.4m) related to indirect taxes based on
production entitlement. More information
on payments to host governments can be
found on page 204.
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STRATEGIC
REPORT
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Corporate Responsibility Report
PEOPLE
Our objective is to ensure the health,
safety, security and welfare of our
employees and those with whom we work
and to ensure that we have a workforce
that is performing at its best.
Occupational health and safety
Safety is the highest priority in our
business and we are committed to
operating safely and responsibly at
all times and to providing a safe and
healthy working environment for staff and
contractors. Following from our Health,
Safety and Environment Policy and
Code of Business Conduct and Ethics,
our HSES MS provides the framework
for our approach and is implemented
at each stage of a project supported by
Occupational Health and Safety Guidance
and Standard Operating Procedures.
While Pharos had no field activity in
2024 in which we were the operator, we
continued to work with our partners in
Vietnam where the HLHVJOCs continued
to maintain a high level of safety. In 2024,
the Company recorded zero LTIs in
Vietnam, an achievement which the JOCs
have maintained since Pharos’ operational
inception, representing 10+ production
years on TGT and CNV. We have worked
to build and contribute to improvements
in the safety culture in Vietnam and we
are proud of that record of achievement.
HSES training, drills, workshops and
inspections are conducted on an annual
basis to ensure that the zero lost time
injury target is maintained.
We are able to share our practices and
lessons learned with others in the industry
and are contributing to further capacity
building.
In Egypt, no lost time injuries and no
motor vehicle crashes were recorded in
2024. We continuously work with the
operator IPR and the JOC Petrosilah to
maintain high safety standards in our
operations.
Safety of our workforce
remains our number one
priority and Pharos has
reinforced the use of stop
cards and safety training
across all of the Group’s
operations
Safety record
2024 2023 2022
KPI Target rates Pharos IOGP
4
Pharos IOGP
4
Pharos IOGP
4
Fatal Accident Frequency Rate
1
Zero
0 0
0.82
0
1.28
Lost Time Injury (“LTI”) Frequency Rate
2
Zero
0 0
0.24
0.30
0.28
Total Recordable Injury Rate
3
Zero
0 0
0.84
0.60
0.90
Million-man hours worked
3.26 3.59
3,291
3.35
2,579
1) Fatal accident frequency rate: Number of fatal accidents per hundred million man-hours for both employees and contractors
2) Lost time injury frequency rate: Number of lost time injuries per million man-hours for both employees and contractors
3) Total Recordable Injury rate: Number of recordable injuries per million man-hours for both employees and contractors
4) International Association of Oil and Gas Producers (“IOGP”) - Statistics not yet available for 2024
5) Note that for IOGP frequency rates the number of hours used depends on the indicator and can be slightly under the total number of work hours in the
database.
Critical Incident Risk Management
Pharos has emergency response plans in place for all projects and assets. The plans are communicated to the workforce and response
personnel receive training to ensure they are competent to carry out their emergency roles. This is supplemented by periodic refresher
training. Drills and training exercises are carried out. We ensure asset integrity and control operations in order to effectively manage all
significant risks during all stages of the operations.
During 2024, there were no Process Safety Events classified Tier 1 or Tier 2 to be reported. All incidents were investigated and lessons
learned as appropriate and actions to prevent recurrence were implemented.
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PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Safety indicators
(for both Pharos employees
and contractors)
Indicator 2024
Lost Time Injury frequency rate (“LTI”)
0
Fatal Accidents
0
Medical Treatment Cases
0
First Aid Cases
0
Number of Motor Vehicle Crashes
0
Roll-over
0
HSES Near Miss
13
HSES Inspections
773
HSES Audits
730
HSES Toolbox Talks
4,957
HSES Meetings
548
Safety indicators
Indicator 2024
Emergency Response Drills
134
Process Safety Events
(Tier 1 or Tier 2)
0
Other minor events
2
Diversity, Equity and Inclusion (D,E&I)
Greater diversity and inclusivity brings
greater understanding of people. Through
our five Guiding Principles of ‘Safety and
Care’, ‘Energy and Challenge’, ‘Openness
and Integrity’, ‘Empowerment and
Capability’ and ‘Pragmatism and Focus’,
we have demonstrated our commitment
to maintaining and building a culture of
diversity and inclusion in meaningful ways.
We believe in a workforce with a diversity
of experience, nationalities, cultural
backgrounds and gender, to support our
business strategy of long-term sustainable
growth. It is crucial to the success of
our business that we retain and develop
the diversity of our workforce and have
diversity and inclusion at the heart of our
recruitment, development and promotion
processes.
Our Code of Business Conduct and
Ethics, associated Policies and the Pharos
Guiding Principles commit us to providing
a workplace free of discrimination where
diversity is valued and all employees can
fulfil their potential based on merit and
ability. They also commit us to providing a
fully inclusive workplace, while providing
the right development opportunities to
ensure existing staff have rewarding
careers. During the year, the Company
undertook a further Group-wide survey
of staff on questions and perceptions of
diversity, equity and inclusion within the organisation. The outcome of these surveys will
continue to inform additional learnings for the whole organisation in 2025.
We work hard to ensure that we consult and engage with all of our employees.
We value the contribution made by all employees and strive to have training and
development opportunities for everyone.
2024 statement of compliance with the Listing Rules on
Diversity and Inclusion
The spirit of diversity, inclusion and trust lies behind everything we do. We are
committed to inclusion and diversity in all areas of the business.
Throughout the year, the Company complied with 2 out of 3 targets set by UKLR
6.6.6R(9)(a) of the FCA’s Listing Rules. As at 31 December 2024, the Company had:
• Three female Directors, representing half of the Board
• All Executive Director positions (Chief Executive Officer and Chief Financial Officer)
held by women
The UKLR 6.6.6R(9)(a) target with which the Company did not comply in 2024
related to ethnic diversity. That Listing Rule establishes a target for listed commercial
companies of having at least one member of the Board from a minority ethnic
background. In the future recruitment of both NEDs and Executive Directors, the
Company will continue to seek and welcome candidates for the Board from a minority
ethnic background. There is also significant diversity within wider organisation,
including in management positions. Equity, diversity and inclusion sit at the heart of our
recruitment, development and promotion processes.
ADDITIONAL
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FINANCIAL
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STRATEGIC
REPORT
Safety
& Care
Energy
& Challenge
Openness &
Integrity
Empowerment &
Accountability
Pragmatism &
Focus
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Corporate Responsibility Report | People - Continued
2024 Gender diversity(*)
Non-Executive Directors
Executive Directors
Senior Management
Other Employees
Male
Female
2
3
3
13 14
1
1
* Figures correct as at 31 December 2024 and
represent the Group’s global workforce (Egypt,
Vietnam, UK), not including contractors.
Gender diversity data is collected from
Pharos’ Human Resources (“HR”) database,
in which employees fill in a questionnaire upon
joining the Company. Gender diversity data
is assumed to be consistent year-on-year,
unless the Company is notified otherwise by
the employee.
Local capability building
We are committed to providing meaningful opportunities for technical cooperation, training and capacity building in host countries.
We have maintained a gender-neutral recruitment process and, wherever possible, are ensuring that we first look to fill any vacancy
internally with a local candidate in London, Vietnam and Egypt.
In Egypt, under the El Fayum and North Beni Suef Concession Agreements, the Contractor party commits to a total of $200,000 split
equally between the two Concessions for training and development of employees. In Vietnam, as part of the HLHVJOCs, we contribute
to local capability building. A training levy of $150,000 for each JOC goes into a fund which is ring-fenced to support the development
of future talent in Vietnam in the industry. The HLHVJOCs also invest in staff development and training.
Overall objective
To ensure the health, safety, security and welfare of our employees and those with whom we work; to sustain and grow a global
cultural of diversity and inclusion such that diversity is at the core of who we are and where inclusion drives innovation and
solutions.
2024 Objectives 2024 Outcomes 2025 Objectives
Building on the strong
foundations and global team
culture. Recognising the value
that DE&I brings to our team,
we will commence a global
learning programme tailored
on our DE&I survey insights
and ensure DE&I initiatives
extend beyond training into
the future.
Strengthened our global team culture through
several successful initiatives: Our second
Company global offsite fostered strong cross-
country relationships and knowledge sharing.
Building on this engagement, we launched
company-wide DE&I workshops and completed
a tailored DE&I learning program creating
lasting channels for ongoing DE&I dialogue and
advancement throughout the organisation.
We are strengthening our
commitment to ethical leadership
through effective DE&I governance
and meaningful engagement
initiatives that uphold our moral
obligation to create an equitable
workplace where all employees are
valued and can thrive with dignity
and respect.
Developing the company’s
Employee Value Proposition
(EVP). Recognising the
benefits of the employee
value proposition (EVP) to
employees and using this as a
tool to aid retention.
Developed and implemented a comprehensive
Employee Value Proposition (EVP) that
enhanced our employee experience and
retention efforts. The EVP framework
strengthened our ability to attract and retain
talent while fostering higher levels of employee
engagement and satisfaction throughout the
organisation.
Develop succession planning
program with focus on diverse
talent
Ensure worker health and
safety is maintained to a
high standard during both
desk-based and operational
activities.
Worker health and safety was adequately
maintained with no recordable injury or ill-health
reported.
Where incidents (including near-misses)
occurred, thorough investigations were carried
out and lessons learned were captured and
communicated.
Safety workshops are routinely held to raise
awareness.
Maintain worker health and safety
to a high standard during both
desk-based and operational
activities.
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PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Corporate Responsibility Report
SOCIETY
Our Social Responsibility and Human
Rights Policies set our requirements
for social responsibility, community
engagement and human rights.
Human Rights & Modern
Slavery
The Group Human Rights Policy commits
Pharos to conducting its business
in accordance with the fundamental
principles of human rights set out in the
Universal Declaration of Human Rights
and reflects the terms of both the OECD
Guidelines for Multinational Enterprises
and the United Nations Guiding Principles
on Business and Human Rights. Together
with our Social Responsibility Policy, it
sets out our commitments to align with
the Voluntary Principles on Security and
Human Rights. We respect indigenous
rights and cultures of the communities
where we operate.
Our human rights due diligence includes
processes to address, monitor and
communicate actual or potential impacts.
For Egypt, all Group corporate policies
including the Human Rights Policy and
the Social Responsibility Policy, have been
translated into Arabic for dissemination
locally.
In accordance with the UK Modern
Slavery Act, Pharos reports annually on
the steps it has taken to mitigate the risk
of modern slavery occurring in any part
of its business. The Group’s Statement
on the prevention of Modern Slavery
and Human Trafficking is available on
the Company’s website at www.pharos.
energy/responsibility/policy-statements/
Local capacity
We support local capacity building during
the exploration or development phases of
a project to ensure a positive imprint and
legacy. All our licence agreements include
a high degree of local content, which
commits us to hire locally where possible
and provide training to develop new
skills. Our policy commits us to provide
meaningful opportunities for technical co-
operation, training and capacity building
within any host country in which we
operate.
Community and social
investment
Pharos remains committed to creating
value for host countries and local
communities as well as for staff and
shareholders. We understand that our
success is reliant upon building and
maintaining strong relationships and
being welcomed as a responsible partner
in our host countries and communities.
In recent years, we have structured our
social investment programme to align
more with the United Nations Sustainable
Development Goals (UN SDGs).
In Vietnam, commitment to local sourcing,
employment, training and industry
capacity building has continued in 2024
with a training levy of $300,000 per year in
a ring-fenced fund to support developing
future Vietnamese expertise in the
industry. In Egypt, under the El Fayum and
North Beni Suef Concession Agreements,
the Contractor parties contribute a total of
$200,000 per year split equally between
the two Concessions to support training
and development in industry.
Pharos works closely with our local
partners and joint ventures in order
to make sure that our social initiatives
continue to bring more positive impacts
to the region. In addition to the training
levy mentioned above, a further $119,253
was invested in a total of 13 healthcare,
education, infrastructure and other
community projects across the Group in
2024. This is thanks to the efforts of the
JOCs and in-country employees who
actively inquired and listened to locals to
find out which areas of the country need
the greatest assistance in order to ensure
that we were investing in local projects
that would bring the most sustainable
positive impact to the community.
Social and community projects have been
part of Pharos since inception, and we
have always sought to invest sustainably
via the HLHVJOC Charitable Programme
so that the initiatives that we helped set
up stay in place and have lasting impacts
for many generations. To build on this
legacy, the Group established a Charity
and Community Projects Committee,
an outcome accumulated from positive
and open discussion with the global
workforce at the Company’s offsite day
in 2023, to bring together employees
from all three offices in the UK, Egypt and
Vietnam to extend Pharos’ social impacts
beyond our host nations. The Charity and
Community Projects Committee, which
includes employees from multiple business
functions and multiple countries, met
seven times in 2024, and have supported
$140,636 in 13 different social projects
across three different countries. The
Committee aims to continue its work in
supporting a diverse mix of social causes
in 2025.
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PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Corporate Responsibility Report | Society - Continued
Total $259,889
Community projects
across the Group
in 2024
UN SDG 1 – No poverty
End poverty in all its forms everywhere
• Living costs support for orphans in Vietnam whose parents passed away due to the
COVID-19 pandemic
• Vietnamese Lunar New Year (Tet) gifts for people from low-income families in various
provinces and communities in Vietnam
• Financial support for:
− House of Grace Orphanage in Thu Duc city, Vietnam
− Stable Antar Dream Foundation (SADF) to support social/ economic development and
integration of underprivileged children in Egypt
UN SDG 2 – Zero hunger
End hunger, achieve food security and improved
nutrition and promote sustainable agriculture
• Financial support towards providing school lunches with protein for children in remote
highland areas in Vietnam
UN SDG 3 – Good health and well-being
Ensure healthy lives and promote well-being
for all at all ages
• Financial support to:
− London’s Air Ambulance Charity’s Up Against Time Appeal to fundraise to replace the current
air ambulance helicopter fleet
− The Flying Doctors, to support emergency health care services to patients in remote and rural
areas in the UK and Australia
− Cleveland Clinic Foundation, to support clinical research for cancer patients
− Children Hospital 2 in Vietnam, to support hematologic cancer (blood cancer) patients
− Association of People with Disabilities, Victims of Agent Orange/Dioxin (“VAVA”) and Social
Protection of Gio Linh District, Quang Tri Province, Hung Ha district, and Thai Binh province
− Heartbeat Vietnam to fund life-saving heart operations for financially disadvantaged children
with congenital heart defects
− Social Protection Centre for homeless elders and disabled children in Ca Mau province
− Mobile medical check and health care for low-income patients in Gia Lai province
− Eye surgery medical fees for patients in need from low-income backgrounds
− Movember to support men’s health
Details of charitable projects supported by the HLHVJOC Charitable Programme and Pharos’ Charity and Community Projects
Committee can be found below.
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PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
UN SDG 4 – Quality education
Ensure inclusive and equitable quality education
and promote lifelong learning opportunities for all
• University tuition fees and living costs support towards orphans at Amalna City
Association in Egypt
• One academic year tuition fees for kindergarten children from low-income backgrounds
in Vietnam
• Financial support to:
− Hear.Us.Now to support English and computer science education for the hearing-impaired in
Ho Chi Minh City
− The Centre for Inclusive Education Development for disabled students of Ca Mau province
− An education fund for high-achieving students from low-income backgrounds in Vietnam
− Secondary and high school students at Hanoi School for the Hearing-impaired in Vietnam
(part of the Vietnam Red Cross)
UN SDG 9 – Industries, innovation and infrastructure
Build resilient infrastructure, promote inclusive and
sustainable industrialisation and foster innovation
• Financial support towards the construction of:
− Toilets for low-income families in Quang Ngai
− New houses for the homeless or low-income in Dien Bien province and Can Gio Beach, in
collaboration with the Vietnam Red Cross
• Donations to repair rooftops of public medical centres after typhoon/monsoon season
• Donations to repair and upgrade old bridges in Hai Phong province
Overall objective
To consult with and contribute into our host communities.
2024 Objectives 2024 Outcomes 2025 Objectives
Continuation of the social investment
programme in Vietnam
On target
Continuation of the social
investment programme in Vietnam
Continuation of the social investment
programmes in Egypt and UK
On target
Continuation of the social
investment programme in Egypt
and UK
ADDITIONAL
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STATEMENTS
STRATEGIC
REPORT
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PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Corporate Responsibility Report
ENVIRONMENT
We recognise the potential impacts of
our business on the environment. Our
Health, Safety and Environment Policy
sets out our commitment to conduct
all business activities in a responsible
manner. In setting the Group’s corporate
responsibility priorities, our objective is
to protect the environment and conserve
biodiversity.
Net Zero Roadmap & Emissions Management Fund
In December 2023, Pharos published its
Net Zero Roadmap following its formal
commitment in September 2022 to
achieve net zero greenhouse gas (GHG)
emissions by 2050. The Roadmap will be
reviewed and updated on an annual basis.
The Net Zero Roadmap, which was
researched and developed by the
Company in close consultation with
specialist advisors and consultants,
models emission reduction pathways to
achieve net zero Scope 1 (direct) and
Scope 2 (indirect) GHG emissions from
all existing and proposed future assets by
2050 or before. Based on this modelling,
the roadmap contains interim targets set
against the Company’s 2021 baseline
year, which have been approved by the
Board.
In order to realise our climate commitment
to achieve Net Zero GHG emissions from
all our future and existing assets by no
later than 2050, Pharos prioritise reducing
emissions by achieving operational
efficiencies, reducing flaring and venting,
replacing the power consumption of
our facilities with lower emission energy
sources and eventually procuring nature-
based carbon offset projects for hard-to-
abate, residual emissions.
More details of our climate strategy,
including interim targets and the
decarbonisation levers at asset-levels,
can be found in our Net Zero Roadmap
published in December 2023 on our
website (https://www.pharos.energy/
media/b55c4sqz/pharos-energy-net-zero-
roadmap-2023_official.pdf), or on pages
96 to 99 of this report which include the
latest updates and progress against the
Roadmap.
The Group has non-controlling equity
stakes in its producing assets and is
predominantly non-operating. As a
result, it has no direct control over the
majority of its emissions inventory but it
can exercise influence through the joint
operating companies (JOCs) in Vietnam
and Egypt in conjunction with the other
JOC partners. The Company will use the
net zero roadmap to continue to engage
with the JOCs, partners and governments
on reducing emissions where possible
through the options identified. To the
extent within its control, the Company
will continue reducing its own emissions
and remain committed to transparency
in reporting and to keeping stakeholders
updated on progress.
In addition, the Company established
an Emissions Management Fund in
September 2022. From every barrel net
to the Group sold at an oil price above
$75 per barrel, a contribution of $0.25
is made to the Fund. The current value
of the Emissions Management Fund
is now c.$830,000. In line with the net
zero roadmap, this Fund is available to
provide financial support for emissions
management projects undertaken directly
by the Group or through the JOCs.
Greenhouse gas emissions
(GHG)
GHGs emissions associated with energy
use and with natural gas flaring and
venting are a key issue for the Group.
In 2024, we continued to monitor
our emissions and disclose them in
accordance with industry requirements
and standards. Additionally, we also
participated in the Carbon Disclosure
Project (CDP), details of which can be
found in the Business section of this
report on page 63, and continue to align
our disclosure with TCFD recommended
disclosures, details of which can be found
in our TCFD report on page 80.
GHG reported
Pharos reports carbon dioxide (CO
2
),
methane (CH
4
), and nitrous oxide (N2O)
combined into carbon dioxide equivalent
(CO
2
e) based on the gases’ 100-year
Global Warming Potential (GWP). These
three gases are produced through
combustion, although N2O quantities
produced via combustion are relatively
small.
In addition to emissions resulting from
combustion, Pharos is reporting its direct
methane emissions from routine venting
and has been doing so since 2021.
The other greenhouse gases, HFCs, PFCs
and SF
6
, are not closely associated with
the petroleum industry. Their respective
emitting activities are not core parts of
Pharos operations. The total emission of
these gases is therefore expected to be
small and has not been calculated.
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PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Emissions scope
Reported Scope 1 direct emissions
comprise direct GHG emissions resulting
from equipment or other sources owned
(partly or wholly) and/or operated by
the Company (for example, gas flaring
operations and fuel gas/diesel use to
generate power or for vehicle use, as well
as venting). Reported Scope 2 indirect
emissions comprise those arising from
purchased energy already transformed
into electricity, heat or steam generation.
For Pharos activities, Scope 2 emissions
comprise electricity supplied by the
national grid in our Cairo office (Egypt) and
in Ho Chi Minh City (Vietnam). Pharos is
not an operator on any of our producing
assets, so we do not have direct control
over our oil and gas production. This is
in the hands of the JOCs, each of which
is staffed by experienced oil and gas
professionals with strong track records
of delivering responsible production.
Certain Pharos personnel are seconded
to senior positions in the JOCs in
Vietnam, providing a degree of influence in
operational planning and execution.
We recognise that Scope 3 value chain
emissions can help companies have
a better and more comprehensive
understanding of their overall emissions
footprints. Value chain emissions have also
seen an increasing amount of focus from
a wide variety of stakeholders. Therefore,
during Q4 2023, Pharos together with our
climate specialist carried out a high-level
materiality assessment across our portfolio
against all 15 categories listed in the GHG
Protocol to understand which categories
are relevant, material and reportable for
Pharos. The materiality assessment took
into account several factors including
the relevance to oil exploration and
production activities, stakeholders’ views,
data completeness and availability, peer
groups’ reporting journeys, and Pharos’
ability to influence the emissions.
In light of this assessment, we have
identified a number of categories
determined to have low materiality
threshold or relevance for Pharos
and therefore do not report on these
categories at this time. These categories
are:
• Category 12 – End-of-Life Treatment
of Sold Products
This is not material for Pharos as we do
not produce non-fuel products (such as
lubricants or plastics) that are disposed
in landfills or via incineration.
• Category 13 – Downstream Leased
Assets
This is only material for companies
with significant leased assets where
the company leases assets to others,
which Pharos do not do.
• Category 14 – Franchises
This is immaterial for Pharos as we do
not own franchises.
As at year-end 2024, we have calculated
emissions from Category 4 – Upstream
Transportation, Category 6 – Business
Travel, and Category 11 – Use of Sold
Product, as defined in the GHG Protocol.
Category 4 and Category 11 are highly-
material categories for Pharos. Further
details can be found in our Corporate
Responsibility Non-Financial Indicators on
page 79 and in our TCFD report under ‘4.
Metrics and Targets’ on pages 94 and 95.
Reporting boundary
Pharos has elected to report its emissions
of GHGs from Egypt and Vietnam
operations on the basis of equity share.
Under equity share reporting, Pharos
reports a pro-rata share of the Scope 1,
2 & 3 GHG emissions from partnerships
or assets over which the Group has
operational control (i.e., Vietnam Blocks
125 &126) and a pro-rata share of the
emissions from partnerships or assets
it does not control (i.e., Vietnam Blocks
9-2 and 16-1 and Egypt, all of which are
operated through JOCs) according to its
ownership interest. Since the middle of
July 2021, Pharos has rented a flexible
office space in London. The electricity
consumption and GHG emissions of this
office space are not included in the report
because they are not disclosed by our
provider. However, because the electricity
procured for this office is 100% renewable,
this energy usage amounts to a minuscule
portion of our total carbon footprint.
Pharos Energy commits to making all
efforts to minimise all GHG emissions
during its ongoing exploration activities
in Blocks 125 & 126, where it has
operational control. Where we are a joint
operating partner, we seek to influence
and ensure alignment with our systems
to promote best practice. Where we have
a minority interest, we seek to make our
views heard and ensure that minimum
standards are met in accordance with
our commitment to the IFC Performance
Standards and TCFD recommendations.
ADDITIONAL
INFORMATION
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STATEMENTS
STRATEGIC
REPORT
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PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Corporate Responsibility Report | Environment - Continued
Methodology
Pharos applies the expectations set by
the ISO 14064-1 standards in terms of
Relevance, Completeness, Consistency,
Transparency and Accuracy which are
endorsed by IPIECA, the Greenhouse
Gas Protocol Initiative and Part 7 of The
Companies Act 2006 (Strategic Report
and Directors’ Report) Regulations 2013.
Emission factors for GHG calculations
were taken from UK Government GHG
Conversion Factors for Company
Reporting (DESNZ, 2024), EEMS, 2008,
Atmospheric Emissions Calculations, IGES
List of Grid Emission Factors (M. Azuma
& M. Louhisuo, 2024) and Ecometrica,
2011. For the calculation of associated
gas consumed and flared in Vietnam, the
emission factors were calculated based on
the carbon content of gas analysed by the
Vietnam Petroleum Institute in December
2024 at the CNV field, and at the gas
export metering skid of TGT also in
December 2024 for the TGT field. For the
calculation of gas consumed, vented and
flared in Egypt, the emissions factors were
calculated based on the carbon content
of gas analysed at the North Silah Deep,
North-East Tersa, South Silah and Silah
Base Separators (EPRI Central Analytical
Labs, 2018) as well as at the Aboud 1-3
and NBS-SW-1X well locations.
In 2024, we have again reported our GHG
emissions intensity in tonnes of GHG per
1,000 tonnes of hydrocarbon produced by
equity share to align with the International
Association of Oil and Gas Producers
(IOGP) benchmarks.
Key sources of our emissions are from
flaring and use of associated gas as
fuel to generate power on our offshore
production sites in Vietnam and likewise
for our onshore production in Egypt. Since
2021, in addition to our emissions from
combustion which had been the focus
of Pharos reporting until then, we have
reported our direct methane emissions
resulting from venting, with the latter being
another significant contributor to our
overall emissions. In 2024, gas fuel and
gas flaring in TGT remain the largest single
contributor to Pharos total emissions.
Venting in Egypt represented 18 percent of
our gross emissions.
The Group’s total CO
2
e emissions for
2024 are 84,403 tonnes of CO
2
equivalent
based on equity share (307,377 tonnes of
CO
2
equivalent gross). This corresponds
to a decrease of 2 percent compared to
2023 (both on equity share and gross
values). This year-on-year reduction in the
Group’s GHG emissions is the result of
proactive maintenance and management
of the TGT facilities with a focus on
minimising event flaring and reducing
overall gas flaring volumes.
Activity data pertaining to GHG emissions
by the HLHVJOCs and Egypt is reported
to Pharos. Telos NRG assisted with data
collation and GHG emissions calculations.
Verification of the 2024 GHG Emissions
Report has been undertaken by RPS
Consulting UK & Ireland using the
principles in BS EN ISO 14064-3:2019
(the Standard) with the following limits:
• Activity data completeness, accuracy
and data collection and control
procedures have not been verified
due to the majority of GHG emissions
arising from activity in operations not
under Pharos’ direct operational (and
data collection) control
• Activity data from Pharos Egypt
operations is considered to have a
higher risk of uncertainty
• This is the second year that Pharos has
reported selected categories of scope
3 GHG emissions. As such, it is noted
that the data collection and calculation
process for these emissions sources
is by nature more variable than other,
more established, emissions sources
• Scope 3, category 11 data from
Pharos’ Egypt operations is considered
to have a higher risk of uncertainty
compared to other scope 3 data
• It should be noted that petroleum
companies’ scope 3 GHG inventory
are unique in that the use of the fuel
products produced can contribute to
emissions in other scope 3 categories.
As such, there is by nature a risk of
double counting between scope 3
categories
• There is inherent variability and
uncertainty associated with the
available methods for calculation of
GHG emissions from activity data;
reported emissions and the verification
statement should be understood in that
context
The Tetra Tech RPS 2024 GHG verification
report is unqualified and covers all of
our GHG metrics, including Scope 3
emissions.
Approaches to reducing
emissions
In Vietnam, we continue to manage
gas flaring by carefully monitoring and
optimising the processing facilities in the
TGT FPSO. The focus for the next year
will be on exploring opportunities and
technologies to reduce gas venting in
Egypt, which can potentially reduce our
Scope 1 emissions while also resulting in
economic gains, such as increased use
of gas generators at well sites, piloting
the use of solar photovoltaics (PV) to
reduce diesel consumption and further
deployment of flare stacks, among other
gas utilisation opportunities. In terms of
energy efficiency, the usage of a co-
working space is an initiative to reduce
both our cost base and our energy usage.
This is a continuation of our energy-saving
initiative from the previous year.
Annual Environmental Measurements - in
accordance with the requirements of the
Egyptian Environmental Law 4 for year
1994, the Company carried out annual
environmental measurements, and all
environmental measurements resulted in
less than the threshold limit in the law.
Environmental permit non-compliances
- the company achieved zero Legal
Environmental Violation during 2024 and
did not obtain any violations from the
Environment Authority in Egypt in 2024.
The Company obtained 3 Environmental
Approvals from the Egyptian Ministry of
Environment during 2024.
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PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
GHG emissions and activity data
GHG Data - tonnes of CO
2
equivalent for 2021 to 2024
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
377,769
376,661
313,839
2021 2022 2023
107,064
86,151
2024
104,929
84,403
307,377
Carbon intensity of production operations (tCO
2
e per 1,000 tonnes of oil equivalent produced)
2021 2022 2023
600
500
400
300
200
100
0
280
297
237
412
553
542
301
326
273
2024
263
536
302
Charts: Scope 1 and 2 emissions from the Group’s operated and joint-operated projects on an equity share basis calculated pro-rata
to its ownership interest.
Venting
Routine venting emissions have been included for the fourth year in the GHG report in 2024. Routine venting only occurs in Egypt. Although
there is no routine venting in Vietnam, accidental leaks can occur. In addition, some activities do occasionally require depressurisation of
differing process systems. In these instances, the system(s) are isolated, and depressurised to as low as possible, and then drained to a
closed drain tank. A minor amount of gas commingled with liquid evacuates through a cold vent line to a safe area. Associated emissions are
negligible (23 tCO
2
e) but for the sake of completeness have been included within the report for 2024.
In 2024, the amount of associated gas used as fuel in gas generators in Egypt was 162 mmscf, which resulted in 15,277 tCO
2
e (gross).
However, had this associated gas been vented it would have resulted in additional emissions in the order of 49,344 tCO
2
e, or nearly a quarter
of the Group’s total emissions on a gross basis.
The Group’s energy use from grid electricity was 328,060 kWh in 2024 for overseas offices in Egypt and Vietnam. In 2023, the Group’s energy
use was 330,552 kWh. Since 2021, Pharos has rented a flexible office / co-working space in London. The electricity consumption and GHG
emissions of this office space are not included in the report because they are not disclosed by our provider. However, because the electricity
procured for this office is 100% renewable, this energy usage amounts to a minuscule portion of our total carbon footprint.
Gross GHG emissions (CO
2
e (t))
Net to Pharos GHG emissions based on Equity Share (CO
2
e (t))
Vietnam
Egypt
Overall
Gas Flared - TGT
43,854 (20.3%)
Gas Fuel - TGT
138,301 (64.0%)
Marine Gasoil (MGO)
16,286 (7.5%)
Gas Flared (CNV)
12,408 (5.7%)
Diesel
5,152 (2.4%)
Venting
54,238 (59.4%)
Gas Fuel
15,277 (16.7%)
Diesel
13,509 (14.8%)
Gas Flared
7,875 (8.6%)
Petrol (0.3%)
Electricity from
the grid (0.2%)
Greenhouse Gas Emissions Contributors (Total CO
2
e (t))
for 2024 – Vietnam (Based on total field emissions)
Greenhouse Gas Emissions Contributors (Total CO
2
e (t)) for 2024
– Egypt (Based on total field emissions, including venting)
Vietnam
Total CO
2
e (t)
Egypt
Total CO
2
e (t)
In 2024, 20 tonnes of gas were flared for every 1,000 tonnes of total hydrocarbon production from Group assets on a net equity share
basis. This is a slight increase from 17 tonnes in 2023.
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PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Corporate Responsibility Report | Environment - Continued
Tonnes (t) of CO
2
equivalent for 2024 Operations
CO
2
e (t)
CO
2
e (t) per 1000 tonnes
of hydrocarbon produced
by equity share
3
Country
Reported
operations
Operational
phase Overall
1
Based on
equity share
1,2
Per field
Per
country
UK
Rented flexible office
space - not reported
Administration
(office – electricity usage)
– – – –
Egypt
Office
Administration support for
exploration
307 70 – –
El Fayum and
NBS concession
Production 89,247 20,402 536 536
Field development 1,743 398
Vietnam
Office Administration (electricity usage) 5 5 – –
Blocks 125 & 126 Desktop activities 0 0
Block 9-2 – Ca Ngu
Vang (CNV) field
Production 13,767 3,442 68
263
Field development 0 0 -
Block 16-1 – Te Giac
Trang (TGT) field
Production 195,038 57,926 317
Field development 7,271 2,159 –
Total 307,377 84,403 302
1) Figures include rounding to the nearest whole number
2) Under equity share, Pharos reports a share of the emissions from the partnerships pro-rata its ownership interest
3) GHG emission intensity is calculated, per field, and at country level, based on equity share, and gross/net boepd produced in 2024 in the CNV and TGT
fields as well as in El Fayum and North Beni Suef Concessions. Conversion from BOE to TOE is based on the following factor: 1 toe = 7.59 boe for El Fayum
and NBS, 1 toe = 8.96 boe for CNV and 1 toe = 7.36 boe for TGT
Biodiversity
The Group’s Biodiversity and
Conservation Policy commits us to meet
the objectives of the Convention on
Biological Diversity (1992). We identify
whether a project is located in modified,
natural or critical habitats, or a legally
protected or internationally recognised
area; and whether the project may
potentially impact on, or be dependent
on, ecosystems services over which
Pharos has direct management control
or significant influence. In Egypt, the El
Fayum Concession borders the multiple-
use management area and the natural
protectorate area of Lake Qarun which
includes important bird habitats. It is
adjacent to the Wadi El Rayan protected
area, which includes the Wadi Al-Hitan
World Heritage Site. In Vietnam, Blocks
125 & 126 are approximately 50km
offshore to the Nha Trang Bay Protected
Area and the Thuy Trieu Marine Protected
Area. Consistent with the Biodiversity and
Conservation Policy, Pharos does not
operate in any UNESCO designated World
Heritage Site and ensures that activities
in buffer zones around these sites do not
jeopardise the Outstanding Universal Value
(as defined by UNESCO) of these sites.
Effluents and waste
During 2024, although Pharos had no
recordable spills in Vietnam and Egypt,
there were four incidents of leaks below
the spill reporting threshold. A crude oil
leak was reported at Armada TGT 1 on
17 July 2024 from the offloading hose
section during offtake. Approximately 4
litres were lost at sea, which is under the
100 litres reporting threshold. In Egypt,
three incidents of oil leaks occurred during
2024. The first oil leak was in relation to
the stuffing box in well Silah-10, and the
second and third oil leaks were from the
emulsion treating site of NSD-1 and Silah
Base. All three leaks were estimated to be
less than 1 litre lost to the environment.
All spillage incidents during the year
were investigated and lessons learned as
appropriate. Actions to prevent recurrence
were implemented.
Water is extracted along with hydrocarbon
reservoir fluids as part of normal
production operations; in Egypt, water is
also withdrawn from deep saline aquifers
and injected into hydrocarbon-bearing
formations to enhance production. In 2024
we generated 5.8 million cubic metres of
produced water. In Vietnam, the produced
water is cleaned by separating the
hydrocarbon phase before discharging to
the sea in line with national standards.
In Egypt, our produced water is all
disposed of in disposal wells. The
company has three Produced Water
Treatment Facilities (PWTF), two of them
are in-service at the gathering stations in
Silah and North Silah Deep (NSD) and the
third is yet to be used at North East Tersa.
The produced water is being collected
in both PWTF (Silah & NSD) and then
disposed of by injecting it into the Abu
Roach “E” formation through disposal
wells at each location (approximately
5,000 bbls/d of water disposed into
Silah-15 & and 6,500 bbls/d of water into
NSD-1-1).
In Vietnam, waste is generated from
both our production operations as well
as from our offshore drilling activities.
Drilling waste includes cuttings, used oil
and other materials. We work to recycle
as much non-hazardous waste as
possible. We have a third-party contract
for the disposal of hazardous waste,
with a reporting system into the specific
Vietnamese authorities for checking, audit,
and approval. In Egypt, waste generated
is segregated into hazardous and non-
hazardous waste and disposed of in a
licensed facility.
Freshwater is used to support our
operations. In 2024, freshwater
consumption for both Vietnam and Egypt
amounted to 67,913 cubic metres. Our
use of freshwater has increased by
2 percent compared to 2023, due to
additional drilling activity in TGT.
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PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
In Vietnam, safe practices were adhered
to ensure the surrounding environment is
protected at all times:
• The oil in water content of produced
water were continuously monitored
• Hazardous wastes have been strictly
managed, with hazardous wastes
manifests completed and submitted to
the relevant authorities
• All waste waters and sewage
generated on the drilling rigs, supply
vessels and FPSO have been treated
before discharge
• All solid wastes were collected,
segregated and transported to shore
and sent to the appointed contractors
who provided waste treatment system
In Egypt, similar safe practices were in
place:
• For normal waste, handling and
disposal was undertaken in compliance
with applicable environmental law
and regulatory requirements, involving
contracting with local units
• Handling, transportation and disposal
of hazardous waste was undertaken as
follows:
− solid hazardous waste to approved
governmental landfill in El Nasrya in
Alexandria
− liquid and solid hydrocarbon waste
to approved landfill by contractor
Petrotrade
− water-based mud cutting waste to the
Fayum Governorate landfill
An annual environmental monitoring was
conducted over Petrosilah work locations
by IMS Company to assess compliance
with applicable environmental law and
regulation.
We are committed to developing site-
specific biodiversity action plans in the
event that operational sites are within
sensitive areas, incorporating country-
specific strategies and action plans and
working in association with external
advisers to ensure that best practice
conservation priorities are achieved.
Non-Financial KPIs (HSES)
KPI
Target - 2024 2024 2023 2022
Spills to the environment* 0
0
2 1
* Number of spills reported (quantities greater than 100 litres).
KPI
Target 2024 2023 2022
Solid non-hazardous waste produced (tonnes) Set per project
130
100 109
Percentage of non-hazardous waste reused or recycled Set per project
38
14 15
Solid hazardous waste (tonnes) Set per project
175
69 60
Percentage of hazardous waste reused or recycled
Set per project
2
5 11
The increase in the amount of waste produced in 2024 is linked to the additional drilling activities carried out in Block 16-1 in Vietnam.
Overall objective
To protect the environment and conserve biodiversity
2024 Objectives 2024 Outcomes 2025 Objectives
Obtain all necessary
environmental permits for
all drilling programmes /
seismic studies.
All necessary permits for our 2024 field development
operations were obtained successfully.
Obtain all necessary
environmental permits for all
drilling programmes / seismic
studies.
Improve methane emissions
management and reporting.
In progress. Pharos has been reporting methane emissions
from venting following established industry procedures. In
2024 we reviewed our carbon accounting practices and
performed more mobile gas measurements to improve the
accuracy of our reporting.
Improve methane emissions
management and reporting.
Carry out further feasibility
studies on CO
2
reduction
technologies and implement
those options deemed
suitable for our assets.
Several technologies for reducing the GHG emissions
intensity of our assets have been identified. We have
successfully implemented projects to replace the lighting
systems in our wellhead platforms in Vietnam, which
contribute to reduce fuel consumption and associated
emissions. In Egypt, Petrosilah is exploring piloting the use of
solar PV at one of the El Fayum wellsite locations.
Carry out further feasibility
studies on CO
2
reduction
technologies and implement
those options deemed suitable
for our assets.
Continue alignment with
TCFD disclosure and
reporting.
Annual review and update
of Net Zero roadmap.
Completed. Updated Net-zero Roadmap can be found on
pages 96 to 99.
Continue alignment with
TCFD disclosure & reporting.
Annual review and update of
Net Zero roadmap.
ADDITIONAL
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STATEMENTS
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PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Corporate Responsibility Report
CORPORATE RESPONSIBILITY
NON-FINANCIAL INDICATORS
2024 2023 2022
3
Hours worked (million)
3.26
3.59 3.35
Lost Time Injury Frequency Rate (number of lost time injuries per million man-hours)
0
0 0.3
Fatal Accident Frequency Rate (number of fatal accidents per hundred million man-hours)
0
0 0
Fatal Accidents
0
0 0
Total Recordable Injury Rate (number of recordable injuries per million hours worked)
0
0 0.6
Total Scope 1 & 2 GHG emissions (tCO
2
e) by equity
2
84,403
86,151 104,929
Scope 1 total GHG emissions (tCO
2
e) by equity
84,361
86,109 104,889
Scope 2 total GHG emissions (tCO
2
e) by equity
42
42 40
Total Scope 3 GHG emissions (tCO
2
e) by equity
2
718,693
853,474 -
Scope 3 GHG emissions (tCO
2
e) by equity – Business Travel
256
270 -
Scope 3 GHG emissions (tCO
2
e) by equity – Upstream Transportation
1,081
1278 -
Scope 3 GHG emissions (tCO
2
e) by equity – Use of Sold Product
717,357
851,926 -
GHG intensity by production (tonnes of CO
2
e per 1,000 tonnes of hydrocarbon produced by equity
share)
302
273 326
Total hydrocarbons flared (Tonnes of hydrocarbons flared for every 1,000 tonnes of production on a
gross basis)
20
17 34
Energy use (grid electricity kWh)
328,060
330,552 323,492
Total energy consumption (from fuel combustion, other operations and purchased electricity) in MWh
1
255,243
237,729 275,115
Non-hazardous waste produced (tonnes)
130
100 109
Hazardous waste produced (tonnes)
175
69 60
Percentage non-hazardous waste recycled
38
14 15
Percentage hazardous waste recycled
2
5 11
Spills to the environment (>100 litres)
0
2 1
Oil in produced water content (Vietnam Blocks 16-1/9-2)
27
28 28
Freshwater use (cubic metres)
67,913
66,588 70,582
HSES regulatory non-compliance
0
0 0
Community investment spend ($)
259,889
247,373 198,600
1) In line with the UK government’s Streamlined Energy and Carbon Reporting (SECR) policy, energy consumption from fuel combustion
2) Under Section 385(2) of the Companies Act 2006 (Strategic Report and Directors’ Report) Regulations, 2013 and in line with the requirements of the Climate
Change Act (2008), carbon reporting for UK-listed companies in directors’ annual reports is mandatory for reports published after 30th September 2013.
The regulations cover the six Kyoto Protocol GHG cited in Section 92 of the Climate Change Act: carbon dioxide (CO
2
), methane (CH
4
), nitrous oxide (N2O),
hydrofluorocarbons (HFC), perfluorocarbons (PFC) and sulphur hexafluoride (SF
6
). The Companies Act 2006 regulation does not state which methodology a
company has to use but requires that this methodology is clearly disclosed.
3) On 21 March 2022 Pharos revenue entitlement in Egypt decreased from 42.6 to 22.86 percent. According to section 5 of the GHG protocol on base year
recalculation following an acquisition, GHG emissions for the year 2022 has been recalculated using this entitlement figure.
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PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
TCFD Report
TCFD INDEX TABLE
Recommended disclosures Status Disclosure location
Governance
a) Describe the board’s oversight
of climate-related risks and
opportunities
• Corporate Responsibility report, page 61
• Chair’s Statement, page 17
• ESG Committee report, pages 117 to 119
• Audit and Risk Committee report, pages 128 to 134
• Remuneration Committee report, pages 135 to 152
• TCFD report, under 1. Governance, page 82
b) Describe the management’s
role in assessing and managing
climate-related risks and
opportunities
• Risk Management report, pages 45 to 56
• Corporate Responsibility report, page 61
• Section 172 (1) statement, pages 34 to 35
• TCFD report, under 1. Governance, page 82
Strategy
a) Describe the climate-related risks
and opportunities the organisation
has identified over the short,
medium and long term
• Viability Statement, pages 57 to 58
• Risk Management report, pages 48 and 52
• TCFD report, under 2. Strategy, pages 83 to 93
b) Describe the impact of climate-
related risks and opportunities
on the organisation's business,
strategy, and financial planning
• TCFD report, under 2. Strategy, pages 83 to 93
c) Describe the resilience of the
organisation's strategy, taking into
consideration different climate
related scenarios, including a 2°C
or lower scenario
• Viability Statement, pages 57 to 58
• TCFD report, under 2. Strategy, pages 83 to 93
Risk
Management
a) Describe the organisation’s
processes for identifying and
assessing climate-related risks
• Risk Management report, pages 48 and 52
• TCFD report, under 3. Risk Management, page 94
b) Describe the organisation’s
processes for managing climate
related risks
• Risk Management report, pages 48 and 52
• TCFD report, under 3. Risk Management, page 94
c) Describe how processes
for identifying, assessing, and
managing climate-related risks
integrated into the organisation’s
overall risk management
• Viability Statement, pages 57 to 58
• Risk Management report, pages 48 and 52
• TCFD report, under 3. Risk Management, page 94
Metrics
& Targets
a) Disclose the metrics used by the
organisations to assess climate-
related risks and opportunities
in line with its strategy and risk
management process
• TCFD report, under 4. Metrics & Targets, pages 94 to 95
b) Disclose Scope 1, Scope 2, and
if appropriate Scope 3 greenhouse
gas (GHG) emissions, and the
related risks
• Corporate Responsibility Non-Financial Indicators, page 79
• TCFD report, under 4. Metrics & Targets, pages 94 to 95
c) Describe the targets used by the
organisation to manage climate
related risks and opportunities and
performance against targets
• TCFD report, under 4. Metrics & Targets, pages 94 to 95
• Remuneration Committee report, pages 139 and 147
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TCFD Report
CLIMATE ACTION AT
PHAROS ENERGY
As an oil and gas company, we support
the need for more consistent and
comparable disclosure around climate-
related risks and opportunities. The
following pages align with 10 out of
11 recommendations issued by the
Task Force on Climate-related Financial
Disclosures (TCFD) and provide greater
insight into our approach to assessing and
managing the financial risks associated
with climate change. We have included
a TCFD index on page 80 as a quick
overview of our TCFD disclosure.
As at year end 2024, Pharos consider
ourselves to not be fully aligned with
one TCFD recommendation: Metrics &
Targets b) Disclose Scope 1, Scope 2
and, if appropriate, Scope 3 greenhouse
gas emissions and the related risks.
For 2024, the Group discloses its
Scope 1 and Scope 2 greenhouse gas
emissions and three Scope 3 categories,
two of which have high materiality for
Pharos. While the Group conducted
materiality assessment against all 15
Scope 3 categories during the year as
recommended by the TCFD guidelines,
we are not able to report all Scope 3
categories either due to limitations of
data collection and methodology, or
some categories’ immateriality to Pharos’
operating model. As Pharos is in early
stages of our Scope 3 reporting journey,
we expect our reporting methodology
as well as the availability and reliability of
required data to improve over time, and
we intend to integrate applicable improved
data into our GHG reporting as it becomes
available. We expect to be fully compliant
with Metrics & Targets b) in the next three
to five years.
Stakeholder
engagement
Gap
analysis
Internal
alignment
Reporting and
disclosure
Approach:
Adopt an integrated approach
Approach as cyclical process
Benefits:
Demonstrates awareness of growing importance of
climate-related issues to key stakeholders
Staying ahead of mandatory disclosure requirements,
focusing on efficiencies
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1. GOVERNANCE
Pharos has a multi-layered
governance structure
that aligns our operating
model with our climate and
corporate responsibility
ambition.
The Board takes overall responsibility for
our Net Zero ambition, climate strategy
and climate-related risk and opportunities.
The Board ensures Pharos maintains
a robust climate risk management
and internal control systems, including
high-level responsibility for setting and
monitoring the company’s GHG emissions
reduction targets and climate ambitions.
The Board has oversight of climate-
related risks and opportunities and
ensures climate-related considerations
are embedded in our decision-making,
including the application of strict financial
discipline, such as our internal carbon
price curves used in going concern and
viability stress test scenarios, across all
business decisions. At the project level,
the assessment of climate-related risks
and opportunities is an integral part of
each exploration and development project.
For example, in developing and updating
the Group’s Net Zero Roadmap, the
Board has taken into consideration how
investment in the development of future
business assets may affect our Net Zero
by 2050 ambition and how the Emission
Management Fund can be utilised in
decarbonisation opportunities. Through
the Remuneration Committee, the Board
ensures climate performance, including
GHG emissions performance against our
net zero target of 5% reduction by 2026
as part of our Net Zero Roadmap, is
embedded in the corporate KPI.
Pharos has integrated management
responsibilities into various business
and functional areas, to which the Board
delegates the corporate responsibility
monitoring to the following Committees:
• The ESG Committee oversees the
Group’s management and compliance
with climate-related reporting and
disclosure requirements, as well as
assists the Board in defining and
implementing the Group’s corporate
responsibility strategy.
• The Audit and Risk Committee (ARC)
oversees all principal and emerging
risks in our risk management process,
in which climate risk is considered a
principal risk. The ARC monitors the
methodologies used to test the going
concern and viability resilience of our
business and determine potential
financial impacts of the Group’s
principal risks, including climate risk.
It also oversees the adequacy and
effectiveness of our policies, standards
and management system for HSES.
• The Remuneration Committee
oversees the level of management
incentives attached to improvements
in climate-related performance in order
to further encourage action on the ESG
agenda.
For the current version of each
Committee’s terms of reference, please
visit www.pharos.energy/about-us/
governance/committees/.
Climate-related matters, as well
as progress against our corporate
responsibility performance and Net Zero
ambitions, are reviewed and discussed
at each committees meeting. Information
is then communicated back to the Board
for consideration when they review the
Group’s strategy at each scheduled Board
meeting. In 2024, each Committee met
four times, as scheduled.
Below Board and Committee level, our
Chief Executive Officer and Chief Financial
Officer manage our climate progress and
are responsible for the delivery of our Net
Zero strategy. To support the Executives
in their delivery, a Net Zero Working
Group was formed in May 2022, with
support from functional and operational
representatives such as Reservoir
Engineer, HSE Manager, Risk Manager,
Investor Relations, and Exploration
Manager to drive progress on our strategy.
The Net Zero Working Group reports to
the relevant Committees and the Board
every quarter.
The Board takes an active approach to
ensure its members are aware of key
climate matters relevant to Pharos and
the broader energy sector. In 2024, at
every ESG Committee meeting, the
Board spends a section of the agenda
to understand and learn about new
developments in the ESG landscape
in the energy sector, such as Net Zero
commitment across peers and emerging
disclosure requirements such as the
IFRS Sustainability Disclosure Standards
(IFRS SDS). Climate intelligence reports
and COP briefing notes prepared by the
Company’s sustainability advisor were also
circulated to the Board as supplementary
reading materials. These efforts play
an important role in informing the
Executive and Non-Executive Directors’
consideration of climate-related matters
and Pharos’ Net Zero ambition in strategic
planning and risk management activities.
BOARD OF DIRECTORS
EXECUTIVE DIRECTORS
ESG Committee
Net Zero Working Group
Audit and Risk Committee
Country Managers
Remuneration Committee
Functional &
Operational teams
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TCFD Report - Continued
2. STRATEGY
Our climate strategy
In order to realise our climate commitment
to achieve Net Zero GHG emissions
from all our future and existing assets
by no later than 2050, Pharos prioritises
reducing emissions by achieving
operational efficiencies, reducing flaring
and venting, replacing the power
consumption of our facilities with less
impactful energy sources and eventually
procuring nature-based carbon offset
projects for hard-to-abate, residual
emissions.
More details of our climate strategy,
including interim targets and the
decarbonisation levers at asset-levels,
can be found in our Net Zero Roadmap
published in December 2023 on our
website (https://www.pharos.energy/
media/b55c4sqz/pharos-energy-net-
zero-roadmap-2023_official.pdf). This
Roadmap was researched and developed
by the Company in close consultation
with climate specialist advisors and ESG
consultants. An updated version of the
Roadmap can be found on pages 96 to
99.
We are committed to transparency
in our climate-related disclosure and
reporting. We strive to achieve a balance
of delivering value to all stakeholders via
cash returns and organic growth while
minimising climate-related impacts on our
long-term business model. Our purpose
is to provide energy security for host
countries in which we operate and help
local government achieve their economic
development goals and prosperity using oil
and gas revenues from our operations.
Identifying climate-related risks and opportunities
Our business strategy is focused on
generating sustainable value from our
producing and development assets,
including an infrastructure-led exploration
approach to identify new resources near
existing infrastructure. The Board hold an
annual review of our corporate strategy,
which incorporates an assessment of
our current portfolio to inform forward
looking plans to ensure the business
maintains its resilience and is positioned
for growth. In 4Q 2023, Pharos with the
support of a TCFD consultant undertook
a scenario analysis exercise to assess the
impact of these physical and transitional
risks and opportunities on our portfolio.
Based on these scenario analyses, in
1Q 2025, Pharos conducted further
internal discussions with our finance and
commercial team and risk manager to
update and assess the materiality of these
climate-related risks based on timeframe,
severity and likelihood rating, details of
which can be found in this report. For
example, risks that have a low likelihood
rating are still deemed to be material if
its severity is considered to be moderate
or above in the short or medium term,
and vice versa. The scenarios helped
the Company to better understand
and assess the impact of possible
shifts in the macroeconomic outlook,
technology developments, policy and
legal implications, and the projected future
demand for our products.
Internally, our approach to identifying risk
is consistent for all other principal and
emerging risk, which is through a well-
established Risk Management Framework
and is guided by a wide range of
information sources and regularly reviewed
by relevant risk owners. More information
on the Risk Management Framework
can be found in our Risk Management
Report on pages 45 to 58. In addition to
the above framework, for climate-related
risks, the Company also use scenario
analyses to help us identify and assess the
size, scope and significance of climate-
related risks and opportunities relative to
other risks in the matrix. Our approach
to identifying climate-related risks and
opportunities will continue to evolve as
the depth of understanding grows across
our organisation. We continue to embed
consideration of transition and physical
risk exposure in our business planning and
decision making.
The risk rating for each scenario is based
on Likelihood (L) multiplied by Severity
(S), aggregated across all three time
periods with the following weightings: for
likelihood, short-term (0-3 years) 40%;
medium-term (3-5 years) 30%; long-
term (5-10 years) 20%. The weightings
reflect the diminishing level confidence
associated with longer term projections.
The results of these risk rating and
weighting assessments helped Pharos
identified the impact of these risks and
which area of operations may be affected,
details of which can be found in this
report.
We have aligned our climate-related
risks and opportunities to cross-
industry metrics and targets in section
4. Metrics and Targets on page 94. For
example, the Emissions Management
Fund reflects the capital available to be
invested in emission reduction projects
to mitigate the impact of transition risks,
such as carbon pricing, and utilise low-
carbon transition enabling technology
opportunities. Risk of restrictions of use
of carbon intensive assets is considered
when we conduct sensitivity analysis and
calculate the anticipated impact to the
business. Additionally, our CO
2
emissions
performance metrics are directly linked
to the targets in our Net Zero Roadmap.
Emissions reduction incentives are part of
all employee and directors’ remuneration
and annual bonus schemes, further
incentivising our emission reduction
efforts.
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PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Assessing the impact of transition and physical risks on our business
1) Transition risks & opportunities
The most material transition risks and
opportunities facing Pharos have been
identified through literature review and
discussions with our TCFD consultant
as well as Pharos colleagues from
commercial, risk and operations teams.
The potential impacts of these transition
risks and opportunities are assessed
under two different emissions scenarios,
in the short-, medium- and long-term
(0-3 years, 3-5 years and 5-10 years
respectively) and based on timeframe,
severity and likelihood rating. We consider
medium terms to be 3-5 years and long-
term to be 5-10 years, as our producing
licences in Vietnam are currently due
to expire within the next 10 years. This
assessment, conducted in 4Q 2023
and updated in 1Q 2025, has enhanced
the Group’s overall critical strategic
decision-making and tests the resilience
of its business strategy against different
possible futures.
The two scenarios considered in this
assessment were:
• Net Zero Pathway: based on the IEA’s
Net Zero Emissions by 2050 Scenario
(NZE), this scenario assumes that there
is rapid implementation of policies
that reduce global carbon emissions.
We have chosen this scenario for
this assessment as it aligned with
the objectives of the Paris Climate
Agreement and limit warming to 1.5°C.
• Stated Policies Scenario (STEPS):
we have chosen this scenario as it
provides a more conservative view of
the future compared to NZE, in which
only current and planned policies are
enacted, and fossil fuels play a greater
role in the energy system, and society
more widely, for longer. According to
the IEA, under STEPS, warming is
projected to reach almost 2.5°C by the
end of the century.
For the purposes of these assessments,
the Net Zero Emissions transition pathway
(NZE) assumes a surge in clean energy
policies and investment and that all
current net zero pledges are achieved,
following significant efforts to realise
near-term reductions. At the same time
carbon prices are introduced in all regions,
albeit at different levels for countries and
sectors. As part of efforts to decarbonise,
the energy sector, government policy and
industry initiatives focus on CO
2
emissions
from production, as well as incentivising
alternative low-carbon solutions. By 2030
NZE assumes the share of fossil fuels in
primary energy demand declines from
80% over the last two decades to 62%.
Under NZE, oil and gas prices decline
rapidly to the costs of the marginal project
required to meet falling demand: c.$40/
barrel for IEA crude oil in 2030, before
declining further to c.$20/barrel in 2050.
For STEPS, this scenario assumes that
Electric Vehicles (EVs) account for around
40% of car sales by 2030 (compared with
15% in 2023) and that deployment of
solar photovoltaics (PV) doubles by 2030.
In the same timeframe, STEPS assumes
the share of fossil fuels in primary energy
demand declines from 80% over the last
two decades to 73%. Related to this,
there is a slight but steady decline oil
demand from the late 2020s, with falling
supply from existing fields keeping pricing
relatively steady – by 2030 IEA crude
reaches $85/barrel under STEPS.
We consider our business to be resilient
when stress-tested using the IEA’s Net
Zero Emissions by 2050 scenario. Key
drivers of the Group’s resilience include
operational stability and the ability to
meet production guidance, as well as
mitigations against the transition and
physical risks outlined in this report. Of
the scenarios considered in our Transition
Risk Assessment, only the Net Zero
Emissions scenario matched the Paris
Climate Agreement objectives of limiting
warming to “well below 2°C”. Therefore,
we continue to stress test the going
concern and viability resilience of our
business using the NZE. These sensitivity
analyses are conducted bi-annually
and form a crucial part of our financial
planning process. We believe that the
NZE price curve has already incorporated
carbon tax considerations into its price
deck. Although there are no carbon tax
policies in Egypt and Vietnam apart from
the environment fees in Vietnam in the
license extension period, our sensitivity
test assumed a carbon tax is effective
from 2026 at $10/tonne CO
2
gradually
increasing to $40/tonne CO
2
e at 2030.
More information on our going concern
and viability statement can be found on
pages 57 to 58.
We aim to regularly review
and enhance our processes
and standards to help
these reflect the potential
impacts of climate change.
We continue to maintain
a watching brief as both
compliance-based and
voluntary carbon pricing
mechanisms continue to
evolve.
6
5
4
3
2
1
0
2000 2010 2020 2030 2040 2050 2060 2070 2080 2090
NZE SSP1-2.6 SSP2-4.5 SSP5-8.5
2100
STEPS
Source: IPCC, 2021 and IEA, 2023
Global temperature increase (relative to 1850-1900) in
O
C
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PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
The risks and opportunities are assessed using a system that assigns a rating of the perceived severity and likelihood of occurrence
under the Net Zero Emissions Pathway and STEPS, with input from Pharos’s internal risk register and Risk Management Framework.
These ratings are re-assessed and updated annually to reflect key developments in the wider ESG landscape as well as any changes
in our internal risk register. Analysis of the current political context in key regions and key global trends is also used in the assessment.
With respect to the energy transition, and the risk assessment undertaken by Pharos, four global trends have been identified that are
pertinent to our areas of operation, Egypt and Vietnam, that help inform the analysis and the risk and opportunity ratings in this report:
• Affordability and security will determine approaches to energy transition
• Carbon capture, utilisation and storage (CCUS) and carbon markets increasingly moving to the fore
• Greater grid investment is required to serve effective renewables power markets
• Developing countries collectively demand greater financial assistance to achieve climate goals
Severity Likelihood Timeframe
Severe - E
Major - D
Moderate - C
Minor - B
Low - A
Very unlikely (<15%) -1
Unlikely (15-40%) - 2
Medium likelihood (40-60%) - 3
Likely (60-85%) - 4
Very likely (>85%) - 5
Short-term (0-3 years)
Medium-term (3-5 years)
Long-term (5-10 years)
Transition risks
Risk
1. Commodity prices:
Oil and gas price volatility
Description
• Increased costs due to shifts in supply and demand for resources
• Potential impact on both assets, Egypt and Vietnam
Potential impact
Short term: 0 Medium term: 0 Long-term: $55.9m
(1)
Timeframe, Severity
& Likelihood
Short term: D3 Medium term: D4 Long term: D4
Business area
impacted
OPERATIONS, SUPPLY CHAIN, MANUFACTURING
Methodology
• Analyse historical trends in oil and gas prices
• Evaluate geopolitical factors impacting supply
• Assess supply chain vulnerabilities in sourcing raw materials
• Conduct stress testing on cost structures under various price scenarios
Mitigations
• Oil commodity hedging
• Close monitoring of business activities, and financial position cash flows
• Control over procurement costs and effective management of supply chains
• Stress test scenarios and sensitivities via principal compound risk analysis, please refer to Note 16 -
Property, plant and equipment and right-of-use assets, where the sensitivities of $55.9m related to Net
Zero have been broken down by field
• Capital discipline with focus on controlling and managing costs
• Discretionary spend actively managed
• Maintain and cultivate good relationships with lenders
TCFD Report - Continued
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PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Risk
2. Restriction of use of carbon intensive assets:
Countries may place caps on imports / use of carbon intensive fuels
and energy / carbon intensive products (e.g. through EU’s Carbon Border
Adjustment Mechanism (CBAM))
Description
• Depreciation of carbon-intensive assets and stranded investments
• Egypt and Vietnam both have plans to increase oil and gas production. Therefore, this risk will have an
impact on all of Pharos’ assets
• However, Pharos believes this risk remains moderately unlikely in the 5 to 10-year timeframe, as it
would take time for Vietnam and Egypt to completely phase out oil and gas. According to S&P, although
Vietnam is one of East Asia’s rare crude suppliers capable of producing more than 300,000 b/d, the
country with a population of close to 100 million has a total refining capacity of around 350,000 b/d,
which is only enough to cover just about half the country’s oil products and chemicals demand
• Additionally, 100% of our products are sold and consumed locally, which reduces the impact and
likelihood of this risk in the short and medium term
Potential impact
Short term: 0 Medium term: $2.2m Long-term: $10.8m
(2)
Timeframe, Severity
& Likelihood
Short term: B2
Medium term: C2 Long term: C3
Business area
impacted
UPSTREAM OPERATIONS, ASSET MANAGEMENT, FINANCE
Methodology
• Conduct a thorough risk assessment on regulatory changes affecting carbon-intensive assets
• Estimate asset depreciation under different regulatory scenarios
• Evaluate potential stranded assets through scenario analysis
• Stress test asset valuations based on evolving environmental regulations
Mitigations
• Managing our carbon footprints through flaring and venting reduction; exploring decarbonisation
technologies to achieve our emission reduction interim targets as detailed in our Net Zero Roadmap;
utilising the Emissions Management Fund; and engaging in regular conversations with lenders to
understand their ESG concerns and requirements
Risk
3. Lack of portfolio diversification:
Transition towards low-carbon economy will see a reduced demand for oil
Description
• Increased vulnerability due to concentrated investments
• While this risk may have an impact on both our assets, the likelihood of completely phasing out of oil and
gas usage in Vietnam and Egypt will have a longer time horizon than 5 to 10 years
• Additionally, 100% of our products are sold and consumed locally, which reduces the impact and
likelihood of this risk in the short and medium term
Potential impact
Short term: 0 Medium term: 0 Long-term: $55.9m
(1)
Timeframe, Severity
& Likelihood
Short term: C3 Medium term: C3 Long term: D4
Business area
impacted
FINANCE, INVESTMENT STRATEGY
Methodology
• Conduct stress testing on portfolio performance under different market conditions
• Consider calculating the cost of diversification under opportunities
Mitigations
• Explore options towards investment in low-carbon technology, as part of our Net Zero Roadmap
• Stress test scenarios and sensitivities via principal compound risk analysis, please refer to Note 16 -
Property, plant and equipment and right-of-use assets, where the sensitivities of $55.9m related to Net
Zero have been broken down by field
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Risk
4. Accelerating electrification:
Accelerating electrification of the transport and heating sectors,
and advances in plastic recycling could result in lower demand for
hydrocarbons in the long term
Description
• Increased demand for electrification solutions and grid upgrades
• Potential impact on both assets, Egypt and Vietnam. However, similar to our previous analysis, Pharos
believes this risk remains moderately unlikely in the 5 to 10-year timeframe
Potential impact
Short term: 0 Medium term: 0 Long-term: $55.9m
(1)
Timeframe, Severity
& Likelihood
Short term: C3 Medium term: C3 Long term: D4
Business area
impacted
TECHNOLOGY, ENERGY, INFRASTRUCTURE
Methodology
• Analyse market trends in renewable energy and electrification
• Model the costs associated with potential infrastructure upgrades (rig electrification)
• Conduct scenario analysis on electrification adoption rates and technology advancements
Mitigations
• Managing our carbon footprints through flaring and venting reduction
• Exploring decarbonisation technologies to achieve our emission reduction interim targets as detailed in
our Net Zero Roadmap
• Utilising the Emissions Management Fund
• Engaging in regular conversations with lenders to understand their ESG concerns and requirements
• Stress test scenarios and sensitivities via principal compound risk analysis, please refer to Note 16 -
Property, plant and equipment and right-of-use assets, where the sensitivities of $55.9m related to Net
Zero have been broken down by field
TCFD Report - Continued
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PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Risk
5. Carbon pricing:
Increased price of carbon through national and international schemes
Description
• Financial impact due to costs associated with carbon emissions pricing
• By 2030, the Sustainable Development Scenario (SDS) assumes that developing countries and emerging
economies with Net Zero pledges will have implemented an effective carbon price of $40 per tonne CO
2
.
Therefore, this risk has potential impacts on both assets, Egypt and Vietnam
• However, under STEPS, it is assumed that operations Egypt and Vietnam will not be subject to a carbon
price within five years. Therefore, we believe this reduces the impact and likelihood of this risk in the
short and medium term
Potential impact
Short term: 0 Medium term: $2.2m Long-term: $10.8m
(2)
Timeframe, Severity
& Likelihood
Short term: C1 Medium term: C2 Long term: D3
Business area
impacted
OPERATIONS, REGULATORY COMPLIANCE, FINANCE
Methodology
• Assess current and potential future carbon pricing mechanisms in relevant jurisdictions
• Utilise commercial models to access potential cost burden of operational emissions, using carbon prices
from different scenarios and timeframes
• Undertake stress testing on financial resilience using different carbon price points
• Assess potential financial benefits of emission reduction initiatives and participation in carbon credit
markets
Mitigations
• Pharos currently uses the NZE prices to stress test, which we believe is the most conservative price
curve compared to SDS and STEPS, at a targeted price of $48.2 per barrel (nominal) by 2030. We
believe that the NZE price curve has already incorporated carbon tax considerations into their price
deck. Results of this can be found in Note 2 (a) and Note 16 on page 172 and page 183
• Although there is currently no carbon tax in Egypt and Vietnam, we still conduct a sensitivity test where
carbon tax is effective from 2026 at $10/tonne CO
2
gradually incrementing to $40/tonne at 2030
• To mitigate the impact of this risk in the medium to long term, Pharos is exploring options towards
investment in low-carbon technology, as part of our Net Zero Roadmap
* Note:
1) The long-term impact of this risk has been considered as part of our cash flow consideration and is incorporated into our disclosure in the Financial Statements.
2) The long-term impact of this risk is calculated based on Pharos production profile and associated increase in carbon tax in the 10-year time frame.
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2) Physical risks & opportunities
This assessment adopts a data-driven
approach to identify and analyse the
most material physical climate risks
facing Pharos Energy’s activities in Egypt
and Vietnam and how those risks may
manifest differently under three emissions
scenarios. It assesses current climate
extreme, such as flooding, heat stress and
storms, as well as how long-term shifts
in climate will affect these events. For
physical climate risk, this scenario analysis
helps Pharos understand how climate
impacts may vary by geography, severity
and timing under different emissions
scenarios, and assess the subsequent
implications for its operations, assets and
supply chains. The Company is able to
identify weaknesses, vulnerabilities and
opportunities to help prioritise capital and
resource allocation.
This assessment considers the impacts of climate change under three Shared Socio-
economic Pathways (SSPs). We have chosen the below SSPs as they provide a broad
range of temperature projections, thus allowing us to fully assess the impact of extreme
physical risks such as heat stress on our business.
• SSP1-2.6
Sustainable future. A scenario with low greenhouse gas emissions and less than
2°C temperature rise by 2100. This scenario represents the lower end of the future
concentration pathways. Under this scenario CO
2
emissions begin to decline after
2020 and reach net zero by 2100.
• SSP2-4.5
Middle of the road. A scenario with intermediate greenhouse gas emissions with a
best estimate temperature rise of 2.7°C by 2100. This scenario represents the middle
of the range of future concentration pathways. Under this scenario, CO
2
emissions
start to decline around 2045 but do not reach net zero by 2100.
• SSP5-8.5
Fossil fuelled development. A scenario with very high greenhouse gas emissions and
a best estimate temperature rise of 4.7°C by 2100. This scenario represents the high
end of the future concentration pathways. Under this scenario, emissions continue to
increase towards the end of the century, peaking around 2080.
Of the scenarios considered in our Physical Risk Assessment, the SSP1-2.6 scenario
matched the objectives the Paris Climate Agreement of limiting warming to “well below
2°C”, but does not limit it to 1.5°C.
6
5
4
3
2
1
0
2000 2010 2020 2030 2040 2050 2060 2070 2080 2090
SSP1-2.6 SSP2-4.5 SSP5-8.5
2100
Source: IPCC, 2021 and IEA, 2023
Global temperature increase (relative to 1850-1900) in
O
C
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PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
For Pharos’ Physical Risk assessment, the Company used its TCFD consultant’s climate risk indices as guidance to evaluate and
identify the most material physical climate risks facing our operations in Egypt (El Fayum Concession and North Beni Suef Concession)
and offshore Vietnam (Offshore Vietnam Blocks 125 & 126 and Blocks 9-2 (CNV) and 16-1 (TGT)). For the purposes of these
assessments, assumptions are made based on the degree to which each country is exposed to a range of chronic and acute climate
hazards by 2050, forming a climate hazard index. It is constructed at a resolution of 50km2 and is comprised of two pillars: Acute
Climate Hazards and Chronic Climate Hazards. The Acute Climate Hazards index, is comprised of Extreme High Temperatures, Extreme
Precipitation and Heatwave Hazard. The Chronic Climate Hazards Index is comprised of Chronic Change in Temperature, Chronic
Change in Precipitation, Chronic Change in Wind Speed, Temperature Variability and Precipitation Variability. These assessments are
updated annually to reflect key changes in our internal risk register and take into account operational measures implemented to mitigate
these physical risks. Under these Physical Risk assessments and their associated ratings, Pharos consider our business resilient, as
the key drivers of the Group’s resilience include operational stability and the ability to meet production guidance, as well as mitigations
against the physical risks, details of which are outlined in the table below.
The assessment can also help Pharos on when and where to invest in new ventures, how to allocate resources for resilience building, or
to risk-adjust strategic decision making. The results of assessments helped Pharos identify the significance and impact of each physical
risks and which area of operations might be impacted, which are detailed in the table below.
Physical risks
Risk
6. Reduced water availability:
May affect operations where water is crucial for drilling and extraction
Description
• Financial impact due to interruptions or slowdown in oil and gas operations due to reduced water
availability
• Higher expenses for securing water from alternative sources
• This risk may have a potential impact both of our assets; however, its impact is unlikely to be significant
as the majority of our production comes from offshore operations in Vietnam, where water availability
is not a concern. In Egypt, Pharos uses high-salinity water for our operations, which is recycled and
reused. Therefore, we do not consider this a material risk for Pharos in all time frames
Potential impact
Negligible
Timeframe, Severity
& Likelihood
Short term: B1
Medium term: B2 Long term: B3
Business area
impacted
OPERATIONS
Methodology
• Use historical data on operational disruptions during water scarcity events
• Estimate production losses and increased downtime based on projections and their financial
consequences
• Assess the financial impact of delayed or halted operations
• Assess the cost of securing water from alternative sources
• Estimate transportation costs for bringing water from distant sources
• Compare these costs with baseline water procurement costs
Mitigations
• Monitoring water usage in our operations
ADDITIONAL
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REPORT
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PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Risk
7. Increased temperatures and heat stress
Affecting both equipment and personnel, potentially affecting safety and
operational efficiency
Description
• Costs associated with implementing measures to mitigate the impact of heat stress on personnel and
equipment
• Financial losses due to potential slowdown or interruptions in operations
• While this risk has the potential to impact both of our operations, its impact is considered to be minimal
thanks to our operational adaptations, which is already in place
Potential impact
Negligible
Timeframe, Severity
& Likelihood
Short term: A4 Medium term: B5 Long term: B5
Business area
impacted
OPERATIONS, HEALTH AND SAFETY, FINANCE
Methodology
• Use risk exposure assessments and health and safety records
• Identify and assess potential adaptation measures (e.g., cooling systems, personal protective equipment)
based on physical risk data and projections
• Estimate the costs of implementing these measures, including installation, maintenance, and training
• Leverage existing data on operational disruptions during periods of increased temperatures
• Estimate production losses and increased downtime based on historical patterns and their financial
consequences
• Assess the long-term effects on overall operational efficiency and competitiveness based on historical
data and projections
Mitigations
• Health and safety training for the operational team in cases of heat stress
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PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Risk
8. Storm frequency
Operations may be impacted from high winds (and waves if offshore)
Description
• Financial losses due to repair and restoration expenses for damaged infrastructure
• Increased costs from production losses and downtime, impacting overall operational efficiency
• This risk can have an impact our operations in Vietnam, particularly during monsoon season. However,
historically, our operational teams plan drilling programmes ahead of time and are mindful to avoid
monsoon seasons. We also take every precautions to protect all operational equipment and our
workforce from any effects of monsoon storms. Therefore, this risk is unlikely to have a major impact on
our Vietnam assets
• This risk is unlikely to impact our Egypt operations as our operations are onshore and not near any
shores where large waves or storms may have an impact
Potential impact
Short term: $0.8m Medium term: $1.5m Long term: $1.5m
Timeframe, Severity
& Likelihood
Short term: B3 Medium term: B3 Long term: B3
Business area
impacted
INFRASTRUCTURE, OPERATIONS
Methodology
• Estimate the cost of repairs for different types of infrastructure based on historical data or engineering
assessments
• Assess vulnerability and exposure of infrastructure to high winds
• Analyse historical data on operational disruptions during storm events, including downtime and
production losses and shut-down and start-up costs
• Estimate the financial impact of delayed or halted operations
• Consider the long-term effects on overall operational efficiency and competitiveness
Mitigations
• To mitigate this risk and reduce downtime, our operational teams plan drilling programmes ahead of time
and are mindful of monsoon seasons
• Operational adaptations are in place to provide flexibility in number of wells drilled and time of drilling to
accommodate storm frequencies
ADDITIONAL
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PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Climate-related opportunities
Opportunity
Technology
Reduce carbon intensity of products through production efficiencies
Description
• Improve the environmental performance of products by enhancing production processes to reduce
carbon intensity
• Reduce the potential impact of carbon tax due to reductions in carbon emissions via production
efficiencies
• Potential impact on both assets, Egypt and Vietnam
Potential benefit
Short term: $0.5m
Medium term: $1.1m Long term: $2.5m
Business area
impacted
RESEARCH AND DEVELOPMENT, OPERATIONS
Methodology
• Conduct a comprehensive analysis of the current production processes
• Identify areas for efficiency improvements and emissions reduction
• Implement breakthrough technologies and innovative practices to enhance production efficiency
• Monitor and assess the impact on carbon intensity through continuous performance measurement
• Engage in life cycle assessments to quantify improvements
Mitigations
• As part of our Net Zero Roadmap, Pharos is exploring several decarbonisation levers to achieve our Net
Zero target by 2050. This includes: reducing and eliminating gas venting, reducing gas flaring via flare
stacks installation, process optimisation, gas utilisation, and carbon capture and removal
• Pharos have implemented some of these technologies to reduce fuel consumption in recent years.
For example, in 2024, we continue to manage gas flaring by carefully monitoring and optimising the
processing facilities in the TGT FPSO, including adjusting the gas turbine compressors (GTC) set-points
to reduce flaring
Opportunity
Technology
Low-carbon transition enabling technology
Description
• Strategically invest in fuels and technologies with lower carbon intensity to align with broader company
corporate responsibility goals
• Potential impact on both assets, Egypt and Vietnam
Potential benefit
Short term: c.$0.8m Medium term: $2.2m Long term: $4.0m
Business area
impacted
STRATEGY
Methodology
• Assess the current portfolio of fuels and technologies
• Identify investment opportunities in less carbon-intensive fuels and technologies
• Develop a comprehensive investment strategy aligned with corporate responsibility goals
• Implement investments and monitor their impact on the overall carbon intensity
• Conduct scenario analysis to evaluate the resilience and potential returns on the investments
Mitigations
• While many climate-related opportunities and decarbonisation levers are being explored by the Group
as part of our pathways towards Net Zero, as mentioned above, one emission-reduction opportunity
already identified is the associated gas-powered electricity generators in Egypt. This is part of a
broader plan to utilise produced associated gas instead of diesel for power generation, along with flare
reductions. The generators reduce CO
2
e emission by using the associated gas that otherwise would
have been flared, and generate electricity to be used for field operations in Egypt
TCFD Report - Continued
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PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
3. RISK MANAGEMENT
Climate risk is a principal risk for Pharos, and it is assessed
and managed in line with Pharos’ overall Risk Management
Framework. The framework comprises:
• A risk management process through which we carry out
regular and robust risk assessment to identify and manage
principal and emerging risks. The process considers relevant
interconnections within the assets and across all business
functions and entities.
• Continued monitoring of macroeconomic environment,
commodity price uncertainties and production volatilities.
• Management deep-dive exercises to gauge its risk appetite
on the risk matrix and recalibrate its risk tolerance to ensure
the appropriate mitigating actions were implemented. Staff
from all functions, entities and asset locations are invited to
participate in these exercises to contribute to the risk matrix.
• An internal control system, including Code of Business
Conduct and Ethics and corporate policies which form part
of the Group’s Business Management System, to enable
risks to be managed in line with our defined risk appetite.
• The Board of Directors supported by the Audit and Risk
Committee (ARC) to ensure that the internal control functions
in place are appropriate, effective and on target. As the
Board believes the Group’s risk matrix is a living dynamic
document, it is agreed that additional risk-assessment
meetings, aside from the quarterly scheduled ARC meetings,
can be called if a new emerging risk is deemed significant.
Quarterly risk reports, conducted by the Group’s Risk
Manager, are submitted to the Board ahead of every Board
meeting.
* Read More
For more information, please see our Risk Management
Report on pages 45 to 56.
In addition to the above framework, for climate-related risks, the
Company also use scenario analyses, conducted by our TCFD
consultant and outlined earlier in this report, to help us identify
and assess the size, scope and significance of climate-related
risks and opportunities relative to other risks in the matrix. The
Group also consider regulatory requirements and emerging
trends related to climate change of each host government, such
as assessing Vietnam and Egypt’s national energy plans as well
as STEPS and SDS. Our Climate Change Policy is available on
our website and reviewed annually by the Board, together with
other corporate policies.
We carefully consider the environmental performance of assets
and opportunities as part of our decision-making process,
underpinned by our Net Zero commitment. Our approach to
climate risk management is continually developing. How we
identify, manage, assess, mitigate and determine the impacts
of each climate-related risk and opportunities will vary by type,
as detailed in the transition and physical risks tables above. We
will continue to review our risk management framework when
determining the materiality of its exposure to climate-related
risks.
4. METRICS & TARGETS
2024 CLIMATE CHANGE RISK-
RELATED METRICS & TARGETS
302
Scope 1 & 2 GHG intensity by production
(2023: 273 tonnes CO
2
e per 1,000 tonnes of hydrocarbon
produced)
84,403
Total Scope 1 & 2 GHG emissions (tCO
2
e) by equity
(2023: 86,151 tonnes CO
2
e)
$55.9m
Maximum anticipated impact to the business
due to a transition risk
$1.5m
Maximum anticipated impact to the business
due to a physical risk
$4.0m
Maximum anticipated benefit to the business due to
adoption of a climate opportunity
$0.25
Of revenue set aside into the Emission Management Fund
for every barrel net to Pharos sold at an oil price above $75
c.$830,000
Total capital accumulated in the Emissions Management
Fund as at year end 2024 to provide support for emissions
management projects
$10-$40
Carbon price range per tonne CO
2
e from 2026 to 2030 used
in Going Concern and Viability stress testing, in alignment
with NZE pathway
Zero
Proportion of GHG emissions subject to carbon pricing
regulations
20%
Total remuneration weighting linked to corporate ESG
target, including GHG emissions improvements in 2024 KPI
718,693
Scope 3 total GHG emissions (tCO
2
e) by equity
(2023: 853,474 tonnes CO
2
e)
ADDITIONAL
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REPORT
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STATEMENTS
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REPORT
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PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Scope 1 & 2
Our GHG emissions in 2024 are recorded
on Scope 1 & 2 CO
2
e absolute and
intensity, and we report on jointly operated
companies in Egypt and Vietnam. We also
measure total hydrocarbon flared as one
of our Corporate Responsibility Non-
Financial Indicators. Both of these metrics
are directly related to our commitment
to achieve Net Zero emissions across
all assets by 2050. For our year-on-year
progress on GHG emissions, please see
our Corporate Responsibility Non-Financial
Indicators on page 79.
In addition to GHG emissions, we also
measure other industry metrics such as
energy consumption, process emissions,
combustion, venting, waste usage and
recycled, freshwater use, and oil spills,
which we track as part of our HSE
performance and can be found in the
Corporate Responsibility report on pages
73 to 78 and our Corporate Responsibility
Non-Financial Indicators on page 79.
In December 2023, Pharos published its
Net Zero Roadmap, which was researched
and developed by the Company in close
consultation with specialist advisors and
consultants, models emission reduction
pathways to achieve net zero Scope
1 (direct) and Scope 2 (indirect) GHG
emissions from all existing and proposed
future assets by 2050 or before. Based
on this modelling, the roadmap contains
interim targets set against the Company’s
2021 baseline year, which have been
approved by the Board and sets out a
5% reduction goal in the short-term and
15% in the medium-term. We use GHG
% reduction against the 2021 baseline as
the main metrics to identify projects and
opportunities with the most potential to
reduce our environmental impact. We also
monitor the reduction of our year-on-year
emission to make sure we are on track
to achieve Net Zero by 2050 ambition
and meet the Remuneration Committee’s
corporate responsibility targets as part of
our annual corporate KPIs.
Pharos made a commitment to renew and
update our Net Zero Roadmap every year,
and the updated version of the Roadmap
can be found on pages 96 to 99 of this
report.
The Company also use a number of
other corporate responsibility metrics
for our KPI (applicable for all staff and
Board members) and LTIP (applicable
only to Board members), such as Lost
Time Injury, environmental spills, diversity
and inclusion, which can be found in
the Directors’ Remuneration Committee
Report on pages 139 and 147.
Scope 3
We recognise that Scope 3 value chain
emissions can help companies have
a better and more comprehensive
understanding of their overall emissions
footprints. Therefore, during 4Q 2023,
Pharos together with our climate specialist
carried out a high-level materiality
assessment across our portfolio against
15 categories listed in the GHG Protocol
to understand which categories are
relevant, material and reportable for
Pharos. This assessment was then
reviewed internally in 1Q 2025 to ensure
Pharos is reporting in line with peers
and meeting all required disclosure
requirements.
In the initial assessment, a review of peer
companies was carried out by our climate
specialist to observe and understand
trends in reporting of the 15 Scope 3
categories. The group of peer companies
were selected with due consideration
to their diverse industry representation,
comparable Scope 3 emissions reporting,
industry similarity, data availability, and
relevance to the Group's operational
context. Following this, an evaluation of
Pharos’ sustainability reports and our
upstream and downstream value chain
activities was conducted to identify all
indirect emissions associated with the
company's operations. The 15 Scope 3
emission categories were then reviewed
with consideration given to factors such
as relevance to Pharos' operations,
materiality thresholds, and the availability
of data within our HSE reports. The
overarching objective of this review was
to identify the key categories that hold
material significance for Pharos, thereby
ensuring alignment with the IPIECA/
API and Greenhouse Gas Protocol
(Greenhouse Gas Protocol, 2013; IPIECA,
2016).
Following this review, the 15 Scope 3
categories were organised by materiality
into four groups:
1
High materiality
2
Moderate materiality
3
Potentially moderate materiality
4
Not material to Pharos
In light of this materiality assessment, we
have calculated emissions from Category
6 – Business travel, which has moderate
materiality to Pharos and is relatively
reliable to measure, and Category 4 –
Upstream transportation and distribution
and Category 11 – Use of Sold Product,
two categories with high materiality for
Pharos. More information on our Scope 3
emissions can be found in the Corporate
Responsibility Report on pages 74 and 75
and in the Non-Financial Indicators table
on page 79.
Activity data pertaining to GHG emissions
in Vietnam and Egypt is reported to
Pharos. Telos NRG assisted with data
collation and GHG emissions calculations.
Verification of the 2024 GHG Emissions
Report has been undertaken by RPS
Consulting UK & Ireland using the
principles in BS EN ISO 12064-3:2019
(the Standard). The RPS’ 2024 GHG
verification report is unqualified and covers
all of our GHG metrics, including Scope 3
emissions.
Like other oil and gas companies, our
emissions targets are not approved by
the Science Based Targets Initiative (SBTi)
because the organisation is still developing
the tools needed to validate them for
our sector. Nevertheless, we respect
the science and base our decisions on
guidance from widely-used frameworks
such as the Taskforce for Climate-related
Financial Disclosures (TCFD) and CDP
(formerly known as the Carbon Disclosure
Project). We consider our targets to
be robust, having been underpinned
by independent analysis and technical
evaluation of our emissions profile, which
we used to identify decarbonisation
initiatives on our operated assets. We will
not engage in any memberships that run
counter to our net zero commitments.
We will be transparent about our
memberships in the sector and beyond.
We plan to address our residual, hard to
abate emissions (which is estimated to
be around 20-40% of our total emissions)
through carbon capture and removal.
TCFD Report - Continued
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PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
OUR ROLE IN THE ENERGY
TRANSITION
Energy is a vital resource for economic, social and
human development
Letter from our CEO
In 2024, the energy sector continued
to face interconnected challenges of
energy access, availability, security, and
affordability to meet the needs of an
ever-growing global population, while at
the same time reducing its environmental
impact.
As the world navigates a period of
energy transition, the oil and gas industry
continues to play a crucial role in meeting
the global energy needs. In emerging
economies such as Vietnam and Egypt, oil
and gas can provide the low-cost, reliable
energy needed to drive GDP growth as a
foundation for long-term socio-economic
prosperity. This serves as a constant
reminder of Pharos’ purpose - to provide
energy to support the development and
prosperity of the countries, communities,
and families wherever we work and
we are proud of our contribution. Our
environmental journey will be guided by
this purpose, and we strive to continue to
power growing economies while operating
in a responsible and sustainable manner.
We understand that we cannot achieve
our ambition alone. We not only need
support from our partners, suppliers
and host governments to push our
strategy forward, but we also stand
ready to help them achieve their socio-
economic and environmental goals,
with the goal of mutual benefits. The
government approval of the TGT and
CNV licence extensions in Vietnam in
December 2024 and the signing of the
Memorandum of Understanding (MOU)
relating to the proposed consolidation of
our concessions in Egypt with EGPC in
February 2025 were key milestones for
Pharos, allowing us to prioritise further
in-country investments to unlock potential
across the portfolio, strengthening our
position and ongoing contributions to
Vietnam’s and Egypt’s energy needs
while creating long-term value for all
stakeholders.
In 2024, we continue to demonstrate a
high standard of sustainability reporting,
having continued our alignment with the
recommendations of the Task Force for
Climate-related Financial Disclosures
(TCFD). I am also pleased to report that
we were awarded scores of B for both
our Climate Change and Water Security
disclosures in the CDP (former Carbon
Disclosure Project), an improvement from
last year’s score of C which was originally
achieved in 2019. As we navigate our
net zero journey, Pharos will continue
to engage with relevant regulatory and
voluntary reporting standards in an honest
and pragmatic manner.
In my first year as Chief Executive Officer
of Pharos Energy, I am excited to continue
building on the important work done by
our team since we announced our net
zero by 2050 ambition in 2022. I am
pleased to share today an updated version
of our roadmap, which aims to provide
stakeholders with a view of our progress
towards our first interim target – a 5% total
emission reduction by 2026.
We know that attaining net zero will
neither be easy nor straightforward.
There are many pathways to achieving
net zero, and we are working towards
the most effective and credible steps for
Pharos to take. We remain committed to
maintaining transparency in our reporting
and to keeping stakeholders informed
on our progress. The roadmap is a
testament to our commitment. It will be
updated annually to ensure that we remain
accountable, transparent, and responsive
to the evolving needs of our industry and
the communities in which we operate.
KATHERINE ROE
Chief Executive Officer
March 2025
Net Zero Roadmap - Continued
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PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
REDUCING OUR CLIMATE IMPACTS
Our net zero fundamentals
In September 2022, we announced a commitment to achieve net zero on our Scope 1
(direct) and Scope 2 (indirect) GHG emissions from all our current and future assets by
no later than 2050. In December 2023, we published our first ever Net Zero Roadmap - a
living document that we will provide an update on every year.
As we evaluate any potential development of our business, such as license extensions,
acquisitions and further exploration, we will take this commitment into account in our
decision-making and it will fall under our net zero target.
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Scope 1&2
Our target covers our
Scope 1 and 2 emissions
All assets
All our current assets are
included in the target
All GHGs
All greenhouse gases are
included in the target
Future assets
All future assets are also
covered by the target
Carbon removal
For 20-40% that is hard-to-abate
we remove carbon
Implementing our strategy
Pharos is not currently an operator on any of our producing assets and therefore has
no direct control over our oil and gas production. This is in the hands of the JOCs, each
of which is staffed by experienced oil and gas professionals with strong track records
of delivering responsible production. Certain Pharos personnel are seconded to senior
positions in the JOCs in Vietnam, providing a degree of influence in operational planning
and execution.
We also recognise that the support of host governments, state oil companies and
regulators is key to pushing our strategy forward.
On track to achieve our interim targets
We worked with a specialist consultancy to model our emissions reduction options in
order to identify interim targets. We set the following short- and medium- term goals on
the way to net zero:
• 2026: 5% reduction
• 2030: 15% reduction
The below pathway, published in our first Net Zero Roadmap in 2023, shows a simplified
model of our road towards net zero by 2050, with short- and medium-term interim
targets by 2026 and 2030 respectively. The model pathway will be updated with further
details as we progress towards our first target in 2026.
Alongside our absolute carbon emissions reduction target, we also target carbon
intensity reductions from our baseline of 48 kg CO
2
e (2021 net entitlement). As we
develop our emissions reduction plans, we will look to accelerate this 2050 target
whenever we can. We will look to embed low carbon technology from the beginning on
new development assets.
Pharos does not currently foresee exploring the use of carbon credits and/or offsets to
help reduce its climate impacts.
Our emissions reduction pathway with short and medium term interim
targets until 2050
Scope
1 and 2
emissions
2026 target
5% reduction
2030 target
15% reduction
Target reduction pathway
2026 2030 2040 2050
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PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
HOW WE ARE REACHING
OUR TARGET
Our roadmap to net zero
Approaches to reducing
emissions
Starting with our biggest impact, our first
priority is to eliminate routine venting in
Egypt and try to reduce routine flaring
across both our assets. After that, we
aim to invest in replacing the power
consumption of our facilities with less
impactful energy sources.
In Vietnam, we continue to manage
gas flaring by carefully monitoring and
optimising the processing facilities in the
TGT FPSO, including adjusting the gas
turbine compressors (GTC) set-points
to reduce flaring. We also reduce fuel
consumptions in field operations by
using LED lightings on the FPSO and
wellhead platforms. In Egypt, we continue
the usage of associated gas-powered
electricity generators for field operations.
This is part of a broader plan to utilise
produced associated gas instead of diesel
for power generation, along with flare
reductions. The generators reduce CO
2
e
emissions by using the associated gas
that otherwise would have been flared,
and generate electricity to be used for field
operations in Egypt. The focus continues
to be on exploring more opportunities
and technologies to reduce gas venting in
Egypt, which can potentially reduce our
Scope 1 emissions while also resulting in
economic gains, such as increased used
of gas generators, piloting the use of Solar
PV to reduce diesel consumption and
further deployment of flare stacks, among
other gas utilisation opportunities.
Tackling hard-to-abate
emissions
We anticipate that there will be between
20-40% of our emissions inventory that is
hard-to-abate and for which technological
innovation may not arrive swiftly enough.
For these GHG emissions we will consider
nature-based solutions that will remove
carbon from the atmosphere in an effort to
move closer towards net zero.
Using capex to unlock change
As non-operators currently, we have no direct control over the production facilities
associated with our assets. That is why we established an Emissions Management Fund
at the end of 2022. For every barrel net to Pharos sold at an oil price above $75, we
will set aside $0.25 into this Fund. As of December 2024, the Fund has reached a value
of c.$830,000. The intended purpose of the fund is to provide support for emissions
management projects for Pharos and our operational partners that are not economically
feasible for individual parties.
Our decarbonisation levers as part of our net zero pathway
Net Zero Roadmap - Continued
EGYPT
Gas venting
Reducing gas
venting
Eliminate gas
venting
Reducing
gas flaring
Install flare
stacks
Process
optimisation
Gas utilisation
(Vapor Recovery
Units (VRUs),
microturbines)
Reducing fuel
consumption
Install renewable
energy
Hard-to-abate
emissions
Carbon capture
and removal
VIETNAM
Gas venting
Reducing
gas flaring
Improve flare
efficiency
Process
optimisation
Gas utilisation
(VRUs, microturbines)
Reducing fuel
consumption
Switch to
alternative
marine fuels
Hard-to-abate
emissions
Carbon capture
and removal
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PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
101
Imaginative,
pragmatic and
disciplined
GOVERNANCE REPORT
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PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
ADDITIONAL
INFORMATION
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
STRATEGIC
REPORT
Chair’s Introduction to Governance 103
Leadership and Governance 105
Board of Directors 107
UK Corporate Governance Code 109
Environmental, Social and Governance (ESG) Committee Report 117
Reserves Committee Report 120
Nominations Committee Report 124
Audit and Risk Committee Report 128
Directors’ Remuneration Committee Report 135
− Annual Report on Remuneration (Audited section) 138
− Notes to the single figure table 139
− Unaudited Section 145
Directors’ Report 153
102
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
103
On behalf of the Board, I am pleased
to present our Governance Report for the
financial year ended 31 December 2024.
Throughout the year, the Company has
maintained full compliance with the UK
Corporate Governance Code whilst delivering
solid operational performance and advancing
our strategic objectives.
The Board has also noted a number of changes to
be introduced by the UK Governance Code 2024,
the majority of which will come into effect for financial
years commencing 1 January 2025. Perhaps the most
notable of these changes, and one that will only take
effect for financial years commencing 1 January 2026,
is the provision requiring boards to make a specific
declaration in the annual report that all material controls
are operating effectively as of the balance sheet date,
together with a description of how they have monitored
and reviewed the organisation’s risk management
and internal control framework. This provision will also
require boards to describe any material controls that are
not operating effectively as of the balance sheet date.
We expect to be in a position to comply in full with the
provisions of the new UK Corporate Governance Code,
including these changes, as and when they take effect.
JOHN MARTIN
Non-Executive Chair
Chair’s Introduction to Governance
A STRONG CULTURE OF
GOVERNANCE
Dear Shareholders,
103
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
GOVERNANCE
REPORT
ADDITIONAL
INFORMATION
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
The Board remains focused on its
fundamental responsibilities: determining
Group strategy and objectives, approving
the overall financial budget and financing
agreements, monitoring the performance
against these, overseeing the key
corporate relationships with operators and
other joint venture partners, and keeping
corporate governance more generally.
The Board provides leadership to the
Group by monitoring culture across the
organisation, ensuring its alignment with
Group strategy, objectives and values,
and overseeing its implementation by
management. The Directors are expected
to always act with integrity and honesty,
to lead by example and to promote
the Pharos principles of Safety & Care,
Energy & Challenge, Openness & Integrity,
Empowerment & Accountability, and
Pragmatism & Focus. The Board also
ensures there are appropriate processes
in place to assess and manage risk,
including the overall appetite for risk
across the Group, and monitors the Group
financial and operational performance
against corporate objectives and KPIs.
The Board is committed to ensuring the
Group complies with applicable laws,
regulations, rules and requirements in
all host countries and other relevant
jurisdictions.
The authority for implementing Group
strategy, including the taking of decisions
and the making of financial and other
commitments, is delegated by the Board
to the executive Directors and the senior
management team subject to defined
authority limits. This delegation by the
Board includes the authority to approve
expenditure in relation to any budgeted
item. However, certain matters are not
delegated and require approval by the
Board itself, and these are set out in
the Group Delegation of Authority, a key
corporate policy document issued and
maintained by the Board that sets out
in detail the financial and non-financial
authorities held by individuals within the
Group.
Overview of 2024
2024 has been a year of operational
achievement, characterised by stable
production, robust cash generation, and
successful drilling campaigns across
our portfolio. A significant milestone was
reached in December 2024 when licence
extensions were secured for CNV and
TGT in Vietnam, providing us with the
necessary tenure to fully develop these
assets' growth potential while supporting
Vietnam's energy security objectives.
This achievement reflects our long-
term relationship with the Vietnamese
Government and our commitment to
responsible resource development.
Our strengthened financial position,
notably our debt-free balance sheet,
provides a solid foundation for our 2025
work programme. This robust financial
footing enables us to direct capital
toward high-return growth opportunities,
while maintaining our commitment to
sustainable shareholder returns through
our dividend policy. The Company has
demonstrated resilience in challenging
market conditions, achieving good
operational and financial performance
across our portfolio.
We are particularly proud of our continued
excellent safety performance, with no Lost
Time Injuries (LTIs) recorded across our
operations. This achievement reflects our
unwavering commitment to maintaining
the highest standards of safety and
operational excellence.
Geopolitical tensions continue to create
challenges to the business notably high
inflation and currency volatility in Egypt.
The Board and executive team maintain a
keen focus on mitigating these challenges
through proactive risk management and
strategic adaptation.
The Board has devoted considerable
time to supporting and constructively
challenging the executive team
throughout the year. Our Non-Executive
Directors have brought valuable
external perspectives to strategic
discussions, particularly regarding
portfolio management, capital allocation,
and operational performance. Regular
meetings between Non-Executive
Directors without executive management
present have ensured independent
oversight and robust governance.
Our committee structure continues to
enhance our governance framework.
The Audit and Risk Committee has
strengthened our risk management
processes and financial controls.
The ESG Committee has overseen
significant progress in our sustainability
agenda, and we are on track to achieve
our Net Zero interim three-year target
(2024-2026) of 5% reduction in emissions.
The newly established Reserves
Committee has enhanced our oversight
of reserves management and reporting,
ensuring continued alignment with industry
best practice.
During 2024, the Nominations Committee
focused on reviewing Board composition,
succession planning for key roles
throughout the company, a review of
annual Board evaluation, and annual
Director re-appointments. This included
the changes to the Board which saw
Katherine Roe’s appointment as CEO
in July 2024 following Jann Brown’s
retirement. Dr Bill Higgs was appointed as
a new NED in January 2024 following a full
process involving an external search firm
and, at the conclusion of the 2024 AGM
in May, Marianne Daryabegui stepped
down from the Board, having served more
than 8 years in total as a NED. As a result
of these changes, the Board currently
comprises six Directors (the Chair, two
Executives and three independent NEDs).
The Remuneration Committee’s activities
in 2024 centred on the updated
remuneration structure. The Remuneration
Committee approved a 6% increase in
salaries of Executive Directors and the
Board. The salaries for non-Director
UK staff were also increased by 6% to
counteract continued inflationary factors
and cost of living challenges. Further
details are set out in the Directors’
Remuneration Committee Report from
pages 135 to 152.
Looking ahead to 2025, we will continue
to build upon our track record of meeting
expectations and delivering on strategy.
Our focus remains on sustainable value
creation through potential organic and
inorganic growth opportunities and
disciplined capital management. In
Vietnam, preparations are progressing
for the TGT appraisal commitment well
scheduled for Q4, with ongoing partner
discussions regarding additional drilling
opportunities at both TGT and CNV sites.
In Egypt, we are set to launch a two-well
drilling program at El Fayum in the second
half of the year. We remain committed to
improving our payment mechanisms in
Egypt, upholding our zero-incident safety
and environmental standards across all
regions, and strengthening relationships
with our strategic partners.
I would like to extend my sincere gratitude
to our employees, shareholders, partners,
and all stakeholders for their continued
support and commitment during
2024. The Board remains dedicated to
maintaining the highest standards of
corporate governance whilst creating
sustainable value for all stakeholders. We
look forward to building on the progress
made this year, supported by our robust
governance framework and clear strategic
direction as we pursue what promises
to be a prosperous and successful year
ahead.
JOHN MARTIN
Non-Executive Chair
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PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Leadership and Governance
LEADERSHIP AND GOVERNANCE
BOARD MEMBERS
JOHN MARTIN*
Non-Executive Chair and Chair of
Nominations Committee and ESG Committee
KATHERINE ROE
(joined 1 July 2024)
Chief Executive Officer, ESG Committee
member
SUE RIVETT
Chief Financial Officer, ESG Committee
member and Reserves Committee member
GEOFFREY GREEN*
Non-Executive Director and Senior
Independent Director, Chair of Remuneration
Committee, Nominations Committee
member, Audit and Risk Committee member
and ESG Committee member
LISA MITCHELL*
Non-Executive Director, Chair of Audit and
Risk Committee, Remuneration Committee
member, Nominations Committee member
and ESG Committee member
DR BILL HIGGS*
Non-Executive Director, Chair of Reserves
Committee and ESG Committee member
MARIANNE DARYABEGUI*
(retired from the Board at the conclusion of
the AGM on 23 May 2024)
Non-Executive Director, Audit and Risk
Committee member, Remuneration
Committee member, Nominations Committee
member and ESG Committee member
JANN BROWN
(stepped down from the Board on
30 April 2024)
Chief Executive Officer, ESG Committee
member and Nominations Committee
member
DIVERSITY OF SKILLS, BACKGROUNDS AND EXPERIENCE
The Board places importance on the diversity of gender, experience, knowledge, skills, and professional, educational and cultural
backgrounds. This diversity has brought an international outlook which has been particularly beneficial to the Board’s discussions about
the strategic positioning of its current and new business ventures. As at 31 December 2024, the Board comprised six Directors.
Meeting attendance
During each Director’s respective term of office during 2024.
In addition to the four scheduled quarterly meetings, the Board met in 2024 on an additional four occasions to deal with specific
business matters which required Board approval. Furthermore, the Board attended a corporate strategy meeting in November 2024. All
Directors on the Board at that time attended the AGM.
Notes:
1) Jann Brown stepped down from the Board on 30 April 2024.
2) Marianne Daryabegui retired from the Board at the conclusion of the AGM
on 23 May 2024.
3) Dr Bill Higgs appointed 16 January 2024.
4) Katherine Roe appointed 1 July 2024.
5) Directors do not participate in decisions in relation to their own
remuneration.
6) The Reserves Committee was established with effect from 23 May 2024.
Attended as member
^
Independent Directors
KEY
Attended as invitee Not attended
Director
Board meeting
scheduled
quarterly x4
Board meeting
additional
x4
Audit and Risk
Committee
x4
Remuneration
Committee
5
x5
Nominations
Committee
x3
ESG
Committee
x4
Reserves
Committee
6
x2
John Martin (Chair)
Katherine Roe (CEO)
4
Sue Rivett (CFO)
Geoffrey Green^
Dr Bill Higgs^
3
Lisa Mitchell^
Jann Brown
1
Marianne Daryabegui^
2
* Independent Non-Executive Directors or, in the case of John Martin, independent on appointment as Chair.
105
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Board of Directors
Principal Committees of the Board
Executive leadership teamManagement Committees
Further support the Board and comprise the
following key committees:
• Disclosure
• Treasury
• Defence
Responsible for day-to-day management of
our business and operations and for monitoring
detailed performance of all aspects of our
business
Audit and Risk
Committee
Remuneration
Committee
Nominations
Committee
Environmental,
Social and
Governance (ESG)
Committee
Reserves
Committee
(established
23 May 2024)
L Mitchell (Chair)
G Green
Responsible
for oversight of
the integrity of
the Financial
Statements and
narrative reporting,
including annual
and half year
reports.
G Green (Chair)
L Mitchell
Responsible
for the design,
development and
implementation
of the Company’s
remuneration
policy.
J Martin (Chair)
L Mitchell
G Green
Responsible for
ensuring the
leadership needs
of the Company
are sufficiently
appropriate to
ensure continued
ability to compete
effectively in the
marketplace.
J Martin (Chair)
L Mitchell
G Green
S Rivett
B Higgs*
K Roe**
B Higgs (Chair)
S Rivett
M Sayed Ahmed
(PDMR)
Responsible
for defining the
Group’s corporate
responsibility
strategy, review of the
Group’s corporate
responsibility policies,
programmes and
initiatives and, more
generally, oversight
of the Group’s
management
of corporate
responsibility matters
and Net Zero ambition.
Responsible for the
evaluation of the
effectiveness of the
Company’s reserves
processes, ensuring
legal and regulatory
compliance, reviewing
asset development
and reserves
accounting annually,
approving reserves
data statements
and changes,
providing input to
work programmes
and budgets and
meeting before key
financial results and
ensuring the Audit and
Risk Committee and
Board are informed of
significant changes to
reserves and resources.
* Dr Bill Higgs was appointed to the Board and ESG Committee on 16 January 2024.
** Katherine Roe was appointed to the Board and the ESG Committee on 1 July 2024.
GOVERNANCE
REPORT
ADDITIONAL
INFORMATION
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
106
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Board of Directors
EXPERIENCED LEADERS
GUIDING OUR FUTURE
JOHN MARTIN
Non-Executive Chair
Appointed: June 2018 (Non-Executive
Director from June 2018 – March 2020;
Non-Executive Chair from March 2020)
John has more than 30 years’
experience in international banking
in the oil and gas industry and was a
Senior Managing Director in the Oil
and Gas team at Standard Chartered
Bank. Prior to joining Standard
Chartered in 2007, John worked for
ABN Amro for 26 years, specialising
in the energy sector. John has served
as the Senior Vice President of the
World Petroleum Council, and as an
Independent Non-Executive Director
of Rockhopper Exploration plc. He
was previously Chairman of Falkland
Oil and Gas Limited, an Independent
Non-Executive Director on the board
of Bowleven plc and, an Independent
Non-Executive Director and Chair of
the Audit Committee of Total E&P UK
Limited.
KATHERINE ROE
Chief Executive Officer
Appointed: July 2024
Katherine has 25 years of senior
corporate, industry and capital
markets experience and most recently
served as the CEO of Wentworth
Resources plc (Wentworth), having
been appointed to that role in 2019
after initially serving as Wentworth’s
Chief Financial Officer. During
her time at Wentworth, Katherine
successfully worked with the
company’s partners and government
stakeholders to optimise the asset,
materially increase production and
secure future re-investment. As a key
strategic partner for host government,
Wentworth balanced positive social,
economic and environmental impact
alongside tangible shareholder
returns by way of both dividend and
capital. These tangible returns were
ultimately realised when, as CEO,
Katherine negotiated and oversaw
the successful sale of Wentworth by
way of recommended cash offer to
Maurel et Prom, which completed
in December 2023. Prior to joining
Wentworth, Katherine spent 11
years at Panmure Gordon & Co,
where she headed up the Natural
Resources team, with a principal
focus on the oil and gas sector.
Katherine has experience across a
number of international jurisdictions
with exposure to emerging and
development markets.
SUE RIVETT
Chief Financial Officer
Appointed: July 2021
Sue, previously Group Head of
Finance and UK General Manager,
has been with the Company for over
nine years. Prior to joining Pharos,
Sue held senior finance roles with
Conoco, ARCO British (subsidiary
of Atlantic Richfield Company), JKX
Oil & Gas plc and Seven Energy.
Sue’s various roles have included
heading up full FTSE finance
functions including finance, taxation,
treasury, IT, corporate planning
and Company Secretary. She was
Head of ARCO British trading arm’s
back office and mid office and has
considerable joint venture experience
and numerous years’ merger and
acquisition experience. Sue is a
Fellow of the Chartered Institute of
Management Accountants (“FCMA”)
with international experience and over
40 years in the energy business.
107
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
GOVERNANCE
REPORT
ADDITIONAL
INFORMATION
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GEOFFREY GREEN
Non-Executive Director and Senior
Independent Director
Appointed: May 2020
Geoffrey has many years of legal and
commercial experience in advising
major UK listed companies on
corporate and governance issues,
mergers and acquisitions and
corporate finance. Geoffrey retired
as a partner of Ashurst LLP in 2013,
a leading international law firm, after
30 years as a partner and 10 years
of service as the senior partner and
chair of its management board. He
served as head of Ashurst’s Asia
practice from 2009 to 2013, based
in Hong Kong, and was responsible
for leading the firm’s strategy and
business development for the region.
He served on the Board of Vedanta
Resources Limited, (formerly Vedanta
Resources plc, a London Stock
Exchange listed company) from
2012 to 2021 and was Chair of the
Remuneration Committee. Geoffrey
was the Non-Executive Chair of the
Financial Reporting Review Panel,
one of the main subsidiary bodies
of the Financial Reporting Council,
from 2015 to 2022, and is also a
non-executive director of a Hong
Kong based investment fund. He
has a degree in law from Cambridge
University and qualified as a solicitor
at Ashurst LLP.
LISA MITCHELL
Non-Executive Director
Appointed: April 2020
Lisa is currently the Chief Financial
Officer of Orca Energy Group Inc.
a TSX-V listed company. Lisa is an
experienced CFO with over 25 years’
international experience, across
the oil and gas, mining and the
pharmaceutical industries. She was
most recently CFO and Executive
Director of San Leon Energy plc and
was previously CFO and Executive
Director of Lekoil Limited, the African-
focused oil and gas exploration and
production company with interests
in Nigeria. Prior to this, Lisa was
CFO and Executive Director at Ophir
Energy plc, formerly a FTSE 250
company where she was responsible
for contributing to the overall business
strategy of Ophir; leading the finance
function including all financial,
taxation, treasury and funding
requirements and investor relations.
Lisa’s previous roles include CSL
Limited, and Mobil Oil Australia. Lisa
is a Certified Practicing Accountant
(FCPA Australia) and holds a Bachelor
of Economics (major in Accounting)
from La Trobe University, Melbourne
and a Graduate Diploma in Applied
Corporate Governance from the
Governance Institute of Australia.
DR BILL HIGGS
Non-Executive Director
Appointed: January 2024
Bill has over 30 years of global
exploration, development and
operations experience, including
more than 10 years in executive roles
for listed independent exploration
and production companies. He is
a qualified geologist with extensive
expertise in all engineering and
other technical and commercial
aspects of hydrocarbon exploration,
development and production. Most
recently, Bill was Chief Executive
Officer of Genel Energy between
2019 and 2022, having served as
Chief Operating Officer from 2017.
Preceding his roles at Genel, Bill was
Chief Operating Officer for Ophir
Energy plc, responsible for managing
the global asset portfolio. Before
that, he served as Chief Executive
Officer of Mediterranean Oil and
Gas, overseeing the successful sale
of the company in 2014. Bill began
his industry career at Chevron,
spending 23 years across a number
of global roles. Bill is currently serving
as Chairman of Chappal Energies
Mauritius Limited, a West Africa-
focussed energy company that has
recently embarked on building a
portfolio of upstream assets.
108
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
UK Corporate Governance Code
2018 UK CORPORATE GOVERNANCE
CODE (THE ‘2018 CODE’)
2024 statement of
compliance with the
2018 Code
We are committed to the highest
standards of corporate governance and
to compliance with the UK Corporate
Governance Code 2018, which sets out
the principles that emphasise the value of
good corporate governance to long-term
sustainable success. The Company was in
full compliance with the provisions of the
2018 Code throughout the year.
This will be the final annual report in
which the Company reports against
compliance with the 2018 Code. As noted
in last year’s report, the Company has
no material concerns over compliance
with the provisions of the 2024 UK
Corporate Governance Code, under
which the majority of provisions will apply
from the Company’s next financial year,
commencing 1 January 2025.
The remainder of this section of the
Governance Report sets out in more detail
the Company’s practical application of the
Principles of the 2018 Code as set out in
the five sections of the 2018 Code:
• Board Leadership and Company
Purpose;
• Division of Responsibilities;
• Composition, Succession and
Evaluation;
• Remuneration; and
• Audit, Risk and Internal Control
Board Leadership and
Company Purpose
Purpose and Culture
At Pharos, our purpose is to provide
energy to support the development and
prosperity of the countries, communities
and families wherever we work, in line
with recognised social and environmental
practices. We have a focused strategy of
delivering long-term, sustainable value for
all our stakeholders though regular returns
and organic growth that, together with a
strong corporate culture, help us fulfil our
purpose.
It remains important to the Board to
preserve and enhance the strong and
resilient culture of our workforce. The
Board monitors adherence to these
principles through a number of different
engagements, both formal and informal,
ensuring that they are evidenced in
behaviours and not simply as words on a
page.
Stakeholder engagement
Colleague engagement
The Board understand that the strategy
and long-term success of the Group is
dependent on a strong culture and set of
values that is clear and guide everything
we do. Our approach is driven by the
strength, skills and imagination of our
people, and our shared purpose to make
a positive impact. The way we work and
do business is based on five guiding
principles (the Pharos Guiding Principles):
Safety & Care, Energy & Challenge,
Openness & Integrity, Empowerment
& Accountability, and Pragmatism &
Focus. The Pharos Guiding Principles are
reinforced by our Code of Conduct and
Business Ethics and other corporate-level
policies, procedures and guidance. The
Board has responsibility for assessing
and monitoring the culture of the Group
and ensuring that the Group’s policies
and practices are aligned with this. There
are a number of ways in which the Board
monitor and assess the culture through
engagement with colleagues in various
forms, as detailed in this report.
The Board places great importance on
the level of engagement with senior
management and other colleagues.
The Board remains passionate about
workforce engagement and fostering a
genuine dialogue between the Company
and staff. All staff are kept informed about
important business developments in the
Company and have channels through
which they can ask questions and provide
input. The now well-practised route of
using video calls facilitates more frequent
engagement across our offices worldwide.
There are biweekly calls between the UK
management and staff and the teams in
the Group’s Cairo and Ho Chi Minh City
offices, in addition to a number of other
regularly scheduled cross-functional calls.
“Lunch and Learn” training sessions
covering particular areas of interest,
importance or topicality are arranged
on an ad hoc basis throughout the year.
In addition, the Group’s relatively flat
organisational structure means shorter
lines of management and more direct,
accessible channels of communication
with leadership.
The Executive Directors receive regular
updates on colleague engagement to
understand any challenges or difficulties
arising in a work context, including from
the hybrid work environment. At the
beginning and end of each calendar
year, every employee is encouraged to
set their own personal and professional
development objectives for the upcoming
year and assess their own performance
against those objectives in conjunction
with their line manager. Each employee
has at least three meetings with their
line manager during the year, to discuss
and agree the objectives and to review
progress mid year and year end. Line
managers also provide additional support
where needed and assist the employee in
overcoming any difficulties they might be
facing.
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PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Following feedback received in previous
years, in which events such as off-site
away days, in-person monthly meetings
and quarterly Group-wide staff calls were
proposed to avoid staff isolation and
promote team culture and the success of
the inaugural off-site event in 2023, the
Company organised a further Group-
wide off-site event in October 2024.
In the course of the event, colleagues
from Egypt, Vietnam and UK all met in
Bournemouth to exchange ideas, provide
feedback and engage in structured team-
building activities. The event proved very
successful, with the sharing of knowledge
and practical experience having an
immediate impact. It also allowed the
new CEO, Katherine Roe, a valuable
opportunity to introduce herself face-to-
face to Group staff based outside the UK
and hear their perspective on the business
directly. The Board believes these Group-
wide events are important not only for the
effective and efficient functioning of the
Company and the business, but to also for
the development, advancement and well-
being of the Group’s global workforce.
Throughout the year, during all employee
events, John Martin, as Chair of the Board
and designated Non-Executive Director
responsible for workforce engagement,
made himself available to all employees
and encouraged all staff members to share
their concerns, feedback and views about
the Company, the Group and its business.
In December 2024, John Martin also
held year-end town hall meetings with all
employees, during which everyone could
share their feedback without the presence
of senior management. Outcomes of these
meetings were then communicated back
to the Board on an anonymous basis.
Additionally, there have been other
forms of engagement with the Group’s
global workforce, including extending
participation in the Company’s share
incentive schemes and the corporate
bonus scheme, and providing other
feedback channels, including through
the Group’s Whistleblowing Policy and
access to the dedicated, anonymous and
confidential NAVEX hotline.
Shareholder engagement
The Board as a whole has responsibility
for maintaining a satisfactory dialogue
with shareholders. The Executive
Directors are responsible for ensuring
on a day-to-day basis that effective
communication is maintained with key
stakeholders and partners, including an
appropriate level of contact with major
shareholders and ensuring that their views
are communicated to the Board. The
Executives have primary responsibility for
investor relations, but senior management
and other members of the Board are also
regularly involved in conversations with
shareholders.
To maintain a clear understanding of the
views of shareholders, all Directors receive
a quarterly investor relations report, which
includes market updates, brokerage and
communications reports, share register
and share performance analysis and
comments and notes from research
analysts and proxy agencies. Additionally,
a section of the agenda for each regularly
scheduled meeting of the Board is
dedicated to investor and stakeholder
considerations. Investor relations is
also a standing agenda item for weekly
management meetings.
Pharos engaged in open and active
dialogue with its institutional, private
and retail shareholders in several
formats throughout the year. The Board
is committed, so far as is reasonably
practical, to providing all shareholders,
however small their holding, with a fair
opportunity in each year to access
the Chair, other Directors and senior
management. The Company uses its
online presence to post and disseminate
key information promptly to a wide
audience, as a complement to the use
of the normal regulatory news service.
The “Contact” section of the Company’s
website is regularly used by shareholders
and stakeholders for email communication
with management. The official X (formerly
known as Twitter) and LinkedIn accounts
of Pharos continue to be used actively.
The Company uses a communications
agency to provide assistance in the
presentation and dissemination of
information to shareholders and the
general public and also to solicit active
feedback as to the effectiveness of such
efforts. Additionally, the Company also
provides a platform for everyone to access
an analyst research feed via its corporate
website at www.pharos.energy/investors/
analyst-research/. This allows for a wider
audience of private and retail shareholder
to freely access analyst research notes
about the Company. The Company’s
existing analyst coverage comprises the
established houses Peel Hunt, Shore
Capital and Auctus Advisors, together
with the more retail-focussed Progressive
Research. All of these analysts produce
regular research notes on the Company,
ensuring a broad and relatively diverse
mix of equity research and investment
opinion are available to all shareholders.
The Company has continued its policy
of regular liaison with proxy advisory
and corporate governance services on
responsible investment, ESG, board
composition, executive remuneration and
the terms of shareholder resolutions.
Also in 2024, the Company continued
its engagement with online platform
Investor Meet Company to host online
meetings with a Q&A session in March
and September, allowing shareholders
and the wider public a free platform to
put questions directly to the Executive
Directors. At the annual Strategy Day
held in London in November 2024, the
Board received presentations and inputs
from several key internal and external
parties, including professional advisers.
During the year, the Executive Directors,
senior management, and investor relations
colleagues also met with over 20 different
institutional investors, family offices,
media journalists and analysts in various
engagements and events, including
investor roadshows, analyst meetings and
media interviews.
The NEDs are each responsible for
taking sufficient steps to understand
shareholder views, including any issues or
concerns relating to the management of
the Company. This includes engagement
outside general meetings with major
shareholders to understand their views
on governance and performance against
strategy, and responding to requests for
additional communication with the Chair,
the Senior Independent Director or other
NEDs.
Additionally, both before and after the
formal proceedings of each AGM of
the Company, all Directors and senior
management, including the Chairs
of the principal Board committees,
make themselves available to answer
shareholder questions and respond to any
specific queries.
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UK Corporate Governance Code - Continued
Local communities, governments
and employees
Our goal is to have a responsible and
positive presence in the regions in
which we operate, creating value for
host countries, local communities,
employees, contractors, suppliers,
partners and shareholders. We engage
with all of those stakeholders on a regular
basis. Additionally, we carefully monitor
compliance with the Modern Slavery
Act 2015 in relation to the Group’s
international operations, including through
regular compliance checks and the
requirements our due diligence and on
boarding processes with suppliers, service
companies and other contractors.
In Vietnam, commitment to local sourcing,
employment, training and industry
capacity building has continued with a
training levy of $300,000 per year in a
ring-fenced fund to support developing
future Vietnamese expertise in the
industry. In Egypt, under the El Fayum and
North Beni Suef Concession Agreements,
the Contractor parties contribute a total of
$200,000 per year split equally between
the two Concessions to support training
and development in industry.
During the year we sought to align our
social investment programme with the
United Nations Sustainable Development
Goals (UN SDGs). In 2024, in addition
to the training levy mentioned above,
a further $259,889 was invested in 26
healthcare, education, infrastructure and
other community projects across all three
host countries. The JOCs approached and
consulted with local partners to determine
which areas of the country would need the
greatest assistance in order to ensure that
we were investing in local projects that
would bring the most sustainable positive
impact to the community. For full details of
all the projects in which Pharos invested
during the year, please see our Corporate
Responsibility report on pages 70 to 72.
As previously reported, the Company
established an innovative Emissions
Management Fund in September 2022,
to provide financial support for emissions
management projects with Pharos and its
JOC that are otherwise not economically
feasible. The establishment of the Fund by
Pharos was, in part, to reflect that, with
its producing assets all operated through
JOCs, the Group has limited control over
the production facilities and is not in a
position to unilaterally introduce measures
or initiatives to manage emissions from
those facilities. From every barrel net to
the Company sold at an oil price above
$75, this Fund is provided with $0.25. As
at 31 December 2024 the value of the
fund was c.$830,000.
Whistleblowing, Ethics and
Business Conduct
Our Whistleblowing Policy and associated
procedures ensure that employees are
protected from possible reprisals when
raising concerns in good faith. In addition
to internal reporting channels, we have a
dedicated, anonymous and confidential
ethics hotline supported by NAVEX with
numbers displayed in our local offices
available 24 hours a day all year round.
Zero calls were made to the NAVEX hotline
in 2024.
Additionally, the Group’s Code of Business
Conduct and Ethics and associated
guidance, reviewed and renewed annually,
were followed rigorously in 2024, with
no known or reported breaches. All
employees are encouraged to place these
policies at the forefront of our engagement
with suppliers, vendors, partners, and
public officials. It is also a requirement for
all Group employees and the Board to
complete and successfully pass their ABC
and Criminal Finance E-Learning training
every year to ensure that the expected
standards of business conduct are
communicated and recognised across the
organisation.
In addition to the overarching Code
of Business Conduct and Ethics,
the Company has also established
governance and policy standards in
response to specific circumstances. Most
notably in recent years, the Company
adopted a new Group Sanctions Policy,
reviewed and updated annually, in
response to the Russian invasion of
Ukraine in February 2022 and the waves
of economic and other sanctions that
have followed in response. A number
of other measures were introduced by
the Company in parallel, including the
formation of a working group monitoring
the potential impact of the conflict and
associated sanctions on the business of
the Group and the introduction of new
wording relating to sanctions compliance
in the Group’s standard form contracts.
Pharos is committed to creating a safe
workplace for all. We recognise that
2024 has seen significant geopolitical
instability, something that has impacted
far reaching communities and families,
the global economy, communities and
trade. Our thoughts remain with those
involved, directly or indirectly, in current
international conflicts. We continue to
support colleagues and contractors during
this difficult time, as well as ensuring that
our business can continue to function
unaffected.
Division of Responsibilities
Responsibilities of the Board
The statutory duty of the Directors is to
act in what they consider to be in the
best interests of the Company and, as
a unitary Board, they are responsible for
the long-term success of the Company.
The Board determines and develops the
strategy for the business and provides
it with the necessary entrepreneurial
leadership. It ensures the Company is
adequately resourced to meet its strategic
objectives and can meet its obligations
to its stakeholders. The Board sets the
values, standards and controls necessary
for risk to be effectively assessed and
managed. Some of its responsibilities
have been delegated to committees of
the Board, including the Audit and Risk,
Remuneration, Nominations, ESG and
Reserves Committees.
The roles of the Chair and Chief
Executive Officer are separate and their
responsibilities are clearly established,
set out in writing and agreed by the
Board. Both are collectively responsible
for the leadership of the Company. The
Chair chairs the Board meetings, leads
the NEDs in the constructive challenge
of the Executive Directors’ strategy
and day-to-day management and is
accountable for the Board’s effectiveness.
This includes encouraging an open and
frank boardroom culture, setting the
Board’s agenda, facilitating the NEDs’
contribution, and ensuring sufficient time
and information to promote effective and
challenging discussions. The Chair has
been in his current role since March 2020
and was previously an independent NED
of the Company, originally appointed in
June 2018.
The CEO is responsible for the everyday
management of the Company. The
CEO leads the Executive Directors and
management team in the implementation
of the Board’s strategy and management’s
performance in running the business.
The NEDs have a supervisory role that
contributes to the development of
the strategy through supportive and
challenging inquiry. They scrutinise the
Executive Directors’ performance in
meeting their agreed goals and objectives
and play a key role in their appointment or
removal.
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PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
The Company Secretary is appointed
by the Board. He facilitates the
communications and processes of the
Board, the induction programme for new
Directors and provides advice through the
Chair as may be required in the ongoing
discharge of the Directors’ duties. This
includes ensuring that the Company
provides the necessary resources for
access to independent advice and
any individual professional training and
development needs agreed with each
Director.
The Board operates within a framework
that distinguishes the types of decisions
to be taken by the Board, including
determination of strategy, setting the
principal operating policies and standards
of conduct, approval of overall financial
budgets and financing agreements,
approval for establishing key corporate
relationships and approval of any actions
or matters requiring the approval of
shareholders.
Board composition
As at December 2024, the Board
comprised six Directors, being the Chair
(who was independent on appointment),
two Executive Directors and three
independent Non-Executive Directors.
Tony Hunter was Company Secretary
throughout the year and his appointment
was approved by the Board as a whole.
Responsibilities and composition
of the principal Board
committees
There are five principal committees of the
Board:
• The Audit and Risk Committee -
responsible for oversight of the integrity
of the Financial Statements and
narrative reporting, including annual and
half year reports
• The Environmental, Social and
Governance (ESG) Committee -
responsible for defining the Group’s
strategy related to ESG matters
• The Nominations Committee -
responsible for ensuring the leadership
needs of the Company are sufficiently
appropriate to ensure continued
ability to compete effectively in the
marketplace
• The Remuneration Committee -
responsible for the design, development
and implementation of the Directors’
Remuneration Policy
• The Reserves Committee – the
newest standing committee of the
Board, established in May 2024 and
responsible for the review of reports
of the Group’s oil and gas producing
activities and monitoring compliance
with applicable law and regulation
regarding disclosure of information
relating to the Group’s oil and gas
reserves and resources
Each principal Board committee has
formal Terms of Reference (TORs),
which sets out the relevant committee’s
delegated role and authority and is
approved by the Board. The TORs for
each committee, as well as the current
committee members, are available on the
Company’s website www.pharos.energy/
about-us/governance/committees/.
Time commitment
The Board has four scheduled meetings a
year, with additional meetings scheduled
as required in connection with the efficient
and diligent operation of the business of
the Company.
In 2024, in addition to the four scheduled
quarterly meetings, the Board also met on
an additional four occasions to deal with
specific business matters which required
Board approval. One of the additional
meetings included the Board Strategy
Day in November 2024, attended by all
members of the Board, certain other
colleagues and a number of external
stakeholders and advisers.
For meetings of the board committees,
only Directors that are members of
the relevant committee are required
to attend. Other Directors are invited
to attend meetings of committees of
which they were not members, where
determined to be appropriate or beneficial.
In addition, the chairs of the principal
Board committees provide an update on
committee activities at each full Board
meeting. The attendance table for the
Board and principal Board committee
meetings in 2024 can be found on page
105.
Composition, succession
and evaluation
Board composition and
succession
The Nominations Committee ensures the
leadership needs of the Company are met
and maintained appropriately to allow it
to compete effectively in the marketplace.
Board appointments are made through
a formal process led by the Nominations
Committee. The Nominations Committee
recognises the emphasis placed by
the 2018 Code on the engagement of
an external search consultancy or the
open advertising of vacancies for the
appointment of the Chair and other NEDs.
As noted in last year’s report, a well-
established international executive
search firm was engaged during 2023
in connection with the search for a
new independent NED with technical
experience, ultimately resulting in the
appointment of Dr Bill Higgs in January
2024 following a competitive phased
process. An executive vacancy arose
during the course of 2024 following
the retirement of Jann Brown as Chief
Executive Officer, announced on 27 March
2024, with Jann stepping down from
the Board on 30 April 2024. Although
the circumstances and relatively limited
available time to recruit a replacement
Chief Executive Officer precluded a full
process involving an external executive
search firm, the Nominations Committee
considered and engaged with a number of
high-quality candidates expressing interest
in the position. From these engagements,
the Nominations Committee finalised a
shortlist of candidates that were asked
to provide a strategy paper indicating
their plans for the Company if appointed.
External references and more informal
inquiries were also pursued on the
shortlisted candidates. Following this
phase of the process, the Nominations
Committee made its recommendation to
the Board in late May 2024, with Katherine
Roe subsequently appointed as the new
Chief Executive Officer of the Company
with effect from 1 July 2024.
The Directors’ roles are established in
writing and approved by the Board.
Biographical details are provided on pages
107 to 108.
Diversity and Inclusion
We believe in a workforce with a diversity
of experience, nationalities, ethnicities,
cultural backgrounds and gender, to
support our business strategy of long-
term sustainable growth. We are proud
that we are able to recruit talents from
diverse backgrounds and ethnicities. As at
year-end 2024, our global team comprised
10 different nationalities, of which women
accounted for c.51%, which ensures that
we cultivate a culture that recognises
and promotes diversity in all forms and
where every voice is heard. Our Code of
Business Conduct and Ethics, associated
policies and procedures, and the Pharos
Guiding Principles commit us to providing
a workplace free of discrimination where
all employees can fulfil their potential
based on merit and ability. They also
commit us to providing a fully inclusive
workplace, while providing the right
development opportunities to ensure
existing staff have rewarding careers.
During the year, the Company also
undertook a Group-wide survey of
staff on questions and perceptions of
diversity, equity and inclusion within the
organisation. The outcome of these
surveys will continue to inform additional
learnings for the whole organisation in
2025.
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UK Corporate Governance Code - Continued
Throughout the year, the Company
complied with 2 out of 3 targets set by
UKLR 6.6.6R(9)(a) of the FCA’s Listing
Rules. As at 31 December 2024, the
Company had:
• Three female Directors, representing
half of the Board
• All Executive Director positions (Chief
Executive Officer and Chief Financial
Officer) held by women
The UKLR 6.6.6R(9)(a) target with which
the Company did not comply in 2024
related to ethnic diversity. That Listing Rule
establishes a target for listed commercial
companies of having at least one member
of the Board from a minority ethnic
background. In the future recruitment
of both NEDs and Executive Directors,
the Company will continue to seek and
welcome candidates for the Board from
a minority ethnic background. There
is also significant diversity within wider
organisation, including in management
positions. Equity, diversity and inclusion
sit at the heart of our recruitment,
development and promotion processes.
For more information on the gender
and ethnic diversity of our corporate
employees and senior management,
please see page 69 of the Corporate
Responsibility report.
Annual re-election of Directors
All Directors annually retire and seek re-
election by shareholders at the Company’s
AGM. The Nominations Committee makes
its recommendation to the Board on each
election or re-election resolution. Pending
the Chair confirming his satisfaction
that each Director continues to perform
effectively and with the appropriate
commitment to the role, the full Board
then determines its own recommendation
to shareholders in relation to those
resolutions.
The Nominations Committee formed its
recommendations regarding the re-
election resolutions (or, in the case of Dr
Bill Higgs, initial election resolution) at
the 2024 AGM following assessments
of Board balance, composition and
independence.
Board effectiveness and
evaluation
The Nominations Committee assesses
the Board’s balance of skills, experience,
independence, diversity, tenure and
knowledge of the Company and
the industry on an annual basis.
The assessments in 2024 included
consideration of the Company’s leadership
needs within the context of growth,
portfolio diversification and long-term
strategy. Those assessments were another
key factor in the appointment of Katherine
Roe as Chief Executive Officer following
the retirement of Jann Brown, with the
Nominations Committee keen to ensure
that the current balance of the Board
remained appropriate and sufficient to
effectively promote the long-term success
of the Company.
Remuneration
Remuneration principles
The Remuneration Committee is
responsible for the design, development
and implementation of the Directors’
Remuneration Policy.
In determining the remuneration packages
awarded to management, the Board
and the Remuneration Committee have
continued to aim at providing incentive
schemes that reflect the characteristics of
attractive rewards, fairness and restraint.
Appropriate advice on best practice is
taken from an independent advisor.
Directors’ Remuneration Policy
Our overarching aim is to operate a
Directors’ Remuneration Policy which
rewards senior management at an
appropriate level for delivering against
the Company’s annual and longer-term
strategic objectives. The policy is intended
to create strong alignment between
Executive Directors and shareholders.
In line with applicable law, we are required
to review and propose to shareholders the
Directors’ Remuneration Policy at least
once every three years. As the policy was
recently reviewed, updated and approved
at the 2023 AGM, the latest by which a
revised policy will be put to shareholders
for approval is the 2026 AGM. The terms
of the revised policy approved at the 2023
AGM are set out on pages 150 to 152 of
this report.
Pension and benefits
All eligible employees have the same
access to the same pension contribution
rate (15% of salary) and access to a
similar level of benefits.
Directors’ shareholdings and
share interests
The Board has a policy requiring Executive
Directors to build a minimum shareholding
of 200% of their annual salary. Additionally,
Long-Term Incentive Plan (LTIP) awards to
the Executive Directors have a two-year
holding period following vesting. This is
intended to emphasise a commitment to
the alignment of Executive Directors with
shareholders and a focus on long-term
stewardship.
Audit, Risk and Internal
Control
Financial reporting and
significant accounting matters
During the first half of 2024, the Group’s
accounting policies, in accordance
with best practice, were reviewed by
management and the Audit and Risk
Committee to ensure that they remained
appropriate for the Group’s activities.
Following this review, the Group’s
accounting policies were judged to be fully
up-to-date and no significant changes
were recommended to the Board by the
Audit and Risk Committee.
Significant issues related to the
2024 Financial Statements
The Audit and Risk Committee identified
the significant issues (disclosed in more
detail in the Audit and Risk Report) that
should be taken into consideration in
relation to the Financial Statements for
the year ended 31 December 2024,
being key issues which may be subject to
heightened risk of material misstatement.
Fair, balanced and
understandable
The Audit and Risk Committee advised
the Board whether the Annual Report
and Accounts taken as a whole are fair,
balanced and understandable and provide
the range of information necessary for
shareholders to assess the Group’s
performance, business model and
strategy. The Directors have confirmed this
in their Responsibility Statement set out on
page 157 of the Directors’ Report.
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Viability statement and Going
concern
In accordance with the UK Corporate
Governance code, the Board assessed
the prospects of the Company over a
period longer than the twelve months
required to support the Going Concern.
The appropriate length which the Viability
Statement should cover is three years. A
significant factor in the Group’s forward
cash position is the oil price assumption,
and as most of the source data relates
to a three-year period, this is considered
as the appropriate lookout period for the
Viability Statement.
In undertaking this assessment, the Board
has carried out a robust review of the
principal and emerging risks facing the
Group, including those that would threaten
its business model, future performance,
solvency or liquidity, with particular
attention given to the principal and
emerging risks.
Management’s Going Concern
assessment supporting the 2024 Financial
Statements was challenged and reviewed
by the Audit and Risk Committee. The
assessment included a “Base Case” for
the Group, including cash flow estimates
for both Vietnam and Egypt, as well as a
“Reasonable Worst Case” scenario, giving
particular regard to the continuing impact
of commodity price volatility. A further
assessment was also undertaken on the
impact of climate change on commodity
prices and a sensitivity on carbon taxes.
Under these scenarios, management
has assessed, on a conservative basis,
the risks around commodity pricing,
operational risk and political and regional
risks, particularly in Egypt.
Based on this detailed analysis,
management has concluded that the
Group will continue as a Going Concern
for 12 months from the date of signing of
the 2024 Financial Statements.
Following its review of management’s
paper on the Going Concern assessment
and in-depth walk through of assumptions
contained in that assessment, the Audit
and Risk Committee is satisfied that it is
appropriate to prepare the 2024 Financial
Statements on a Going Concern basis.
For more information, please see the
Viability Statement in the Strategic Report
on pages 57 to 58.
Internal controls and risk
management systems
The Group’s internal control framework
and risk management processes are
designed to ensure that risk identification,
assessment and mitigation is properly
embedded throughout the organisation.
The risk management approach is
designed to provide the Audit and Risk
Committee and the Board with reasonable
assurance that financial irregularities and
control weaknesses will be identified to
mitigate risks that could potentially have
a material adverse impact on the Group’s
operations, earnings, liquidity and financial
prospects.
During 2024, the Group continued to
carry out comprehensive reviews of the
overall effectiveness of its internal controls
framework and continued to work on
improvements.
The Board is primarily responsible for
the effectiveness of the Group’s internal
control systems which are monitored and
improved on an ongoing basis.
The Audit and Risk Committee has been
delegated the responsibility to monitor
and assess the effectiveness of the control
systems operated by management. The
Company’s external auditor, Ernst &
Young LLP, also provides feedback and
recommendations on controls which are
brought to the attention of the Audit and
Risk Committee.
Internal controls and risk management
issues are discussed in detail and
reviewed for effectiveness at each Audit
and Risk Committee meeting, with a
report being provided to the Board for
approval.
Internal controls focus for 2024
The Board approved the appointment of
KPMG to carry out various internal audits.
The programme of work for 2023 included
the Corporate Cash Flow Forecast and
Valuation Model and Egyptian compliance
with Joint Operating Agreements and for
2024 IT and Cyber security.
The Treasury Committee continue to meet
regularly to review compliance of the RBL
covenants and also to review the Group’s
liquidity, hedging requirements and
investment strategy. The Audit and Risk
Committee reviewed and approved the
related compliance statements set out in
the Risk Management Report.
The Audit and Risk Committee has also
reviewed and approved the statements
regarding compliance with the 2018 Code,
in the Governance Report on page 109.
The Audit and Risk Committee reviewed
and discussed with management and
the external auditor the Company’s
relevant financial information prior to
recommendation for Board approval.
This included the Financial Statements
and other material information presented
in the annual and half year reports. The
Audit and Risk Committee considered
the significant financial reporting issues,
accounting policies and judgements
impacting the Financial Statements, and
the clarity of disclosures. The Audit and
Risk Committee also conducted a review
of its Terms of References (TORs) for best
practice, which were approved by the
Board in 2024. These will be reviewed
again during 2025.
The Audit and Risk Committee and
the Board have carried out a review of
the effectiveness of the Group’s risk
management and internal control systems.
Overall, the control environment was
considered to be operating effectively.
We recognise the oil and gas industry
faces many challenges ahead, including
the technical, financial, environmental
and political challenges of accessing
an increasingly scarce resource base
and at the same time coping with the
opposing dual challenges of production
growth but managing transition to a low
carbon future. On 6 December 2023,
the Company published the Net Zero
Roadmap to achieve net zero greenhouse
gas (GHG) emissions by 2050. An
updated version of the Net Zero Roadmap
can be found on page 96 of this report.
The Board’s strategic planning takes
into consideration the range of potential
risks and the nature of their impact on
the business. The strategic ambitions of
the Group, achieving our financial and
ESG objectives, maintaining operational
effectiveness, ensuring our reputation to
markets, partners, and stakeholders are
all assessed in the context of our appetite
for risk.
The Board is responsible for maintaining
a sound system of internal controls to
safeguard shareholders’ investment and
the assets of the Company. There is an
effective internal control function within
the Company which gives reasonable
assurance against any material
misstatement or loss. The Board and
management will continue to review the
effectiveness and the adequacy of the
Company’s internal control systems and
update such as may be necessary.
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UK Corporate Governance Code - Continued
Risk assessment
The Audit and Risk Committee is
responsible for carrying out regular and
detailed risk assessments for the Group,
in which it reviews existing risks and
identifies new risks as appropriate. As
part of this process, the likelihood and
significance of each risk are evaluated,
along with proposed mitigating factors.
All new risks or changes to existing risks
were monitored throughout the year
and discussed at each Audit and Risk
Committee meeting and subsequently
reported to the Board.
The Audit and Risk Committee also
maintains a comprehensive bribery risk
assessment and mitigation procedure to
ensure that the Group has procedures
in place to eliminate bribery, and that
all employees, agents, contractors, and
other associated persons are made fully
aware of the Group’s robust policies and
procedures on a regular basis. It is also a
requirement for all Group employees and
the Board to complete and successfully
pass their ABC and Criminal Finance
E-Learning modules training every year.
In 2024 this training was expanded to
include a further E-learning module on the
new offence of failure to prevent fraud,
introduced by the Economic Crime and
Corporate Transparency Act 2023.
External auditor
Ernst & Young LLP was selected to
succeed Deloitte LLP as external
auditor to the Company in March
2023, with effect from the financial year
commencing 1 January 2024. During
the early part of 2024, Ernst & Young
LLP “shadowed” Deloitte’s work as
external auditor in connection with the
audit of the financial statements for the
year ended 31 December 2023, with
a view to preserving know-how and
experience and encouraging a seamless
transition. Shareholders approved the
appointment of Ernst & Young LLP as
external auditor for the financial year
commencing 1 January 2024 at the
2024 AGM, following which Deloitte LLP
formally resigned their role of auditor to
the Company. Ernst & Young LLP then
conducted the independent review of the
Company’s interim financial statements
for the six-month period ending 30
June 2024 and reported on this review
in the normal way, in accordance with
the guidance contained in International
Standard on Review Engagements 2410.
The Company’s financial statements
accompanying this annual report are the
first to be audited by Ernst & Young LLP.
In each year, the Audit and Risk
Committee assesses the performance
of the external auditor based on their
experience, the quality of their written
and oral communication and input
from management, prior to making
any recommendations as to the
appointment or re-appointment of the
external auditor at the AGM. The Audit
and Risk Committee also assesses the
independence of the external auditor
once a year and, reflecting the Company’s
listing, recognises that the lead audit
partner is required to be rotated every five
years. The current Ernst & Young LLP lead
partner is Andy Smyth. The Audit and Risk
Committee is satisfied that Ernst & Young
LLP was independent on appointment
and is committed to compliance with all
rotation requirements in future.
External auditor - non-audit
services
The external auditor is appointed primarily
to carry out the statutory audit and their
continued independence and objectivity
is crucial. In view of their knowledge of
the business, there may be occasions
when the external auditor is best placed
to undertake other services on behalf of
the Group. The Audit and Risk Committee
has a policy which sets out those
non-audit services which the external
auditor may provide and those which
are prohibited. Within that policy, any
non-audit service, even if permitted by
law, must first be approved by the Audit
and Risk Committee. The policy also
requires that a report on the non-audit
related expenditure will be provided at
each meeting for ratification by the Audit
and Risk Committee, and that the Audit
and Risk Committee report to the Board
at least annually on how it has discharged
its responsibilities under or in connection
with the policy. The policy is reviewed
and renewed annually, and a copy of
the current policy is available on the
Company’s website.
Before approving a non-audit service,
consideration is given to whether the
nature of the service, materiality of the
fees, or the level of reliance to be placed
on it by the Group would create, or appear
to create, a threat to independence.
If it is determined that such a threat might
arise, approval will not be granted unless
the Audit and Risk Committee is satisfied
that appropriate safeguards are applied to
ensure independence and that objectivity
is not impaired. The auditor is prohibited
from providing any services which might
result in certain circumstances that have
been deemed to present such a threat,
including auditing their own work, taking
management decisions for the Group or
creating either a mutuality or conflict of
interest. The Company has taken steps
to develop resources and relationships in
order to establish availability of alternate
advisers for financial and other matters.
Principal and emerging risks
On page 45, we set out our assessment
of the principal and emerging risks
facing the business. The Group Risk
Management framework requires that all
business units within the Group conduct
on-going risk management and reporting
to the Audit and Risk Committee and
the Board. The Group Risk Management
Policy defines the specifics of the risk
management process, describes the risk
tools (for example, the preparation and
maintenance of a Group risk matrix and
risk register) and outlines the reporting
process and responsibilities within the
overall risk management framework.
115
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Board Leadership and
Company Purpose
Page(s)
Purpose and Culture
6, 14, 16, 68, 69,
109
Colleague engagement
6, 34, 109
Shareholder engagement
16, 36, 110, 127
Local communities, government
and employees
13, 14, 17, 28, 62,
66, 70-72
Conflicts of interests & Ethics
hotline
35, 55, 66, 127,
157
Division of Roles & Responsibilities
Responsibilities of the Board
16, 33-36, 49, 61,
103-106, 111-115
Board composition
105-108
Responsibilities & Composition of
the Committees
106
Time commitment
105, 112
Composition, succession and evaluation
Board composition and
succession
105-108, 112, 124-
127
Diversity and Inclusion
14, 68, 69, 126
Annual re-election of Directors
127, 154
Board effectiveness and
evaluation
36, 124-127, 134
Remuneration
Remuneration principles
136, 137
Remuneration policy
150-152
Pension & Benefits
113, 138, 139, 144,
147, 150
Directors’ shareholdings and
share interests
143
Audit, Risk and Internal Control
Significant reporting and
accounting matters
130
Fair, balanced and
understandable
130, 157
Viability statement and going
concern
44, 57, 58, 129, 130,
157, 172
Risk management and internal
controls
45-56, 131, 133, 134
Internal audit
129, 131
External auditor
129, 131, 134, 181
Principal and emerging risks
45
Accountability statement page references
Accountability statements Report Page(s)
Strategic objectives and
Business model
Strategic Report 7, 8, 24
Directors’ responsibility
statement
Directors’ Report 157
Auditor’s statement
Independent
Auditor’s Report
161-167
Going concern
CFO Statement 44
Viability statement
Viability Statement 57, 58
Critical judgements and
accounting estimates
Note 4 to the
Financial Statements
178
Risk Management and
Internal Control
Risk Management
Report
45-56
UK Corporate
Governance Code
Report
113-115
Audit and Risk
Committee Report
128-134
Audit, Risk and Internal
Control
UK Corporate
Governance Code
Report
113-
115
Audit and Risk
Committee Report
128-134
Nominations Committee
UK Corporate
Governance Code
Report
112,
113
Nominations
Committee Report
124-127
GOVERNANCE
REPORT
ADDITIONAL
INFORMATION
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
116
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Meeting attendance
Committee member 2024 attendance
John Martin (Chair) ^
Katherine Roe
Sue Rivett
Geoffrey Green ^
Dr Bill Higgs ^
Lisa Mitchell ^
Jann Brown
Marianne Daryabegui ^
KEY
^ Independent Directors
Attended as member
Not attended
Note:
a) Jann Brown stepped down from the Board
on 30 April 2024.
b) Marianne Daryabegui retired from the Board
at the conclusion of the AGM on 23 May
2024.
117
JOHN MARTIN
ESG Committee Chair
Environmental, Social and Governance (ESG) Committee Report
ENVIRONMENTAL, SOCIAL AND
GOVERNANCE (ESG) COMMITTEE
REPORT
117
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
GOVERNANCE
REPORT
ADDITIONAL
INFORMATION
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
Dear Shareholders,
I am pleased to present this
Environmental, Social and Governance
(ESG) Committee Report for the year
ended 31 December 2024, which sets
out the role and work of the committee
during the year. The ESG Committee
have focused their work on reviewing and
overseeing the Group’s HSE performance,
progress towards emission reduction
targets, compliance with climate-related
reporting and disclosure requirements,
and social investment projects during the
year.
Membership and
responsibilities
During 2024, the ESG Committee was
comprised of myself as Chair, Katherine
Roe, Sue Rivett, Geoffrey Green, Bill
Higgs, and Lisa Mitchell. Jann Brown
stepped down from the Board and all
Board Committees on 30 April 2024, and
Marianne Daryabegui retired from the
Board and all Board Committees at the
conclusion of the AGM on 23 May 2024.
As Chair of the ESG Committee, I convene
meetings on a regular basis and report to
the Board throughout the year.
The ESG Committee has a Term of
Reference outlining its responsibilities,
which is reviewed and updated as
appropriate by the Board on an annual
basis. This is available on our website
at www.pharos.energy/about-us/
governance/committees/.
Key responsibilities
The Committee is constituted by the
Board to:
• Oversee the Group’s management
and compliance with climate-related
reporting and disclosure requirements,
including applicable rules and principles
of corporate governance, and
applicable industry standards;
• Assist the Board in defining and
implementing the Group’s corporate
responsibility strategy;
• Review the policies, programmes,
practices and initiatives of the Group
relating to corporate responsibility
matters, ensuring they remain effective
and up to date;
• Report on these matters to the
Board and, where appropriate, make
recommendations to the Board; and
• Report as required to shareholders of
the Company on the activities and remit
of the Committee, and in achieving
corporate responsibility and Net Zero
targets.
ESG Committee meetings
in 2024
The Committee met four times during
2024. These meetings were regularly
scheduled Committee meetings held in
March, May, September and December.
At each meeting, the Committee reviewed
and discussed:
• HSES quarterly performance reports,
which includes review of KPIs for both
safety and environmental matters,
and all HSES plans, policies and
procedures
• GHG emissions in Egypt and Vietnam
• Proposed carbon-reduction initiatives in
Egypt and Vietnam
• Progress towards emission reduction
targets set in the Net Zero Roadmap
• Annual review and update of the Net
Zero Roadmap
• Emissions Management Fund
• TCFD reporting, CDP disclosure and
annual Corporate Responsibility (CR)
Report
• Development of environmental
regulations and COP events
• Procedures in place to ensure safe
workplace and practices
• Updates from the Charity and
Community Projects Committee as a
sub-committee of the ESG Committee
to oversee Group’s social investment
projects
In addition to members of the Committee,
additional non-committee members, such
as technical, legal and investor relations
staff were invited to attend the regularly
scheduled Committee meetings. There
was noted to be buy-in on corporate
responsibility matters across the Group.
During 2024, the following additional areas
were reviewed and discussed at each
meeting:
March
• 4Q 2023 HSES performance report
• KPIs for both safety and environmental
matters along with emissions levels and
any safety events
• Draft ESG Committee report to be
included in the Annual Report 2023
• Annual Committee performance
evaluation, which was discussed at the
Nominations Committee meeting held
on the same day
May
• 1Q 2024 HSES performance report
• GHG emission performance, noting
further reductions in flaring compared
to previous year
• Emission reduction initiatives
implemented, such as the installation of
LED lights in the FPSO in Vietnam
• Other lower-carbon energy
opportunities being explored
• Updates on social investment
projects approved by the Charity and
Community Projects Committee
September
• 2Q 2024 HSES performance report
• KPIs for safety and environmental
matters, noting no environmental
incidents across the Group
• Progress towards updating the Net
Zero Roadmap, noting alignment with
TCFD recommendations, peer groups’
reporting journey, recommended
disclosure approach, and timing of
publication
• Updates on continued participation in
CDP
• Updates on social investment
projects approved by the Charity and
Community Projects Committee
December
• 3Q 2024 HSES performance report
• GHG emissions performance, noting
the Group remained on course to meet
its targets despite increased drilling
activities in 2H 2024
• Progress towards updating the Net
Zero Roadmap, noting input from the
Company’s ESG consultant
• Updates on COP29 events
• Update on social investment projects
selected by the Charity and Community
Projects Committee
118
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Environmental, Social and Governance (ESG) Committee Report - Continued
Notable matters discussed during the year:
Net Zero Roadmap and
Emissions Management Fund
In December 2023, Pharos published its
Net Zero Roadmap following its formal
commitment in September 2022 to
achieve net zero greenhouse gas (GHG)
emissions by 2050. Since its publication,
the Roadmap has been reviewed and
updated on an annual basis. As at year
end 2024, the short and medium term
targets set in the Net Zero Roadmap are
still considered valid and relevant for the
Company.
In order to realise our climate commitment
to achieve Net Zero GHG emissions
from all our future and existing assets
by no later than 2050, Pharos prioritises
reducing emissions by achieving
operational efficiencies, reducing flaring
and venting, replacing the power
consumption of our facilities with lower
emission energy sources and eventually
procuring nature-based carbon offset
projects for hard-to-abate, residual
emissions.
* Read More
More details of our climate
strategy, including interim targets
and the decarbonisation levers at
asset-levels, can be found in our
Net Zero Roadmap published in
December 2023 on our website
(https://www.pharos.energy/media/
b55c4sqz/pharos-energy-net-zero-
roadmap-2023_official.pdf), or on
pages 96 to 99, which included the
latest updates and progress against
the Roadmap.
The Company established an Emissions
Management Fund in September 2022.
From every barrel net to the Group sold
at an oil price above $75 per barrel, a
contribution of $0.25 is made to the
Fund. The current value of the Emissions
Management Fund is now c.$830,000. In
line with the Net Zero Roadmap, this Fund
is available to provide financial support
for emissions management projects
undertaken directly by the Group or
through the JOCs.
Health and Safety
In 2024, the Company recorded zero
LTIs in Vietnam, an achievement which
the JOCs have maintained since their
formation, representing well over 10 years
of production from each of the TGT and
CNV Fields. We have worked to build and
contribute to improvements in the safety
culture in Vietnam and we are proud of
this achievement. HSES training, drills,
workshops and inspections are conducted
on an annual basis to ensure that the zero
lost time injury target is maintained.
We are able to share our practices and
lessons learned with others in the industry
and are contributing to further capacity
building.
In Egypt, no lost time injuries and no
motor vehicle crashes were recorded
in 2024. Throughout the year we
worked with the operator IPR and the
JOC Petrosilah to maintain high safety
standards in our operations.
HSES performance of the Group was
reviewed and discussed at every ESG
Committee meetings in 2024. All incidents
during the year were investigated and
lessons learned as appropriate and
actions to prevent recurrence were
implemented. Safety of our workforce
remains our number one priority and
Pharos has reinforced the use of stop
cards and safety training across all of the
Group’s operations.
Task Force on Climate-related
Financial Disclosures
The Company continued to bring our
disclosures in line with the four pillars of
the TCFD in 2024 – Governance, Strategy,
Risk Management, and Metrics & Targets.
* Read More
Full details of our TCFD disclosure
can be found in our TCFD report
on pages 80 to 95. As at year end
2024, Pharos is compliant with 10
out of 11 of TCFD recommendations.
CDP
In 2024, the Company continued its
participation in the CDP Climate Change
and Water Security Questionnaire.
Pharos is pleased to report
that we were awarded scores
of B for both our Climate
Change and Water Security
disclosures.
This is an improvement from last year’s
score of C which was originally achieved
in 2019. Both questionnaires were
completed through collaborative efforts
across multiple disciplines and functions
within the Group, with oversight and
approval from the Chief Financial Officer
before submission.
Social and community investment
projects
In recent years, we have structured our
social investment programme to align
more with the United Nations Sustainable
Development Goals (UN SDGs).
Pharos works closely with our local
partners and joint ventures in order to
make sure that our social initiatives in the
region continue to bring more positive
impacts to the region. In 2024, a total of
$259,889 was invested in 26 social and
community projects in Egypt, Vietnam and
UK, and a further $500,000 was invested
in ring-fenced funds for training to develop
future talents in the industry in Egypt and
Vietnam.
* Read More
Further details can be found in our
Corporate Responsibility report on
pages 59 to 79.
JOHN MARTIN
ESG Committee Chair
119
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Meeting attendance
Committee member 2024 attendance
Dr Bill Higgs (Chair) ^
Sue Rivett
Mohamed Sayed
KEY
^ Independent Directors
Attended as member
Not attended
GOVERNANCE
REPORT
ADDITIONAL
INFORMATION
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
DR BILL HIGGS
Reserves Committee Chair
Reserves Committee Report
RESERVES COMMITTEE
REPORT
120
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Reserves Committee Report - Continued
Dear Shareholders,
I am pleased to present the Reserves
Committee Report for the year ended
31 December 2024 – the first Reserves
Report for Pharos Energy - which sets
out the role and work of the committee
during the year. The Reserves Committee
have focused their work on evaluating
and reviewing the effectiveness of the
Company’s processes for the estimation
of technical reserves and resources, asset
development planning, and annual work
programme and budget development.
Membership and
responsibilities
The Committee was formed in May 2024
and convened for the first time in August.
During 2024, the Reserves Committee
was comprised of myself as Chair, Sue
Rivett, and Mohamed Sayed. As Chair
of the Reserves Committee, I convene
meetings at least twice a year and report
to the Board at each Board meeting.
The Reserves Committee has Terms of
Reference outlining its responsibilities,
which is reviewed and updated as
appropriate by the Board on an
annual basis. This is available on our
website at www.pharos.energy/about-us/
governance/committees/.
Key responsibilities
The Committee is constituted by the
Board to:
• Evaluate the effectiveness of the
Company’s and the Group’s technical
reserves and resources evaluation,
determination and reporting processes
and standards;
• Assist the Board in the Company’s
compliance with legal, regulatory
requirements and perform any other
activities consistent with these terms
of reference, as the Board deems
necessary or appropriate;
• Review the Company's asset
development planning and reserves
and resources accounting procedures
annually, providing information to the
Company’s independent qualified
reserves evaluator(s) for the purposes
of its report on the Company’s
reserves and resources data and
providing guidance to the Board on
the underlying procedures for the
assessment of reserves and resources
information subject to disclosure under
applicable law;
• Review and, where applicable, approve
the content of (a) any statement of
reserves and resources data and other
information that may be used to value
the Company’s upstream assets, this
includes publication by the Company of
any statement of reserves or resources
data and other oil and gas information
(b) any report of an independent
qualified reserves evaluator and (c)
any significant changes in reserves
volumes or changes in assumptions or
forecasts;
• Review asset development plans for
each of the Group’s producing and
preproduction assets annually as an
input to the annual setting of work
programmes and budgets; and
• Ensure the Audit and Risk Committee
and the Board are kept appraised of
any potential significant changes to the
Group’s reserves and resources.
Reserves Committee
meetings in 2024
The Committee met twice during the
year. These meetings were held in August
and November. At each meeting, the
Committee reviewed and discussed:
• Production performance during the
period, including well performance and
progress on RFDPs
• Future work programme (‘Annual Work
Programme & Budget, or ‘WP&B’) and
forecast
• Reserves auditors
Notable matters discussed
during the year:
Terms of Reference
The Committee noted its terms of
reference approved by the Board and
distributed in advance of the meeting.
The Committee confirmed that, as well
as being convened when there were any
material changes to reserves, it would in
any case meet in connection with capital
allocation during the budgeting process,
and in advance of results announcements
to review reserves, production volumes,
assumptions and forecasts. The Board
would continue to receive regular reports
on production and forecasts.
As such, it was agreed to update the
terms of reference to include a committee
call ahead of the half year results along
with a meeting ahead of the Board budget
cycle.
Review of 2024 production
performance
The 2024 production versus guidance
was reviewed at both meetings and it was
noted that the production was within the
guidance range for 2024.
Review of proposed 2025 WP&B
The proposed work programme for 2025
was reviewed in terms of cost, schedule
and resulting well and field performance
ahead of finalising for presentation to the
Board. This included a review of the group
production estimation for 2025, including
risks and uncertainties.
Reserves auditors
The Committee reviewed and discussed
the process and outcome of the tender for
reserves auditors to the Group. McDaniel
& Associates Consultants Ltd (McDaniel),
who already acted as reserves auditors
for both the Group and IPR in Egypt,
were noted to be the preferred candidate.
McDaniel were also familiar with the
Group’s Vietnam assets and the first
reports of others would take more time
and cost to complete. After discussion
and consideration, it was resolved that
management would be authorised to
appoint McDaniel as reserves auditors for
all the Group’s assets.
Notable matters discussed
post year end:
Year-end 2024 Reserves
assessment
The Committee met with McDaniel, our
reserves auditor, to review and discuss
their assessment of the Company’s
year-end 2024 reserves and resources.
The Committee endorsed their audit
report (Competent Persons Report) and
their assessment of the 2P Reserves as
reflected in the table on the next page.
Group Reserves and
Contingent Resources
The Group Reserves Statistics table
summarises our reserves and contingent
resources based on the Group’s unitised
net working interest in each field. Gross
reserves and contingent resources have
been independently audited by McDaniel
& Associates Consultants Ltd. (McDaniel).
121
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
GOVERNANCE
REPORT
ADDITIONAL
INFORMATION
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
Group Reserves Statistics
Net working interest, mmboe TGT CNV Vietnam El Fayum NBS Egypt Group
Oil and Gas 2P Commercial Reserves
1,2
As at 1 January 2024 6.3 2.8 9.1 13.6 0.8 14.4 23.5
Production (1.2) (0.4) (1.6) (0.5) - (0.5) (2.1)
Revision 1.0 0.4 1.4 (1.6) 0.1 (1.5) (0.1)
2P Commercial Reserves as at
31 December 2024
6.1 2.8 8.9 11.5 0.9 12.4 21.3
Oil and Gas 2C Contingent Resources
1,2
As at 1 January 2024 6.3 5.6 11.9 9.6 - 9.6 21.5
Revision (0.8) (3.3) (4.1) (1.3) - (1.3) (5.4)
2C Contingent Resources as at
31 December 2024
5.5 2.3 7.8 8.3 - 8.3 16.1
Total of 2P Reserves and 2C Contingent
Resources as at 31 December 2024
11.6 5.1 16.7 19.8 0.9 20.7 37.4
1) Reserves and Contingent Resources are categorised in line with 2018 SPE/WPC/AAPG/SPEE/SEG/SPWLA/EAGE Petroleum Resources Management
System.
2) Assumes an oil equivalent conversion factor of 6,000 standard cubic feet per barrel of oil equivalent.
Group’s Net Working Interest Reserves and Contingent Resources
TGT Field at 31 December 2024 (mmboe) (net to Group’s working interest)
Reserves
2
1P 2P 3P
Oil 5.0 5.8 6.3
Gas
1
0.1 0.3 0.4
Total 5.1 6.1 6.7
Contingent Resources
2
1C 2C 3C
Oil 3.3 5.1 6.7
Gas
1
0.2 0.4 0.5
Total 3.5 5.5 7.2
Sum of Reserves and Contingent Resources
3
1P & 1C 2P & 2C 3P & 3C
Oil 8.3 10.9 13.0
Gas
1
0.3 0.7 0.9
Total 8.6 11.6 13.9
1) Assumes oil equivalent conversion factor of 6,000 standard cubic feet per barrel of oil equivalent.
2) Reserves and Contingent Resources have been audited independently by McDaniel.
3) The summation of Reserves and Contingent Resources has been prepared by the Company.
122
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Reserves Committee Report - Continued
CNV Field at 31 December 2024 (mmboe) (net to Group’s working interest)
Reserves
2
1P 2P 3P
Oil 1.5 1.7 1.9
Gas
1
1.0 1.1 1.2
Total 2.5 2.8 3.1
Contingent Resources
2
1C 2C 3C
Oil 0.8 1.4 2.2
Gas
1
0.6 0.9 1.4
Total 1.4 2.3 3.6
Sum of Reserves and Contingent Resources
3
1P & 1C 2P & 2C 3P & 3C
Oil 2.3 3.1 4.1
Gas
1
1.6 2.0 2.6
Total 3.9 5.1 6.7
1) Assumes oil equivalent conversion factor of 6,000 standard cubic feet per barrel of oil equivalent.
2) Reserves and Contingent Resources have been audited independently by McDaniel.
3) The summation of Reserves and Contingent Resources has been prepared by the Company.
El Fayum Concession at 31 December 2024 (mmboe) (net to Group’s working interest)
Reserves
1
1P 2P 3P
Oil 6.1 11.5 13.9
Contingent Resources
1
1C 2C 3C
Oil 3.1 8.3 16.4
Sum of Reserves and Contingent Resources
2
1P & 1C 2P & 2C 3P & 3C
Total 9.2 19.8 30.3
1) Reserves and Contingent Resources have been audited independently by McDaniel.
2) The summation of Reserves and Contingent Resources has been prepared by the Company.
North Beni Suef Concession at 31 December 2024 (mmboe) (net to Group’s working interest)
Reserves
1
1P 2P 3P
Oil 0.3 0.9 1.0
Contingent Resources
1
1C 2C 3C
Oil - - -
Sum of Reserves and Contingent Resources
2
1P & 1C 2P & 2C 3P & 3C
Total 0.3 0.9 1.0
1) Reserves and Contingent Resources have been audited independently by McDaniel.
2) The summation of Reserves and Contingent Resources has been prepared by the Company.
DR BILL HIGGS
Reserves Committee Chair
123
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Meeting attendance
Committee member 2024 attendance
John Martin ^ (Chair)
Jann Brown
Marianne Daryabegui ^
Lisa Mitchell ^
Geoffrey Green ^
KEY
^ Independent Directors
Attended as member
Not attended
Notes:
a) Dr Bill Higgs attended one meeting, and Sue Rivett attended two meetings, as non-committee members.
b) Jann Brown stepped down from the Board on 30 April 2024.
c) Marianne Daryabegui retired from the Board at the conclusion of the AGM on 23 May 2024.
GOVERNANCE
REPORT
ADDITIONAL
INFORMATION
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
JOHN MARTIN
Nominations Committee Chair
Nominations Committee Report
NOMINATIONS
COMMITTEE REPORT
124
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Nominations Committee Report - Continued
Dear Shareholders,
I am pleased to present this Nominations
Committee Report for the year ended
31 December 2024, which sets out the
role and work of the committee during
the year. The Nominations Committee
have focused their work on ensuring the
composition of the Company’s leadership
remains effective, reviewing the Board
balance, structure and composition,
and leading the process for Board and
committee appointments.
Role of the Committee
The Nominations Committee (the
‘Committee’) has responsibility for:
• Ensuring the composition of the
Company’s leadership remains effective
and competitive;
• Leading the process for Board and
committee appointments and making
recommendations to the Board;
• Annually reviewing the Board balance,
structure, composition, diversity and
succession planning; and
• Establishing an ongoing process for
evaluating the Board’s performance
and effectiveness.
The Committee has continued to ensure
that Board independence was preserved
during 2024 and will continue into 2025,
taking into account the Board composition
requirements of the 2018 UK Corporate
Governance Code and its replacement,
the 2024 UK Corporate Governance
Code (the ‘2024 Code’), the majority of
which will come into force for financial
years commencing on or after 1 January
2025. The Committee does not anticipate
any significant change to its approach to
Board independence and composition
when the 2024 Code comes into effect.
Membership
At the start of the year, the Committee
comprised John Martin as Chair, the
Chief Executive Officer Jann Brown and
the three Independent Non-Executive
Directors (‘NEDs’), Marianne Daryabegui,
Lisa Mitchell and Geoffrey Green. Jann
Brown stepped down from the Board and
as a member of the Committee on 30 April
2024. In addition, Marianne Daryabegui
ceased to be a member of the Committee
on stepping down from the Board on 23
May 2024, following the Company’s AGM.
The qualifications of each of the Chair and
members of the Committee are set out on
pages 107 and 108.
Meetings
The Committee conducted its duties
through three meetings held during 2024.
During the year, the following areas were
discussed at the Committee meetings:
2024 Matter
1Q
• Review and approval
of Nominations
Committee report for
inclusion in the 2023
Annual Report and
Accounts
• Annual review of
Director’s conflicts of
interest register
• Annual Director
reappointment
• Annual Committee
performance
evaluation
2Q
(two
meetings)
• Discussion on
search and potential
recruitment of a
new Chief Executive
Officer (CEO)
• Update on CEO
recruitment
• Selection of CEO
candidate for
recommendation to
the Board
As at 31 December 2024, the Board
comprised two Executive Directors and
four NEDs, including the Chair. All of
those NEDs (discounting the Chair, who
was independent on appointment) were
considered independent for the purposes
of the 2018 Code. John Martin, the
Chair of the Board, also remains Chair
of the ESG Committee and Chair of the
Nominations Committee.
Board refreshment and
succession planning
Board refreshment and succession
planning continue as ongoing processes.
In 2024, a key priority for the Committee’s
priority was the process to identify and
recommend for appointment a new Chief
Executive Officer to replace Jann Brown.
This process, and the Committee’s role
within it, is summarised in “Appointments
Process” below.
As noted in last year’s report, Dr Bill Higgs
was appointed as an independent NED
on 16 January 2024 following a thorough
search process involving the international
management consulting and search firm
Korn Ferry. This process followed the
Committee identifying, in conjunction with
the 2023 Board evaluation process, a
need for an additional independent NED
with technical expertise, preferably with a
background in geoscience.
Following Marianne Daryabegui’s
retirement from the Board following the
2024 AGM, the Committee is keeping
under review the possibility of appointing a
further NED to the Board.
Appointments Process
Board appointments are made through
a formal process led by the Nominations
Committee. Full details of the process
leading to the appointment of Dr Bill Higgs
as a new independent NED in January
2024 were included in last year’s report
and are not repeated here.
In March 2024, Jann Brown notified the
Company and the Board or her intention
to retire and stand down as a Director
on 30 April 2024. Jann agreed to stay in
position as CEO beyond that date to effect
a managed and smooth transition to her
successor.
The search process for Jann’s
replacement as CEO commenced
immediately on the Board’s receipt of this
notification. The process was managed
and overseen by the Committee, in
a manner consistent with its terms
of reference and scope of delegated
authority from the Board.
Although the 2018 Code (and, for future
financial years, the 2024 Code) states
that “open advertising and/or an external
search consultancy should generally be
used for the appointment of the chair
and non-executive directors” there is no
similar expectation for the process to
recruit or appoint executive directors.
Taking this into account, together with
the other circumstances including the
relatively limited time available to recruit a
125
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
replacement CEO and broader strategic
considerations, the Committee concluded
that it was neither necessary nor desirable
to engage an external executive search
firm to undertake a full recruitment
process. Accordingly, the process to
identify and evaluate candidates for the
CEO role was undertaken on a more
informal and word-of-mouth basis, with
priority given to candidates available
immediately or within a relatively short
timeframe. Committee members,
Board members, senior management,
and certain advisers and stakeholders
contributed to this initial word-of-mouth
search phase. Individual members of the
Committee also kindly agreed to spend
their time outside the scope of Committee
meetings on initial candidate vetting
and assessment, including in one-to-
one calls and meetings with prospective
candidates.
By the time the Committee met in May
2024, the options had been narrowed
down to a shortlist of very high calibre and
experienced industry professionals from a
variety of backgrounds. These candidates
were then asked to prepare and submit
to the Committee and the Board a
strategy paper outlining their plans for the
Company if appointed as CEO.
Following the shortlist phase and a
brief period for negotiation of terms, the
Committee recommended to the Board
the appointment of Katherine Roe as
the new CEO to replace Jann Brown.
Following the Board’s approval, Katherine
was appointed as CEO and as a Director
on 1 July 2024, with her appointment
announced to the market on the same
day. Prior to joining Pharos, Katherine had
over 20 years of senior corporate, industry
and capital markets experience and most
recently served as the CEO of Wentworth
Resources plc (Wentworth), having been
appointed to that role in 2019 after initially
serving as Wentworth’s Chief Financial
Officer. During her time at Wentworth,
Katherine successfully worked with the
company’s partners and government
stakeholders to optimise the asset,
materially increase production and secure
future re-investment. As a key strategic
partner for host government, Wentworth
balanced positive social, economic and
environmental impact alongside tangible
shareholder returns by way of both
dividend and capital. These tangible
returns were ultimately realised when, as
CEO, Katherine negotiated and oversaw
the successful sale of Wentworth by way
of recommended cash offer to Maurel
et Prom, which completed in December
2023.
Independence
As at the date of this report, the
Committee and the Board are satisfied
that all of the NEDs (discounting the Chair,
who was independent on appointment),
are independent. In reaching this
assessment, the Committee and the
Board have taken into account the
considerations described in the 2018
Code.
Board balance
The Committee assesses the
Board’s balance of skills, experience,
independence, diversity, tenure and
knowledge of the Company and
the industry on an annual basis.
The assessment in 2024 included
consideration of the Company’s leadership
needs within the context of growth,
portfolio diversification and long-term
strategy. The appointments of Dr Bill
Higgs as a new independent NED in
January 2024 and of Katherine Roe as
the new CEO in July 2024 reflect those
considerations. Taking into account those
appointments, the Committee considers
that the balance of the current Board is
appropriate and sufficient to effectively
promote the long-term success of the
Company but, as stated above, is keeping
under review the possible appointment of
a further NED.
The Board’s current balance and
composition in 2024 are shown on page
106.
Diversity
Our approach to diversity and
inclusiveness is embedded within the
Group’s Human Rights Policy available on
the Company’s website at www.pharos.
energy/responsibility/policy-statements/.
A key aim of the Policy is a workplace that
is inclusive and free from discrimination.
In applying the Human Rights Policy
to Board composition, the Committee
pursues diversity of approach, experience,
knowledge, skills, and professional,
educational and cultural backgrounds.
The global perspective achieved has
enhanced the Board’s discussions
on business development, M&A and
operational and financial integration.
At present the Board composition scores
highly on gender diversity. During 2024,
the appointment of Dr Bill Higgs, and
the retirement of Marianne Daryabegui
and Jann Brown and the appointment of
Katherine Roe led to female representation
on the Board decreasing slightly from
67% at the start of 2024 to 50% at the
date of this report, but the gender balance
remains well above the Listing Rules
reporting threshold for female Directors
of 40%. The average age of the Board
is 62.5, which is a little higher than the
average for listed companies, but not
dramatically so. It is also a reduction on
the average age of 65 disclosed in last
year’s report, following the appointment
of Katherine Roe as CEO. There is no
minority ethnic representation on the
Board although, as noted in this report
the Group’s staff as a whole, including the
management team immediately below the
Executive Directors and the wider team,
has significantly more ethnic diversity.
In its annual review of diversity, the
Committee noted diversity of gender,
age, demographics, skills, professional
backgrounds, experience and education
amongst the Board and senior
management.
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PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Nominations Committee Report - Continued
Board evaluation
In line with the UK Corporate Governance
Code, at the end of 2024, the Board
carried out its annual review of its own
performance and effectiveness. In doing
so, it also evaluated the effectiveness
of its principal Committees and that of
the Chair and the individual Directors.
The Committee Chair led the process
which was facilitated by the company
secretariat and followed a similar format
to that of prior years. Directors completed
confidential questionnaires which included
questions structured to encourage full,
in-depth responses on each area of
focus. As well as the current context,
the outcomes of last year’s review were
also considered and specific follow-on
questions related to last year’s conclusions
and action points were integrated into this
year’s process. Questions covered the
following key areas:
• Strategy
• Risk
• Shareholder and stakeholder relations
• Succession planning
• The Chair’s effectiveness
• Board effectiveness and operation
• The operation of each of the principal
Board committees
• Director effectiveness
• Any other general matters Directors
wished to raise
The results were reported on an
unattributed basis and discussed by
the Nominations Committee, led by the
Committee Chair, then shared with the
whole Board. The results of the evaluation
of the Chair’s performance were discussed
with the other NEDs, led by the Senior
Independent Director, and communicated
to the Chair. Following the review process,
the results of which were positive, a
number of areas of focus were identified
for the coming year, including:
• Ongoing development and
implementation of strategy
• Continued assessment and
management of risk
• Maintaining shareholder and
stakeholder interests
• People development and succession
planning
Re-election
All Directors annually retire and seek
re-election by shareholders at the
Company’s AGM. The Committee makes
its recommendation to the Board on
each re-election resolution. Pending the
Chair confirming his satisfaction that each
Director continues to perform effectively
and with the appropriate commitment to
the role, the full Board then determines its
own recommendation to shareholders in
relation to those resolutions, considering
the recommendations of the Committee.
In 2024, five of the six Directors holding
office at the 2024 AGM retired and offered
themselves for re-election at that meeting.
One Director, Marianne Daryabegui,
retired at the 2024 AGM and did not
offer herself for re-election. The other five
Directors were duly re-elected at the AGM,
each receiving more than 84% of the
proxy votes submitted in advance of the
meeting.
The Committee is satisfied that each
individual Director’s performance continues
to be effective and demonstrates
commitment to the role and, accordingly,
has recommended to the Board that each
such Director remains in office subject
to re-election by shareholders at the
AGM. In the case of Katherine Roe, she
will seek election by shareholders for the
first time at the 2025 AGM, having been
appointed by the Board since the 2024
AGM. The Committee and the Board
both recommend that shareholders vote
in favour of the election of Katherine Roe
at the AGM, as they do in respect of the
resolutions for the re-election of all other
Directors.
The Committee formed its
recommendations regarding re-election
following assessments of Board balance,
composition and independence.
Workforce engagement
In his role as Non-Executive Director
responsible for workforce engagement,
the Committee Chair joined global office
staff for the Group-wide offsite event in
October, at which staff members were
able to discuss matters of interest. In
addition to this event, the Committee
Chair held individual meetings with each
regional office as well as regularly attended
Company functions and meetings at the
London office and remains approachable
to all staff.
This engagement has proved an effective
communication route for the employees
and demonstrates the values of openness
and integrity to which we are committed.
Board development,
information and support
Throughout 2024, all Directors received
ongoing access to resources for the
update of their skills and knowledge; both
on an individual and a full Board basis.
Comments are solicited in the annual
Board evaluation and discussed with the
Chair.
Conflicts of interest
The Board has the power, subject to
certain conditions, to authorise, where
appropriate, a situation where a Director
has, or can have, a direct or indirect
interest that conflicts, or possibly may
conflict, with the Company’s interests.
Such authority is in accordance with
section 175 of the Companies Act 2006
and the Company’s articles of association.
Procedures are in place for ensuring that
the Board’s powers to authorise conflicts
are used effectively and appropriately.
Directors are required to notify the
Company of any conflicts of interest or
potential conflicts of interest that may
arise, before they arise, either in relation to
the Director concerned or their connected
persons. The decision to authorise each
situation is considered separately on its
particular facts.
Only Directors who have no interest in
the matter under discussion are able to
take the relevant decision to authorise
a conflict and must act in a way they
consider, in good faith, will be most likely
to promote the Company’s success.
The Directors will impose such limits or
conditions as they deem appropriate
when giving authorisation or when
an actual conflict arises. These may
include provisions relating to confidential
information, attendance at Board meetings
and availability of Board papers, along
with other measures as determined
appropriate.
Each Director has notified the Board of
either the potential for or the absence
of conflicts. The Board assesses every
notification of a conflict on its own
merits, including the implementation of
appropriate limits and conditions, prior to
giving authorisation for any specific conflict
or potential conflict to exist.
The Board assesses its conflict
authorisations on an ongoing basis
throughout the year and additionally
performs a scheduled review in March.
JOHN MARTIN
Nominations Committee Chair
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PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Meeting attendance
Committee member 2024 attendance
Lisa Mitchell (Chair) ^
Marianne Daryabegui ^
Geoffrey Green ^
Notes:
a) Sue Rivett, Dr Bill Higgs and John Martin attended all four meetings, Jann Brown attended one meeting and
Katherine Roe attended two meetings, all as non-Committee members.
b) Marianne Darabegui retired from the Board at the conclusion of the AGM on 23 May 2024.
KEY
^ Independent Directors
Attended as member
Not attended
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LISA MITCHELL
Non-Executive Director
Audit and Risk Committee Report
AUDIT AND RISK
COMMITTEE REPORT
128
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Audit and Risk Committee Report - Continued
Dear Shareholders,
I am pleased to present this Audit and
Risk Committee Report for the year ended
31 December 2024, which sets out the
role and work of the Committee during the
year. The Audit and Risk Committee have
focused their work on financial controls,
prudent financial management, including
risk management and mitigation.
Membership and
responsibilities
During 2024, the Audit and Risk
Committee comprised me as Chair,
Geoffrey Green and Marianne Daryabegui
until her retirement in May 2024.
As Chair of the Committee, I convene
meetings on a regular basis and report to
the Board throughout the year.
The Audit and Risk Committee has
a formal document outlining its
responsibilities, which is reviewed and
updated as appropriate by the Board on
an annual basis.
The Audit and Risk Committee Terms
of Reference are available on our
website, www.pharos.energy/about-us/
governance/committees/.
Key responsibilities
• Reviewing key financial, operational
and corporate responsibility risk
management processes;
• Reviewing the effectiveness of internal
control processes and systems,
including IT control platforms;
• Monitoring the integrity of the Financial
Statements of the Group and formal
announcements relating to the Group’s
financial performance;
• Reviewing any significant financial
reporting judgements;
• Reviewing and testing the integrity of
the Group’s Financial Statements to
ensure full compliance with international
financial reporting standards and other
requirements;
• Overseeing the planning and
execution of the ongoing external audit
programme including a review of audit
quality and results.
Audit and Risk Committee meetings in 2024
The Committee met four times during
2024. These meetings were the regularly
scheduled committee meetings held in
March, May, September and December.
The Committee examines and discusses
at each meeting:
• Detailed review of internal controls and
implementation of upgrades;
• Review of the risk register and risk
management reports, including
updates on Russian sanctions and
the monitoring of sanctions against
Israel or Israeli state actors in relation
to actions in Gaza, a comprehensive
report is also presented to the Board.
In addition to members of the Committee,
all members of the Board, the finance
management team, operational
management and the Group’s external
auditor, Ernst & Young LLP (EY), attended
each of the Audit and Risk Committee
meetings. Deloitte LLP, as the auditor
of the financial statements within the
2023 ARA, attended the March and
May meetings. EY was appointed as the
Company’s new auditor at the 2024 AGM.
During 2024, the following additional
areas were discussed at meetings of the
Committee:
March
• Review of the proposed updates of the
Modern Slavery and Human Trafficking
Statement, Climate Change Policy,
HSE Policy, Social Responsibility
Policy, Security Policy, Biodiversity and
Conservation Policy, Human Rights
Policy, Code of Business Conduct and
Ethics, Non-Audit Services by External
Auditors, Water Resource Management
Policy, Anti-facilitation Tax Evasion
Policy and Tax Strategy Statement and
Sanctions Policy;
• Finance update including the Internal
Controls Report, Reserves Update,
Impairment Analysis, Going Concern
and Viability Statement, Treasury and
Dividend and Market capitalisation
review;
• Review and approval of the 2023
Financial Statements, including reviews
that they were fair, balanced and
understandable, reviews of the Going
Concern and Viability Statements;
• Review of the 2023 external audit
status, including analyses of findings of
the external audit and key judgemental
areas;
• Review and update of the Audit and
Risk Committee governance matters,
with attention to internal controls
processes and systems, and a detailed
review of Risk management issues and
mitigations.
May
• Finance update including the Internal
Controls Report, Going Concern and
Viability Statement, Treasury review and
update on risks;
• Verbal update given by Deloitte LLP
on the finalisation of their 2023 audit
report;
• Formalisation of the engagement letter
with the new auditor, EY. EY’s letter of
engagement was reviewed, discussed
and approved;
• Reviewed and discussed KPMG’s
report on Compliance with Egyptian
Joint Operating Agreements;
• Review and discussed IT security in the
Group referring to a presentation by the
Company’s IT third party provider.
September
• Finance update including the
Internal Controls Report, Reserves
Update, Impairment Analysis, Market
capitalisation, Going Concern and
Viability Statement, Treasury review and
Internal audit update;
• Review and approval of the
2024 Interim Accounts, including
presentation by the external auditor,
EY, and Audit and Risk Committee
comments;
• Annual Review and Approval of the
Terms of Reference of the Audit and
Risk Committee.
December
• Finance update including Treasury, Risk
and Internal audit update;
• Review of the 2024 Actuals versus
budget;
• Review of 2024 year-end planning,
including the external auditor’s Audit
Planning Report.
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PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
During the year, the Committee focused on the following matters:
Financial reporting and
significant accounting issues
During the first half of 2024, the Group’s
accounting policies, in accordance
with best practice, were reviewed by
management and the Committee to
ensure that they remained appropriate
for the Group’s activities. Following this
review, the Group’s accounting policies
were judged to be fully up-to-date
and there were no significant changes
recommended to the Board by the
Committee.
Significant issues related to the
2024 Financial Statements
The Committee identified the significant
issues (disclosed in more detail below)
that should be taken into consideration
in relation to the Financial Statements
for the year ended 31 December 2024,
being key issues which may be subject to
heightened risk of material misstatement.
Fair, balanced and
understandable
The Committee advised the Board
whether the annual report and accounts
taken as a whole are fair, balanced and
understandable and provide the range of
information necessary for shareholders to
assess the Group’s performance, business
model and strategy. The Directors have
confirmed this in their Responsibility
Statement set out on page 157 of the
Directors’ Report.
Going Concern
Management completed their Going
Concern assessment which was
challenged and reviewed by the
Committee. The assessment included
a “Base Case” for the Group, including
cash flow estimates for both Egypt and
Vietnam, as well as a “Reasonable Worst
Case” scenario, giving particular regard
to the continuing impact of commodity
price volatility. A further assessment was
also undertaken on the impact of climate
change on commodity prices and a
sensitivity on carbon taxes.
Under these scenarios, management
has assessed, on a conservative basis,
the risks around commodity pricing,
operational risk and political and
regional risks, particularly in Egypt. The
assessments also took into account
the impact of potential discretionary
reductions in capital expenditure, as well
as the hedging of production volumes
to mitigate against commodity price
fluctuations.
Based on this detailed analysis,
management has concluded that the
Group will continue as a Going Concern
for 12 months from the date of signing of
the 2024 Financial Statements.
Following its review of management’s
Committee paper and in-depth walk
through of assumptions, the Committee
are satisfied that it is appropriate to
prepare the 2024 Financial Statements on
a Going Concern basis.
Oil and gas reserves
The Group’s estimates of oil and gas
reserves have a crucial impact on the
Financial Statements, especially in relation
to DD&A and impairment of PP&E assets.
Oil and gas reserves, as discussed in the
Risk Management Report on page 54
are calculated using best practice and
industry evaluation techniques which have
uncertainties in their application.
In March 2024, the Committee reviewed,
in conjunction with management and
Deloitte LLP, the 2023 YE reserves audit
conducted by RISC Advisory Pty Ltd
(RISC) for the TGT and CNV concessions
in Vietnam. In addition, the Committee
reviewed, in conjunction with management
and Deloitte LLP, the reserves audit
conducted by McDaniel for the El Fayum
and NBS Concessions in Egypt.
In 2024 the Company formed a
Reserves Committee of the Board to
provide enhanced governance over the
Company’s Reserves and Resources.
For 2024 YE reserves, the Reserves
Committee reviewed, in conjunction with
management and EY, the reserves audit
conducted by McDaniel for all of the
group’s producing fields.
The reserves are described in the
Reserves Committee report on pages 120
to 123.
The various reserves estimates have
been scrutinised by management, taking
into account the status of each field’s
development, to be satisfied that reserves
estimates are appropriate, that DD&A
calculations are correct, and that rigorous
impairment testing has been carried out.
Management also reviewed its estimates
of future costs (including decommissioning
costs) associated with producing reserves.
Reserve estimates are inherently uncertain
and are revised over the producing lives
of oil and gas fields as new reserves
estimates become available and economic
conditions evolve.
For the 2023 YE reserves report, Deloitte
LLP engaged their in-house Reserves
Evaluation and Advisory team in Canada
to understand and challenge management
processes in determining the year
end reserves estimates. This included
performing procedures over the future
production forecasts to the approved
budgets and to the reserves auditors’
Competent Person Reports (CPR’s),
comparing historical prior year forecasts
and impairment models to understand
variances and reviewing of the technical
reserves revisions in the year.
For the 2024 YE reserves report, Ernst
& Young LLP engaged their partner with
significant oil and gas reserves expertise
and valuation experience to review the
reserves reports generated by the external
expert and assess the appropriateness of
inputs of technical nature.
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PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Audit and Risk Committee Report - Continued
Internal controls and risk
management systems
The Group’s internal control framework
and risk management processes are
designed to ensure that risk identification,
assessment and mitigation is properly
embedded throughout the organisation.
The risk management approach is
designed to provide the Committee and
the Board with reasonable assurance
that financial irregularities and control
weaknesses will be identified to mitigate
risks that could potentially have a material
adverse impact on the Group’s operations,
earnings, liquidity and financial prospects.
During 2024, the Group continued to
carry out comprehensive reviews of the
overall effectiveness of its internal controls
framework and continued to work on
improvements.
The Board is primarily responsible for
the effectiveness of the Group’s internal
control systems which are monitored and
improved on an ongoing basis.
The Committee has been delegated
the responsibility to monitor and assess
the effectiveness of the control systems
operated by management. The external
auditor, EY, also provides feedback and
recommendations on controls which are
brought to the attention of the Committee.
Internal controls and risk management
issues are discussed in detail and
reviewed for effectiveness at each
Committee meeting, with a report being
provided to the Board for approval.
KPMG LLP was appointed to carry
out various internal audits. For 2023,
reviews of the Corporate Cash Flow
Forecast and Valuation Model and
Egyptian compliance with Joint Operating
Agreements were completed. During
2024 KPMG commenced a review
of the IT environment and the 2024
Egyptian compliance with Joint Operating
Agreements is scheduled to start in the
first half of 2025.
Reserve Based Lending Facility
(RBL)
As at 31 December 2024, the loan under
the RBL is fully repaid (2023: $30.0m).
During 2024, the Group has cancelled
the majority of the available facility, with
the balance down to just $100,000 at 2
December 2024 (1 January 2024 $43m).
The RBL facility will mature in July 2025,
and while it remains in place, the Group
is bound by certain debt covenants for
each half year ending 30 June and 31
December, as set out on page 200.
We have obtained a waiver of the
requirement under the RBL facility
agreement, to maintain a minimum of
$8m in the debt service reserve account
(DSRA) established in connection with
the facility. As a result of the waiver, we
are only required to maintain an amount
equivalent to the remaining loan principal
when the outstanding principal is less than
$8 million (previously the minimum DSRA).
The Committee has reviewed
management’s assessments of debt
covenant calculations and is satisfied that
the Group is fully compliant.
Commodity hedging – treasury
management
The Group actively managed its exposure
to commodity price risk by entering into
an ongoing programme of hedging. The
objectives of the hedging programme are
mainly to comply with the requirements
under the RBL and to protect the Group’s
Reasonable Worst-Case Scenario.
A Treasury Committee, comprising the
Chief Financial Officer as Chair and senior
members of the Group’s finance team,
convenes on a regular basis to review
the Group’s strategy and the open hedge
positions to ensure that these are still
fit for purpose in light of current market
conditions. For the year end 31 December
2024 a loss of $0.1m was realised (2023:
loss of $0.2m). The RBL facility agreement
requires the Group to hedge at least 35%
of Vietnam RBL production volumes and
the current hedging programme meets this
requirement through to June 2025.
We obtained a waiver of the obligation
to invite eligible RBL lenders to submit
quotes for a hedging agreement before
entering into such an agreement with a
third party. This waiver provides Pharos
with full flexibility to begin arranging
hedges for the second half of 2025.
In 2025, the Group seeks to extend this
coverage further to protect budgetary
cash flow and ensure compliance with the
RBL until its maturity in July 2025.
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KEY JUDGEMENTS AND ESTIMATES IN FINANCIAL REPORTING
Key judgements and estimates
in financial reporting Audit and Risk Committee review Outcomes
Asset carrying values
and impairment testing –
including judgements on
future oil pricing, discount
rates, production profiles,
reserves and cost estimates
Reviewed the Group’s oil price assumptions
The Group’s short and long commodity price
assumptions were reviewed and reduced
accordingly
Reviewed the Group’s discount rates for
impairment testing
The Group’s discount rates were reviewed
and updated accordingly (reduced for Egypt
and Vietnam)
Oil and gas assets impairment charges and
reversals were reviewed twice during the year
Impairment reversal of assets
Significant risks that
could potentially impact
on financial statements –
including DD&A estimates,
management override of
controls
Reviewed DD&A estimates, based on reserves
reports, units of production and future
development costs
Management’s assessments of DD&A
judged to be reasonable based on prudent
assumptions
Reviewed risks of management override of
controls
No breaches were found
Oil and gas reserves
accounting – including
management’s assumptions
for future oil prices which
have a direct impact
on the estimate of the
recoverability of asset
values reported in the
Financial Statements
Reviewed the Group’s guidelines and policy
for compliance with oil reserves disclosure
regulations; including governance and control
Reviewed exploration costs
Costs held in Vietnam pending future work
programme
Egypt:
• El Fayum exploration licence expiring on
15 February 2025, therefore, West Ain
Assilien well in the Abu Roash G and
Upper Bahariya formations drilled during
2023 has been fully impaired.
• NBS exploration license expired on 23
March 2024, therefore, the asset value has
been fully impaired.
Reviewed at each Committee meeting the
status of all updated estimates
Updated third party estimates and
independent audit completed, with results
disclosed in the 2024 Financial Statements
Exploration and evaluation assets and impairment review
The Committee reviewed the Group’s
intangible exploration and evaluation
assets individually in Egypt and Vietnam
for any indications of impairment,
including the various indicators specified
in paragraphs 18 to 20 as set out in IFRS
6 – “Exploration for and Evaluation of
Mineral Resources”. Please refer to Note
2 (a) to the Financial Statements for more
information on climate change and energy
transition.
At both the half year and year end 2024,
the Committee considered whether
various indicators of impairment existed,
and also whether there were issues arising
from the results of impairment reviews by
management. Such reviews are carried
out in relation to both exploration and
evaluation assets, with the role of the
Committee being focused on challenging
management’s underlying assumptions
and estimates and to judge whether they
are realistic and justified.
Detailed drilling engineering studies for
the proposed well on Prospect A in Block
125 commenced in 3Q 2024 and orders
were placed for long lead items. Following
the impairment review, the Committee
recommended to the Board that no
impairment had been triggered for Block
125.
In Egypt, West Ain Assilien well in the Abu
Roash G and Upper Bahariya formations
drilled during 2023 was fully impaired at
31 December 2024 due to the exploration
licence expiring on 15 February 2025.
On NBS, the exploration period officially
expired on 23 March 2024. The work
programme associated with the financial
commitment (Pharos 45%: $5.1m) has
been completed. Therefore, the Group
have impaired the assets.
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PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Audit and Risk Committee Report - Continued
Producing assets,
property, plant and
equipment (PP&E) and
impairment review
The Committee reviewed individually the
Group’s oil and gas producing assets
classified as PP&E on the balance sheet
for impairment with reference to IAS 36
– “Impairment of Assets”. During 2024,
the Group’s PP&E oil and gas assets
comprised its two Vietnam producing
fields, TGT and CNV, as well as the El
Fayum and NBS Concessions in Egypt.
These are described in the Reserves
Committee report on pages 120 to 123.
This review focused on an updated
assessment of the recoverable amount
of each asset compared to their carrying
value in the accounts. If the recoverable
amount dropped below the carrying value,
there would be an impairment charge
to reduce the carrying value. Where a
previous impairment has been recognised,
if the recoverable amount is above the
carrying value, there will be a reversal
impairment to increase the carrying
amount. The Committee considered the
various assumptions underpinning the
assessment of the recoverable amount,
including underlying reserves, commodity
prices, production rates and discount
rates. Based on the Group’s approved
economic assumptions, the Committee
recommended to the Board that
impairment reversals were made on the
two Vietnam fields and on the El Fayum
Concession in Egypt.
In Vietnam, there was an upwards
technical revision of 2P reserves following
the granting of 5-year extensions to the
Petroleum contracts and a decrease in
discount rate, which has led to impairment
reversals for both fields.
On our CNV field in Vietnam, a pre-tax
impairment reversal of $3.6m has been
reflected in the Income Statement with an
associated deferred tax charge of $1.3m.
As at 31 December 2024, the carrying
amount of the CNV oil and gas producing
property is $60.2m.
On our TGT field in Vietnam, a pre-tax
impairment reversal of $19.8m has been
reflected in the Income Statement with an
associated deferred tax credit of $7.1m.
As at 31 December 2024, the carrying
amount of the TGT oil and gas producing
property is $153.6m.
For our El Fayum concession in Egypt,
an impairment reversal of $4.9m, no tax
applicable, is reflected in the Income
Statement. As at 31 December 2024,
the carrying amount of the El Fayum oil
producing property is $58.5m. There was
a decrease in the discount factor which
has led to an impairment reversal for El
Fayum, partially offset by a downwards
technical revision of El Fayum 2P reserves
due to change in the development plan.
For our NBS concession in Egypt, as at 31
December 2024, the carrying amount of
the NBS oil producing property is $1.1m.
Disposal of 55% interest in
Egypt Concessions
On 21 March 2022 the farm-out
transaction of Egyptian assets was
completed. The firm consideration was
received in two tranches, $2.0m in
September 2021 and $3.0m on 30 March
2022.
The carry of $35.9m is a disproportionate
funding contribution from IPR adjusted
for working capital and interim period
adjustments from the effective economic
date of 1 July 2020 and completion date.
The carry decreased every month against
the cash calls received from IPR. The full
amount of the carry was utilised during
1Q 2024 (2023: $23.2m), and it has been
disclosed in “Consideration in relation
to farm out of Egyptian assets” in the
Cash Flow Statement as part of investing
activities.
The Group is entitled to contingent
consideration depending on the average
Brent Price each year from 2022 to
the end of 2025 (with floor and cap at
$62/ bbl and $90/bbl respectively). The
contingent consideration is calculated
yearly and is capped at a maximum total
payment of $20.0m. As at 31 December
2024, the contingent consideration
amounts to $5.1m, $3.3m current and
$1.8m non-current (2023: $8.5m - $3.6m
current and $4.9m non-current). Testing
of sensitivity for a $5/bbl reduction in
long term oil price would result in $0.8m
decrease in contingent consideration to
$4.3m.
The final consideration is still being
completed between IPR and Pharos.
The financial exposure from finalising the
consideration to Pharos, reflecting the
remaining amounts still under discussion,
is considered immaterial to the financial
statements.
Egypt Foreign Currency
Risk
In Egypt, 2024 has brought about a
general improvement of the macro-
economic situation.
In early 2024, the Egyptian Government
(i) first, announced a landmark agreement
with ADQ (an Abu Dhabi sovereign wealth
fund), whereby the latter has acquired
development rights of the new coastal city
of Ras El Hekma for $35 billion ($24 billion
paid in cash and $11 billion as conversion
of UAE deposits at the Central Bank of
Egypt), and then (ii) on 6 March, raised all
main interest rates by 600 basis points;
signed a significantly expanded new loan
with the International Monetary Fund
(IMF) ($8 billion, including the original $3
billion secured in December 2022), which
facilitated additional $14 billion from other
institutional lenders including the World
Bank and the European Union; and let the
Egyptian pound (EGP) fully float, with an
immediate devaluation from c. 31 to c. 49
EGP per USD, which forthwith eradicated
the parallel FX market.
Overall, out of the total of $57 billion
pledged to Egypt, we understand that $38
billion has been received.
These measures have provided a short-
term boost to confidence, but structural
challenges remain, particularly regarding
inflation, debt sustainability, and long-term
foreign currency liquidity.
Pharos’ receivables have decreased to
$29.5m at 31 December 2024 prior to
the application of a risk factor provision of
$1.4m (2023: $37.4m receivables prior to
the application of a risk factor provision of
$4.0m).
The improvement was also made possible
by the Company’s decision to accept
part payments in EGP, as these can now
be applied to fund operations, following
the expiry of the carry with IPR. The fact
that the receivables are contractually
denominated in USD provides protection
against any additional devaluation of the
EGP (currently at 50.4 vs 49.3 on the day
of the March 2024 devaluation).
Internal controls focus for
2024
The Board approved the appointment
of KPMG to carry out various internal
audits. The programme of work for 2023
included a review of the Corporate Cash
Flow Forecast and Valuation Model and
Egyptian compliance with Joint Operating
Agreements. For 2024, the review
comprised of IT and Cyber security.
The Treasury Committee continued to
meet regularly to review compliance of
the RBL covenants and also to review the
Group’s liquidity, hedging requirements
and investment strategy.
The Committee reviewed and approved
the related compliance statements set out
in the Risk Management Report.
The Committee has also reviewed and
approved the statements regarding
compliance with the 2018 Code, in the
UK Corporate Governance Code Report
on page 109. The Committee reviewed
and discussed with management and
the external auditor the Company’s
133
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REPORT
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REPORT
FINANCIAL
STATEMENTS
relevant financial information prior to
recommendation for Board approval.
This included the Financial Statements
and other material information presented
in the annual and half year reports. The
Committee considered the significant
financial reporting issues, accounting
policies and judgements impacting the
Financial Statements, and the clarity of
disclosures. The Committee conducted a
review of its Terms of Reference for best
practice, which were approved by the
Board in 2024. These will be reviewed
again during 2025.
The Audit and Risk Committee and
the Board conducted a review of
the effectiveness of the Group’s risk
management and internal control systems.
Overall, the control environment was
considered to be operating effectively.
We recognise the oil and gas industry
faces many challenges ahead, including
the technical, financial, environmental
and political challenges of accessing
an increasingly scarce resource base
and at the same time coping with the
opposing dual challenges of production
growth but managing transition to a low
carbon future. On 6 December 2023,
the Company published the Net Zero
roadmap to achieve net zero greenhouse
gas (GHG) emissions by 2050. The
roadmap was reviewed and updated in
2024 and further details can be found on
pages 96 to 99.
Our Strategic Framework takes into
consideration the range of potential
risks and the nature of their impact on
the business. The strategic ambitions of
the Group, achieving our financial and
ESG objectives, maintaining operational
effectiveness, ensuring our reputation to
markets, partners, and stakeholders are
all assessed in the context of our appetite
for risk.
The Board is responsible for maintaining
a sound system of internal controls to
safeguard shareholders’ investment and
the assets of the Company. There is an
effective internal control function within
the Company which gives reasonable
assurance against any material
misstatement or loss. The Board and
management will continue to review the
effectiveness and the adequacy of the
Company’s internal control systems and
update such as may be necessary.
Risk assessment
The Committee conducted a detailed
risk assessment in which it reviewed
existing risks and identified new risks
as appropriate. The likelihood and
significance of each risk was evaluated
along with proposed mitigating factors and
was reported to the Board. All new risks or
changes to existing risks were monitored
throughout the year and discussed at
each committee meeting. The Committee
maintains a comprehensive bribery risk
assessment and mitigation procedure to
ensure that the Group has procedures
in place to mitigate bribery, and that all
employees, agents, contractors, and
other associated persons are made fully
aware of the Group’s robust policies and
procedures on a regular basis.
External auditor
Ernst & Young LLP was appointed as
our external auditor with effect from the
financial year commencing 1 January
2024.
The financial year commencing 1 January
2023 was the final year for which Deloitte
LLP acted as external auditor to the
Company. During 2023 and 2024, Ernst
& Young LLP “shadowed” Deloitte LLP’s
work as external auditor, with a view to
preserving know-how and experience
and encouraging a seamless transition.
Deloitte LLP completed the 2023 Financial
Statement audit.
In each year, the Committee assesses
the performance of the external auditor
based on their experience, the quality of
their written and oral communication and
input from management, prior to making
any recommendations as to the re-
appointment of the external auditor at the
AGM. The Committee also assesses the
independence of the external auditor once
a year and the lead partner is required to
be rotated every five years. The current
Ernst & Young LLP lead partner is Andy
Smyth.
External auditor – non-
audit services
The external auditor is appointed primarily
to carry out the statutory audit and their
continued independence and objectivity
is crucial. In view of their knowledge of
the business, there may be occasions
when the external auditor is best placed to
undertake other services on behalf of the
Group. The Committee has a policy which
sets out those non-audit services which
the external auditor may provide and those
which are prohibited. Within that policy,
any non-audit service must be approved
by the Committee. The current version of
this policy is available on the Company’s
website at https://www.pharos.energy/
responsibility/policy-statements/.
Before approving a non-audit service,
consideration is given to whether the
nature of the service, materiality of the
fees, or the level of reliance to be placed
on it by the Group would create, or appear
to create, a threat to independence.
If it is determined that such a threat
might arise, approval will not be granted
unless the Committee is satisfied that
appropriate safeguards are applied to
ensure independence and that objectivity
is not impaired. The auditor is prohibited
from providing any services which might
result in certain circumstances that have
been deemed to present such a threat,
including auditing their own work, taking
management decisions for the Group or
creating either a mutuality or conflict of
interest. The Company has taken steps
to develop resources and relationships in
order to establish availability of alternate
advisers for financial and other matters.
External audit fees
Total audit and non-audit fees in 2024
were $0.8m and $0.1m respectively.
The Committee approved all non-audit
services provided by the external auditor in
2024. The principal non-audit fees during
2024 were $0.1m for the interim review.
The Committee reviews its non-audit
services policy on an annual basis and
current policy requires all non-audit
services to be pre-approved by the
Committee. It is noted that the Group’s
policy sets out the permitted services and
those that are prohibited.
Review of the effectiveness
of the Audit and Risk
Committee
During the year, the Committee has
undergone a comprehensive review of its
effectiveness and results were reported
to the Board. The Committee was
considered by the Board to be operating
effectively and in compliance with the
2018 Code and associated guidance.
LISA MITCHELL
Audit and Risk Committee Chair
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PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Meeting attendance
Committee member 2024 attendance
Geoffrey Green (Chair) ^
Marianne Daryabegui ^
Lisa Mitchell ^
KEY
^ Independent Directors
Attended as member
Not attended
Note:
a) John Martin attended four meetings, Sue Rivett attended three meetings, Katherine Roe attended
two meetings and Dr Bill Higgs and Jann Brown attended one of the meetings, all as non-committee
members.
b) Marianne Daryabegui retired from the Board at the conclusion of the AGM on 23 May 2024.
135
GEOFFREY GREEN
Remuneration
Committee Chair
Directors’ Remuneration Committee Report
DIRECTORS’ REMUNERATION
COMMITTEE REPORT
135
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
GOVERNANCE
REPORT
ADDITIONAL
INFORMATION
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
Dear Shareholders,
On behalf of the Board, we are pleased
to present the Directors’ Remuneration
Committee Report for the financial year
ended 31 December 2024. This report
has been prepared in accordance with
section 421 of the Companies Act 2006
and Schedule 8 of the Large and Medium-
sized Companies and Groups (Accounts
and Reports) Regulations 2008 (as
amended).
Highlights of Committee
actions in 2024
The year has seen significant progress
with our strategy. Activities undertaken by
the Committee include:
• Board changes – Following the
annual review of Board composition
in 2023, the Committee recruited
an independent NED with technical
experience. Dr Bill Higgs, a qualified
geologist, was recruited for the role
and was appointed to the Board on 16
January 2024. Jann Brown stepped
down from the Board effective 30
April 2024 and Marianne Daryabegui,
a Committee member, stepped down
from the Board effective 23 May 2024.
Katherine Roe was appointed as Chief
Executive Officer from 1 July 2024
• Setting robust and stretching
performance targets for the annual
bonus scheme and LTIP
• Monitoring developments in market
practice and reporting regulations
How performance was reflected in the pay of our
Executive Directors
As reported throughout the Strategic
Report, 2024 was a year of good
operational and financial performance
across the Group.
We have continued to build on a culture
of capital discipline to deliver material
improvement to the Group’s balance sheet,
and good recovery of receivables in Egypt
enabled the Company to move to a debt
free status in 2024. We delivered stable
drilling performance in both Vietnam and
in Egypt, with a further discovery on the El
Fayum exploration well. This has allowed
the Board to continue our commitment to
sustainable shareholder returns. In 2024,
we returned $8.8m to shareholders via
both share buyback and dividends. In late
December we were able to announce the
approval of five-year licence extensions
on our Vietnam producing assets TGT
and CNV. These achievements are a
testament to the hard work, dedication and
commitment of the entire Pharos team.
As part of our continued commitment to
help employees deal with the rising cost
of living, the Company made early interim
payments of c.25% of the bonus potential
in September 2024 to employees other
than the Executive Directors, a further
interim payment in December with a final
payment linked to the licence extensions
awarded being made in January 2025.
Employees continue to receive support
with their travel expenses, a policy that
was introduced from January 2023.
Strategic
Underpinned by a strengthened balance
sheet and steady production base across
the portfolio, Pharos continue to execute
our strategy of sustainable value creation
through a number of key priorities: regular
shareholder returns, capital discipline, and
focus on organic growth opportunities.
Dividend is a key part of the Company’s
equity story since its inception, and in
2024, we returned $4.2m to shareholders
via a final dividend for the 2023 financial
year of 0.77p per share. The original
$3m share buyback programme was
supplemented by two further $3m
programmes in 2023 and 2024 which were
part of the Company’s broader strategy to
deliver value to our shareholders. The 2024
programme was completed in January
2025.
Pharos is in a materially improved financial
position, has stable production from its
asset base with significant growth potential
in both Vietnam and Egypt. Together, these
put us in a strong position.
Operational
On an operational basis, the Company
performed well across a broad range of
metrics. Production levels in both Vietnam
and Egypt were in line with guidance.
Financial performance was strong, with
cost control, cash generation and funding
ahead of expectations. Whilst safety results
were excellent in Vietnam, continuing our
record of zero LTIs since operations began,
and although there were no recordable
oil spills during 2024, there were four
incidents of leaks below the spill reporting
threshold. A crude oil leak was reported
at Armada TGT 1 on 17 July 2024 from
the offloading hose section during offtake.
Approximately four litres were lost at sea,
which is under the 100 litres reporting
threshold. In Egypt, three incidents of oil
leaks occurred during 2024. The first oil
leak was in relation to the stuffing box in
well Silah-10, and the second and third
oil leaks were from the emulsion treating
site of NSD-1 and Silah Base. All three
leaks were estimated to be less than one
litre lost to the environment. As all four
leaks were below the reporting threshold,
bonus outcomes for these elements were
achieved.
Following a robust assessment of the
performance criteria the Committee
determined the formulaic out-turn for
bonuses at 70.7% of the maximum
potential including 20.0% on formal
approval of the Vietnam licence extensions.
The Committee considered the wider
stakeholder experience and agreed that
the formulaic outcome was appropriate.
Bonus outcomes for the wider workforce
also reflect corporate KPIs achieved as
well as their personal performance. The
October 2021 LTIP awards vested in full
having met the TSR performance criteria.
Role of Committee
The Remuneration Committee is responsible for setting the remuneration of the Chair and the Executive Directors, has oversight
of pay more generally, and is responsible for appointing any consultants it may engage in carrying out its duties.
136
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Directors’ Remuneration Committee Report - Continued
Approach for 2025
The current Directors’ Remuneration
Policy was approved at the 2023 AGM.
The Committee believes that the Policy
remains fit for purpose and continues to
support the business strategy. The current
Policy is well understood by participants
and investors. It is also considered to be
aligned to market practice and already
includes standard corporate governance
best practice features such as pension
alignment and the use of post-cessation
shareholding requirements. The Company
is required to review and propose to
shareholders the Directors’ Remuneration
Policy at least once every three years
and, accordingly, we expect to propose a
revised Policy to shareholders for approval
at the 2026 AGM.
Base salaries for the Executive Directors
and Non-Executive Directors were
increased by 3% effective from 2025. The
new CEO, Katherine Roe, also received
a further increase of 9.2% effective from
2025 noting that the resulting salary was
still lower than that of the previous CEO
by some 9.5% (based on 2025 levels).
Across the UK employee population, the
average increase for 2025 is just under 6%
which follows an increase of 6% in 2024.
The Committee determined that the salary
increase for the Executive Directors, which
is lower than that for the wider workforce
over the last three years, is appropriate to
maintain competitiveness and is reflective
of performance in the role.
The current annual bonus and LTIP
maximum awards will remain unchanged.
The annual bonus will continue to be
subject to a scorecard of measures
including safety, operations, financial
and capital structure, sustainability and
governance, reflecting the key priorities
of the business and disclosed on a
retrospective basis.
The LTIP measures and targets will be
based on relative TSR (35% weighting),
absolute TSR (20% weighting), cash flow
from operations (15% weighting), ROCE
(15% weighting) and an ESG condition
(15% weighting).
Conclusion
The Remuneration Committee
believes that the remuneration
outcomes for 2024 are a fair
reflection of the context in which
decisions had to be made. We
believe that the continuation of the
current Directors’ Remuneration
Policy, approved at the AGM
in 2023, in all material respects
maintains the link between strategy
and incentives, as well as being
closely aligned to the market.
We look forward to receiving your
support at the upcoming AGM.
GEOFFREY GREEN
Remuneration Committee Chair
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REPORT
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STRATEGIC
REPORT
FINANCIAL
STATEMENTS
ANNUAL REPORT ON
REMUNERATION
(AUDITED SECTION)
Single total figure of remuneration
The table below sets out the total remuneration in respect of qualifying services for both Executive and Non-Executive Directors for the
financial year 2024.
2024
Fees/
Salary
£000’s
Benefits
£000’s
Bonus
Cash
1
£000’s
Bonus
Deferred
1
£000’s
LTIP
£000’s
Pension
£000’s
Total
£000’s
Fixed
£000’s
Variable
£000’s
Executive Directors
J Brown
2
165 14 134 52 153
22 540 187 353
K Roe
3
185 8 131 65 -
28 417 213 204
S Rivett 297 20 210 105 203 45 880 342 538
Non-Executive Directors
J Martin 170 - - - - - 170 170 -
M Daryabegui
4
25 - - - - - 25 25 -
L Mitchell 80 - - - - - 80 80 -
G Green 93 - - - - - 93 93 -
Dr B Higgs
5
71 - - - - - 71 71 -
Total 1,086 42 475 222 356 95 2,276 1,181 1,095
The benefits receivable by Executive Directors include private medical insurance, permanent health insurance, life assurance cover,
critical illness cover, travel, relocation and car benefits. The benefits column for Non-Executive Directors includes taxable travel and
accommodation expenses to attend Board functions in the year and other benefits, and the tax payable thereon, in accordance with
HMRC guidance. Fees and/or salaries paid to the Directors are in relation to their dates of service as a Director during the year.
1) The total Directors’ bonuses include the following: a) Cash bonus paid in
December 2024 of £319k; b) Cash bonus paid in January 2025 of £156k
following formal approval of the licence extensions in Vietnam in December
2024; c) Deferred bonus of £222k granted under the Deferred Share Bonus
Plan
2) Jann Brown stepped down from the Board on 30 April 2024
3) Katherine Roe was appointed to the Board as CEO on 1 July 2024
4) Marianne Daryabegui stepped down from the Board on 23 May 2024
5) Dr Bill Higgs was appointed to the Board on 16 January 2024
Comparative figures for 2023 is provided in the table below:
2023
Fees/
Salary
£000’s
Benefits
£000’s
Bonus
Cash
1
£000’s
Bonus
Deferred
1
£000’s
Pension
£000’s
Total
£000’s
Fixed
£000’s
Variable
£000’s
Executive Directors
J Brown 420 35 271 136 63 925 483 442
S Rivett 280 88 181 90 42 681 322 359
Non-Executive Directors
J Martin 150 - - - - 150 150 -
M Daryabegui 60 - - - - 60 60 -
L Mitchell 75 - - - - 75 75 -
G Green 88 - - - - 88 88 -
Total 1,073 123 452 226 105 1,979 1,178 801
The benefits receivable by Executive Directors include private medical insurance, permanent health insurance, life assurance cover,
critical illness cover, travel, relocation and car benefits. The benefits column for Non-Executive Directors includes taxable travel and
accommodation expenses to attend Board functions in the year and other benefits, and the tax payable thereon, in accordance with
HMRC guidance. Fees and/or salaries paid to the Directors are in relation to their dates of service as a Director during the year.
1) The total Directors’ bonuses include the following: a) Cash bonus paid in December 2023 of £452k; b) Deferred bonus of £226k granted under the Deferred
Share Bonus Plan.
The aggregate emoluments of all Directors during the year was £2.3m (2023: £2.0m).
138
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Directors’ Remuneration Committee Report - Continued
NOTES TO THE SINGLE
FIGURE TABLE
Base Salaries
Salaries for the former CEO and CFO were increased by 6% effective from January 2024 to £445,200 and £297,000 respectively. The
increase was aligned with the 6% applied across the wider workforce.
Katherine Roe was appointed as CEO during the year on a salary of £370,000.
Pensions
Executive Directors receive a pension allowance of 15% of salary, which is aligned to the wider workforce.
Annual bonus
Setting measures
The Company seeks to set challenging, yet achievable, performance measures designed to link pay to performance against its core
strategic objectives.
The performance measures were chosen to ensure that Executive Directors are focused on the near-term objectives that build the long-
term delivery of value to shareholders, which results in a combination of measures being used covering strategic, operational, financial,
business development and sustainability goals. While we monitor the Group’s performance with a broader mix of financial and non-
financial KPIs, the measures impacting the annual bonus emphasise those deemed most relevant to management performance and
take into account the annual budget and the prevailing economic environment.
The maximum bonus opportunity for an Executive Director in 2024 was 150% of salary.
2024 annual bonus measures and out-turns
Metric Weight Bonus awarded
Safety and Environment 12.00% 12.00%
Zero LTIs 6.00% 6.00%
Link to strategy
• Safety of our people
• Sound oil field practices
Target
• Zero LTIs
Performance
• There were no LTIs
Outcome
• Achieved
TRIR Target of 0.8 3.00% 3.00%
Link to strategy
• Safety of our people
• Sound oil field practices
Target
• 0.8
Performance
• No recordable incidents
Outcome
• Achieved
Zero reportable environmental spills 3.00% 3.00%
Link to strategy
• Sound oil field practices
• Management of our carbon
footprint wherever we work
Target
• Zero reportable environmental
spills
Performance
• No recordable incidents
• 1 crude oil leak in Vietnam,
estimated 0.004 m
3
lost
(below 0.1 m
3
reporting threshold)
• 3 environmental spills recorded in
Egypt, all less than 1 litre
Outcome
• Achieved
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PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Metric Weight Bonus awarded
Operational/Business Plan 50.00% 29.00%
Business Plan 10.00% 0.00%
Link to strategy
• Deliver value through growth
Target
• Secure funding partner for 125
commitment well
Performance
• A number of interested parties
have been reviewing the physical
data and the competent persons
report on resources
Outcome
• Not Achieved
Production 10.00% 9.00%
Link to strategy
• Prudent management
Target
• Vietnam production volumes
3,900 – 5,000 boepd
• Egypt production volumes 1,300 –
1,500 bopd
Performance
• Vietnam production outturn was
4,361 boepd
• Egypt production outturn year was
1,440 bopd
Outcome
• Partly achieved
for Vietnam,
within guidance
• Partly achieved
for Egypt, within
guidance
Secure licence extensions 20.00% 20.00%
Link to Strategy
• Continued development of
Vietnam assets
Target
• Secure extensions on TGT and
CNV in Vietnam
Performance
• Approvals formally received from
Vietnam Ministry of Industry &
Trade (MOIT) in December 2024
Outcome
• Achieved
Portfolio optimisation 10.00% 0.00%
Link to Strategy
• Effective portfolio management
Target
• Optimisation project
Performance
• Consolidation project commenced
in Egypt
Outcome
• Not achieved
GOVERNANCE
REPORT
ADDITIONAL
INFORMATION
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
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PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Directors’ Remuneration Committee Report - Continued
Metric Weight Bonus awarded
Financial and capital structure 30.00% 21.70%
Increase OCF 25.00% 16.70%
Link to strategy
• Control expenditure
Target
• Underlying operating costs < 2023
• Reduce Egypt debtor days
• Increase OCF
Performance
• Operating costs decreased 10%
to $37.0m (2023: $41.3m)
• Good recovery of debt in value
of $25.5m, but debtor days have
increased to 691 days (2023: 597
days)
• OCF increased by 20% to $54.0m
(2023: $44.9m)
Outcome
• Achieved
• Not achieved
• Achieved
Debt management 5.00% 5.00%
Link to strategy
• Access affordable sources of
funding
• Return to shareholders
Target
• Extend NBE borrowing facility
• Manage the RBL facility
Performance
• Extended facility to November
2025
• Debt repaid in full
Outcome
• Achieved
Sustainability & Governance 8.00% 8.00%
GHG Emissions 5.00% 5.00%
Link to Strategy
• Sustainability
Target
• Identify one project to utilise the
Emissions Management Fund
Performance
Decarbonisation initiatives
implemented in 2024:
• changing of lighting system in
TGT-H4-WHP
• active management of routine
flaring at TGT
• further deployment of gas
generators at El Fayum
• PetroSilah piloting solar PV
systems to reduce diesel
consumption
Outcome
• Achieved
DE&I 3.00% 3.00%
Link to Strategy
• Strong governance and personal
codes of conduct
Target
• Develop the Pharos Way
incorporating DE&I learnings
Performance
• Training was carried out during
the year with staff and with the full
Board in December
Outcome
• Achieved
OVERALL 100% TOTAL ASSESSMENT 70.70%
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PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
The Committee felt that the overall performance and the experience of stakeholders in 2024 was sufficiently recognised in the formulaic
outcome and therefore no use of discretion was considered necessary.
Executive Directors receive a third of any bonus as awards under the Deferred Share Bonus Plan. This ensures their interests remain
closely aligned with shareholders. For 2024, the total Directors’ bonuses include the following: a) Cash bonus paid in December 2024 of
£319k; b) Cash bonus paid in January 2025 of £156k following formal approval of the licence extensions in Vietnam in December 2024
and (c) Deferred bonus of £222k to be granted under the Deferred Share Bonus Plan.
Paid
Cash Bonus
£000s
Accrued
Cash Bonus
£000s
Deferred
Share Bonus
£000s
Total
Bonus
£000s % of max
J Brown
1
75 59 52 186 70.70%
K Roe
2
94 37 65 196 70.70%
S Rivett
150 60 105 315 70.70%
1) Stepped down 30 April 2024
2) Appointed 1 July 2024
The bonus amounts for Jann Brown and Katherine Roe are pro-rated to reflect time served as a Director during the period.
LTIP vesting in respect of performance ended 31 December 2024
The October 2021 LTIP awards vested in full in October 2024, having met the higher performance criteria. The awards were subject
to a relative TSR measure against a bespoke group of 15 companies. The table below sets out an overview of Pharos’s relative TSR
performance during that period.
Performance against comparator group
Vesting schedule
25% vesting
Median (Rank of 8)
100% vesting
Upper Quartile (Rank of 4.25)
Actual vesting
0%
Above Upper Quartile (Rank of 3.65)
The resulting values for awards which vested are set out in the table below:
No. of awards
granted
No. of dividend
equivalents
No. of awards
vesting
Value of awards
vesting
1
J Brown
1,550,855 142,036 1,692,891 £344,503
S Rivett
909,317 87,833 997,150 £202,920
1) Value of awards vesting based on share price on 6 October 2024 (being £0.2035)
The Committee was comfortable that the formulaic vesting was reflective of performance over the three year period. Awards remain
subject to a two year holding period.
LTIP award grants made in 2024
The LTIP awards are usually made in March but the Company was in a closed period and so awards were delayed to 30 April 2024. In
March, Jann Brown had informed the Board of her intention to retire and step down from the Board on 30 April 2024, and accordingly
no awards were made to Jann for this period. Sue Rivett was awarded 200% of contractual salary at the time the award was made.
Katherine Roe, who joined on 1 July 2024 was issued shares of 167% of salary as of that date. It is anticipated that future grants,
including the grants to be made in 2024, will be made following the announcement of the preliminary results in March. These will be
made on a similar basis to prior years, with awards to Executive Directors over shares worth two times salary and subject to the same
TSR measure (subject to confirmation of the precise list of comparators immediately prior to grant).
Date of grant No. of shares Face value of award Award as % of salary
K Roe
1
1 July 2024 2,934,899 £616,329 167%
S Rivett
2
30 April 2024 2,592,139 £593,600 200%
1) Face value based on share price at the time of awards were determined on 28 June 2024 (being £0.210)
2) Face value based on share price at the time of awards were determined on 29 April 2024 (being £0.229)
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The performance measures for the 2024 awards are set out below, with 25% vesting for Threshold rising on a straight-line basis to full
vesting at Maximum:
Metric Weight Targets
TSR – Relative vs bespoke peer group
35% Median to Upper Quartile ranking
TSR – Absolute
20% 20% to 30% absolute growth
ESG medium term measures
15% 10% to 15% reduction in emissions
Cash flow from operations
15% $150m to $200m over the 3 year period
Return on Capital Employed
15% 6% to 10% average for the 3 year period
Deferred Share Bonus Plan awards granted in 2024
The DSBP awards were granted in April 2024 in relation to the 2023 annual bonus outcome.
Date of grant No. of shares Face value of award
J Brown
1
30 April 2024 591,851 £135,534
S Rivett
30 April 2024 394,567 £90,356
Face value based on share price at the time of awards were determined on 29 April 2024 (being £0.229)
1) Stepped down as a Director with effect from 30 April 2024.
Directors’ interests as at 31 December 2024
The Board has a policy requiring Executive Directors to build a minimum shareholding of 200% of their annual salary. Additionally, LTIP
awards require a two–year holding period following vesting. This is intended to emphasise a commitment to the alignment of Executive
Directors with shareholders and a focus on long-term stewardship.
The table below sets out interests of Directors’ who were in office during the year as at 31 December 2024 and any subsequent
changes to their beneficially owned shares are shown as at the date of this report:
Shareholding
requirement
Beneficially
owned shares as
at 31 December
2024
Beneficially
owned shares as
at the date of this
report
Awards subject
to performance
conditions as
at 31 December
2024
1,2
Awards subject
to Option Price
120 pence as at
31 December
2024
Awards subject
to service
conditions as
at 31 December
2024
1
(% of
salary)
Achieved
(Yes/No)
Executive
K Roe
2
200% No 24,933 36,712 2,934,899 – –
S Rivett
2
200% No 918,409 1,149,990 7,632,922 90,000 823,532
J Brown
5
– – N/A – – – –
Non-Executive
J Martin
– – 237,000 237,000 – – –
G Green
– – 95,000 95,000 – – –
L Mitchell
3
– – 51,958 51,958 – – –
B Higgs
– – – – – – –
1) Figures include accrued dividend equivalents.
2) At the date of this report, K Roe and S Rivett are yet to reach the 200% shareholding requirement.
3) These shares are held by Alexander Barblett (husband of L Mitchell), and a closely associated person to L Mitchell.
4) Our share price at the close of business on 31 December 2024 was 24.3p and the range of the middle market price during the year was 18.7p to 26.8p.
5) J Brown held 2,305,434 shares when she stepped down from the Board on 30 April 2024 and is not required to disclose her shareholding after that date.
Directors’ Remuneration Committee Report - Continued
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PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
While the Executive Directors, as potential beneficiaries, are technically deemed to have an interest in all ordinary shares held by the
Company’s EBT, the table above only includes those ordinary shares held by the EBT which are potentially transferable to the Directors
pursuant to Options granted to them under the Company’s incentive schemes. Details of the EBT and its holdings are set out in Note 28
to the Financial Statements.
There have been no changes to the Directors’ interests subsequent to 31 December 2024 other than as set out above and as described
in the notes to the table above.
Share awards outstanding at 31 December 2024
Type of
award
As at
1 Jan 2024
Granted/
awarded Adjusted
1
Lapsed Vested
3
Released
As at
31 Dec 2024
Date
potentially
vested
2
Expiry
date
K Roe
(appointed
1 July 2024)
5
LTIP
–
2,934,899
– – –
– 2,934,899 01.07.27 01.07.34
S Rivett
3,4,5,6,7
LTIP 952,209 – 44,941 – 997,150 997,150
–
06.10.24 06.10.31
LTIP 2,128,547
–
100,461 –
–
– 2,229,008 25.03.25 25.03.32
LTIP 2,606,288
–
123,010
– – –
2,729,298 23.03.26 23.03.33
LTIP
–
2,592,139 82,477
– – –
2,674,616 30.04.27 30.04.34
DSOP 25,000 – – –
–
– 25,000 31.05.19 31.05.26
DSOP 65,000 – – –
–
– 65,000 31.05.19 31.05.26
DSBP 143,296
–
2,135 – 145,431 145,431
–
25.03.24 25.03.32
DSBP 397,645
–
18,766
– – –
416,411 13.01.25 13.01.33
DSBP – 394,567 12,554 – – – 407,121 30.04.26 30.04.34
1) Outstanding awards under the Company’s share schemes were adjusted for dividend equivalents in accordance with plan rules (see Note 31 to the Financial
Statements).
2) LTIP awards granted in 2021 vest subject to Pharos’s relative TSR performance against a group of comparator companies and subject to a further holding
requirement. The performance measures for the 2024 LTIP are set out on page 143. DSBP awards vest subject to continued service over a two-year vesting
period.
3) The performance measures for the 2021 LTIP awards were met in full resulting in 100% vesting.
4) DSBP Awards to S Rivett were structured as nil-cost options.
5) LTIP Awards to K Roe and S Rivett were structured as nil-cost options.
6) LTIP awards vest subject to the achievement of certain performance conditions.
7) DSOP awards have an exercise price of 120 pence and do not have any performance conditions.
Payments for loss of office and payments to former Directors
There have been no payments for loss of office during the year.
Jann Brown stepped down from the Board effective 30 April 2024, but continued to work for the Company and be paid base salary,
benefits and pension provision until 30 September 2024, the date of termination of her employment. She remained eligible for a bonus
in relation to 2024, pro-rated to reflect her actual period of service during the year. The bonus outcome for her period as a Director is set
out on page 142. Jann did not receive any 2024 LTIP awards. In relation to her earlier LTIP awards still outstanding, she currently holds
“good leaver” status, meaning that, provided that status is maintained, the awards remain in place subject to the original performance
conditions and time pro-rating. She remains subject to the post-cessation shareholding requirement whereby she will be expected to
retain the lower of actual shares held and shares equal to 200% of salary for up to two years post-cessation (unless the Committee
exceptionally determines that it is appropriate to release this requirement). The vesting and release of these awards in future years, if
applicable, will be set out in the corresponding ‘Directors’ Remuneration Committee Report. Jann was entitled to remain as a participant
in the private health insurance scheme provided through the Company until the renewal date of 31 March 2025. In addition, Jann was
entitled to a contribution from the Company towards her legal costs of £2,500 exclusive of VAT in connection with advice relating to the
termination of her employment and the terms of the settlement agreement between herself and the Company.
A payment of $634k was made in relation to the posthumous vesting of all outstanding LTIP and DSBP awards for the former CEO of
the Company, Ed Story, settled in cash and paid to his estate with the agreement of the executor. The cash settlement was provided for
in the relevant share scheme rules and formally approved by the Remuneration Committee.
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UNAUDITED SECTION
Historical TSR performance and CEO outcomes
TSR performance
The chart below illustrates Pharos’ ten-year TSR performance against the FTSE All Share Oil & Gas Index, being a broad market index
which is sector specific. In addition, we have shown a comparison against the TSR comparator group used for the LTIP award.
Total Shareholder Return (TSR) (£)
0
2014 2015 2016 2017 2018 2019 2020 2021 2022
100
300
2023
200
400
500
2024
CEO outcomes
The table below shows the total remuneration paid to the CEO over the same ten-year period. In addition, the annual bonus and LTIP
awards vesting are set out in respect of each year as a percentage of the maximum:
2015 2016 2017 2018 2019 2020 2021 2022
1
2023 2024
2
CEO single figure of remuneration (£000s) 2,325 1,632 1,716 1,829 1,567 669 894 909 925
804
Annual bonus pay-out (% of maximum) 75% 35% 65% 105% 50% 0% 58% 66% 65%
71%
LTIP vesting (% of maximum) 96% 46% 0% 0% 0% 0% 0% 0% 0%
0%
1) 2022 includes the total remuneration of Ed Story for 1 January 2022 to 22 March 2022, reflecting the period he served on the Board as CEO. Jann Brown’s
total remuneration is then presented for the period 23 March 2022 to 31 December 2022.
2) 2024 includes the total remuneration of Jann Brown for 1 January 2024 to 30 April 2024, reflecting the period she served on the Board as CEO. Katherine
Roe’s total remuneration is then presented for the period from her appointment on 1 July 2024 to 31 December 2024.
Directors’ Remuneration Committee Report - Continued
Pharos Energy FTSE All Share Oil, Gas & Coal TSR Comparator Group
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PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Percentage change in remuneration of the Directors
The table below illustrates the percentage change in salary, benefits and annual bonus for each Director and all other employees.
% change
in salary
(2024/
2023)
% change
in salary
(2023/
2022)
% change
in salary
(2022/
2021)
3
% change
in salary
(2021/
2020)
3
% change
in benefits
(2024/
2023)
% change
in benefits
(2023/
2022)
% change
in benefits
(2022/
2021)
% change
in benefits
(2021/
2020)
% change
in annual
bonus
(2024/
2023)
% change
in annual
bonus
(2023/
2022)
% change
in annual
bonus
(2022/
2021)
% change
in annual
bonus
(2021/
2020)
E Story
N/A N/A N/A -32.1% N/A N/A N/A -67.8% N/A N/A N/A 100.0%
Dr M Watts
N/A N/A N/A -32.1% N/A N/A N/A 26.4% N/A N/A N/A 100.0%
J Brown
2
N/A 8.0% 35.1% -32.1% N/A -10.3% -0.8% 5.5% N/A -7.7% -5.4% 100.0%
K Roe
4
N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
S Rivett
6.0% 1.1% N/A N/A -77.3% 450% N/A N/A 16.2% -0.7% N/A N/A
J Martin
13.3% 4.9% 26.7% N/A N/A N/A N/A N/A N/A N/A N/A N/A
M Daryabegui
5
N/A 5.3% 26.7% -10.0% N/A N/A N/A N/A N/A N/A N/A N/A
R Gray
N/A N/A N/A -11.2% N/A N/A N/A -100.0% N/A N/A N/A N/A
L Mitchell
6.7% 6.3% 26.7% N/A N/A N/A N/A N/A N/A N/A N/A N/A
G Green
5.7% 11.2% 40.6% N/A N/A -100.0% 100.0% N/A N/A N/A N/A N/A
Dr B Higgs
6
N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
All other
employees
6.4% 9.9% 29.5% 7.0% 10.0% -9.3% 15.5% -25.8% 16.2% 8.1% 24.1% 100%
1) Bonuses are normally awarded in respect of the calendar year. No bonuses were awarded in relation to 2020.
2) J Brown stepped down from the Board on 30 April 2024.
3) The figures detailed above reflect the salary reductions that have been taken by the Directors. The Executive Directors took a reduction of 35% of their
salaries for the first quarter of 2021 and then further reduced this by another 15% (to a total reduction of 50%) from 1 April 2021 for the Executive Directors
in office at that date. These reductions stayed in place for the remainder of 2021 and through to 20 March 2022. The Chair, who had reduced his fee by 25%
on assuming the role in March 2020, also took an additional 25% reduction along with the other Non-Executive Directors from 1 May 2021 which continued
through the full year 2021 and up until 20 March 2022.
4) K Roe was appointed to the Board on 1 July 2024.
5) M Daryabegui stepped down from the Board on 23 May 2024.
6) Dr B Higgs was appointed to the Board on 16 January 2024.
Chief Executive Officer’s pay ratio
The Company currently has 17 UK employees and therefore has no statutory requirement to publish a CEO pay ratio. Given the
relatively few employees, the Committee is aware of pay levels and does not feel the need to produce a ratio. The Committee will
continue to review the appropriateness of publishing pay ratios in the future.
Relative importance of spend on pay
The chart below illustrates the year on year change in total remuneration as per Note 11 to the Financial Statements compared to the
change in shareholder returns, which would include capital returns, dividends and share buybacks.
2024
2023
Wages and Salaries ($m)
Shareholder Distributions ($m)
8.4
9.3
9.0
8.8
External appointments
With prior approval of the Board, Executive Directors are allowed to accept non-executive appointments on other boards and to retain
the associated directors’ fees. Under this Policy:
• Jann Brown serves on the board of RHI Magnesita, for which she retained associated fees for the period 1 January to 30 April 2024
in the amount of £35,000 (2023: £94,700)
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PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Implementation for 2025
Base salary
The following table shows the Executive Director base contractual salary levels.
2025 Base salary 000s 2024 Base salary 000s* Increase from 2024 %
K Roe £415 £370
12.2%
S Rivett £306 £297
3%
The normal salary increases of 3% for the Executive Directors for 2025 are lower than the average inflationary impact salary increase of
just under 6% across the workforce. Katherine Roe receives an additional 9.2% salary increase to bring her salary more into line with
market. Katherine voluntarily invests an after-tax salary equivalent to £30,000 gross pay into buying shares in the Company, subject to
share dealing restrictions. Furthermore, Sue Rivett voluntarily invests an after-tax salary equivalent to £20,000 gross pay into buying
shares, subject to the same share dealing restrictions.
Benefits
For 2025, benefits available to Executive Directors will be consistent with those set out in the Directors’ Remuneration Policy approved
at the 2023 AGM.
Pension
For 2025, a pension benefit at 15% of salary will be provided to each Executive Director through contributions to the Company’s money
purchase plan up to plan limits or a cash supplement. Our Pension Policy for Executive Directors is already consistent with that for all
employees (as a percentage of salary).
Annual bonus
It is intended that annual bonus awards will be considered for Executive Directors in December 2025. The maximum total bonus
opportunity for an Executive Director is 150% of salary, including cash and deferred components in accordance with the approved
Policy. The table below sets out the weighted performance measures which will be applied in determining annual bonus awards for
2025, and identifies the link from each of these measures to our core strategy of:
2025 KPI’s
Metric Weight Performance criteria which will be considered
Operational & Business Plan
50%
Strategic objectives: to replace produced reserves
and add to the reserve base in a way which is value
and/or cash flow accretive
• Production volumes for all producing assets
• Commence drilling campaign in Vietnam following licence extensions
• Secure licence extension Block 125 & 126 in Vietnam
• Secure funding partner for well to be drilled on Block 125
• Egypt consolidation project progressed
• Stakeholder engagement
Financial
30%
Strategic objectives: to control expenditure and
access affordable sources of funding in order to
maintain a strong balance sheet with sufficient liquid
resource to fund planned activities.
• Operating Cash Flow
• Underlying Operating Costs
• Reduce debtor days in Egypt
• Liquidity management
ESG
20%
Strategic objectives: to preserve the safety of all
our people, staff and contractors and preserve the
environment through sound oil field practices and
management of our own carbon footprint wherever
we work.
• Zero LTIs
• TRIR target
• Zero reportable environment spills
• GHG emissions reduction*
• DE&I progress
*Note: The KPI for GHG emissions reduction is linked to the GHG emissions reduction interim targets in our Net Zero Roadmap, which
was published on December 2023. The Group set a 5% reduction target on all Scope 1 & 2 emissions by 2026. More information can
be found at on our website at https://www.pharos.energy/media/b55c4sqz/pharos-energy-net-zero-roadmap-2023_official.pdf.The
roadmap was reviewed and updated in 2024, further details can be found on pages 96 to 99.
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PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Details of how the Committee assessed performance against these weighted measures will be set out in next year’s report. The
Committee retains discretion over the amount of bonus paid out to ensure that appropriate consideration is given to the relative
importance of the achievements in the year and the actual contribution of these towards furthering the Group’s strategy, as well as the
prevailing economic environment.
LTIP
When determining the grant level for 2025, the Committee will take into account the share price at the date of grant and all other
relevant circumstances into account. In normal circumstances, the awards will be granted at 200% of salary, in accordance with the
approved Policy.
The performance conditions for the 2025 awards are expected to be a mixed weighting as follows: of TSR (35%) relative and (20%)
absolute and 15% weighting to each of cash flow from operations, return on capital employed, and emission reduction targets.
Metric Weight Targets
TSR – Relative
35% Same criteria/TSR group as above
TSR – Absolute
Achieve 20% growth over the three year period, sliding scale to 30% for the full 20%
20% 20% to 30%
ESG medium term measures (base 2021)
Achieve 10% reduction over a three year period, sliding scale to 15% for the full 15%
15% 10% to 15% reduction in emissions
Cash flow from operations
Achieve $115m cash flow from operations over the three year period, sliding scale to
$150m for the full 15%
15% $115m to $150m
Return on Capital Employed
Achieve over 6% average per year for the three year period, sliding scale to 10%
for the full 15%
15% 6% to 10%
Shareholder dilution
Pharos monitors the number of shares issued under employee share plans and their impact on dilution limits. These will not exceed the
limits set by The Investment Association Principles of Remuneration currently in force, in respect of all share plans (10% in any rolling
ten-year period).
Malus and clawback provisions
All variable pay arrangements for Executive Directors are subject to provisions which enable the Committee to reduce vesting, or
recover value delivered if certain circumstances occur. These circumstances include serious misconduct, an error in calculation,
misstatement of the Company’s financial results, fraud, insolvency of the Company or serious reputational damage to the Company. In
each case the occurrence of those circumstances and the effect on variable pay arrangements will be determined by the Committee.
The malus and clawback provisions are set out in the respective award plan rules, which participants agree to adhere to as part of any
invitation process.
Non-Executive Director remuneration
Non-Executive Director fees, which have been set within the aggregate limits set out in the Company’s articles of association and
approved by shareholders, are set out in the table below:
Fee from 1 January 2025 Fee from 1 January 2024
Chair of the Company
£185,400
£159,000*
Non-Executive Director
£65,508
£63,600
Additional fee: Senior Independent Director
£13,648
£13,250
Additional fee: Chair of Audit and Risk Committee
£16,377
£15,900
Additional fee: Chair of Remuneration Committee
£16,377
£15,900
Additional fee: Chair of Reserves Committee
£16,377
£15,900
Additional fee: Workforce Engagement Nominated Director
£5,459
£5,300
*The Chair fees were reviewed and increased from 1 July 2024 to £180,000, reflecting market rates and were approved by the
Remuneration Committee.
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The Chair fees were reviewed and approved by the Remuneration Committee and the Non-Executive Director fees were reviewed and
approved by the Board and an increase of inflation at 3% was agreed from 1 January 2025.
For 2025, benefits available to Non-Executive Directors will be consistent with those set out in the Policy approved at the 2023 AGM.
Non-Executive Directors are not eligible for participation in the Company’s incentive or pension schemes.
Service Contract (reference Table A on page 154)
Consideration by Committee of matters relating to Executive Directors’ remuneration
The Directors who were members of the Remuneration Committee when matters relating to Directors’ remuneration for the year were
being considered were Marianne Daryabegui, Lisa Mitchell and Geoffrey Green as Remuneration Committee Chair for the March
meeting and Lisa Mitchell and Geoffrey Green for the September and December meetings.
The Committee received assistance from Jann Brown, Katherine Roe and Sue Rivett, except when matters relating to their own
remuneration were being discussed. The Committee additionally received assistance from other Non-Executives Directors when
required.
The Committee has appointed FIT Remuneration Consultants LLP (“FIT”) as its remuneration advisers, and fees of £21,651 were paid in
2024 for their advisory services. FIT is a member of the Remuneration Consultants Group and complies with their professional code of
conduct. FIT do not provide any other services to the Group which, along with FIT’s credentials and proven performance, contributes to
the Committee’s view that the advice received has been appropriate, objective and independent.
The Committee reviews all aspects of remuneration on an annual basis and with respect to individual and corporate performance during
the year. The review is aided by comparison to published data on executive pay in the sector and in similar sized companies. More
detailed benchmarking may be conducted, such as upon an indication of a change in market ranges, with results being monitored for
indications of potential unwarranted upward ratcheting. The Committee receives regular updates on evolving regulatory and market
practice including market trends, key developments, and a broad range of published principles and guidelines. The Committee takes
into account pay conditions elsewhere in the Company, and considered matters related to Group remuneration.
Shareholder voting
The most recent binding resolution on the Directors’ Remuneration Policy was passed at 2023 AGM. The advisory vote on the
Directors’ Remuneration Report was approved at last years’ AGM. The table below shows votes from shareholders on the relevant
resolutions:
Directors’ Remuneration Report (2024 AGM)
Directors’ Remuneration Policy (2023 AGM)
Votes % Votes %
Votes in favour
148,541,759 98.42%
200,307,051 84.59%
Votes against
2,388,177 1.58%
36,478,777 15.41%
Total votes
150,929,936 100.00%
236,785,828 100.00%
Votes withheld
23,298,630 –
9,230 –
Service contracts
Executive Directors’ contracts are for an indefinite period and are terminable by either party on giving one year’s notice, which may be
satisfied with a payment in lieu of notice. The contracts do not contain specific termination provisions.
The Committee has a duty to prevent the requirement to make payments that are not strictly merited and endorses the principle of
mitigation of damages on early termination of a service contract. Any payment on early termination will be assessed on the basis of the
particular circumstances, but in any event will not be in respect of any period beyond the notice period specified by the contract.
The Non-Executive Directors’ appointments are terminable at the will of the parties but are envisaged to establish an initial term of three
years after which they will be reviewed annually.
The Executive Directors’ service contracts and the Non-Executive Directors’ letters of appointment are available for inspection by
arrangement at the Company’s registered office.
Directors’ Remuneration Committee Report - Continued
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Policy Report (Unaudited)
This Directors’ Remuneration Policy became effective from the date of the 2023 AGM. This section provides a summary of the Policy
approved. The full Policy can be viewed in the 2022 Annual Report on our website at: www.pharos.energy/investors/results-reports-
and-presentations/.
Operation Maximum Performance criteria
Contractual fixed cash amount paid monthly.
Particular care is given in fixing the appropriate
salary level considering that incentive pay is
generally set at a fraction or multiple of base
salary.
The Committee takes into account a number
of factors when setting salaries, including (but
not limited to):
• Size and scope of individual’s responsibilities
• Skills and experience of the individual
• Performance of the Company and the
individual
• Appropriate market data
• Pay and conditions elsewhere in Pharos
Base salaries are normally reviewed annually.
Results of benchmarking exercises are
monitored for indications of potential
unwarranted upward ratcheting.
Any salary adjustments will normally be in line
with those of the wider workforce.
The Committee retains discretion to award
higher increases in certain circumstances
such as increased scope and responsibility
of the role, or in the case of new Executive
Directors who are positioned on a lower
salary initially, as they gain experience over
time. In these circumstances a base salary
increase will not exceed the previous CEO’s
unadjusted salary of $924,000.
N/A
BENEFITS
Purpose and link to strategy
• To provide Executive Directors with market competitive benefits consistent with the role.
Operation Maximum Performance criteria
Executive Directors receive benefits which may
include (but are not limited to) medical care
and insurance, permanent health insurance,
life assurance cover, critical illness cover, travel
benefits, expatriate benefits, car benefits and
relocation expenses.
Reasonable business related expenses will be
reimbursed (including any tax payable thereon).
Benefits are positioned at an appropriate
market level for the nature and location of the
role. Whilst the actual value of benefits may
vary from year to year based on third party
costs, it is intended that the maximum annual
value will not exceed $250,000 or £200,000,
per Directors’ base currency.
In addition to the above cap, the Company
may contribute to relocation expenses up to
100% of salary.
N/A
PENSION
Purpose and link to strategy
• To provide retirement benefits consistent with the role.
Operation Maximum Performance criteria
Pension benefits are delivered through
contributions to Pharos’ money purchase
plan up to relevant plan limits and/or a cash
supplement.
15% of base salary per annum which remains
aligned with the wider workforce.
N/A
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VARIABLE PAY
ANNUAL BONUS
Purpose and link to strategy
• Incentives and rewards for the delivery of the strategic plan on an annual basis.
Operation Maximum Performance criteria
Payments are based on performance in the
relevant financial year.
At the beginning of the year, the Committee
sets objectives which it considers are critical to
the delivery of the business strategy.
Performance against these key strategic
objectives is assessed by the Committee at the
end of the year.
The Committee retains the discretion to amend
the bonus pay-out (negatively or positively) to
ensure it reflects the performance of either the
individual or the Company.
One-third of any bonus pay-out is subject to
deferral into Pharos shares under the Deferred
Share Bonus Plan.
150% of base salary per annum, including
cash and deferred components at the
discretion of the Committee.
The annual bonus is based on individual and
corporate performance during the year.
Corporate goals are set annually and
may include monitored measures for
particular projects; portfolio objectives;
corporate strategic goals; safety, social and
environmental measures; financial measures;
and other measures as may be deemed
appropriate and relevant to the period for
delivery of the business strategy.
If the Committee determines that a minimum
level of performance has not been achieved,
no bonus will be payable. Thereafter the
bonus will begin paying out, up to the
maximum of 150% of salary.
The Committee determines the appropriate
weighting of the metrics each year.
LTIP
Purpose and link to strategy
• Incentives and rewards for the Company’s strategic plan of building shareholder value.
Operation Maximum Performance criteria
Typically a conditional award of shares or a
nil price option is made annually, normally in
March/April, following the year end closed
period.
Vesting of the awards is dependent on the
achievement of performance targets, which
are typically measured over a three-year
performance period.
Awards (post-tax) will also be subject to a two-
year post-vesting holding period during which
they cannot be sold (except in exceptional
circumstances and with the Committee’s prior
approval).
Usually 200% of base salary per annum. Awards vest based on performance against
financial, operational and/or share price
measures, as set by the Committee, which
are aligned with the long-term strategic
objectives of Pharos.
No less than 50% of the award will be based
on share price measures. The remainder
will be based on financial, operational, or
strategic measures.
For ‘threshold’ levels of performance, 25% of
the award vests. 100% of the award will vest
for maximum performance. Pro-rating applies
between these points and between ranking
positions.
The Committee may reduce LTIP vesting
outcomes (including to zero), based on the
result of testing the performance condition,
if it considers the potential outcome to be
inconsistent with the performance of the
Company, business or individual during
the performance period. Any use of such
discretion would be detailed in the Annual
Report on Remuneration.
Directors’ Remuneration Committee Report - Continued
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PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
SHAREHOLDING GUIDELINES
Purpose and link to strategy
• Further increases alignment between Executive Directors and shareholders.
Operation Maximum Performance criteria
The Board has a policy of requiring Executive
Directors to build a minimum shareholding in
Pharos shares equivalent to 200% of salary.
A post-cessation shareholding guideline
will operate from the approval of this Policy.
Executive Directors will be expected to retain
the lower of actual shares held and shares
equal to 200% of salary for a two year post-
cessation (unless the Committee exceptionally
determines that it is appropriate to release this
requirement). Pharos shares which vest from
future deferred bonus and LTIP awards will be
retained until a sufficient holding has been built
up.
N/A N/A
GEOFFREY GREEN
Remuneration Committee Chair
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Directors’ Report
DIRECTORS’ REPORT
Annual Report of the Directors
The Directors present their Annual Report along with the audited
Financial Statements of the Group for the year ended 31
December 2024.
The following sections of this report are incorporated herein by
reference and form part of this Directors’ report.
Page(s)
Strategic report pages 3 to 100
Board of Directors pages 107 to 108
UK Corporate Governance Code Report pages 109 to 116
ESG Committee report pages 117 to 119
Reserves Committee report pages 120 to 123
Nominations Committee report pages 124 to 127
Audit and Risk Committee report pages 128 to 134
Directors’ Remuneration Committee Report pages 135 to 152
Financial Statements pages 161 to 199
Additional Information pages 200 to 208
Developments during the 2024 reporting
period
An indication of the likely future developments in the business of
the Group is included in the Strategic Report.
The reporting period saw a continued focus on shareholder
returns, together with progress on the exciting opportunities
within our asset base.
In Vietnam, we reported the TGT field’s successful completion
of the two-well infill drilling programme in October on time
and under budget, with both wells contributing to production.
Discussions continued with potential farm-in partners and rig
contractors required to progress Block 125 & 126. Detailed
drilling engineering studies for the proposed well on Prospect A
in Block 125 commenced in 3Q and orders were placed for long
lead items. Following the approval of the TGT and CNV five-year
licence extensions, planning is underway for the drilling of a
TGT appraisal commitment well in 4Q 2025. Appraisal success
with the well is expected to open up an undrilled area in the
field. Additional drilling potential in TGT and CNV to increase
reserves currently under discussion with partners and 3D seismic
reprocessing on both assets was expected to commence shortly.
In Egypt, the successful completion of the drilling of the second
exploration commitment well occurred in September in El Fayum,
encountering oil-bearing reservoirs in Abu Roach G formation.
One El Fayum development well was put on production in
December. In the North Beni Suef concession, the processing of
3D seismic data continued and is expected to be completed in
1Q 2025, with interpretation and mapping to follow. Discussions
with EGPC and our partner on the consolidation of our Egyptian
concessions are progressing well. Considering the continued
macroeconomic uncertainty in Egypt, the Board intends to
maintain a measured approach to capital allocation and drilling in
Egypt in 2025, with an eye on the receivable balance.
Pharos continued to have an excellent safety record during 2024,
and the Company reported zero LTIs across all Group operations.
In Vietnam, the Group has maintained a record of zero LTIs since
1997.
In October 2024 the Company held a Group-wide off-site event
in Bournemouth, where colleagues from Egypt, Vietnam and UK
all met to exchange ideas, give business updates and promote
team building. This event was important not only for the effective
functioning of the Company, but to also develop the Group’s
global workforce and to underpin the Board’s commitment
to maintaining high standards of governance and promoting
corporate values throughout the organisation. It also provided the
new CEO, Katherine Roe, with a valuable opportunity to introduce
herself face-to-face to Group staff based outside the UK and hear
their perspective on the business directly.
The Company ended the reporting period with a strong balance
sheet. Cash balances as at 31 December 2024 were $16.5m and
the Group is now entirely debt free following voluntary repayment
of the RBL loan facility in September 2024 and the NBE revolving
credit facility in August 2024 (2023: cash balances $32.6m; net
debt $6.6m). The Directors believe that, with the combination of a
robust financial position and a steady production base across the
portfolio, Pharos is in an excellent position to continue its principal
strategy of long-term sustainable value creation and shareholder
returns.
Dividends
During 2024, the Company continued regular dividend payments
in accordance with the policy announced in September 2022.
Under that policy, Pharos intends to return to shareholders by
way of dividend no less than 10% of operating cash flow each
year in two tranches: (i) An interim dividend of around 33% of the
previous year’s final dividend, payable in January of the following
year; and (ii) subject to shareholder approval, a final dividend
payable in July of the following year. Pursuant to that policy the
following dividends were paid in 2024:
• following approval by shareholders at the 2024 AGM, a final
dividend in respect of the year ended 31 December 2023 of
0.77 pence per share, amounting to $4.1m, was paid on 19
July 2024; and
• an interim dividend of 0.363 pence per share, amounting to
$1.8m, in respect of the year ended 31 December 2024 was
paid on 22 January 2025.
The total amount of each dividend stated above takes into
account that the trustee of the Pharos Employee Benefit Trust
(EBT) waived its right to receive the dividend in relation to the
ordinary shares held in the EBT.
The Board has recommended a final dividend in respect of the
year ended 31 December 2024 of 0.847 pence per share, subject
to approval of the shareholders at the Company’s 2025 AGM.
Subject to this approval, the final dividend will be paid in full on
18 July 2025 in Pounds Sterling to ordinary shareholders on the
register at the close of business on 13 June 2025, with an ex-
dividend date of 12 June 2025. Including the interim dividend for
the year paid on 22 January 2025, this would take the 2024 full
year dividend to 1.210 pence per share, an increase of 10% on
the prior year.
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Share buy back
Throughout 2024, the Company continued to repurchase its
ordinary shares on market under the share buyback programme
initiated in July 2022. After the end of the reporting period, on
28 January 2025, the programme was completed following full
utilisation of the most recent tranche of $3m committed to the
programme. Over the course of the programme, the Company
acquired in aggregate 30,949,334 ordinary shares between
20 July 2022 and 28 January 2025 for a total consideration
of approximately £7.323 million (net of expenses), at a volume
weighted average price paid of approximately 23.66 pence per
ordinary share. All purchases made under the programme were
made through Peel Hunt, the Company’s joint broker.
Directors
The business of the Company is managed by the Directors
who may exercise all powers of the Company subject to the
articles of association of the Company (“Articles”) and applicable
law. The Directors who held office during the year, and up to
the date of signing this Annual Report, and the dates of their
current service contracts or letters of appointment, which are
available for inspection, are listed in Table A of this report. All
Directors held office throughout the year except as noted in
the table. In addition, two Directors of the Company ceased to
hold office during 2024: Jann Brown, formerly Chief Executive
Officer, resigned as a Director with effect from 30 April 2024, and
Marianne Daryabegui, formerly an independent Non-Executive
Director, retired at the Company’s 2024 AGM on 23 May 2024
without seeking re-election.
The NEDs’ appointments are terminable by either party on notice
at any time. Executive Directors’ contracts are terminable by
either party on giving one year’s notice.
In accordance with the provisions of the UK Corporate
Governance Code, all Directors will retire at the 2025 AGM and,
being eligible, offer themselves for reappointment. Relevant details
of the Directors, which include their Committee memberships, are
set out in the section headed ‘Board of Directors’ on pages 107
to 108.
Pharos provides liability insurance for its Directors and officers.
The annual cost of the cover is not material to the Group. The
Articles allow it to provide an indemnity for the benefit of its
Directors, which is a qualifying indemnity provision for the purpose
of section 233 of the Companies Act 2006 (“2006 Act”). The
Company has made such provisions for the benefit of its Directors
in relation to certain losses and liabilities that they may incur in the
course of acting as Directors of the Company, its subsidiaries or
associates, which remain in force at the date of this report.
No member of the Board had a material interest in any contract
of significance with the Company or any of its subsidiaries at any
time during the year, except for their interests in shares and in
share awards and under their service agreements and letters of
appointment disclosed in the Directors’ Remuneration Committee
Report commencing on page 135.
Table A: Directors holding office during 2024 and up to the
date of signing of this report
Director Date of appointment
John Martin - Chair*
X
13 March 2020
Katherine Roe – Chief Executive Officer 1 July 2024
Sue Rivett - Chief Financial Officer 1 July 2021
Geoffrey Green* 20 May 2020
Lisa Mitchell* 1 April 2020
Dr Bill Higgs* 16 January 2024
* Denotes those determined by the Board to be Independent
Non-Executive Directors as described on page 105. The Chair
was determined to be independent on appointment. Geoffrey
Green is the designated Senior Independent Director.
X
Date used in table date of appointment as Chair. Originally
appointed as an Independent Non-Executive Director on 7 June
2018.
Contributions
The Group’s policies prohibit political donations.
AGM
An explanation of the resolutions to be proposed at the 2025
AGM, and the recommendation of Directors in relation to these, is
included in the circular to shareholders which is available on the
Company’s website (www.pharos.energy). Resolutions regarding
the authority to issue shares and the disapplication of statutory
pre-emption rights on issue are commented upon in this report
under share capital.
A separate communication will be sent to shareholders and
published on the Company’s website regarding the AGM.
Share capital
Details of changes to share capital in the period are set out in
Note 27 to the Financial Statements. The Company currently has
one class of shares in issue, ordinary shares of £0.05 each, all
of which are fully paid. Each ordinary share in issue carries equal
rights including one vote per share on a poll at general meetings
of the Company, subject to the terms of the Articles and law.
Shares held in treasury carry no such rights for so long as they
are held in treasury. Votes may be exercised by shareholders
attending or otherwise duly represented at general meetings.
Deadlines for the exercise of voting rights by proxy on a poll at a
general meeting are detailed in the notice of meeting and proxy
cards issued in connection with the relevant meeting. Voting rights
relating to the ordinary shares held by the EBT are not exercised.
The Articles may only be amended by a special resolution of the
shareholders.
No shareholder, unless the Board decides otherwise, is entitled
to attend or to vote either personally or by proxy at a general
meeting or to exercise any other right conferred by being a
shareholder if he or she or any person with an interest in ordinary
shares has been sent a notice under section 793 of the 2006
Act (which confers upon public companies the power to require
information with respect to interests in their voting shares) and
he or she or any interested person failed to supply the Company
with the information requested within 14 days after delivery of that
notice.
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The Board may also decide that no dividend is payable in respect
of those default shares and that no transfer of any default shares
shall be registered. These restrictions end seven days after receipt
by the Company of a notice of an approved transfer of the shares
or all the information required by the relevant section 793 notice,
whichever is earlier.
The Directors may refuse to register any transfer of any share
which is not a fully-paid share, although such discretion may
not be exercised in a way which the Financial Conduct Authority
regards as preventing dealings in shares of that class from taking
place on an open or proper basis. The Directors may likewise
refuse any transfer of a share in favour of more than four persons
jointly.
The Company is not aware of any other restrictions on the
transfer of ordinary shares in the Company other than certain
restrictions that may from time to time be imposed by laws and
regulations (for example, insider trading and market abuse laws);
and pursuant to the UK Listing Rules whereby certain employees
of the Company require approval of the Company to deal in the
Company’s shares.
The Company is not aware of any agreements between
shareholders that may result in restrictions on the transfer of
securities or voting rights. Resolutions will be proposed at the
2025 AGM, as is customary, to authorise the Directors to exercise
all powers to allot shares and approve a limited disapplication
of pre-emption rights. This authority will be sought in line with
the Statement of Principles published by the Pre-Emption
Group in November 2022 (the “Pre-Emption Principles”), as it
was at the previous AGM held in 2024. The authority sought
for disapplication of pre-emption rights will be in two parts: (a)
10% of the issued ordinary share capital, which may be issued
on an unrestricted basis; and (b) an additional 10%, which may
be used in connection with an acquisition, or a specified capital
investment, in either case announced with the issue or which
has taken place in the preceding 12 months and is disclosed in
the announcement. In addition, both legs of the disapplication
resolution will seek up to a further 2% authority (4% in total)
to disapply pre-emption rights in making ‘follow-on’ offers to
retail investors and existing shareholders who are not allocated
shares as part of the placing. Further information regarding
these resolutions, which are based on the template resolutions
published by the Pre-Emption Group, is set out in the circular to
shareholders containing the notice of the AGM.
A resolution will also be proposed at the 2025 AGM, as is
customary, to renew the Directors’ existing authority to make
market purchases of the Company’s ordinary share capital, and
to limit such authority to purchases of up to approximately 10% of
the Company’s issued ordinary share capital. Shares purchased
under this authority may either be cancelled or held as treasury
shares. Although the Company’s most recent share buyback
programme concluded in January 2025, the Directors believe
that it is advantageous for the Company to continue to have the
flexibility to make market purchases of its own shares.
Auditor
A resolution to reappoint Ernst & Young LLP as the Company’s
auditor will be proposed at the 2025 AGM.
Ernst & Young LLP have also provided non-audit services to the
Group, and details of the non-audit services provided in the year
to 31 December 2024 are set out in Note 10 to the Financial
Statements. All non-audit services are approved by the Audit
and Risk Committee. The Directors are currently satisfied, and
will continue to ensure, that this range of services is delivered in
compliance with the relevant ethical guidance of the accountancy
profession and does not impair the judgement or independence of
the auditor. Further details of the Group policy on the provision of
non-audit services by the external auditor are set out in the Audit
and Risk Committee Report on pages 128 to 134. In addition,
the current revision of this policy is available on the Company’s
website at www.pharos.energy/responsibility/policy-statements/.
The Directors at the date of approval of this report confirm
that, so far as they are each aware, there is no relevant
audit information, being information needed by the auditor in
connection with preparing its report, of which the auditor is
unaware. Each Director has taken all steps that they ought to
have taken as a Director, having made such enquiries of fellow
Directors and the auditor and taken such other steps as are
required under their duties as a Director, to make themselves
aware of any relevant audit information and to establish that the
auditor is aware of that information. This confirmation is given and
should be interpreted in accordance with the provisions of section
418 of the 2006 Act.
Greenhouse gas emissions reporting
Reporting on emission sources, as required under the Companies
Act 2006 (Strategic and Directors’ Reports) Regulations 2013
and the Companies (Directors’ Report) and Limited Liability
Partnerships (Energy and Carbon Report) Regulations 2018, is
included in the Corporate Responsibility report on pages 73 to 79.
Tax governance
The Company is committed to high standards of tax governance
and strives to meet its tax obligations. Tax contributions benefit
the communities in which we operate by providing a framework
within which the Company can grow. Pharos’ Tax Strategy
Statement, which the Board approves annually, defines the key
tax objectives of the Group and is available on the Company’s
website (www.pharos.energy/responsibility/policy-statements/).
The Group has also adopted and communicated across the
organisation a corporate policy specifically dedicated to measures
against and awareness of tax evasion and the related offence of
facilitation of tax evasion. Staff members receive annual training
on tax evasion and related offences as part of the Group’s
regular business ethics programme. In 2024 this programme
was expanded to include training on the new offence of failure to
prevent fraud introduced by the Economic Crime and Corporate
Transparency Act 2023.
Risk management
The Directors carried out a robust review of the principal
and emerging risks facing the Group that could threaten the
Company’s business model, future performance, solvency and
liquidity. The Risk Management report on pages 45 to 56 details
how we manage and mitigate these risks.
Directors’ Report - Continued
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Substantial shareholdings
As at the date of this report, the Company had been notified, in accordance with Chapter 5 of the Disclosure and Transparency Rules,
or is aware of, the voting rights as a shareholder of the Company shown in Table B of this report.
Table B: Substantial shareholdings in the Company
No. of Ordinary Shares held as %
of voting rights
1
As % of Nature of holding
Bradley Radoff 81,643,795 19.70 Direct
Aberforth Partners LLP
2
43,290,014 10.45 Direct
Ettore Contini 32,613,577 7.87 Direct and indirect
Blue Albacore Business Ltd 31,260,296 7.54 Direct
Barbara Contini 27,444,382 6.62 Direct
The Estate of the late Ed Story 16,271,613 3.93 Direct and indirect
1) As at 25 March 2025, the total voting rights attached to the issued share capital of the Company comprised 414,359,658 Ordinary shares each of £0.05
nominal value being 423,481,926 Ordinary shares in issue less 9,122,268 Ordinary shares currently held in treasury.
2) As at 31 December 2024: Aberforth Partners LLP held 41,006,229 Shares representing 9.88% of the voting rights in the Company at that time.
During the period between 31 December 2024 and the date of this report, the Company did not receive any notifications under Chapter
5 of the Disclosure and Transparency Rules indicating a different whole percentage holding than as at 31 December 2024 other than as
shown in the footnotes to the table above. For further information on Directors’ interests, please see page 143.
Requirements of the UK Listing Rules
Table C of this report provides references to where the information required by UKLR 6.6.1R of the UK Listing Rules is disclosed within
this Annual Report. Where there is no specific reference in Table to a UKLR 6.6.1R information requirement, that requirement is not
applicable to the Company for the reporting year.
Table C: Listing Rules requirements
UKLR 6.6.1R requirement
Details of any long-term incentive schemes as required by UKLR 9.3.3 R.
Directors’ Remuneration Committee Report
pages 135 to 152
Details of any arrangements under which a director of the company has waived or agreed
to waive any emoluments from the company or any subsidiary undertaking. Where a
director has agreed to waive future emoluments, details of such waiver together with those
relating to emoluments which were waived during the period under review.
No such waivers
Details required in the case of any allotment for cash of equity securities made during
the period under review otherwise than to the holders of the company’s equity shares
in proportion to their holdings of such equity shares and which has not been specifically
authorised by the company’s shareholders.
No such share allotments
Details of any contract of significance subsisting during the period under review: (a) to which
the listed company, or one of its subsidiary undertakings, is a party and in which a director
of the listed company is or was materially interested; and (b) between the listed company, or
one of its subsidiary undertakings, and a controlling shareholder.
Note 35 page 197
Details of any arrangement under which a shareholder has waived or agreed to waive any
dividends, and where a shareholder has agreed to waive future dividends, details of such
waiver together with those relating to dividends which are payable during the period under
review.
Note 29 page 193
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Directors’ Report - Continued
Whistleblowing procedure
The Board has reviewed, and is satisfied with, the Group’s
Whistleblowing Policy and associated procedures, enabling
employees to raise issues in confidence concerning improprieties
which would be addressed with appropriate follow-up action.
The Group has in place an Ethics Hotline using a dedicated,
confidential and anonymous telephone service available to
staff to report a suspected breach of the Group’s Code of
Business Conduct and Ethics, the corresponding guidelines for
implementation of that Code or other related Group policies, such
as the Group’s Sanctions Policy.
Business Relationships
In order to foster relationships with suppliers and customers,
Pharos ensures a robust engagement process before contracts
are awarded. Every vendor is required to complete due diligence
so that the Company may ensure all corporate and banking
details are recorded and checked before invoices are issued;
this allows for prompt and accurate payment. Where possible,
payment terms are 30 days from date of receipt of a validly
submitted invoice. A comprehensive contracts register is
maintained to ensure that post award contract management is
addressed to consider delivery of appropriate notices of renewal
of termination.
We strive to work constructively with all our suppliers, customers
and other business partners to build and maintain productive
relationships.
Going concern
It should be recognised that any consideration of the foreseeable
future involves making a judgement, at a particular point in time,
about future events which are inherently uncertain. Nevertheless,
at the time of preparation of these accounts and after making
enquiries, the Directors have a reasonable expectation that the
Group has adequate resources to continue operating for the
foreseeable future. For this reason, and taking into consideration
the additional factors in the Strategic Report on pages 3 to
100 including the Going Concern section of the Chief Financial
Officer’s Statement on page 44, they continue to adopt the going
concern basis in preparing the accounts.
Directors’ responsibilities for the Financial
Statements
The Directors are responsible for preparing the Annual Report
and the Financial Statements in accordance with UK-adopted
international accounting standards in conformity with the
requirements of the 2006 Act. The Financial Statements have
also been prepared in accordance with International Financial
Reporting Standards as issued by the IASB and endorsed
by the UKEB. The Directors are required to prepare Financial
Statements for each financial year that give a true and fair view of
the financial position of the Company and of the Group and the
financial performance and cash flows of the Group for that period.
In preparing those accounts the Directors are required to select
suitable accounting policies and then apply them consistently;
present information and accounting policies in a manner that
provides relevant, reliable and comparable information; and state
that the Company and the Group have complied with applicable
accounting standards, subject to any material departures
disclosed and explained in the accounts.
The Directors are responsible for keeping proper accounting
records which disclose with reasonable accuracy at any time the
financial position of the Company and the Group and enable them
to ensure that the accounts comply with relevant legislation. They
are also responsible for safeguarding the assets of the Company
and the Group and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
Company’s website. Information published on the internet is
accessible in many countries with different legal requirements.
Legislation in the United Kingdom governing the preparation and
dissemination of Financial Statements may differ from legislation
in other jurisdictions.
Directors’ responsibility statement
The Directors confirm that, to the best of each person’s
knowledge:
a) the Financial Statements set out on pages 168 to 199,
which have been prepared in accordance with international
accounting standards in conformity with the requirements of
the Companies Act 2006 and International Financial Reporting
Standards as adopted by the UK and in accordance with
International Financial Reporting Standards as issued by the
IASB, give a true and fair view of the assets, liabilities, financial
position and loss of the Company and the Group taken as a
whole;
b) this Directors’ Report along with the Strategic Report,
including each of the management reports forming part of
these reports, includes a fair review of the development and
performance of the business and the position of the Company
and the Group taken as a whole, together with a description
of the principal risks and uncertainties that they face and how
these are being managed and mitigated as set out in the Risk
Management Report on pages 45 to 49; and
c) the Annual Report and the Financial Statements, taken as
a whole, are fair, balanced and understandable and provide
the information necessary for the shareholders to assess the
Group’s position, performance, business model and strategy.
Approved by the Board and signed on its behalf.
Chief Financial Officer
25 March 2025
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159
Results that
reflect strength
and strategy
FINANCE REPORT
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ADDITIONAL
INFORMATION
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STATEMENTS
GOVERNANCE
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Independent Auditor’s Report to the Members of Pharos Energy plc 161
Consolidated Financial Statements 168
− Consolidated Income Statement 168
− Consolidated Statement of Comprehensive Income 168
− Balance Sheets 169
− Statements of Changes in Equity 170
− Cash Flow Statements 171
Notes to the Consolidated Financial Statements 172
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PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Independent Auditor’s Report to the Members of Pharos Energy plc
REPORT ON THE AUDIT OF THE
FINANCIAL STATEMENTS
Opinion
In our opinion:
• Pharos Energy plc’s group financial
statements and parent company
financial statements (the “financial
statements”) give a true and fair view
of the state of the group’s and of the
parent company’s affairs as at 31
December 2024 and of the group’s
profit for the year then ended;
• the group financial statements
have been properly prepared in
accordance with UK adopted
international accounting standards;
• the parent company financial
statements have been properly
prepared in accordance with UK
adopted international accounting
standards as applied in accordance
with section 408 of the Companies
Act 2006; and
• the financial statements have been
prepared in accordance with the
requirements of the Companies Act
2006.
We have audited the financial
statements of Pharos Energy plc (the
‘parent company’) and its subsidiaries
(the ‘group’) for the year ended 31
December 2024 which comprise:
Group Parent company
Balance sheet as at 31 December 2024
Balance sheet as at 31
December 2024
Consolidated income statement for the
year then ended
Statement of changes in
equity for the year then
ended
Consolidated statement of
comprehensive income for the year then
ended
Cash flow statement for
the year then ended
Statement of changes in equity for the
year then ended
Related notes 1 to
36 to the financial
statements, including:
material accounting
policy information
Cash flow statement for the year then
ended
Related notes 1 to 36 to the financial
statements, including: material
accounting policy information
The financial reporting framework that has been applied in their
preparation is applicable law and UK adopted international
accounting standards and as regards the parent company
financial statements, as applied in accordance with section 408 of
the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the
Auditor’s responsibilities for the audit of the financial statements
section of our report. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our
opinion.
Independence
We are independent of the group and parent in accordance
with the ethical requirements that are relevant to our audit of
the financial statements in the UK, including the FRC’s Ethical
Standard as applied to listed public interest entities, and we have
fulfilled our other ethical responsibilities in accordance with these
requirements.
The non-audit services prohibited by the FRC’s Ethical Standard
were not provided to the group or the parent
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Conclusions relating to going concern
In auditing the financial statements, we
have concluded that the directors’ use of
the going concern basis of accounting in
the preparation of the financial statements
is appropriate. Our evaluation of the
directors’ assessment of the group and
parent company’s ability to continue
to adopt the going concern basis of
accounting included:
• confirming our understanding of
management’s going concern
assessment process in conjunction
with our walkthrough of the Group’s
financial close process and engaging
with management to confirm all
relevant assumptions were considered;
• evaluating whether management’s
going concern period up to 31 March
2026 was appropriate by considering
the existence of any significant events
or conditions beyond this period;
• assessing whether the forecasts
incorporated in the base case model
are consistent with the budget
approved by the Board;
• comparing the key assumptions in
the base forecast to those used in
the impairment models for oil and gas
producing assets and understanding
the basis for any differences;
• assessing the historical accuracy of
budgets prepared by management by
comparing the group’s actual results
against budgets;
• assessing the reasonableness of
management’s oil price assumptions by
comparing them with forward curves;
• assessing whether the assumptions in
management’s Reasonable Worst Case
scenario were plausible and sufficiently
severe by comparing these downside
assumptions with historical data and by
considering the ranges of broker and
consultant oil price forecasts;
• evaluating management’s reverse
stress test to determine the oil price
at which liquidity becomes negative
and assessing the likelihood of its
occurrence and testing the going
concern model for mathematical
accuracy;
• assessing whether the disclosures
relating to going concern are
appropriate.
Based on the work we have performed,
we have not identified any material
uncertainties relating to events or
conditions that, individually or collectively,
may cast significant doubt on the group
and parent company’s ability to continue
as a going concern for a period up to 31
March 2026.
In relation to the group and parent
company’s reporting on how they have
applied the UK Corporate Governance
Code, we have nothing material to add
or draw attention to in relation to the
directors’ statement in the financial
statements about whether the directors
considered it appropriate to adopt the
going concern basis of accounting.
Our responsibilities and the responsibilities
of the directors with respect to going
concern are described in the relevant
sections of this report. However, because
not all future events or conditions can
be predicted, this statement is not a
guarantee as to the group’s ability to
continue as a going concern.
Overview of our audit approach
Audit scope
• We performed an audit of the complete financial information of 4 components and audit procedures
on specific balances for a further 1 component and central procedures on cash and cash equivalents,
intercompany balances, decommissioning provisions, equity, impairment of oil and gas assets, share
based payments and oil and gas reserve estimates.
Key audit
matters
• Impairment and impairment reversal of oil and gas producing assets
• Impairment of investment in subsidiaries (parent company only)
Materiality
• Overall group materiality of $2.15 million which represents 2.5% of EBITDAX
An overview of the scope of the parent company and group audits
In the current year our audit scoping reflects the new requirements of ISA (UK) 600 (Revised). We have followed a risk-based approach
when developing our audit approach to obtain sufficient appropriate audit evidence on which to base our audit opinion. We performed
risk assessment procedures, to identify and assess risks of material misstatement of the group financial statements and identified
significant accounts and disclosures. When identifying components at which audit work needed to be performed to respond to the
identified risks of material misstatement of the group financial statements, we considered our understanding of the group and its
business environment, the potential impact of climate change, the applicable financial framework, the group’s system of internal control
at the entity level, the existence of centralised processes, applications and any relevant internal audit results.
We determined that centralised audit procedures can be performed on multiple components in the following audit areas:
Key audit area on which procedures were performed centrally Component subject to central procedures
Cash and cash equivalents All components
Intercompany balances All components
Decommissioning provisions SOCO Vietnam Limited, OPECO Inc and OPECO Vietnam Limited
Equity All components
Impairment of oil and gas assets All in scope components
Share based payments All components
Oil and gas reserve estimates All in scope components
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Independent Auditor’s Report to the Members of Pharos Energy plc - Continued
We then identified 4 components as
individually relevant to the group due
to relevant events and conditions
underlying the identified risks of material
misstatement of the group financial
statements being associated with the
reporting components and 1 of the
components of the group as individually
relevant due to materiality or financial size
of the component relative to the group.
For those individually relevant
components, we identified the significant
accounts where audit work needed to
be performed at these components by
applying professional judgement, having
considered the group significant accounts
on which centralised procedures will be
performed, the reasons for identifying
the financial reporting component as an
individually relevant component and the
size of the component’s account balance
relative to the group significant financial
statement account balance.
We then considered whether the remaining
group significant account balances not yet
subject to audit procedures, in aggregate,
could give rise to a risk of material
misstatement of the group financial
statements. We determined that no other
components were required to be included
in the group scoping.
Having identified the components for
which work will be performed, we
determined the scope to assign to each
component.
Of the 5 components selected, we
designed and performed audit procedures
on the entire financial information of 4
components (“full scope components”).
For 1 component, we designed and
performed audit procedures on specific
significant financial statement account
balances or disclosures of the financial
information of the component (“specific
scope component”).
Our scoping to address the risk of material
misstatement for each key audit matter is
set out in the Key audit matters section of
our report.
Involvement with component
teams
Audit work for the Vietnam component,
which covers 2 full scope components,
has been performed by an integrated
primary audit team comprising of team
members from EY UK and EY Vietnam
and led by the Senior Statutory Auditor.
During the current year’s audit cycle, a
site visit was undertaken by the Group
audit team to Vietnam in November
2024. This visit involved meetings with
local management, including members of
both finance and operations teams. We
held discussions on the audit approach,
reviewed working papers during and
after the site visit to validate that the
required procedures have been performed
and discussed the issues arising in the
component audit.
Climate change
Stakeholders are increasingly interested
in how climate change will impact Pharos
Energy plc. The Group has determined
that the most significant future impacts
from climate change on their operations
will be from Commodity price volatility,
Lack of portfolio diversification and
Carbon pricing. These are explained on
pages 80 to 95 in the Task Force On
Climate Related Financial Disclosures and
on pages 48, 52 and 58 in the principal
risks and uncertainties. They have also
explained their climate commitments on
pages 96 to 99. All of these disclosures
form part of the “Other information,” rather
than the audited financial statements.
Our procedures on these unaudited
disclosures therefore consisted solely of
considering whether they are materially
inconsistent with the financial statements
or our knowledge obtained in the course
of the audit or otherwise appear to be
materially misstated, in line with our
responsibilities on “Other information”.
In planning and performing our audit we
assessed the potential impacts of climate
change on the Group’s business and
any consequential material impact on its
financial statements.
The group has explained in Note 2 how
they have reflected the impact of climate
change in their financial statements
including how this aligns with their
commitment to achieve Net Zero on
Scope 1 (direct) and Scope 2 (indirect)
GHG emissions from all current and future
assets by no later than 2050. Significant
judgements and estimates relating to
climate change are included in Note 2.
These disclosures also explain where
governmental and societal responses to
climate change risks are still developing,
and where the degree of certainty of
these changes means that they cannot
be taken into account when determining
asset and liability valuations under the
requirements of UK adopted international
accounting standards. In Note 16 to
the financial statements, supplementary
sensitivity disclosures of the impact of
changes in oil price under the IEA scenario
– Net Emission zero by 2050 have been
provided.
Our audit effort in considering the impact
of climate change on the financial
statements was focused on evaluating
management’s assessment of the impact
of climate risk, physical and transition,
their climate commitments, the effects of
material climate risks disclosed on pages
85 to 95 and the significant judgements
and estimates disclosed in Note 2 and
whether these have been appropriately
reflected in oil and gas asset values
where these are impacted by future
cash flows and associated sensitivity
disclosures (see Note 16), and in the
timing and nature of liabilities recognised,
following the requirements of UK adopted
international accounting standards. As
part of this evaluation, we performed
our own risk assessment, supported by
our climate change internal specialists.
This included making inquiries of the
group’s climate and finance teams and
a review of peer disclosures and sector
guidance on climate change and energy
transition to determine the risks of material
misstatement in the financial statements
from climate change which needed to be
considered in our audit.
We also challenged the Directors’
considerations of climate change risks
in their assessment of going concern
and viability and associated disclosures.
Where considerations of climate change
were relevant to our assessment of going
concern, these are described above.
Based on our work, whilst we have
not identified the impact of climate
change on the financial statements to
be a standalone key audit matter, we
have considered the impact on the
following key audit matters: Impairment
and impairment reversal of oil and gas
producing assets; and Impairment of
investment in subsidiaries. Details of the
impact, our procedures and findings are
included in our explanation of key audit
matters below.
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Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud)
that we identified. These matters included those which had the greatest effect on: the overall audit strategy, the allocation of resources
in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial
statements as a whole, and in our opinion thereon, and we do not provide a separate opinion on these matters.
Risk Our response to the risk
Impairment and impairment reversal of oil and gas
producing assets
Refer to the Audit and Risk Committee Report (pages 128
to 134); Accounting policies (page 174); and Note 16 of the
Consolidated Financial Statements (pages 183 to 185). The
value of property, plant and equipment relating to the group’s
producing oil and gas assets as at 31 December 2024 was
$273.4 million (2023: $279.8 million).
In the current period, management noted impairment and
impairment reversal indicators for certain of the Group’s
assets and recorded a net pre-tax impairment reversal of
$28.3 million (2023: net pre-tax impairment of $58.9 million).
The impairment models include a number of key estimates
for each cash-generating unit (CGU) including oil and gas
prices and discount rates. Changes to key inputs could
lead to a material change in an impairment or a reversal of
impairment, hence this is considered a key audit matter. In
addition, we considered that there was a risk of additional
impairment due to the potential impact of climate change on
long term oil prices.
In relation to reserves estimates and production profiles,
management have engaged third party reservoir engineering
experts to provide an independent report on the group’s
reserve estimates using standard industry reserve estimation
methods and definitions for Pharos’s producing fields.
Management have explained the scope of work of the third-
party experts and their findings in the Reserves Committee
Report on pages 121 to 123, as well as highlighting oil and
gas reserves as a key source of estimation uncertainty in
Note 4(b) to the financial statements.
The risk has remained the same as the prior year.
Our procedures involved the following:
• confirmed our understanding of Pharos’s impairment assessment
process, as well as the controls implemented by management;
• evaluated management’s assessment of whether or not impairment
or impairment reversal indicators were present in respect of
each producing oil and gas asset, and thus the completeness of
management’s impairment tests. Where indicators were identified,
we assessed the methods and models used for consistency with the
requirements of IAS 36 “Impairment of Assets”.
• tested the models for mathematical accuracy and formulae
consistency to evaluate spreadsheet integrity;
• assessed the appropriateness of management’s oil and gas price
assumptions through comparison with the estimates of market
participants and peer information. We also compared Pharos’s prices
to the IEA’s Net Zero Emissions 2050 (NZE) and to the Announced
Pledges Scenario (APS) price assumptions as potential contradictory
evidence for best estimates of future oil prices;
• assessed the appropriateness of management’s impairment discount
rates including an independent re-calculation of the discount rates by
our EY valuations specialists;
• gained an understanding of the process used by management to
derive their reserves estimates and associated production profiles
and how they provide information to, and interact with, their external
third party reserves expert;
• evaluated the professional expertise and objectivity of management’s
external expert;
• reconciled production and cost profiles used in the impairment model
to the reserves report produced by management’s external third party
reserves expert;
• communicated directly with the external third party reserves expert
to discuss their scope of work and assess their methodologies used
and outputs;
• evaluated the consistency of assumptions used in the impairment
model with other areas of the audit such as going concern;
• assessed the appropriateness of management’s presentation and
disclosures relating to the impairment reversals recognised, including
sensitivities.
Key observations communicated to the Audit and Risk Committee
We reported to the Audit and Risk Committee that the key assumptions used within the impairment models were within an acceptable
range and, based on our testing performed, we considered the recognition and valuation of the current period impairment reversals to be
reasonable.
On sensitivity disclosures, management appropriately disclosed the impact on the value of PP&E under the IEA’s NZE scenario. We also
reported that management had appropriately included environmental protection fees as imposed under the license extension agreement
within the Vietnam asset impairment models.
How we scoped our audit to respond to the risk
Our audit response was executed by the primary audit team, covering all assets at risk of material impairment and impairment reversal.
FINANCIAL
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PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Risk Our response to the risk
Impairment of investment in subsidiaries (parent company only)
Refer to the Audit and Risk Committee Report (pages 128 to 134); Accounting
policies (page 174); and Note 17 of the Financial Statements (pages 185 to 187).
Investments in subsidiaries of $287.0 million (2023: $261.5 million) represents a
material asset on the parent company balance sheet.
Considering the significant difference between market capitalisation and
the carrying value of the Investments in subsidiaries, we consider the risk of
material misstatement in the recoverability of the investment to be high. The
parent company investment value is interconnected with the recoverability of
subsidiaries’ oil and gas producing assets which is also identified as a significant
risk for the group audit. In the current period, management noted impairment
and impairment reversal indicators for investments in subsidiaries and, as a result
of their impairment test, recorded an impairment reversal of $24.6 million (2023:
impairment of $52.1 million).
The calculation of the recoverable amount of investment in subsidiaries involves
significant estimates and judgements, similar to the ‘Impairment and impairment
reversal of oil and gas producing assets’ key audit matter described above. In
addition, there is complexity involved in determining the enterprise value of the
subsidiaries including any relevant intercompany adjustments, hence, this is
considered a key audit matter.
As part of our current year testing, we identified a prior year error in the
recoverable value due to the incorrect adjustment of intercompany balances as
part of the impairment tests in prior periods. This resulted in an overstatement
of the Investment in subsidiaries account of $29.2m as at 1 January 2023 and
$32.8m as at 31 December 2023. Refer to Note 2(t) to the financial statements.
Our procedures involved the following:
• assessed the methodology used by management
to estimate the recoverable value of each
investment for which an impairment test was
performed to ensure that this is consistent with
the accounting standards;
• tested that the relevant assets and liabilities of
each investment have been appropriately included
in the assessment of recoverable value, including
the effects of intercompany balances;
• refer to the key audit matter above on ‘Impairment
and impairment reversal of oil and gas producing
assets’ with respect to our procedures performed
on the recoverable value of individual assets
tested for impairment, including our consideration
of climate change;
• tested the appropriateness of the prior year
restatement and associated disclosures with
reference to the requirements of IAS 8: Accounting
Policies, Changes in Accounting Estimates and
Errors; and
• assessed the appropriateness of management’s
presentation and disclosures relating to the
impairment reversal, including sensitivities.
Key observations communicated to the Audit and Risk Committee
We reported to the Audit and Risk Committee that the intercompany balances have been appropriately treated in determining the
recoverable value. We observed that management’s disclosure for the restatement of prior year balances and the reversal of impairment in
2024 were reasonable and satisfied the applicable IAS 8 requirements.
How we scoped our audit to respond to the risk
Our audit response was executed by the primary audit team.
Our application of materiality
We apply the concept of materiality
in planning and performing the audit,
in evaluating the effect of identified
misstatements on the audit and in forming
our audit opinion.
Materiality
The magnitude of an omission or
misstatement that, individually or in the
aggregate, could reasonably be expected
to influence the economic decisions of the
users of the financial statements. Materiality
provides a basis for determining the nature
and extent of our audit procedures.
We determined materiality for the Group
to be $2.15 million (2023 predecessor
auditor: $3.8 million), which is 2.5% (2023
predecessor auditor: 4%) of EBITDAX
(2023 predecessor auditor: 3 year average
EBITDAX). We believe that EBITDAX
provides us with the most appropriate
measure upon which to calculate materiality
as it represents a key performance indicator
used by Pharos’s investors. For the 2024
audit, we have not used a normalised
measure based on our observations of
the current year oil prices and analysis of
forecast price curves, noting that oil price
volatility caused by the pandemic and the
outbreak of war in Ukraine in 2023 has
reduced. Consequently, we have not used
a 3 year average of EBITDAX in the current
year. We have set materiality at 2.5% (2023
predecessor auditor: 4%) of EBITDAX
based on our assessment of risk impacting
Pharos.
Consistent with the EBITDAX measure
used, we have excluded non-recurring
items such as impairments and impairment
reversals to ensure we are using a
consistent measure representative of the
underlying business. The non-recurring
items excluded in 2024 were a net
impairment reversal in respect of oil and gas
assets of $26.3 million.
We determined materiality for the Parent
Company to be $4.5 million (2023
predecessor auditor: $3.4 million), which is
1.5% (2023 predecessor auditor: 1.5%) of
Net Assets. The basis for calculating parent
company materiality is same as that used
by the predecessor auditor.
During the course of our audit, we
reassessed initial materiality and concluded
that the Group’s actual performance in
2024 did not affect our initial materiality. As
such our materiality was unchanged from
planning.
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PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Performance materiality
The application of materiality at the
individual account or balance level. It is set
at an amount to reduce to an appropriately
low level the probability that the
aggregate of uncorrected and undetected
misstatements exceeds materiality.
On the basis of our risk assessments,
together with our assessment of the
Group’s overall control environment,
our judgement was that performance
materiality was 50% (2023 predecessor
auditor: 70%) of our planning materiality,
namely $1.08m (2023 predecessor
auditor: $2.7m). We have set performance
materiality at this percentage due to this
being the first year of our audit.
Audit work was undertaken at component
locations for the purpose of responding
to the assessed risks of material
misstatement of the group financial
statements. The performance materiality
set for each component is based on the
relative scale and risk of the component to
the Group as a whole and our assessment
of the risk of misstatement at that
component. In the current year, the range
of performance materiality allocated to
components was $0.4m to $1.0m (2023:
$1.9m to $3.1m).
Reporting threshold
An amount below which identified
misstatements are considered as being
clearly trivial.
We agreed with the Audit and Risk
Committee that we would report to them
all uncorrected audit differences in excess
of $0.11m (2023 predecessor auditor:
$0.19m), which is set at 5% of planning
materiality, as well as differences below
that threshold that, in our view, warranted
reporting on qualitative grounds.
We evaluate any uncorrected
misstatements against both the
quantitative measures of materiality
discussed above and in light of other
relevant qualitative considerations in
forming our opinion.
Other information
The other information comprises the
information included in the annual report
set out on pages 3 to 158, including the
Strategic Report, Corporate Governance
and Supplementary Information, other
than the financial statements and our
auditor’s report thereon. The directors
are responsible for the other information
contained within the annual report.
Our opinion on the financial statements
does not cover the other information and,
except to the extent otherwise explicitly
stated in this report, we do not express
any form of assurance conclusion thereon.
Our responsibility is to read the other
information and, in doing so, consider
whether the other information is materially
inconsistent with the financial statements
or our knowledge obtained in the course
of the audit, or otherwise appears to be
materially misstated. If we identify such
material inconsistencies or apparent
material misstatements, we are required
to determine whether this gives rise to
a material misstatement in the financial
statements themselves. If, based on the
work we have performed, we conclude
that there is a material misstatement of
the other information, we are required to
report that fact.
We have nothing to report in this regard.
Opinions on other
matters prescribed by the
Companies Act 2006
In our opinion, the part of the Directors’
Remuneration Committee Report to be
audited has been properly prepared in
accordance with the Companies Act
2006.
In our opinion, based on the work
undertaken in the course of the audit:
• the information given in the strategic
report and the directors’ report for the
financial year for which the financial
statements are prepared is consistent
with the financial statements; and
• the strategic report and the directors’
report have been prepared in
accordance with applicable legal
requirements.
Matters on which we
are required to report by
exception
In the light of the knowledge and
understanding of the group and the parent
company and its environment obtained
in the course of the audit, we have not
identified material misstatements in the
strategic report or the directors’ report.
We have nothing to report in respect of
the following matters in relation to which
the Companies Act 2006 requires us to
report to you if, in our opinion:
• adequate accounting records have not
been kept by the parent company, or
returns adequate for our audit have
not been received from branches not
visited by us; or
• the parent company financial
statements and the part of the
Directors’ Remuneration Committee
Report to be audited are not in
agreement with the accounting records
and returns; or
• certain disclosures of directors’
remuneration specified by law are not
made; or
• we have not received all the information
and explanations we require for our
audit.
Corporate Governance
Statement
We have reviewed the directors’ statement
in relation to going concern, longer-term
viability and that part of the Corporate
Governance Statement relating to the
group and company’s compliance with
the provisions of the UK Corporate
Governance Code specified for our review
by the UK Listing Rules.
Based on the work undertaken as part of
our audit, we have concluded that each
of the following elements of the Corporate
Governance Statement is materially
consistent with the financial statements or
our knowledge obtained during the audit:
• Directors’ statement with regards to the
appropriateness of adopting the going
concern basis of accounting and any
material uncertainties identified set out
on page 157;
• Directors’ explanation as to its
assessment of the company’s
prospects, the period this assessment
covers and why the period is
appropriate set out on pages 57 and
58;
• Directors’ statement on whether it
has a reasonable expectation that
the group will be able to continue in
operation and meets its liabilities set
out on pages 57 and 58;
• Directors’ statement on fair, balanced
and understandable set out on page
157;
• Board’s confirmation that it has carried
out a robust assessment of the
emerging and principal risks set out on
page 155;
• The section of the annual report that
describes the review of effectiveness of
risk management and internal control
systems set out on pages 45 to 56;
and
• The section describing the work of the
Audit and Risk Committee set out on
page 129.
FINANCIAL
STATEMENTS
ADDITIONAL
INFORMATION
GOVERNANCE
REPORT
STRATEGIC
REPORT
166
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Responsibilities of
directors
As explained more fully in the directors’
responsibilities statement set out on page
157, the directors are responsible for the
preparation of the financial statements
and for being satisfied that they give a true
and fair view, and for such internal control
as the directors determine is necessary
to enable the preparation of financial
statements that are free from material
misstatement, whether due to fraud or
error.
In preparing the financial statements, the
directors are responsible for assessing
the group and parent company’s ability to
continue as a going concern, disclosing,
as applicable, matters related to going
concern and using the going concern
basis of accounting unless the directors
either intend to liquidate the group or the
parent company or to cease operations, or
have no realistic alternative but to do so.
Auditor’s responsibilities
for the audit of the
financial statements
Our objectives are to obtain reasonable
assurance about whether the financial
statements as a whole are free from
material misstatement, whether due to
fraud or error, and to issue an auditor’s
report that includes our opinion.
Reasonable assurance is a high level
of assurance, but is not a guarantee
that an audit conducted in accordance
with ISAs (UK) will always detect a
material misstatement when it exists.
Misstatements can arise from fraud or
error and are considered material if,
individually or in the aggregate, they could
reasonably be expected to influence the
economic decisions of users taken on the
basis of these financial statements.
Explanation as to what extent the
audit was considered capable of
detecting irregularities, including
fraud
Irregularities, including fraud, are
instances of non-compliance with laws
and regulations. We design procedures
in line with our responsibilities, outlined
above, to detect irregularities, including
fraud. The risk of not detecting a material
misstatement due to fraud is higher than
the risk of not detecting one resulting
from error, as fraud may involve deliberate
concealment by, for example, forgery
or intentional misrepresentations, or
through collusion. The extent to which
our procedures are capable of detecting
irregularities, including fraud is detailed
below.
However, the primary responsibility for the
prevention and detection of fraud rests
with both those charged with governance
of the company and management.
• We obtained an understanding of the
legal and regulatory frameworks that are
applicable to the group and determined
that the most significant are those that
related to the reporting framework
(UK adopted international accounting
standards, Companies Act 2006, the
UK Corporate Governance Code and
Listing Rules of the UK Listing Authority)
and the relevant tax compliance
regulations in the jurisdictions in
which Pharos operates. In addition,
we concluded that there are certain
significant laws and regulations that
may have an effect on the determination
of the amounts and disclosures in
the financial statements, relating to
health and safety, employee matters,
environmental matters and bribery and
corruption practices.
• We understood how Pharos Energy plc
is complying with those frameworks
by making inquiries of management,
internal audit and those responsible
for legal and compliance procedures.
We corroborated our enquiries
through review of board minutes,
papers provided to the Audit and
Risk Committee and correspondence
received from regulatory bodies.
• We assessed the susceptibility of
the group’s financial statements to
material misstatement, including how
fraud might occur by considering the
degree of incentive, opportunity and
rationalisation that may exist within the
group. We did this by meeting with
management to gain an understanding
of where there was susceptibility to
fraud, how the company is complying
with international tax laws and
regulations, procedures in place
to address the risk of bribery and
corruption in high-risk countries. We
also performed procedures around
setting key performance indicators and,
alongside our forensics specialists,
assessed any adverse media reports
with a potential financial reporting
impact.
• Based on this understanding we
designed our audit procedures to
identify non-compliance with such
laws and regulations. Our procedures
involved journal entry testing, with a
focus on journals meeting defined risk
criteria based on our understanding
of the business; inquiries with legal
counsel, group management, internal
audit and management of all full
and specific scope components;
review of legal expense accounts;
and performance of adverse press
searches.
• If any instances of non-compliance with
laws and regulations were identified,
these were communicated to the
relevant local EY team and sufficient
and appropriate audit procedures were
performed to address the risk identified,
supplemented by audit procedures
performed at the group level.
A further description of our responsibilities
for the audit of the financial statements
is located on the Financial Reporting
Council’s website at https://www.frc.
org.uk/auditorsresponsibilities. This
description forms part of our auditor’s
report.
Other matters we are
required to address
• Following the recommendation from
the Audit and Risk Committee, we were
appointed by the company on 28 May
2024 to audit the financial statements
for the year ending 31 December 2024
and subsequent financial periods.
• The period of total uninterrupted
engagement including previous
renewals and reappointments is 1 year,
covering the year ended 31 December
2024.
• The audit opinion is consistent with the
additional report to the Audit and Risk
Committee.
Use of our report
This report is made solely to the
company’s members, as a body, in
accordance with Chapter 3 of Part 16 of
the Companies Act 2006. Our audit work
has been undertaken so that we might
state to the company’s members those
matters we are required to state to them
in an auditor’s report and for no other
purpose. To the fullest extent permitted
by law, we do not accept or assume
responsibility to anyone other than the
company and the company’s members as
a body, for our audit work, for this report,
or for the opinions we have formed.
STATUTORY AUDITOR)
for and on behalf of Ernst & Young
Kingdom
25 March 2025
Independent Auditor’s Report to the Members of Pharos Energy plc - Continued
167
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Consolidated Financial Statements
CONSOLIDATED
INCOME STATEMENT
for the year to 31 December 2024
| 2024 | 2023 | ||
| Notes | $ million | $ million | |
| Continuing operations | |||
Revenue | 5, 6 | ||
Cost of sales | 6, 7 | ( | ( |
Impairment reversal/(charge) – Financial asset | 6, 7 | ( | |
| Gross profit | |||
| Administrative expenses | ( | ( | |
Other operating costs | 6, 8 | ( | |
Pre-licence costs | 6 | ( | ( |
Impairment charge – Intangible assets | 6, 15 | ( | ( |
Impairment reversal/(charge) – Property, plant and equipment | 6, 16 | ( | |
| Operating profit/(loss) | ( | ||
Other/restructuring expense | 8 | ( | ( |
Gain/(loss) on fair value movement of financial asset | 6, 20 | ( | |
Investment revenue | 5 | ||
Finance costs | 9 | ( | ( |
| Profit/(loss) before tax | 6 | ( | |
Income tax charge | 6, 12 | ( | ( |
| Profit/(loss) for the year | 30 | ( | |
| Profit/(loss) per share (cents) | 14 | ||
| Basic | ( | ||
| Diluted | ( |
CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME
for the year to 31 December 2024
| 2024 | 2023 | ||
| Notes | $ million | $ million | |
Profit/(loss) for the year | 30 | ( | |
| Items that may be subsequently reclassified to profit or loss: | |||
Fair value (loss)/gain arising on hedging instruments during the year | 25 | ( | |
Less: Loss arising on hedging Instruments reclassified to profit or loss | 25 | ||
| Total comprehensive income/(loss) for the year | ( |
The above Consolidated Income Statement and Consolidated Statement of Comprehensive Income should be read in conjunction with
the accompanying notes.
FINANCIAL
STATEMENTS
ADDITIONAL
INFORMATION
GOVERNANCE
REPORT
STRATEGIC
REPORT
168
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Consolidated Financial Statements - Continued
BALANCE SHEETS
as at 31 December 2024
Group | Company | ||||
| 2023 | 2023 | ||||
| 2024 | Restated 1 | 2024 | Restated 1 | ||
| Notes | $ million | $ million | $ million | $ million | |
| Non-current assets | |||||
Intangible assets | 15 | – | – | ||
Property, plant and equipment | 16 | – | – | ||
Right of use asset | 16, 33 | – | – | ||
Investments | 17 | 287.0 | 261.5 | ||
Loan to subsidiaries | 17 | 18.4 | 16.8 | ||
Other assets | 18 | – | – | ||
305.4 | 278.3 | ||||
| Current assets | |||||
Inventories | 19 | – | – | ||
Trade and other receivables | 20 | 0.5 | 0.4 | ||
Tax receivables | 0.2 | 0.2 | |||
Cash and cash equivalents | 21 | 0.8 | 1.7 | ||
1.5 | 2.3 | ||||
Total assets | 306.9 | 280.6 | |||
| Current liabilities | |||||
Trade and other payables | 22 | ( | ( | (3.8) | (2.3) |
Borrowings | 24 | ( | – | – | |
Lease liabilities | 33 | ( | ( | – | – |
Tax payable | ( | ( | – | (0.9) | |
( | ( | (3.8) | (3.2) | ||
| Non-current liabilities | |||||
Other payables | 22 | ( | ( | – | – |
Deferred tax liabilities | 23 | ( | ( | – | – |
Borrowings | 24 | ( | – | – | |
Lease liabilities | 33 | ( | – | – | |
Long term provisions | 26 | ( | ( | – | – |
( | ( | – | – | ||
Total liabilities | ( | ( | (3.8) | (3.2) | |
Net assets | 303.1 | 277.4 | |||
| Equity | |||||
Share capital | 27 | 33.1 | 33.7 | ||
Share premium | 27 | 58.0 | 58.0 | ||
Other reserves | 28 | 202.0 | 200.6 | ||
Retained (deficit)/earnings | 30 | ( | ( | 10.0 | (14.9) |
Total equity | 303.1 | 277.4 |
The above Consolidated and Company Balance Sheets should be read in conjunction with the accompanying notes.
1) See Notes 2(s) and 2(t)
The profit for the financial year in the accounts of the Company (Co number 3300821) was $35.0 m inclusive of dividends from
subsidiary undertakings (2023: $50.0 m restated loss). As provided by section 408 of the Companies Act 2006, no Income Statement or
Statement of Comprehensive Income is presented in respect of the Company.
169
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
STATEMENTS OF CHANGES
IN EQUITY
for the year to 31 December 2024
| Group | ||||||
| Called up | Share | Other | Retained | |||
| share capital | premium | reserves | earnings/(deficit) | |||
| (see Note 27) | (see Note 27) | (see Note 28) | (see Note 30) | Total | ||
| Notes | $ million | $ million | $ million | $ million | $ million | |
| As at 1 January 2023 | ( | |||||
Loss for the year | 30 | ( | ( | |||
Other comprehensive income | 28 | |||||
Share buy back | 27, 28, 30 | ( | ( | ( | ||
Share-based payments | 28 | |||||
Distributions to shareholders (Restated) | 29,30 | ( | ( | |||
Transfer relating to share-based payments | 28, 30 | ( | ||||
As at 1 ) | ( | |||||
Profit for the year | 30 | |||||
Share buy back | 27, 28, 30 | ( | ( | ( | ||
Shares purchased | 28 | ( | ( | |||
Share-based payments | 28 | |||||
Distributions to shareholders | 29,30 | ( | ( | |||
Transfer relating to share-based payments | 28, 30 | ( | ||||
As at | ( |
1) See Notes 2(s) and 2(t)
Company
Notes
Called up
share capital
(see Note 27)
$ million
Share
premium
(see Note 27)
$ million
Other
reserves
(see Note 28)
$ million
Retained
earnings/(deficit)
(see Note 30)
$ million
Total
$ million
As at 1 January 2023 (Restated
1
) 34.3 58.0 199.7 42.9 334.9
Loss for the year (Restated) 13, 30 – – – (50.0) (50.0)
Share buy back 27, 28 ,30 (0.6) – 0.6 (2.8) (2.8)
Share-based payments 28 – – 1.0 – 1.0
Distributions to shareholders (Restated) 29 ,30 – – – (5.6) (5.6)
Transfer relating to share-based payments 28, 30 – – (0.7) 0.6 (0.1)
As at 1 January 2024 (Restated
1
) 33.7 58.0 200.6 (14.9) 277.4
Profit for the year
13, 30 – – – 35.0 35.0
Share buy back
27, 28 ,30 (0.6) – 0.6 (2.9) (2.9)
Share-based payments
28 – – 1.7 – 1.7
Distributions to shareholders
29 ,30 – – – (5.9) (5.9)
Transfer relating to share-based payments 28, 30 – – (0.9) (1.3) (2.2)
As at 31 December 2024 33.1 58.0 202.0 10.0 303.1
1) See Notes 2(s) and 2(t)
The above Consolidated and Company Statements of Changes in Equity should be read in conjunction with the accompanying notes.
FINANCIAL
STATEMENTS
ADDITIONAL
INFORMATION
GOVERNANCE
REPORT
STRATEGIC
REPORT
170
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Consolidated Financial Statements - Continued
CASH FLOW STATEMENTS
for the year to 31 December 2024
Group | Company | ||||
| 2024 | 2023 | 2024 | 2023 | ||
| Notes | $ million | $ million | $ million | $ million | |
| Net cash from (used in) operating activities | 32 | (11.2) | (8.1) | ||
| Investing activities | |||||
Purchase of intangible assets | ( | ( | – | – | |
Purchase of property, plant and equipment | ( | ( | – | – | |
Payment to abandonment fund | 18 | ( | ( | – | – |
Consideration in relation to farm out of Egyptian assets 1 | 20 | – | – | ||
Contingent consideration received in relation to farm out of Egyptian assets | 20 | – | – | ||
Assignment fee in relation to farm out of Egyptian assets | 22 | ( | ( | – | – |
Loans with subsidiaries | 4.7 | – | |||
Dividends received from subsidiary undertakings | 14.3 | 11.4 | |||
Net cash (used in) from investing activities | ( | ( | 19.0 | 11.4 | |
| Financing activities | |||||
Share purchase | ( | ||||
Repayment of borrowings | 24 | ( | ( | – | – |
Proceeds from borrowings | 24 | – | – | ||
Interest paid on borrowings | 24 | ( | ( | – | – |
Lease payments | 33 | ( | ( | – | – |
Share buy back | 30 | ( | ( | (2.9) | (2.8) |
Dividends paid to shareholders | 29 | ( | ( | (5.9) | (5.6) |
Funding movements with subsidiaries | – | (2.1) | |||
| Net cash used in financing activities | ( | ( | (8.8) | (10.5) | |
| Net decrease in cash and cash equivalents | ( | ( | (1.0) | (7.2) | |
| Cash and cash equivalents at beginning of year | 1.7 | 8.8 | |||
| Effect of foreign exchange rate changes | ( | ( | 0.1 | 0.1 | |
Cash and cash equivalents at end of year | 21 | 0.8 | 1.7 |
1) During the year IPR, acting as operator and agent, was authorised to settle its operating liabilities of $3.7 m (2023: $3.5 m) and investing liabilities of $1.3 m
(2023: $12.1 m) against the consideration due from the associated carry debtor (Note 20) amounting to $5.0 m (2023: $15.6 m). The Company has disclosed
the underlying cash flows as operating, investing or financing according to their nature on the basis that, as a principal, the entity has the right to the cash
inflows and/or the obligation to settle the liability and to ensure clarity of disclosure of the operating cash costs of the business.
The above consolidated and company cash flow statements should be read in conjunction with the accompanying notes.
171
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Notes to the Consolidated Financial Statements
CONSOLIDATED FINANCIAL
STATEMENTS
1. General information
incorporated in England and Wales
The address of the registered office is given on the inside back
cover. The nature of the Group’s operations and its principal
activities are set out in Note 6, in the Operational Review and
Chief Financial Officer’s Statement on pages 29 to 32 and 37
to 44, respectively. Pharos Energy plc
company of the Group and except where otherwise indicated the
following accounting policies apply to both the Group and the
Company.
FINANCIAL
STATEMENTS
ADDITIONAL
INFORMATION
GOVERNANCE
REPORT
STRATEGIC
REPORT
172
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Notes to the Consolidated Financial Statements - Continued
173
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
FINANCIAL
STATEMENTS
ADDITIONAL
INFORMATION
GOVERNANCE
REPORT
STRATEGIC
REPORT
174
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Notes to the Consolidated Financial Statements - Continued
175
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
FINANCIAL
STATEMENTS
ADDITIONAL
INFORMATION
GOVERNANCE
REPORT
STRATEGIC
REPORT
176
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Notes to the Consolidated Financial Statements - Continued
3. Financial risk management
The Board reviews and agrees policies for managing financial
risks that may affect the Group. In certain cases the Board
delegates responsibility for such reviews and policy setting to the
Audit and Risk Committee. The principal financial risks affecting
the Group are discussed in the Risk Management Report on
pages 45 to 56 and in Note 36.
177
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
4. Critical judgements and accounting
estimates
a) Critical judgements in applying the Group’s
accounting policies
In the process of applying the Group’s accounting policies
described in Note 2, management has made judgements that
may have a significant effect on the amounts recognised in the
financial statements. These are discussed below:
Oil and gas assets
Note 2(i) describes the judgements necessary to implement the
Group’s policy with respect to the carrying value of intangible
exploration and evaluation assets.
Management considers these assets for impairment at least
annually with reference to indicators in IFRS 6. Note 15 discloses
the carrying value of intangible exploration and evaluation
assets along with details of impairment charges that arose
during the year. Further, Note 2(i) describes the Group’s policy
regarding reclassification of intangible assets to tangible assets.
Management considers the appropriateness of asset classification
at least annually.
b) Key sources of estimation uncertainty
The key assumptions concerning the future, and other key
sources of estimation uncertainty at the balance sheet date, other
than those mentioned above, that may have a significant risk of
causing a material adjustment to the carrying amounts of assets
and liabilities within the next financial year are discussed below:
Oil and gas reserves and DD&A
Note 2(i) sets out the Group’s accounting policy on DD&A. Proven
and probable reserves are estimated using standard recognised
evaluation techniques and are disclosed on pages 121 to 123.
The estimate is reviewed at least twice a year and is audited by
third party reservoir engineers at year end. Future development
costs are estimated taking into account the level of development
required to produce the reserves by reference to operators, where
applicable, and internal engineers. As discussed in the Reserves
Committee Report on pages 121 to 123, the Vietnam and Egypt
fields’ proved and probable reserves estimates have been revised
based on ongoing work of ERCE and audited by our Reserves
Auditors, McDaniel. Reserves estimates are inherently uncertain,
especially in the early stages of a field’s life, and are routinely
revised over the producing lives of oil and gas fields as new
information becomes available, judgements are taken over the life
of the licence, and as economic conditions evolve. Such revisions
may impact the Group’s future financial position and results, in
particular, in relation to DD&A and impairment testing of oil and
gas property, plant and equipment.
Impairment of producing oil and gas assets
If impairment indicators are identified in relation to a producing
oil and gas field, management is required to carry out an
assessment in accordance with IAS 36 ‘Impairment of Assets’
by comparing the net carrying value of the assets and liabilities
which represent the field cash generating unit (CGU) with the
estimated recoverable amount of the field. Management generally
determines the recoverable amount of the field by estimating its
value in use, using a discounted cash flow method. Calculating
the net present value of the discounted cash flows involves
key assumptions which include commodity prices, 2P reserves
estimates and discount rates. Other assumptions include
production profiles, future operating and capital expenditures
and the relevant fiscal terms. Further information relating to the
specific assumptions and uncertainties relevant to impairment
tests performed in the year are discussed in Note 16.
5. Total revenue
An analysis of the Group’s revenue is as follows:
| 2024 | 2023 | |
| $ million | $ million | |
| Oil and gas sales (see Note 6) | 136.1 | 168.1 |
| Realised losses on commodity hedges | (0.1) | (0.2) |
| (see Note 6 and Note 25) | 136.0 | 167.9 |
| Investment revenue | 0.4 | 0.2 |
| 136.4 | 168.1 |
FINANCIAL
STATEMENTS
ADDITIONAL
INFORMATION
GOVERNANCE
REPORT
STRATEGIC
REPORT
178
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Notes to the Consolidated Financial Statements - Continued
6. Segment information
which the Group reports its segment information.
| 2024 | ||||
| SE Asia | Egypt | Unallocated | Group | |
| $ million | $ million | $ million | $ million | |
| Oil and gas sales (see Note 5) | 115.4 | 20.7 | – | 136.1 |
| Realised loss on commodity hedges (see Note 5 and Note 25) | – | – | (0.1) | (0.1) |
| Total revenue | 115.4 | 20.7 | (0.1) | 136.0 |
| Cost of sales | (75.6) | (14.2) | – | (89.8) |
| Impairment reversal – Financial asset (see Note 20) | – | 2.5 | – | 2.5 |
| Administrative expenses | – | – | (9.1) | (9.1) |
| Depreciation, depletion and amortisation - Oil and gas (see Note 7 and Note 16) | (42.1) | (5.0) | – | (47.1) |
| Depreciation, depletion and amortisation - Other (see Note 16) | – | (0.2) | – | (0.2) |
| Other operating costs (see Note 8) | – | – | (0.8) | (0.8) |
| Pre-licence costs | – | – | (0.8) | (0.8) |
| Impairment charge – Intangible assets (see Note 15) | – | (2.0) | – | (2.0) |
| Impairment reversal - PP&E (see Note 16) | 23.4 | 4.9 | – | 28.3 |
| Gain on fair value movement of financial asset (see Note 20) | – | 0.3 | – | 0.3 |
Profit/(loss) before tax 1 | 60.9 | 11.3 | (11.5) | 60.7 |
| Tax charge on operations (see Note 12) | (26.8) | (1.9) | – | (28.7) |
| Tax charge on impairment reversal (see Note 12) | (8.4) | – | – | (8.4) |
| 2023 | |||||
| SE Asia | Egypt | Unallocated | Group | ||
| $ million | $ million | $ million | $ million | ||
Oil and gas sales (see Note 5) | 149.2 | 18.9 | – | 168.1 | |
Realised loss on commodity hedges | (see Note 5 and Note 25) | – | – | (0.2) | (0.2) |
Total revenue | 149.2 | 18.9 | (0.2) | 167.9 | |
Cost of sales | (95.6) | (13.4) | – | (109.0) | |
Impairment charge – Financial asset (see Note 20) | – | (2.2) | – | (2.2) | |
Administrative expenses | – | – | (9.0) | (9.0) | |
Depreciation, depletion and amortisation - Oil and gas (see Note 7 and Note 16) | (51.0) | (4.4) | – | (55.4) | |
Depreciation, depletion and amortisation - Other (see Note 16) | – | (0.2) | – | (0.2) | |
Pre-licence costs | – | (0.4) | – | (0.4) | |
Impairment charge – Intangible assets (see Note 15) | – | (6.5) | – | (6.5) | |
Impairment charge - PP&E (see Note 16) | (46.0) | (12.9) | – | (58.9) | |
Loss on fair value movement of financial asset (see Note 20) | – | (0.3) | – | (0.3) | |
Profit/(loss) before tax 1 | 5.6 | (18.4) | (16.2) | (29.0) | |
Tax charge on operations (see Note 12) | (36.0) | – | – | (36.0) | |
Tax credit on impairment charge (see Note 12) | 16.2 | – | – | 16.2 |
1) Unallocated amounts included in profit/(loss) before tax comprise corporate costs not attributable to an operating segment, investment revenue, other gains
and losses and finance costs.
The accounting policies of the reportable segments are the same as the Group’s accounting policies as described in Note 2.
Included in revenues arising from South East Asia and Egypt are revenues of $115.4m and $20.7m which arose from the Group’s two
largest customers, who contributed more than 10% to the Group’s oil and gas revenue (2023: $149.2m and $18.9m in South East Asia
and Egypt from the Group’s two largest customers).
179
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
| 2024 | 2023 | |
| $ million | $ million | |
Vietnam | 115.4 | 149.2 |
Egypt | 20.7 | 18.9 |
136.1 | 168.1 |
| 2024 | 2023 | |
| $ million | $ million | |
Vietnam | 233.5 | 240.4 |
Egypt | 62.0 | 57.6 |
295.5 | 298.0 |
| 2024 | 2023 | |
| $ million | $ million | |
Depreciation, depletion and amortisation (see Note 16) | 47.1 | 55.4 |
| Production based taxes | 9.2 | 10.5 |
| Production operating costs | 39.5 | 39.1 |
| Change in inventories | (6.0) | 4.0 |
| 89.8 | 109.0 | |
| Impairment (reversal)/charge – | (2.5) | 2.2 |
| financial asset (see Note 20) | 87.3 | 111.2 |
| 2024 | 2023 | |
| Other operating costs | $ million | $ million |
| Share based payments | 0.6 | – |
| Other | 0.2 | – |
| 0.8 | – |
| 2024 | 2023 | |
| Other/restructuring expense | $ million | $ million |
| Redundancy costs | 0.4 | – |
| Other | – | 0.6 |
| 0.4 | 0.6 |
| 2024 | 2023 | |
| $ million | $ million | |
| Unwinding of discount on provisions | 2.2 | 2.0 |
| (see Note 26) | ||
| Interest expense and similar fees | 1.1 | 7.7 |
| (see Note 24) | ||
| Net foreign exchange losses | 0.6 | 0.5 |
| 3.9 | 10.2 |
FINANCIAL
STATEMENTS
ADDITIONAL
INFORMATION
GOVERNANCE
REPORT
STRATEGIC
REPORT
180
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Notes to the Consolidated Financial Statements - Continued
| 2024 | 2023 | |
| $000s | $000s | |
| Fees payable to the Company’s auditor | ||
and their associates for the audit of the Company’s annual accounts | 781 | 574 |
Fees payable to the Company’s auditor and their associates for other services to the Group: | ||
| Audit of the Company’s subsidiaries | – | 11 |
| Total audit fees | 781 | 585 |
| Audit related assurance services | 141 | 141 |
| – half year review | ||
| Other assurance services | – | 37 |
| Total non-audit fees | 141 | 178 |
11. Staff costs
The average monthly number of employees of the Group including
Executive Directors was 35 (2023: 38), of which 31 (2023: 34)
were administrative personnel and 4 (2023: 4) were operations
personnel. Their aggregate remuneration comprised:
| Group | ||
| 2024 | 2023 | |
| $ million | $ million | |
| Wages and salaries | 6.1 | 6.1 |
| Social security costs | 0.8 | 0.6 |
| Share-based payment expense | 1.2 | 1.3 |
| (see Note 31) | ||
| Other pension costs under money | 0.5 | 0.5 |
| purchase schemes | ||
| Other benefits | 0.3 | 0.7 |
| 8.9 | 9.2 |
In accordance with the Group’s accounting policy $3.7m (2023:
$3.3m) of the Group’s staff costs above have been capitalised,
of which $2.8m (2023: $2.5m) relates to our Vietnam assets and
$0.9m (2023: $0.8m) relates to our Egypt assets.
In 2024, total staff costs were $8.9m (2023: $9.2m) and includes
the costs of head office and Pharos’ subsidiary employees.
Excluding the impact of IFRS 2 share-based payment expense
and bonuses paid to staff, the underlying costs have fallen 9%
year on year to $5.3m (2023: $5.8m).
In 2024, redundancy costs of $0.4m for the Egypt office in Cairo
were disclosed in other/restructuring expense in the income
statement (see Note 8). A further $0.1m of redundancy costs
were incurred for one employee as a result of the closure of the
Group’s US office and disclosed in Other operating expenses in
the income statement (see Note 8).
12. Tax
| 2024 | 2023 | |
| $ million | $ million | |
| Current tax | ||
| Corporation income tax | 36.0 | 44.7 |
| Adjustments in respect of prior years | 1.8 | (0.2) |
| 37.8 | 44.5 | |
| Deferred tax | ||
| Deferred tax credit on operations | (9.1) | (8.5) |
| (see Note 23) | ||
| Deferred tax charge/(credit) on impairment | 8.4 | (16.2) |
| (see Note 16 and 23) | (0.7) | (24.7) |
| Total tax charge | 37.1 | 19.8 |
The Group’s corporation tax is calculated at 50% (2023: 50%)
of the estimated assessable profit for the year in Vietnam. In
Egypt, under the terms of the concession, any local taxes arising
are settled by EGPC. During 2024 and 2023, both current and
deferred taxation have arisen in overseas jurisdictions only.
The charge for the year can be reconciled to the profit/(loss) per
the income statement as follows:
| 2024 | 2023 | |
| $ million | $ million | |
| Profit/(loss) before tax | 60.7 | (29.0) |
| Tax at 50% (2023: 50%) | 30.4 | (14.5) |
| Effects of: | ||
| Non-taxable income | (5.8) | – |
| Non-deductible expenses | 8.1 | 18.0 |
| Egypt taxation at different rate to Vietnam | (2.0) | – |
| effective tax rate | ||
| Tax losses not recognised | 4.9 | 16.5 |
| Utilisation of tax losses | (0.3) | – |
Adjustments to tax charge in respect of prior periods | 1.8 | (0.2) |
| Tax charge for the year | 37.1 | 19.8 |
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PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
The prevailing tax rate in Vietnam, where the Group produces oil
and gas, is 50%. The tax charge in future periods may also be
affected by the factors in the reconciliation above.
In 2024, non-taxable income relates to the tax impact of Vietnam
impairment reversals of $(3.3)m in relation to the non-cost
recovery pool and Egypt impairment reversal of $(2.5)m. Non-
deductible expenses primarily relate to Vietnam DD&A charges
for costs previously capitalised, which are non-deductible for
Vietnamese tax purposes of $6.2m (2023: Vietnam impairment
charges of $6.8m in respect of the non-cost recovery pool and
DD&A charges for costs previously capitalised of $10.4m). A
further $0.9m (2023: $0.8m) relates to non-deductible corporate
costs including share scheme incentives and $1.0m (2023: $nil) in
relation to impairment of Egypt intangible assets.
The Egypt concessions are subject to corporate income tax
at the standard rate of 40.55%, however responsibility for
payment of corporate income taxes falls upon EGPC on behalf
of Pharos El Fayum (PEF). The Group records a tax charge, with
a corresponding increase in revenue, for the tax paid by EGPC
on its behalf. As PEF became profitable in 2024, reversing the
historic tax loss position since first production, this led to a $1.9m
tax charge being recorded.
The effect from tax losses not recognised in 2024 relates to costs,
primarily of the Company, deductible for tax in the UK but not
expected to be utilised in the foreseeable future.
13. Profit/(loss) attributable to
Pharos Energy plc
The profit for the financial year in the accounts of the Company
was $35.0m inclusive of dividends from subsidiary undertakings
(2023: restated loss of $50.0m). As provided by section 408 of
the Companies Act 2006, no income statement or statement of
comprehensive income is presented in respect of the Company.
14. Earnings per share
The calculation of the basic and diluted earnings per share is
based on the following data:
| Group | ||
| 2024 | 2023 | |
| $ million | $ million | |
| Gain/(loss) for the purposes of basic | 23.6 | (48.8) |
| earnings per share | ||
| Effect of dilutive potential ordinary shares – | (0.9) | – |
| Cash settled share awards and options | ||
| Gain/(loss) for the purposes of diluted | 22.7 | (48.8) |
| earnings per share |
| Number of shares | ||
| (million) | ||
| 2024 | 2023 | |
| Weighted average number of ordinary | 417.0 | 427.2 |
| shares | ||
| Effect of dilutive potential ordinary shares – | 2.7 | – |
| Share awards and options | ||
| Weighted average number of ordinary | ||
| shares for the purpose of diluted profit/ | 419.7 | 427.2 |
| (loss) per share |
In accordance with IAS 33 “Earnings per Share”, the effects of
2.9m antidilutive potential shares have not been included when
calculating dilutive earnings per share for the year ended 31
December 2023, as the Group was loss making.
| Group | ||
| 2024 | 2023 | |
| $ million | $ million | |
| Exploration and evaluation expenditure | ||
| As at 1 January | 18.2 | 16.5 |
| Additions | 5.6 | 11.1 |
| Transfer to property, plant and equipment | – | (2.9) |
| Impairment – Intangibles | (2.0) | (6.5) |
| As at 31 December | 21.8 | 18.2 |
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PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Notes to the Consolidated Financial Statements - Continued
| Group | ||||
| Oil and gas | ||||
| properties | Other | Total | ||
| $ million | $ million | $ million | ||
| Cost | ||||
As at 1 January 2023 | 1,101.8 | 1.1 | 1,102.9 | |
Additions | 11.9 | 0.2 | 12.1 | |
Transfer from intangible assets | 2.9 | – | 2.9 | |
Revision in decommissioning asset (see Note 26) | (2.5) | – | (2.5) | |
As at 1 January 2024 | 1,114.1 | 1.3 | 1,115.4 | |
Additions | 17.8 | – | 17.8 | |
Revision in decommissioning asset (see Note 26) | (4.9) | – | (4.9) | |
As at 31 December 2024 | 1,127.0 | 1.3 | 1,128.3 | |
| Depreciation, depletion and impairment | ||||
As at 1 January 2023 | 720.5 | 0.6 | 721.1 | |
Charge for the year | 55.4 | 0.2 | 55.6 | |
Impairment charge | 58.9 | – | 58.9 | |
As at | 1 January 2024 | 834.8 | 0.8 | 835.6 |
Charge for the year | 47.1 | 0.2 | 47.3 | |
Impairment reversal | (28.3) | – | (28.3) | |
As at 31 December 2024 | 853.6 | 1.0 | 854.6 | |
| Carrying amount | ||||
As at 31 December 2024 | 273.4 | 0.3 | 273.7 | |
As at 31 December 2023 | 279.3 | 0.5 | 279.8 | |
Property, plant and equipment | 273.2 | 0.3 | 273.5 | |
Right of use asset (see Note 33) | 0.2 | – | 0.2 | |
As at 31 December 2024 | 273.4 | 0.3 | 273.7 | |
Property, plant and equipment | 278.8 | 0.5 | 279.3 | |
Right of use assets (see Note 33) | 0.5 | – | 0.5 | |
As at 31 December 2023 | 279.3 | 0.5 | 279.8 |
183
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
| TGT | CNV | El Fayum | NBS | Total | |
| Summary of Impairments - Oil and Gas properties | $m | $m | $m | $m | $m |
| 2024 | |||||
| Pre-tax impairment reversal | 19.8 | 3.6 | 4.9 | – | 28.3 |
| Deferred tax charge | (7.1) | (1.3) | – | – | (8.4) |
| Post-tax impairment reversal | 12.7 | 2.3 | 4.9 | – | 19.9 |
| Reconciliation of carrying amount: | |||||
| As at 1 January 2024 | 158.6 | 65.0 | 54.7 | 1.0 | 279.3 |
| Additions | 12.8 | 1.0 | 3.5 | 0.5 | 17.8 |
Changes in decommissioning asset 1 | (4.9) | – | – | – | (4.9) |
| DD&A | (32.7) | (9.4) | (4.6) | (0.4) | (47.1) |
| Impairment reversal | 19.8 | 3.6 | 4.9 | – | 28.3 |
| As at 31 December 2024 | 153.6 | 60.2 | 58.5 | 1.1 | 273.4 |
| 2023 | |||||
Pre-tax impairment (charge)/reversal | (46.3) | 0.3 | (11.0) | (1.9) | (58.9) |
Deferred tax charge | 16.5 | (0.3) | – | – | 16.2 |
Post-tax impairment charge | (29.8) | – | (11.0) | (1.9) | (42.7) |
| Reconciliation of carrying amount: | |||||
| As at 1 January 2023 | 242.4 | 76.4 | 62.5 | – | 381.3 |
| Additions | 1.3 | 3.0 | 7.6 | – | 11.9 |
| Transfer from intangible assets | – | – | – | 2.9 | 2.9 |
Changes in decommissioning asset 1 | – | (2.5) | – | – | (2.5) |
| DD&A | (38.8) | (12.2) | (4.4) | – | (55.4) |
| Impairment (charge)/reversal | (46.3) | 0.3 | (11.0) | (1.9) | (58.9) |
As at 31 December 2023 | 158.6 | 65.0 | 54.7 | 1.0 | 279.3 |
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PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Notes to the Consolidated Financial Statements - Continued
| Country | Country | Percentage | Registered | |||
| of incorporation | of operation | Principal activity | holding | Footnotes | address | |
| OPECO Vietnam Limited | Cook Islands | Vietnam | Oil and gas development | 100 | 2,4 | e |
| and production | ||||||
| SOCO Vietnam Limited | Cayman Islands | Vietnam | Oil and gas development | 100 | 2,3 | d |
| and production | ||||||
| Pharos Exploration Limited | Jersey | – | Investment holding | 100 | 1 | a |
| Pharos SEA Limited | Jersey | – | Investment holding | 100 | 1 | a |
| SOCO Exploration (Vietnam) Limited | Cayman Islands | Vietnam | Oil and gas exploration | 100 | 2,5 | d |
| OPECO, Inc | USA | – | Investment holding | 100 | 2,4 | c |
| Oil and gas exploration, | ||||||
| Pharos El Fayum | Cayman Islands | Egypt | development and | 100 | 1,6 | d |
| production | ||||||
| SOCO Management Services, Inc. | USA | USA | Management services | 100 | 2 | c |
| Pharos Energy Israel Limited | UK | Israel | Extraction of crude | 100 | 1 | b |
| petroleum |
185
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
| Investments | ||
| 2023 | ||
| 2024 | Restated 1 | |
| $ million | $ million | |
| Subsidiary undertakings | ||
| As at 1 January | 261.5 | 305.7 |
| Additions to investments | 0.9 | 7.9 |
| Impairment reversal/(charge) | 24.6 | (52.1) |
As at 31 December | 287.0 | 261.5 |
FINANCIAL
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ADDITIONAL
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186
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Notes to the Consolidated Financial Statements - Continued
| 2024 | 2023 | ||||
| 2024 | Remaining | 2023 | Remaining | ||
| Trigger for | (Impairment)/ | recoverable | (Impairment)/ | recoverable | |
| 2024 | reversal | amount | reversal | amount | |
| Impairment | $ million | $ million | $ million | $ million | |
| Pharos Exploration Limited | 1 | (0.2) | 21.8 | 0.1 | 21.1 |
| Pharos SEA Limited | 2 | 15.3 | 179.9 | (33.7) | 164.6 |
| Pharos El Fayum | 2 | 9.5 | 85.3 | (18.5) | 75.8 |
| Pharos Energy Israel Limited | – | – | – | – | |
Total | 24.6 | 287.0 | (52.1) | 261.5 |
| Group | ||
| 2024 | 2023 | |
| $ million | $ million | |
| Amounts falling due after one year: | ||
| Abandonment security fund | 56.0 | 53.7 |
| Contingent consideration on Egypt farm-out (see Note 20) | 1.8 | 4.9 |
| 57.8 | 58.6 |
187
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
19. Inventories
| Group | ||
| 2024 | 2023 | |
| $ million | $ million | |
| Crude oil and condensate | 9.3 | 3.3 |
| 9.3 | 3.3 |
Crude oil and condensate are valued at net realisable value in line with well established industry practice with changes in hydrocarbon
inventories adjusted through cost of sales (see Note 7).
Group | Company | |||
| 2024 | 2023 | 2024 | 2023 | |
| $ million | $ million | $ million | $ million | |
| Amounts falling due within one year | ||||
| Trade receivables | 40.5 | 50.8 | – | – |
| Other receivables | 4.5 | 9.5 | – | – |
| Prepayments and accrued income | 2.8 | 1.9 | 0.5 | 0.4 |
| Derivative financial instruments (see Note 25) | 0.1 | 0.1 | – | – |
| 47.9 | 62.3 | 0.5 | 0.4 |
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ADDITIONAL
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PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Notes to the Consolidated Financial Statements - Continued
21. Cash and cash equivalents
As at 31 December 2024, cash and cash equivalents was $16.5m (2023: $32.6m). Of this balance, $0.1m (2023: $1.2m) were in
Money Market Funds that are valued at quoted prices of the funds in the active markets for the financial instruments.
Group | Company | |||
| 2023 | 2023 | |||
| 2024 | Restated 1 | 2024 | Restated 1 | |
| $ million | $ million | $ million | $ million | |
| Amounts falling due within one year: | ||||
| Other payables | 8.0 | 9.6 | 1.7 | 1.8 |
| Accruals and deferred income | 4.2 | 2.9 | 1.2 | 0.5 |
| Other taxation and social security | 2.1 | – | 0.9 | – |
| 14.3 | 12.5 | 3.8 | 2.3 | |
| Amounts falling due after one year: | ||||
| Other payables | 0.2 | 0.5 | – | – |
| 0.2 | 0.5 | – | – |
| Accelerated tax | Other temporary | ||
| depreciation | differences | Group | |
| $ million | $ million | $ million | |
As at 1 January 2023 | 89.2 | 3.7 | 92.9 |
Credit to income (see Note 12) | (22.8) | (1.9) | (24.7) |
| As at 1 January 2024 | 66.4 | 1.8 | 68.2 |
| (Credit)/charge to income (see Note 12) | (3.7) | 3.0 | (0.7) |
| As at 31 December 2024 | 62.7 | 4.8 | 67.5 |
189
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
| Group | |||||
| 2024 | 2024 | 2024 | 2023 | ||
| $ million | $ million | $ million | $ million | ||
| Credit | Total | Total | |||
facility | RBL | Borrowings | Borrowings | ||
| Borrowings: | |||||
| Carrying value as of 1 January | 9.2 | 31.3 | 40.5 | 74.2 | |
| Proceeds from Uncommitted Revolving credit facility | 2.2 | – | 2.2 | 9.2 | |
| Repayments of borrowings | (11.4) | (30.0) | (41.4) | (44.2) | |
Interest expense and similar fees | (see Note 9) | 0.4 | 0.7 | 1.1 | 7.7 |
| Interest paid during the year | (0.4) | (2.0) | (2.4) | (6.4) | |
Carrying value as of 31 December | – | – | – | 40.5 | |
| Current | – | – | – | 29.5 | |
| Non-current | – | – | – | 11.0 | |
| Carrying value as of 31 December | – | – | – | 40.5 |
FINANCIAL
STATEMENTS
ADDITIONAL
INFORMATION
GOVERNANCE
REPORT
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190
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Notes to the Consolidated Financial Statements - Continued
1Q25 | 2Q25 | |
Production hedge per quarter - 000/bbls | 150 | 90 |
Min. Average value of hedge - $/bbl | 63.60 | 64.00 |
Max. Average value of hedge - $/bbl | 88.94 | 90.17 |
Group | Company | |||
| 2024 | 2023 | 2024 | 2023 | |
| $ million | $ million | $ million | $ million | |
| Decommissioning provision | 51.1 | 53.8 | – | – |
| 51.1 | 53.8 | – | – |
| Group | ||
| 2024 | 2023 | |
| Movement in decommissioning | $ million | $ million |
| As at 1 January | 53.8 | 54.3 |
| New provisions and changes in estimates | (4.9) | (2.5) |
| Unwinding of discount (see Note 9) | 2.2 | 2.0 |
As at 31 December | 51.1 | 53.8 |
191
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
| Group and Company | ||||
| 2024 | 2023 | 2024 | 2023 | |
| Shares | Shares | $ million | $ million | |
| Issued and fully paid | 424,178,662 | 432,026,943 | 33.1 | 33.7 |
| Group and Company | ||
| 2024 | 2023 | |
| $ million | $ million | |
| As at 1 January | 33.7 | 34.3 |
| Share buy back | (0.6) | (0.6) |
| Issued and fully paid | 33.1 | 33.7 |
| Group and Company | ||
| 2024 | 2023 | |
| $ million | $ million | |
| As at 1 January and 31 December | 58.0 | 58.0 |
| Group | ||||||
| Capital | ||||||
| redemption | Merger | Hedging | Share-based | |||
| reserve | reserve 1 | Own shares | reserve | payments | Total | |
| $ million | $ million | $ million | $ million | $ million | $ million | |
As at 1 January 2023 | 100.9 | 194.0 | (42.7) | (0.7) | 2.1 | 253.6 |
Other comprehensive income | – | – | – | 0.8 | – | 0.8 |
Share buy back | 0.6 | – | – | – | – | 0.6 |
Share-based payments | – | – | – | – | 1.0 | 1.0 |
Transfer relating to share-based payments | – | – | 0.1 | – | (0.7) | (0.6) |
As at 1 January 2024 | 101.5 | 194.0 | (42.6) | 0.1 | 2.4 | 255.4 |
Share buy back | 0.6 | – | – | – | – | 0.6 |
Shares purchased | – | – | (0.9) | – | – | (0.9) |
Share-based payments | – | – | – | – | 1.7 | 1.7 |
Transfer relating to share-based payments | – | – | 2.2 | – | (0.9) | 1.3 |
As at 31 December 2024 | 102.1 | 194.0 | (41.3) | 0.1 | 3.2 | 258.1 |
FINANCIAL
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ADDITIONAL
INFORMATION
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PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Notes to the Consolidated Financial Statements - Continued
| Company | |||||
| Capital | |||||
| redemption | Merger | Share-based | |||
| reserve | reserve | Own shares | payments | Total | |
| $ million | $ million | $ million | $ million | $ million | |
As at 1 January 2023 | 100.9 | 137.1 | (40.3) | 2.0 | 199.7 |
Share buy back | 0.6 | – | – | – | 0.6 |
Share-based payments | – | – | – | 1.0 | 1.0 |
Transfer relating to share-based payments | – | – | – | (0.7) | (0.7) |
As at 1 January 2024 | 101.5 | 137.1 | (40.3) | 2.3 | 200.6 |
Share buy back | 0.6 | – | – | – | 0.6 |
Share-based payments | – | – | – | 1.7 | 1.7 |
Transfer relating to share-based payments | – | – | – | (0.9) | (0.9) |
As at 31 December 2024 | 102.1 | 137.1 | (40.3) | 3.1 | 202.0 |
| 2024 | 2023 | 2023 | ||
| 2024 | Pence per | Restated 1 | Pence per | |
| Amounts recognised as distributions to equity holders in the year: | $ million | ordinary share | $ million | ordinary share |
| Prior year interim dividend, paid in the year | 1.7 | 0.330 | – | – |
| Prior year final dividend, paid in the year | 4.2 | 0.770 | 5.6 | 1.000 |
| Total dividend, paid in year | 5.9 | 1.100 | 5.6 | 1.000 |
| Interim dividend for the year ended 31 December 2024 | 1.8 | 0.363 | ||
| Proposed final dividend for the year ended 31 December 2024 | 4.4 | 0.847 |
193
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
| Group | |||
| Retained | Unrealised currency | ||
| (loss)/profit | translation differences | Total | |
| $ million | $ million | $ million | |
As at 1 January 2023 | (20.4) | 5.1 | (15.3) |
Loss for the year | (48.8) | – | (48.8) |
Share buy back | (2.8) | – | (2.8) |
Distributions to shareholders (Restated 1 ) | (5.6) | – | (5.6) |
Transfer relating to share-based payments | 0.6 | – | 0.6 |
As at 1 January 2024 (Restated 1 ) | (77.0) | 5.1 | (71.9) |
Profit for the year | 23.6 | – | 23.6 |
Share buy back | (2.9) | – | (2.9) |
Distributions to shareholders | (5.9) | – | (5.9) |
Transfer relating to share-based payments | (1.3) | – | (1.3) |
As at 31 December 2024 | (63.5) | 5.1 | (58.4) |
| Company | |||
| Retained | Unrealised currency | ||
| (loss)/profit | translation differences | Total | |
| $ million | $ million | $ million | |
As at 1 January 2023 (Restated 1 ) | 265.0 | (222.1) | 42.9 |
Loss for the year | (50.0) | – | (50.0) |
Share buy back | (2.8) | – | (2.8) |
Distributions to shareholders (Restated 1 ) | (5.6) | – | (5.6) |
Transfer relating to share-based payments | 0.6 | – | 0.6 |
As at 1 January 2024 (Restated 1 ) | 207.2 | (222.1) | (14.9) |
Profit for the year | 35.0 | – | 35.0 |
Share buy back | (2.9) | – | (2.9) |
Distributions to shareholders | (5.9) | – | (5.9) |
Transfer relating to share-based payments | (1.3) | – | (1.3) |
As at 31 December 2024 | 232.1 | (222.1) | 10.0 |
31. Incentive plans
Details of the Group’s employee incentive schemes are set out below. Additional information regarding the schemes is included in the
Directors’ Remuneration Committee Report on pages 135 to 152. The Group recognised total expenses of $1.2m (2023: $1.3m) in
respect of the schemes during the year.
Long Term Incentive Plan
The Company operates a LTIP for employees of the Group. Awards vest over a period of three years, subject to criteria based on
their individual performance. For Executive and senior management the LTIP measures and targets are based on relative TSR (35%
weighting), absolute TSR (20% weighting), cash flow from operations (15% weighting), ROCE (15% weighting) and an ESG condition
(15% weighting). Awards are normally forfeited if the employee leaves the Group before the award vests. Awards normally expire at the
end of ten years following the date of grant, subject to the requirement to exercise certain awards prior to 15 March of the year following
vesting.
The Board has a policy requiring Executive Directors to build a minimum shareholding of 200% of their annual salary. Additionally, LTIP
awards to the Executive Directors have a two-year holding period following vesting. This is intended to emphasise a commitment to
the alignment of Executive Directors with shareholders and a focus on long term stewardship. Please refer to Directors’ Remuneration
Committee Report for further details.
FINANCIAL
STATEMENTS
ADDITIONAL
INFORMATION
GOVERNANCE
REPORT
STRATEGIC
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194
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Notes to the Consolidated Financial Statements - Continued
| 2024 | 2023 | |
| No. of share | No. of share | |
| awards | awards | |
| As at 1 January | 20,153,833 | 17,642,212 |
Adjustments 1 | 998,049 | 882,124 |
| Granted | 7,042,038 | 7,347,221 |
| Exercised | (3,525,696) | (267,779) |
| Forfeited during the year | (2,553,573) | (5,449,945) |
| As at 31 December | 22,114,651 | 20,153,833 |
| Exercisable as at 31 December | 2,893,353 | 664,243 |
| 2024 | 2023 | |
| Volatility | 3.04% | 11.94% |
| Risk free rate of interest | 4.53% | 3.21% |
| Correlation with comparator group | n/a | n/a |
| No. of share | No. of share | |
| awards | awards | |
| As at 1 January | 4,860,374 | 2,886,857 |
Adjustments 1 | 233,075 | 148,069 |
| Granted | 1,501,418 | 1,875,448 |
| Forfeited during the year | (27,413) | (50,000) |
| Exercised | (2,239,619) | – |
| As at 31 December | 4,327,835 | 4,860,374 |
| Exercisable as at 31 December | 1,012,762 | 578,172 |
195
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
32. Reconciliation of operating profit/(loss) to operating cash flows
Group | Company | |||
| 2023 | ||||
| 2024 | 2023 | 2024 | Restated 1 | |
| $ million | $ million | $ million | $ million | |
| Operating profit/(loss) | 64.3 | (18.1) | 20.6 | (61.6) |
| Share-based payments | 0.9 | 0.9 | 0.9 | 0.9 |
| Depletion, depreciation and amortisation | 47.3 | 55.6 | – | – |
| Impairment (reversal)/charge | (26.3) | 65.4 | (31.2) | 52.4 |
| Taxes paid-in-kind | (1.9) | – | – | – |
Operating cash flows before movements in working capital | 84.3 | 103.8 | (9.7) | (8.3) |
| (Increase)/decrease in inventories | (6.0) | 3.9 | – | – |
Decrease/(increase)/ in receivables 2 | 11.3 | (19.1) | (1.7) | (0.2) |
| (Decrease)/increase in payables | (0.3) | 0.2 | (0.1) | 0.1 |
Cash generated by (used in) operations | 89.3 | 88.8 | (11.5) | (8.4) |
| Interest received | 0.4 | 0.4 | 0.3 | 0.3 |
| Other/restructuring expense outflow | (0.4) | – | – | – |
| Income taxes paid | (35.3) | (44.3) | – | – |
Net cash from (used in) operating activities | 54.0 | 44.9 | (11.2) | (8.1) |
1) See Notes 2(s) and 2(t)
2) Includes $2.5m decrease (2023: $2.2m increase) in expected credit losses in respect of Egypt trade receivables.
During the year, a total of $0.5m of trade receivables due from EGPC in Egypt were settled by way of non-cash offset, of which $0.4m
relates to the assignment bonus settled upon receipt of contingent consideration in relation to IPR Farm out and $0.1m to the training
bonuses settled with EGPC.
During 2023, a total of $3.2m of trade receivables due from EGPC in Egypt were settled by way of non-cash offset, out of which $2.2m
relates to a second instalment of assignment bonus due to EGPC in relation to the IPR Farm out, $0.5m relates to a bonus due to
EGPC for the NBS development lease and $0.5m relates to training bonuses and fees paid to EGPC for participation in a bid round
process.
33. Lease arrangements
For short-term leases (lease term less than 12 months) and leases for which the underlying asset is of low value, the Group has opted to
recognise a lease expense on a straight-line basis as permitted under IFRS 16.
| 2024 | 2023 | |
| $ million | $ million | |
Lease liability recognised as at 1 January | 0.5 | 0.8 |
| Principal repayments | (0.3) | (0.3) |
Lease liability recognised as at 31 December | 0.2 | 0.5 |
| Of which are: | ||
| Current lease liabilities | 0.2 | 0.3 |
| Non-current lease liabilities | – | 0.2 |
Right of use assets recognised as at 1 January | 0.5 | 0.8 |
| New leases | – | – |
| Depreciation | (0.3) | (0.3) |
Right of use asset recognised as at 31 December | 0.2 | 0.5 |
| Of which are: | ||
| Oil & Gas properties | 0.2 | 0.5 |
FINANCIAL
STATEMENTS
ADDITIONAL
INFORMATION
GOVERNANCE
REPORT
STRATEGIC
REPORT
196
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Notes to the Consolidated Financial Statements - Continued
During 2022, Pharos signed a new agreement for rental of gas
generators in Egypt, the agreement is effective from August 2022
to October 2025 and is accounted for as a lease under IFRS 16.
Pharos 45% share of the asset and liability which is applicable
post completion of the Farm out (21 March 2022) has been
recognised accordingly. The lease was measured at the present
value of the lease payments, discounted using the incremental
borrowing rate at the start of the lease, 6.3%.
The following table presents the amounts reported in the income
statement for short-term leases:
| Operating lease expenses | 2024 | 2023 |
| by segment | $ million | $ million |
| SE Asia | 9.9 | 10.1 |
| Egypt | 0.3 | 1.4 |
| 10.2 | 11.5 |
At 31 December 2024, the Group is committed to its share of
$9.6m (2023: $10.8m) for short-term leases of less than 12
months and which accordingly are not included in the above.
Certain short-term leases contain discretionary options to extend
the lease period. These future periods are only included in the
assessment of the lease term after consideration of the economic
incentives and if it is reasonably certain that the option will be
exercised.
| 2024 | 2023 | |
| $ million | $ million | |
| Short-term employee benefits | 4.0 | 2.7 |
| Post-employment benefits | 0.2 | 0.1 |
| Share-based payments | 1.0 | 1.8 |
| 5.2 | 4.6 |
197
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
FINANCIAL
STATEMENTS
ADDITIONAL
INFORMATION
GOVERNANCE
REPORT
STRATEGIC
REPORT
198
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Notes to the Consolidated Financial Statements - Continued
199
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Non-IFRS Measures (Unaudited)
NON-IFRS MEASURES (UNAUDITED)
Non-IFRS measures
The Group uses certain measures of performance that are not
specifically defined under IFRS or other generally accepted
accounting principles. These non-IFRS measures include cash
operating costs per barrel, DD&A per barrel, gearing, free cash
flow, operating cash per share and return on capital employed.
For the RBL covenant compliance, three Non-IFRS measures are
included: Net debt, EBITDAX and Net debt/EBITDAX.
Cash operating costs per barrel
Cash operating costs are defined as cost of sales less DD&A,
production based taxes, movement in inventories and certain
other immaterial cost of sales.
Cash operating costs for the period are then divided by barrels
of oil equivalent produced. This is a useful indicator of cash
operating costs incurred to produce oil and gas from the Group’s
producing assets.
2024
$ million
2023
$ million
Cost of sales
87.3
111.2
(Less)/add:
Depreciation, depletion and amortisation
(47.1)
(55.4)
Production based taxes
(9.2)
(10.5)
Change in inventories
6.0
(4.0)
Trade receivables expected credit loss
2.5
(2.2)
Other cost of sales
(1.7)
(1.8)
Cash operating costs 37.8
37.3
Production (BOEPD)
5,801
6,508
Cash operating cost per BOE ($)
17.80
15.70
Cash operating cost per barrel by
segment (2024)
Vietnam
$ million
Egypt
$ million
Total
$ million
Cost of sales 75.6 11.7
87.3
Depreciation, depletion and
amortisation
(42.1) (5.0)
(47.1)
Production based taxes (9.1) (0.1)
(9.2)
Change in inventories 6.0 –
6.0
Trade receivables expected
credit loss
– 2.5
2.5
Other cost of sales (1.3) (0.4)
(1.7)
Cash operating costs
29.1 8.7
37.8
Production (BOEPD)
4,361 1,440
5,801
Cash operating cost per BOE ($)
18.23 16.51
17.80
DD&A per barrel
DD&A per barrel is calculated as net book value of oil and gas
assets in production, together with estimated future development
costs over the remaining 2P reserves. This is a useful indicator
of ongoing rates of depreciation and amortisation of the Group’s
producing assets.
2024
$ million
2023
$ million
Depreciation, depletion and amortisation
47.1
55.4
Production (BOEPD)
5,801
6,508
DD&A per BOE ($)
22.18
23.32
DD&A per barrel by segment (2024)
Vietnam
$ million
Egypt
$ million
Total
$ million
Depreciation, depletion and
amortisation
42.1 5.0
47.1
Production (BOEPD)
4,361 1,440
5,801
DD&A per BOE ($) 26.38 9.49
22.18
Net cash/(debt)
Net cash/(debt) comprises interest-bearing bank loans, less cash
and cash equivalents.
2024
$ million
2023
$ million
Cash and cash equivalents
16.5
32.6
Borrowings *
–
(39.2)
Net cash/(debt) 16.5
(6.6)
* Excludes unamortised capitalised set up costs
EBITDAX
EBITDAX is earnings from continuing activities before interest, tax,
DD&A, impairment (reversal)/ charge of PP&E and intangibles,
exploration expenditure, pre-licence costs and Other/restructuring
expense items in the current year.
2024
$ million
2023
$ million
Operating profit/(loss)
64.3
(18.1)
Depreciation, depletion and amortisation
47.3
55.6
Pre-licence costs
0.8
0.4
Impairment (reversal)/charge
(26.3)
65.4
EBITDAX 86.1
103.3
ADDITIONAL
INFORMATION
GOVERNANCE
REPORT
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
200
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Non-IFRS Measures (Unaudited) - Continued
Net debt/EBITDAX
Net Debt/EBITDAX ratio expresses how many years it would take
to repay the debt, if net debt and EBITDAX stay constant. For
2024, the Group is in a net cash position overall and no data has
therefore been presented.
2024
$ million
2023
$ million
Net Debt
–
(6.6)
EBITDAX
86.1
103.3
Net Debt/EBITDAX –
(0.06)
Gearing
Debt to equity ratio is calculated by dividing interest-bearing bank
loans by stockholder equity. The debt to equity ratio expresses
the relationship between external equity (liabilities) and internal
equity (stockholder equity).
2024
$ million
2023
Restated
1
$ million
Total Debt *
–
39.2
Total Equity
290.8
275.2
Debt to Equity –
0.14
* Exclude unamortised capitalised set up costs
1) See Note 2(s)
Free cash flow
Free cash flow is calculated by subtracting capital cash
expenditure from net cash from operating activities.
2024
$ million
2023
$ million
Net cash from operating activities
54.0
44.9
Capital cash expenditure
(26.1)
(26.7)
Free cash flow 27.9
18.2
Operating cash per share
Operating cash per share is calculated by dividing net cash from
(used in) continuing operations by number of shares in the year.
2024
$ million
2023
$ million
Net cash from operating activities
54.0
44.9
Weighted number of shares in the year
417,019,506
427,170,044
Operating cash per share
0.13
0.11
Return on capital employed (ROCE)
ROCE is calculated by dividing operating profit/(loss) by total
assets less current liabilities. ROCE measures a company’s
profitability and the efficiency with which its capital is employed.
2024
$ million
2023
$ million
Operating profit/(loss)
64.3
(18.1)
Total assets less current liabilities
409.6
408.9
ROCE 15.7%
(4.4)%
201
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Five Year Summary (Unaudited)
FIVE YEAR SUMMARY (UNAUDITED)
Year to
31 Dec 2024
$ million
Year to
31 Dec 2023
$ million
Year to
31 Dec 2022
$ million
Year to
31 Dec 2021
$ million
Year to
31 Dec 2020
$ million
Consolidated Income Statement
Oil and gas revenues
136.1
168.1 221.6 163.8 118.3
Commodity hedge (losses)/gains
(0.1)
(0.2) (22.5) (29.7) 23.7
Gross profit
48.7
56.7 82.3 19.5 18.2
Operating profit/(loss)
64.3
(18.1) 100.2 48.3 (231.3)
Profit/(loss) for the year
23.6
(48.8) 24.4 (4.7) (215.8)
2024
$ million
2023
Restated
1
$ million
2022
$ million
2021
$ million
2020
$ million
Consolidated Balance Sheet
Non-current assets
353.3
356.6 457.4 460.3 483.2
Net current assets
56.3
52.3 56.4 51.6 10.4
Non-current liabilities
(118.8)
(133.7) (183.2) (207.5) (199.9)
Net assets
290.8
275.2 330.6 304.4 293.7
Share capital
91.1
91.7 92.3 92.9 87.3
Other reserves
258.1
255.4 253.6 250.5 243.0
Retained deficit
(58.4)
(71.9) (15.3) (39.0) (36.6)
Total equity
290.8
275.2 330.6 304.4 293.7
1) See Note 2(s)
Year to
31 Dec 2024
$ million
Year to
31 Dec 2023
$ million
Year to
31 Dec 2022
$ million
Year to
31 Dec 2021
$ million
Year to
31 Dec 2020
$ million
Consolidated cash flow statement
Net cash from operating activities
54.0
44.9 53.4 10.8 56.4
Capital expenditure
26.1
26.7 31.9 41.8 41.3
Distributions
5.9
5.6 – – –
ADDITIONAL
INFORMATION
GOVERNANCE
REPORT
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
202
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Reserves Statistics (Unaudited)
RESERVES STATISTICS (UNAUDITED)
Net working interest, MMBOE
TGT CNV Vietnam
3
El Fayum NBS Egypt
3
Group
Oil and Gas 2P Commercial Reserves
1,2
As at 1 January 2024 6.3 2.8 9.1 13.6 0.8 14.4 23.5
Production (1.2) (0.4) (1.6) (0.5) - (0.5) (2.1)
Revision 1.0 0.4 1.4 (1.6) 0.1 (1.5) (0.1)
2P Commercial Reserves as at 31 December 2024 6.1 2.8 8.9 11.5 0.9 12.4 21.3
Oil and Gas 2C Contingent Resources
1,2
As at 1 January 2024 6.3 5.6 11.9 9.6 - 9.6 21.5
Revision (0.8) (3.3) (4.1) (1.3) - (1.3) (5.4)
2C Contingent Resources as at 31 December 2024 5.5 2.3 7.8 8.3 - 8.3 16.1
Total of 2P Reserves and 2C Contingent Resources
as at 31 December 2024
11.6 5.1 16.7 19.8 0.9 20.7 37.4
1) Reserves and Contingent Resources are categorised in line with 2018 SPE/WPC/AAPG/SPEE/SEG/SPWLA/EAGE Petroleum Resources Management System.
2) Assumes oil equivalent conversion factor of 6,000 standard cubic feet per barrel of oil equivalent
3) Reserves and Contingent Resources have been independently audited by McDaniel.
Risks associated with reserves evaluation and estimation uncertainty are discussed in Note 4(b) to the Financial Statements.
203
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Report on Payments to Governments (Unaudited)
REPORT ON PAYMENTS TO
GOVERNMENTS (UNAUDITED)
Disclosure
In accordance with the Financial Conduct Authority’s Disclosure
and Transparency Rule 4.3A in respect of payments made by
the Company to governments for the year ended 31 December
2024 and in compliance with The Reports on Payments to
Governments Regulations 2014 (SI 2014/3209), Pharos presents
its disclosure for the year ending 31 December 2024.
Basis for preparation
Legislation
This report is prepared in accordance with the Reports on
Payments to Governments Regulations 2014 as enacted in the
UK in December 2014 and as amended in December 2015.
The Reports on Payments to Government Regulations (UK
Regulations) were enacted on 1 December 2014 and require
UK companies in extractive industries to publicly disclose
payments they have made to Governments where they
undertake extractive operations. The aim of the regulations is to
enhance the transparency of the payments made by companies
in the extractive sector to host governments in the form of
taxes, bonuses, royalties, fees and support for infrastructure
improvements. The UK Regulations came into effect on 1 January
2015.
The payments disclosed for 2024 are in line with the EU Directive
and UK Regulations and we have provided additional voluntary
disclosures on payroll taxes, export duty, withholding tax and
other taxes.
In line with the UK Regulations, a payment of a series of related
payments which do not exceed $106,941 (£86,000) has not been
disclosed. Where the aggregate payments made in the period for
a project or country are less than $106,941, payments are not
disclosed for the project or country.
All of the payments disclosed in accordance with the EU Directive
have been made to National Governments, either directly or
through a Ministry or Department, or to a national oil company,
who have a working interest in a particular licence.
Payment
The information is reported under the following payment types:
Production entitlements in barrels
These are the host government’s total share of production in the
reporting period derived from projects operated by Pharos. This
includes the government’s non-cash royalties as a sovereign
entity or through its participation as an equity or interest holder in
projects within its home country. The figures produced are on a
paid lifting basis valued at realised sale prices.
Income Taxes
This represents cash tax calculated on the basis of profits
including income or capital gains. Income taxes are usually
reflected in corporate income tax returns. The cash payment
of income taxes occurs in the year in which the tax has arisen
or up to one year later. Income taxes also include any cash
tax rebates received from the government or revenue authority
during the year. Income taxes do not include fines and penalties.
Consumption taxes including value added taxes, personal income
taxes, sales taxes and property taxes are excluded.
Royalties
These represent royalties during the year to governments for the
right to extract oil or gas. The terms of these royalties are set
within the individual Production Sharing Contracts & Agreements
and can vary from project to project within a country. The cash
payment of royalties occurs in the year in which the tax has
arisen.
Dividends
These are dividend payments, other than dividends paid to a
government as an ordinary shareholder of an entity, in lieu of
production entitlements or royalties. For the year ending 31
December 2024, there were no reportable dividend payments to
governments.
Bonuses
This represents any bonus paid to governments during the
year on achievement of commercial milestones such as signing
of a petroleum agreement or contract, achieving commercial
discovery, or after first production.
Licence Fees
This represents licence fees, rental fees, entry fees and other
consideration for licences and/or concessions paid for access to
an area during the year (with the exception of signature bonuses
which are captured within bonus payments).
Infrastructure improvement payments
This represents payments made in respect of infrastructure
improvements for projects that are not directly related to oil
and gas activities during the year. This can be a contractually
obligated payment in a Production Sharing Contract or a
discretionary payment for building/improving local infrastructure
such as roads, bridges, ports, schools and hospitals.
Payroll Taxes
This represents payroll and employer taxes including PAYE and
national insurance paid by Pharos as a direct employer.
Export Duty
This represents payments made to governments during the year
in relation to the exportation of petroleum products.
Withholding Tax
This represents the amount of tax deducted at source from third
party service providers during the year and paid to respective
governments.
Other Taxes
This represents business rates paid during the year on non-
domestic properties.
ADDITIONAL
INFORMATION
GOVERNANCE
REPORT
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
204
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Transparency Disclosure 2024 (Unaudited)
TRANSPARENCY DISCLOSURE 2024
(UNAUDITED)
UK Regulations Voluntary Disclosure
Production
entitlements
Production
entitlements
Income
Taxes Royalties Dividends
Bonus
Payments
Licence
fees
Infrastructure
improvement
payments
Total EU
Transparency
Directive
Payroll
Taxes
Export
Duty
With-
holding
Tax
Other
Taxes Total
Licence/
Corporate/ Area bbls (000) $ 000’s $ 000’s $ 000’s $ 000’s $ 000’s $ 000’s $ 000’s $ 000’s $ 000’s $ 000’s $ 000’s $ 000’s $ 000’s
Vietnam*
Block 16–1 805 65,679 26,943 7,506 – – 78 – 100,206 – – – – –
Block 9-2 426 27,237 9,653 1,564 – – 75 – 38,529 – – – – –
Total Vietnam 1,231 92,916 36,596 9,070 – – 153 – 138,735 – – – – –
Egypt
El Fayum 229 17,132 – – – 230 – – 17,362 232 – 7 18 257
North Beni Suef 19 1,349 – – – 159 – – 1,508 – – – – –
Total Egypt 248 18,481 – – – 389 – – 18,870 232 – 7 18 257
United Kingdom (UK)
Corporate – – – – – – – – – 2,356 – – – 2,356
Total UK – – – – – – – – – 2,356 – – – 2,356
United States of America (US)
Corporate – – – – – – – – – 41 – – – 41
Total US – – – – – – – – – 41 – – – 41
Pharos Total 1,479 111,397 36,596 9,070 – 389 153 – 157,605 2,629 – 7 18 2,654
UK Regulations Voluntary Disclosure
Production
entitlements
Production
entitlements
Income
Taxes Royalties Dividends
Bonus
Payments
Licence
fees
Infrastructure
improvement
payments Total
Payroll
Taxes
Export
Duty
With-
holding
Tax
Other
Taxes Total
Country/
Government bbls (000) $ 000’s $ 000’s $ 000’s $ 000’s $ 000’s $ 000’s $ 000’s $ 000’s $ 000’s $ 000’s $ 000’s $ 000’s $ 000’s
Vietnam*
Ho Chi Minh City
Tax Dept
– – 36,596 9,070 – – – – 45,666 – – – – –
Customs Office – – – – – – – – – – – – – –
PetroVietnam
E&P Corp
(PVEP)
1,231 92,916 – – – – 153 – 93,069 – – – – –
Total Vietnam 1,231 92,916 36,596 9,070 – – 153 – 138,735 – – – – –
Egypt
Egyptian General
Petroleum
Corporation
(EGPC)
248 18,481 – – – 389 – – 18,870 – – – – –
Tax department – – – – – – – – – 232 – 7 18 257
Total Egypt 248 18,481 – – – 389 – – 18,870 232 – 7 18 257
United Kingdom (UK)
HMRC – – – – – – – – – 2,356 – – – 2,356
Total UK – – – – – – – – – 2,356 – – – 2,356
United States of America (US)
Internal Revenue
Service
– – – – – – – – – 41 – – – 41
Total US – – – – – – – – – 41 – – – 41
Pharos Total 1,479 111,397 36,596 9,070 – 389 153 – 157,605 2,629 – 7 18 2,654
* Joint Operating Company Project’s tax payments reported on Pharos Net Working Interest Basis.
205
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Glossary of Terms
DEFINITIONS
A
AGM
Annual General Meeting
B
bbl
Barrel
boe or BOE
Barrels of oil equivalent
boepd or BOEPD
Barrels of oil equivalent per day
bopd
Barrels of oil per day
BSR
Binh Son Refining and Petrochemical JSC,
the operator of the Dung Quat refinery,
Quang Ngai Province, Vietnam
C
cash
Cash, cash equivalent and liquid investments
capex
Capital expenditure
CEO
Chief Executive Officer
CPR
Competent person’s report or equivalent (e.g.
mineral expert’s report)
CNV
Ca Ngu Vang field located in Block 9-2,
Vietnam
Company or Pharos
Pharos Energy plc
Contingent Resources or contingent
resources
Those quantities of petroleum to be
potentially recoverable from known
accumulations by application of development
projects but which are not currently
considered to be commercially recoverable
due to one or more contingencies
Contractor
The party or parties identified as being, or
forming part of, the “CONTRACTOR” as
defined in the El Fayum Concession or,
as the case may be, the North Beni Suef
Concession
D
DD&A
Depreciation, depletion and amortisation
E
EBITDAX
Earnings before interest, tax, DD&A,
impairment of PP&E and intangibles,
exploration expenditure and other/
restructuring items in the current year
EGP
Egyptian Pounds, the lawful currency of the
Arab Republic of Egypt
EGPC
Egyptian General Petroleum Corporation, an
Egyptian state oil and gas company and the
industry regulator
El Fayum or the El Fayum Concession
The concession agreement for petroleum
exploration and exploitation entered into on
15 July 2004 between the Arab Republic
of Egypt, EGPC and Pharos El Fayum in
respect of the El Fayum area, Western
Desert, as amended from time to time
ERCE
ERC Equipoise Limited, an independent
energy consulting group
ESG
Environmental, social and governance
F
Financial Statements
The preliminary financial statements of the
Company and the Group for the year ended
31 December 2024
FPSO
Floating, production, storage and offloading
Vessel
G
G&A
General and administrative expenses
GHG
Greenhouse gas
Group
Pharos and its direct and indirect subsidiary
undertakings
H
1H
The first half of a calendar year
2H
The second half of a calendar year
HLJOC
Hoang Long Joint Operating Company, the
operator of the TGT field on Block 16-1,
Vietnam
HVJOC
Hoan Vu Joint Operating Company, the
operator of the CNV field on Block 9-2,
Vietnam
I
IFRS
International Financial Reporting Standards
IMF
The International Monetary Fund
IPR or IPR Energy Group
The IPR Energy group of companies,
including IPR Lake Qarun and IPR Energy
AG, or such of them as the context may
require
IPR Lake Qarun
IPR Lake Qarun Petroleum Co, an exempted
company with limited liability organised
and existing under the laws of the Cayman
Islands (registration number 379306), a
wholly owned subsidiary of IPR Energy AG
J
JOC
Joint operating company
JV
Joint venture
K
km
Kilometre
km
2
Square kilometre
L
LTI
Lost Time Injury
LTIP
Long Term Incentive Plan
M
m
Million (where used to describe a monetary
amount)
McDaniel
McDaniel & Associates Consultants Ltd
mmboe
Million barrels of oil equivalent
MMstb
Millions of stock tank barrels
MOIT
The Vietnamese Ministry of Industry and
Trade
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206
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Glossary of Terms- Continued
N
NAV
Net asset value
NBE or NBE UK
the National Bank of Egypt (UK) Limited,
a subsidiary of National Bank of Egypt,
the largest Egyptian commercial bank and
owned by the state of Egypt
NBS, North Beni Suef or the North Beni
Suef Concession
The concession agreement for petroleum
exploration and exploitation entered into
on 24 December 2019 between the Arab
Republic of Egypt, EGPC and Pharos El
Fayum in respect of the North Beni Suef
area, Nile Valley
Net Zero Roadmap
The Group’s detailed net zero roadmap to
achieve net zero GHG emissions by 2050,
originally published in December 2023 and
as updated from time to time
O
OCF
Operating cash flow
opex
Operational expenditure
P
PEF
Pharos El Fayum, a wholly owned
subsidiary of the Company holding the
Group’s participating interest in El Fayum
and North Beni Suef
Petrosilah
An Egyptian joint stock company held
50/50 between EGPC and the Contractor
parties under the El Fayum Concession
(being IPR Lake Qarun and PEF)
Petrovietnam
Vietnam Oil and Gas Group, the
Vietnamese state-owned integrated oil
and gas company
PP&E
Property, plant and equipment
prospect
An identified trap that may contain
hydrocarbons. A potential hydrocarbon
accumulation may be described as a lead
or prospect depending on the degree
of certainty in that accumulation. A
prospect generally is mature enough to be
considered for drilling
PSC
Production sharing contract or production
sharing agreement
R
Reserves or reserves
Reserves are those quantities of petroleum
anticipated to be commercially recoverable
by application of development projects
to known accumulations from a given
date forward under defined conditions.
Reserves must further satisfy four criteria:
they must be discovered, recoverable,
commercial and remaining based on the
development projects applied
RBL
Reserve-based lending or, as the context
may require, reserve-based lending facility
RFDP
Revised field development plan
T
TCFD
Task Force on Climate-related Financial
Disclosures
TGT
Te Giac Trang field located in Block 16-1,
Vietnam
TLJOC
Thang Long Joint Operating Company, the
operator of Block 15-2/01, Vietnam, with
which the HLJOC shares access to the
FPSO used for TGT production
U
UK
United Kingdom
USD, US dollars, US$ or $
United States dollars, the lawful currency
of the United States of America
£ or GBP
UK Pound Sterling
1C
Low estimate scenario of Contingent
Resources
1P
Equivalent to proved Reserves; denotes
low estimate scenario of Reserves
2018 Code
The 2018 UK Corporate Governance
Code
2C or 2C Contingent Resources
Best estimate scenario of Contingent
Resources
2P, 2P Reserves or 2P Commercial
Reserves
Equivalent to the sum of proved plus
probable Reserves; denotes best estimate
scenario of Reserves
3C
High estimate scenario of Contingent
Resources
3P
Equivalent to the sum of proved, probable
and possible Reserves; denotes high
estimate scenario of Reserves
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PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Company Information
COMPANY INFORMATION
Registered office:
Pharos Energy
27/28 Eastcastle Street, London
W1W 8DH, United Kingdom
Registered in England
T +44 (0)20 7747 2000
Company No. 3300821
www.pharos.energy
Company Secretary
Tony Hunter
Financial Calendar
Group results for the year to 31 December
are announced in March. The Annual
General Meeting is held during the second
quarter. Interim Results to 30 June are
announced in September.
Auditors
Ernst & Young LLP
1 More London Place, London
SE1 2AF, United Kingdom
Bankers:
J.P. Morgan Chase Bank
25 Bank Street, London, E14 5JP
United Kingdom
HSBC UK Bank plc
60 Queen Victoria Street, London,
EC4N 4TR United Kingdom
BNP Paribas – Singapore Branch
10 Collyer Quay
#33-01 Ocean Financial Center
049315
Singapore
Corporate Brokers:
Peel Hunt
100 Liverpool Street, London
EC2M 2AT, United Kingdom
Shore Capital
Cassini House, 57 St James’s Street,
London SW1A 1LD, United Kingdom
Registrar:
Equiniti Limited
Aspect House
Spencer Road Lancing, BN99 6DA
United Kingdom
ADDITIONAL
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GOVERNANCE
REPORT
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REPORT
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STATEMENTS
Designed and Produced by Presentation Graphics Design Ltd
208
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2024
Pharos Energy (Head Office)
Eastcastle House
27/28 Eastcastle Street
London
W1W 8DH
United Kingdom
Registered in England
Company No. 3300821
T +44 (0)20 7747 2000
www.pharos.energy