ANNUAL
REPORT
& ACCOUNTS
www.pharos.energy
Positioned for growth
2025
Strategic Report Additional Information
Governance Report
Financial Statements
1
Led by an experienced team, Pharos is a cash generative business with a robust balance sheet and an established platform to
deliver both organic growth and inorganic opportunities.
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.
Pharos Energy is an independent energy company listed on the main market of the
London Stock Exchange focused on delivering sustainable growth and returns to
stakeholders, with a portfolio of production, development and exploration assets in
Vietnam and Egypt.
WHO WE ARE
EGYPT
1,303 bopd
2025 EGYPT PRODUCTION (NET)
VIETNAM
4,095 boepd
2025 VIETNAM PRODUCTION (NET)
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
2
www.pharos.energy
STRATEGIC
PHAROS AT A GLANCE 5
WHERE WE OPERATE 6
OUR STRATEGY AND PURPOSE 7
OUR STRATEGIC OBJECTIVES 8
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
BUSINESS MODEL 15
CHAIR’S STATEMENT 17
MARKET OVERVIEW 19
CHIEF EXECUTIVE OFFICER’S STATEMENT 23
KEY METRICS 27
OPERATIONAL REVIEW 31
SECTION 172(1) 35
CHIEF FINANCIAL OFFICER’S STATEMENT 39
RISK MANAGEMENT REPORT 45
PRINCIPAL RISKS AND MITIGATIONS 51
VIABILITY STATEMENT 57
CORPORATE RESPONSIBILITY REPORT 59
− Business 63
− Ethics 66
− People 67
− Society 70
− Environment 73
− Corporate Responsibility Non-Financial Indicators 80
TCFD REPORT 81
NET ZERO ROADMAP 97
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 119
RESERVES COMMITTEE REPORT 121
NOMINATIONS COMMITTEE REPORT 125
AUDIT AND RISK COMMITTEE REPORT 129
DIRECTORS’ REMUNERATION COMMITTEE REPORT 137
− Annual Report on Remuneration (Audited section) 140
− Notes to the single figure table 141
− Unaudited Section 148
DIRECTORS’ REPORT 162
FINANCIAL STATEMENTS
INDEPENDENT AUDITOR’S REPORT TO THE
MEMBERS OF PHAROS ENERGY PLC 169
CONSOLIDATED FINANCIAL STATEMENTS 176
− Consolidated Income Statement 176
− Consolidated Statement of Comprehensive Income 176
− Balance Sheets 177
− Statements of Changes in Equity 178
− Cash Flow Statements 179
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 180
ADDITIONAL INFORMATION
NON-IFRS MEASURES (UNAUDITED) 211
FIVE YEAR SUMMARY (UNAUDITED) 213
RESERVES STATISTICS (UNAUDITED) 214
REPORT ON PAYMENTS TO GOVERNMENTS (UNAUDITED) 215
TRANSPARENCY DISCLOSURE 2025 (UNAUDITED) 216
GLOSSARY OF TERMS 217
COMPANY INFORMATION 219
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
4
PHAROS AT A GLANCE 5
WHERE WE OPERATE 6
OUR STRATEGY AND PURPOSE 7
OUR STRATEGIC OBJECTIVES 8
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
BUSINESS MODEL 15
CHAIR’S STATEMENT 17
MARKET OVERVIEW 19
CHIEF EXECUTIVE OFFICER’S STATEMENT 23
KEY METRICS 27
OPERATIONAL REVIEW 31
SECTION 172(1) 35
CHIEF FINANCIAL OFFICER’S STATEMENT 39
RISK MANAGEMENT REPORT 45
PRINCIPAL RISKS AND MITIGATIONS 51
VIABILITY STATEMENT 57
CORPORATE RESPONSIBILITY REPORT 59
− Business 63
− Ethics 66
− People 67
− Society 70
− Environment 73
− Corporate Responsibility Non-Financial Indicators 80
TCFD REPORT 81
NET ZERO ROADMAP 97
Additional Information
Governance Report
Financial Statements
5
Strategic Report
Driven by energy,
committed to excellence
PHAROS AT A GLANCE
LISTED ON LONDON STOCK EXCHANGE
1997
COUNTRIES OF OPERATION
2
ACREAGE KM
2
11,256
GLOBAL EMPLOYEES
BLOCKS
6
OIL & GAS FIELDS
14
CASH OPERATING COSTS *
($/boe)
$19.39/boe
(2024: $17.80/boe)
CASH AND CASH EQUIVALENTS ($m)
$40.2m
(2024: $16.5m)
OPERATING CASH FLOW ($m)
$55.6m
(2024: $54.0m)
REVENUE ($m)
$114.6m
(no hedging gain or loss realised)
(2024: $136.1m, prior to hedging loss of
$0.1m)
RETURN TO SHAREHOLDERS
$6.5m
(or 1.210p per share)
(2024: $5.9m)
AVERAGE NET PRODUCTION
(boepd)
5,398 boepd
(2024: 5,801 boepd)
2025 GROUP HIGHLIGHTS 2025 KEY FIGURES
* Read More | Non-IFRS measures on page 211.
VIETNAM
+
+
+
+
Block 125
Block 126
Block 9-2 CNV Field
Block 16-1 TGT Field
HO CHI
MINH CITY
NHA
TRANG
QUY
NHON
+
+
El Fayum Concession
CAIRO
EGYPT
North Beni Suef Concession
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
6
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).
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 – Vietnam and Egypt – both of which have
great potential to create more value.
EGYPT (D,P,E)VIETNAM (D,P,E)
2025 Average Production (net)
1,303 bopd
(2024: 1,440 bopd)
2025 Average Production (net)
4,095 boepd
(2024: 4,361 boepd)
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.
D: Development P: Production E: Exploration
Additional Information
Governance Report
Financial Statements
7
Strategic Report
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 and
gas 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 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 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.
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.
OUR STRATEGY AND PURPOSE
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
8
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
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
effective hedging programme and, where
appropriate, 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 production
growth 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 2025 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 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 pages 96 to 99. 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.
T
h
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
Additional Information
Governance Report
Financial Statements
9
Strategic Report
OUR INVESTMENT CASE
Provide energy
to support the
development and
prosperity of the
countries, communities
and families wherever
we work
Our investment case
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
10
We exhibit capital discipline through a focus on cost management, a part of our DNA, underpinned and enhanced by our commitment
to regular 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 shareholder returns 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 2025, we are proud to have returned $552.9m to shareholders, through a combination of dividends and share buybacks.
To assess
And develop
high grade
growth
opportunities
To provide
cash returns to
shareholders
To focus
On our cost base
wherever we are
1. Capital discipline
in our DNA
OUR INVESTMENT CASE - CONTINUED
We have a culture of careful financial
management, capital allocation and
capital return.
Read More | Chief Financial Officer’s Statement page 39.
FY
2025
$6.5m
1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022
4.0
3.0
2.0
1.0
0
Market
cap ($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
$552.9m
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
2025
RV
To allocate
Capital to those
assets which offer a
combination of cash
flow, growth, and
sustainability
Additional Information
Governance Report
Financial Statements
11
Strategic Report
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. Following the approval of
the five-year licence extensions to the
TGT and CNV fields to December 2031
and December 2032, respectively, the
Company began its six-well infill and
appraisal drilling programme in October
2025. This fully funded drilling campaign,
expected to be completed by mid-
2026, is the most significant investment
in our Vietnamese assets since the
initial development and is expected to
deliver up to a 20% increase in Vietnam
production volumes, as well as derisk
additional development opportunities.
Two rigs are running in parallel, and all
wells can be brought immediately onto
production utilising existing facilities.
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 by ERCE on Blocks 125 & 126 in
Vietnam, which estimates prospective
oil resources with an aggregated gross
unrisked Mean of 13,328 MMstb,
covering 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. In June
2025, Pharos received approval for the
two-year extension of the Production
Sharing Contract for Blocks 125 & 126,
extending the Exploration Period to
November 2027. This approval reflects
the Government’s continued support
and allows Pharos to retain optionality
for the prospect as we progress active
discussions with potential farm-in
partners and rig contractors ahead of
drilling the commitment well on this
basin-opening play. Detailed drilling
engineering studies for the proposed
well on Prospect A are completed, and
long lead items are now in place. All work
done to date highlights the scale of the
potential in these blocks and underscores
our commitment to pursue this exciting
opportunity whilst investing in near term
production growth in our core producing
assets, TGT and CNV, in Vietnam.
Upcoming catalysts
in 2026
• TGT & CNV: Continuation of six-
well drilling programme currently
underway; expected to finish by
mid-2026
• The four infill wells in the programme
will maintain production at 2025 levels.
Successes at the two appraisal wells,
TGT-18X and CNV-5X, could deliver
up to a 20% increase in Vietnam
production volumes and derisk
additional development opportunities
• Blocks 125 & 126: formal farm-out
process ongoing with discussions
at advanced stage; further updates
expected by mid-2026
2. Quality assets with growth potential
OUR INVESTMENT CASE - CONTINUED
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.
Read More | Operational Review page 31.
Vietnam
High net-back producing assets with further
significant exploration potential
NET 2025
PRODUCTION
4,095
boepd
(2024: 4,361 boepd)
2P RESERVES AS AT
YEAR END 2025
7.2
mmboe
(2024: 8.9 mmboe)
BLOCKS IN VIETNAM
4
YEARS ACTIVE
IN VIETNAM
25+
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
12
The Group’s Egyptian assets, El Fayum
and North Beni Suef Concessions,
were acquired in April 2019 and
farmed down to IPR in March 2022. In
September 2025, Pharos announced
it has received approval from EGPC’s
Executive Board for the consolidation
of the two concessions into a new
consolidated concession agreement (the
“Consolidated Concession”). Pharos
retains a 45% working interest in the
Consolidated Concession, with IPR Lake
Qarun Company (“IPR”) continuing as
operator with a 55% working interest. In
addition to the 12 development leases
of the EF and NBS concessions, the
Consolidated Concession will include
three new exploration areas.
The new Consolidated Concession is
a significant milestone for our Egyptian
business. It unlocks substantial value
by improving certain fiscal terms such
as Profit Oil and Cost Oil, extending
the duration of the licenses by up
to 20 years, and committing the
Contractor parties (Pharos Group and
IPR) to additional work programmes
to deliver production growth. While the
Consolidated Concession is subject to
customary approvals and to Egyptian
Parliamentary ratification, which is
expected to take place in 2026, the
new set of terms was effective from 5
October 2025 following the approval
from EGPC, and the six-well drilling
programme is expected to commence
in late March 2026. Additionally, Pharos
was pleased to end the year with a
$20m payment from EGPC, doubling
our year-end 2025 cash balance and
reducing our outstanding receivables
balance from EGPC to $7.4m (before
expected credit loss of $0.1m), its lowest
level since December 2021.
Our operational and financial
achievements in Egypt in 2025
provide the Group with significant
operational momentum going into 2026.
Nevertheless, the Group continues to
monitor its balance sheet strength and
progress in the payment of its receivable
balance to manage capital allocation for
further growth.
Catalysts in 2026
• Preparations underway for the
agreed work programme of six wells
expected to commence in late March
2026
• Parliamentary ratification of the
consolidated Concession Agreement
expected in 2026
NET 2025
PRODUCTION
1,303
bopd
(2024: 1,440 bopd)
2P RESERVES AS AT
YEAR END 2025
11.2
mmboe
(2024: 12.4 mmboe)
DEVELOPMENT
LEASES UNDER THE
CONSOLIDATED
EL FAYUM & NBS
CONCESSIONS
12
PHAROS WORKING
INTEREST
45%
OUR INVESTMENT CASE - CONTINUED
Read More | Operational Review page 31.
Egypt
Onshore, low cost drilling path to grow production
with proven exploration upside
Additional Information
Governance Report
Financial Statements
13
Strategic Report
3. Operational capability
OUR INVESTMENT CASE - CONTINUED
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 2025, Pharos has
invested over $1.4 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
2025, 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.
Read More
Corporate Responsibility Report page 59.
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
14
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,
equality, 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 2025,
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.
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.
4. Diverse and inclusive workforce
OUR INVESTMENT CASE - CONTINUED
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.
Read More
Corporate Responsibility Report page 59.
10
nationalities
of which women
accounted for
50%
Most notably our
global team comprised
Additional Information
Governance Report
Financial Statements
15
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
• Investment in M&A opportunities
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 returns to shareholders.
Our investment programme will continue
to be allocated over our asset base in a
disciplined manner to drive further growth
and 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 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 Blocks 125 & 126 in
Vietnam
• Conventional and unconventional
and exploration potential
Stakeholders
• Regular shareholder returns
• Net Asset Value (NAV) per share
growth
• In-country economic contribution
and social investment
• Local capability training,
local employment & trusted
partnerships
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
16
Pharos Energy takes a
pragmatic approach to
delivering growth and
enhancing value.
Additional Information
Governance Report
Financial Statements
17
Strategic Report
Strengthened
business positioned
for growth
CHAIR’S STATEMENT
JOÃO SARAIVA E SILVA
Non-Executive Chair
I am pleased to present my first statement
as Non-Executive Chair of Pharos Energy,
having been appointed in June 2025
following John Martin’s resignation from
the Board at the 2025 AGM. I would
like to thank John for his years
of dedication and hard work
in guiding Pharos through
challenging times, and wish
him well in his retirement.
A year of achievements
Since joining Pharos, I
have been consistently
impressed by the
strength of the
underlying business
- a high-quality asset
base delivering stable
production and robust
cash flows, a dedicated
and highly motivated
workforce, and a
healthy balance sheet.
The operational and financial milestones
achieved during 2025 are a testament to
the Company’s culture of capital discipline
and commitment to shareholder value.
In Vietnam, we are pleased to have
commenced the six-well drilling campaign
on TGT and CNV, the most significant
investment into these assets since their
original development, designed to drive
production growth from both fields in
2026 and beyond. On Blocks 125 &
126, approval of the two-year extension
to the PSC Exploration Period in June is
very welcome progress as we continue
discussions with potential farm-in partners
in a structured process. In Egypt, we
were pleased to receive approval from
EGPC for the consolidation of our two
existing concessions, with development
lease extensions for up to 20 years
and improved fiscal terms providing an
attractive investment framework for both
Pharos and our partner IPR. Most notably,
I am delighted we ended the year with a
$20 million payment from EGPC, doubling
our year-end cash balance and reducing
our outstanding receivable balance to
$7.4m, its lowest level since December
2021.
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
18
JOÃO SARAIVA E SILVA
Non-Executive Chair
Open dialogues and
effective governance
I would like to thank our shareholders
for their continued support and trust
in Pharos. The Board maintains a
strong commitment to high standards
of governance through transparent,
collaborative, and constructive dialogues
with all our stakeholders. During the year,
I met with our joint operating partners
and government stakeholders, including
EGPC, IPR, the Egyptian Minister of
Petroleum and Natural Resources, and
have been greatly encouraged by the
open and receptive discussions. Their
continued engagement and support
were instrumental in delivering our key
achievements this year, including approval
of the consolidation of our concessions in
Egypt, material reduction in our receivable
balance with EGPC, the two-year licence
extension on Blocks 125 & 126 and
the commencement of the significant
appraisal and infill drilling programme
on TGT and CNV. Their support and
confidence in Pharos underscore the
strength of our relationships and reflect the
shared recognition of Pharos’ long-term
commitment to the regions.
Sustainability at Pharos
Sustainability is embedded within our
culture and remains integral to how Pharos
operates our business. During the year,
we continued to reduce our emissions by
improving the efficiency of our operations
and ensuring we have robust GHG and
HSE monitoring systems and processes
across all assets. We are on track to
achieve our Net Zero interim target of
5% emission reduction at year end 2026
compared to the 2021 baseline, and we
look forward to updating the market in due
course.
Equally important is our commitment to the
communities in which we work. Our aim is
to be a positive presence and add value in
everything we do, and charitable initiatives
have been a part of the Company’s
culture since its inception. Throughout
the year, Pharos contributed to the local
communities through donations to support
community development, social welfare,
healthcare, and infrastructure programmes
in areas where we operate. We believe
these efforts will not only deliver meaningful
social impact to our host communities,
but also reinforce a strong sense of
purpose and motivation among our global
workforce.
Outlook
We entered 2026 as a strengthened business, with a resilient balance
sheet, a quality asset base underpinned by safe and responsible
operations, and a portfolio of exciting catalysts to pursue growth. We look
forward to concluding our Vietnam drilling programme safely in mid-2026,
and preparation with partners for the agreed work programme under the
new consolidated concession in Egypt is underway, further strengthening
our operational base. In parallel, we are progressing our discussions with
potential farm-in partners on Blocks 125 & 126 and stepping up our efforts
to identify opportunities beyond our existing portfolio, dedicating resources
to ensure we are active participants in the market.
Our focus on both organic and inorganic growth will continue to be guided
by capital discipline. The Board maintains a clear commitment to our
capital allocation goals: to balance returns to shareholders with investment
in our assets to generate growth, while preserving the resilience of the
balance sheet.
On behalf of the Board, I would like to thank the Pharos team for their
commitment and delivery throughout the year. I am also grateful to
shareholders for their trust, and our partners, suppliers, and advisors for
their support. The Board looks to the future with great confidence in our
ability to deliver growth and value in 2026 and beyond.
CHAIR’S STATEMENT - CONTINUED
Additional Information
Governance Report
Financial Statements
19
Strategic Report
MARKET OVERVIEW
Understanding today’s
energy landscape
Economics and Political
1 https://www.congress.gov/crs-product/R45281#:~:text=Conflict%20in%20June%202025,through%20the%20Strait%20of
2 https://www.rystadenergy.com/news/chokepoints-under-pressure-fragile-lifelines-global-energy
3 https://www.iea.org/reports/oil-market-report-march-2025
4 https://www.ons.gov.uk/economy/grossdomesticproductgdp/bulletins/gdpfirstquarterlyestimateuk/octobertodecember2025
5 https://www.cnbc.com/2025/12/30/stock-market-today-live-updates.html
6 https://www.forbes.com/sites/rrapier/2026/01/11/energy-stocks-enter-2026-on-uneven-ground-after-a-surprising-2025/
7 https://www.forbes.com/sites/rrapier/2026/01/11/energy-stocks-enter-2026-on-uneven-ground-after-a-surprising-2025/
8 https://www.iea.org/reports/oil-market-report-march-2026
The global oil and gas market in 2025 was
defined by a supply surplus and low prices.
World oil production reached record highs,
averaging 105 to 108 million barrels per
day, driven by strong output from both
OPEC+ and non-OPEC+ producers,
notably the U.S., Brazil, and Guyana. U.S.
crude production maintained its global
leadership. However, demand growth was
modest, rising by 700–830 kb/d due to
economic headwinds, improved energy
efficiency and the continued rise of electric
vehicles especially in OECD countries.
Geopolitical volatility continued to reshape
the market landscape. The ongoing
Russia-Ukraine conflict persistently shifted
trade flows with Russian oil exports to
Europe replaced by increased shipments
to Asia, while Russian gas deliveries to
Europe collapsed to just c.12% of pre-war
levels. Europe responded by increasing
LNG imports, primarily from the U.S., and
diversifying crude sources, accelerating
its energy transition and reducing
dependency on Russian hydrocarbons.
Tensions in the Middle East, particularly
the Israel-Gaza conflict, heightened supply
security concerns, principally around key
maritime chokepoints like the Strait of
Hormuz and the Red Sea. Houthi attacks
in the Red Sea disrupted shipping, forcing
rerouting and raising freight costs, while
Iranian threats underscored the region’s
strategic importance. However, proactive
measures by Gulf producers, alternative
export routes, and robust spare capacity
prevented major supply disruptions.
1
2
At the same time, U.S. policy under
President Trump’s administration
intensified sanctions and adopted a more
protectionist stance contributing to global
trade tensions and increased market
uncertainty. The U.S. played a key role
in enforcing sanctions and supporting
alternative energy flows, reinforcing its
influence over global energy markets.
3
From a macroeconomic perspective,
2025 was characterised by persistent
geopolitical tensions and policy
unpredictability which weighed on business
confidence and trade. Despite this, global
growth remained resilient, with GDP
expanding by around 1.34% in the UK.
4
However, this growth was slower than in
previous years, reflecting the drag from
trade frictions and elevated risk aversion.
Financial markets navigated this
challenging environment with remarkable
strength. The S&P 500 finished up 16.4%
for the year, marking its third consecutive
year of double-digit gains.
5
Key drivers
included earnings growth, enthusiasm for
artificial intelligence, and multiple interest
rate cuts by the Federal Reserve, which
helped support valuations and investor
sentiment. The energy sector delivered a
c.7.9% total return but lagged the broader
market due to lower oil prices and ongoing
geopolitical tensions.
6
7
Moving into 2026, the first quarter of the
year was relatively stable until the joint US
and Israeli military action, with surprise
airstrikes on multiple sites and cities across
Iran, began on 26 February 2026, initiating
an ongoing conflict. Disruptions to Middle
Eastern supplies due to attacks on the
region’s oil infrastructure and the cessation
of tanker traffic through the Strait of
Hormuz sent Brent futures soaring, trading
within a whisker of $120/bbl. As a result,
global economic growth projections for
2026 are under consideration as the long-
term effects of this conflict are currently
unknown.
8
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
20
Oil Price
Oil markets were less volatile in 2025
than 2024, marked by a slow decline due
to oversupply and an uncertain market
environment. Tighter sanctions on Russian
and Iranian oil and severe winter weather
caused prices to peak at the beginning of
the year past $80/bbl, but the U.S. tariffs,
weakening global demand for oil and the
unwinding of OPEC+ voluntary restrictions
caused prices to tumble through the first
half of the year. Notable price fluctuations
included a spike in June due to escalating
tensions between Israel and Iran, the
downward trend continued through the
latter half of the year due to supply surplus
and geopolitical pessimism. Brent crude
traded in a narrow range of $63-$79/bbl
on a monthly average basis, averaging
$69/bbl for the year, c.$12/bbl less than
2024, marking a c.15% decrease year on
year.
1
2
Month-by-month oil prices reflected the
interplay of sanctions, trade tensions,
OPEC+ policy shifts and regional conflicts.
After peaking in January, prices fell to
a four-year low of just above $60/bbl in
early May with a price decline in February
and early March of c.$7/bbl due to a
combination of weakening global demand
outlooks and escalating trade tensions,
followed by further declines of around $10/
bbl in March and early April amid Trump’s
reciprocal tariff announcement and fears
of a recession. This was compounded
by some OPEC+ members’ decision to
accelerate the unwinding of voluntary
production cuts. Prices fell by another
$10/bbl over April into May amid U.S.
tariff escalation and increased OPEC+ oil
production hikes, but eased after the U.S.
reached trade deals with the UK and China
in May. Prices briefly rebounded in July due
to geopolitical tensions in the Middle East,
but resumed their decline in early August
as OPEC+ announced plans to fully unwind
its output cuts by September. Oil prices
waned in September and October due
to expected supply surplus, decreasing
optimism that a near-term Russia-Ukraine
peace deal would be reached, and fresh
sanctions against Russia and Iran. Global
oil supply increased while oil demand
1 https://www.eia.gov/todayinenergy/detail.php?id=66944
2 https://www.eia.gov/outlooks/steo/
3 All data sourced from the IEA monthly market reports: https://www.iea.org/analysis?type=report
4 https://www.bloomberg.com/quote/EGCPYOY:IND
5 https://www.reuters.com/world/africa/egypts-economy-seen-growing-46-202526-inflation-eases-2025-10-20/
6 https://www.reuters.com/world/africa/imf-reaches-staff-level-agreement-egypts-fifth-sixth-loan-programme-reviews-2025-12-23/
7 https://www.aljazeera.com/economy/2025/12/5/egypts-economy-stabilises-but-poverty-challenges-persist
8 https://www.imf.org/en/news/articles/2025/12/22/pr25441-egypt-imf-staff-reaches-sla-on-5th-and-6th-review-under-eff-and-1st-rev-under-the-rsf
9 https://www.spglobal.com/ratings/en/regulatory/article/-/view/type/HTML/id/3456845
10 https://www.chathamhouse.org/2025/12/egypts-foreign-policy-will-remain-too-little-too-late-2026
11 https://www.washingtoninstitute.org/policy-analysis/egypts-economy-amidst-regional-conflicts
growth remained modest in the final two
months of the year, which resulted in Brent
dropping below $61/bbl on the last day of
the year.
3
Due to the initiation of the US/Israel/Iran
conflict in February 2026, Brent prices
were extremely volatile in 1Q. The ultimate
impact on oil and gas markets and the
broader economy from the conflict will
depend not only on the intensity of military
attacks and any damage to energy assets,
but also, crucially, on the duration of
disruptions to shipping through the Strait
of Hormuz.
Egypt
In 2025, Egypt’s economy stabilised,
inflation and interest rates continued to
fall, with the devaluation of its currency
prompting an increase in exports and a
surge in tourism. The country had faced
high inflation in recent years but has seen
improvements over the last two years and
particularly in 2025. Signs of economic
recovery are also reflected in recent growth
projections of 4.6% for the fiscal year, an
increase from 3.7% in 2024.
4
5
Since the Ras El Hekma deal in February
2024, where an Abu Dhabi sovereign fund
agreed to invest $35 billion, of which $24
billion was paid in cash to the Egyptian
Government, and the pivotal IMF $8 billion
loan (Extended Fund Facility, or ‘EFF’) to
Egypt in March of the same year, Egypt
was able to start mitigating the country’s
foreign exchange currency shortage
6
. In
2025, the IMF completed its fourth review
of Egypt’s reform programme as part of the
loan conditions, and distributed a further
$1.2bn as a part of the $8bn loan.
7
On 22
December 2025, the IMF announced they
had reached an agreement on the fifth and
sixth reviews under the EFF arrangement,
which could unlock approximately $2.5
billion disbursement, along with the
first review under the Resilience and
Sustainability Facility (RSF), which would
trigger additional disbursement.
8
In
early January, the disbursement by the
European Union of the second €1 billion
tranche of their €5 billion support package
was also announced. In October 2025,
S&P Global upgraded Egypt’s rating to ‘B’
from ‘B-‘ due to the country’s improving
growth outlook and balance of payments.
9
While Egypt’s business climate improved,
the country continues to navigate a
complex political landscape. Egypt played
a crucial role in mediation talks in the
region, such as de-escalating Israel’s
military campaign in southern Lebanon,
and hosted the emergency Arab summit
in March 2025 and the Sharm-El-
Sheikh Peace Summit focusing on the
same issue in October 2025.
10
Despite
complexities in the region, the country’s
geopolitical relevance makes Egypt an
attractive destination for multilateral foreign
investment and the country’s continued
economic recovery provides a strong
foundation for further growth.
11
MARKET OVERVIEW - CONTINUED
Additional Information
Governance Report
Financial Statements
21
Strategic Report
MARKET OVERVIEW - CONTINUED
Vietnam
In 2025, the Vietnamese economy
demonstrated resilience, achieving GDP
growth of 8.2% (to the third quarter of
2025), up from 7.09% the previous year.
1
Despite facing external challenges such as
one of the highest levies imposed by the
Trump administration in April, and several
adverse weather events, Vietnam adapted
and outperformed many of its neighbours.
2
3
Donald Trump announced a 46% tariff on
Vietnam on 2 April, the fifth highest rate in
his reciprocal tariffs package. The tariffs
showed no immediate disruption, and
Vietnam, one of the top exporters to the
United States, became the third country
after the UK and China to swiftly reach an
agreement to impose a reduced levy of
20% on Vietnamese goods.
4
The potential
risk imposed by the initial tariff, which was
compounded by Vietnam’s recovery from
extensive damage from several floods in
2024 and the year prior, demonstrated the
country’s resilience during the period. In
2025, foreign direct investment (FDI) rose
by 9% to over $27.6 billion, reaffirming
Vietnam’s standing as a favoured
destination for foreign capital.
5
Looking ahead to 2026, Vietnam’s GDP
growth is projected to be around 6.2%,
despite weaker external demand curbing
exports.
6
Vietnam maintained its position
as the strongest performing economy in
Southeast Asia by the third quarter, with
investment flows and strong production
activity reflecting the country’s growth
momentum despite ongoing trade
challenges.
7
1 https://www.oecd.org/content/dam/oecd/en/publications/reports/2025/12/oecd-economic-outlook-volume-2025-issue-2_413f7d0a/9f653ca1-en.pdf
2 https://www.bloomberg.com/opinion/articles/2025-12-14/vietnam-won-t-let-go-of-the-global-economy
3 https://www.bloomberg.com/news/newsletters/2025-11-27/vietnam-s-weak-flood-defenses-overwhelmed-by-storms
4 https://www.chathamhouse.org/2025/07/vietnams-tariff-deal-trump-reflects-balancing-act-between-us-and-china
5 https://www.reuters.com/world/asia-pacific/vietnams-annual-growth-reaches-8-trade-surplus-with-us-hits-record-despite-2026-01-05/#:~:text=The%20Reuters%20
Daily%20Briefing%20newsletter,record%20figure%20of%20%24119.5%20billion.
6 https://www.oecd.org/content/dam/oecd/en/publications/reports/2025/12/oecd-economic-outlook-volume-2025-issue-2_413f7d0a/9f653ca1-en.pdf
7 https://www.mckinsey.com/featured-insights/future-of-asia/southeast-asia-quarterly-economic-review
8 S&P Capital IQ, Upstream M&A Data 2025
9 https://www.reuters.com/markets/deals/eni-hold-387-ithaca-energy-following-completion-uk-asset-sale-2024-10-03/
10 https://www.deloitte.com/uk/en/Industries/energy/analysis/uk-upstream-independents.html
11 https://climate.copernicus.eu/copernicus-2025-was-third-hottest-year-record#:~:text=Global%20temperature,2024%20and%200.01%C2%BAC%20above%202023
12 https://globalcarbonbudget.org/fossil-fuel-co2-emissions-hit-record-high-in-2025/
13 https://www.msci-institute.com/wp-content/uploads/2025/11/MSCI-Transition-Finance-Tracker-Q3-2025-201125.pdf
14 https://about.bnef.com/insights/clean-energy/bloombergnef-finds-global-energy-transition-investment-reached-record-2-3-trillion-in-2025-up-8-from-2024/
E&P Merger & Acquisition
activity
In 2025, global M&A activity in the
upstream oil and gas sector was muted,
with the overall value of deals coming to
$13.77bn, the lowest in over 10 years.
8
The London market still saw a few major
deals despite the slower environment,
including the consolidation of Eni UK’s
North Sea assets with Ithaca Energy,
a deal valued at c.$993 million.
9
UK-
listed E&P companies pursued strategic
consolidations and asset portfolio
balancing, such as EnQuest’s acquisition
of Harbour Energy’s Vietnam assets.
10
Net Zero
2025 was the third warmest year on
record. The global average temperature
for the year was 14.97 °C, 0.59°C above
the 1991-2020 average.
11
Greenhouse
gases related to fossil fuel production were
projected to have risen by 1.1% in 2025,
reaching a record high.
12
Despite the growing adoption of net
zero targets, it is estimated that the
emissions trajectories of the world’s listed
companies in aggregate would take the
world to 2.7°C.
13
Progress towards net
zero faced new challenges this year,
as Europe’s oil majors, including BP
and Shell, retreated from their climate
commitments and renewed their focus on
oil and gas production, while companies
outside the industry also decreased
climate commitments. Despite geopolitical
fragmentation, clean energy spending
reached new records. Global total energy
investment in 2025 reached $2.3 trillion, up
8% from 2024.
14
For more information on the impact of
climate change on the long-term oil prices
and demand, please see page 57 of the
Viability Statement.
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
22
MARKET OVERVIEW - CONTINUED
Brent crude 2015-2025 ($bbl)
120
100
80
60
40
20
0
$bbl
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Source: Bloomberg
Global Crude Oil Consumption 2014-2026P
106
104
102
100
98
96
94
92
90
mmbpd
2014A 2015A 2016A 2017A 2018A 2019A 2020A 2021A 2022A 2023A 2024P 2025P 2026P
Source: EIA
Sum of Total Transaction Value ($USDmm)
40
80
120
160
0
$ billions
2013 2014 2015 2016 2017 2018 2019
2020 2023
2021 2022
200
2024 2025
Source: S&P Capital IQ
Additional Information
Governance Report
Financial Statements
23
Strategic Report
I am pleased to report that 2025 was
another year of strength for Pharos
Energy. During the year, the Company
achieved both financial and operational
successes delivering against expectations
and achieving pivotal milestones in both
Vietnam and Egypt, while maintaining
our exceptional record of safety
and operational reliability.
Activity throughout the year
has enhanced the quality of our
assets, established operational
momentum, and delivered a
robust financial base for further
organic and inorganic growth.
A year of operational
momentum,
financial strength,
and strategic growth
CHIEF EXECUTIVE OFFICER’S STATEMENT
KATHERINE ROE
Chief Executive Officer
Operational achievements underpinning financial strength
The Company had an operationally
active year in 2025. We are excited to be
drilling offshore in Vietnam again, and our
debt-free balance sheet has supported
the commencement of a six-well infill and
appraisal drilling programme on TGT and
CNV in the second half of the year, the
most significant investment into these
assets since their original development.
We are proud that our successes to date
on these operationally challenging wells
were achieved on time and on budget,
with no safety incidents during the year,
maintaining our zero lost-time injury rate
since operational inception. This excellent
health and safety record is thanks to the
JOCs’ consistent effort to promote and
champion workers’ health and safety, and
a culture at Pharos that puts safety at the
heart of the business.
In Egypt, we were pleased to announce at
the end of the financial year a $20 million
payment from EGPC for oil sales, doubling
our year end cash balance and reducing
our outstanding receivable balance to
$7.4m, its lowest level since December
2021. This very welcome progress
towards the recovery of our receivables,
coupled with improvements in the macro
environment in Egypt, have provided us
with comfort that outstanding receivables
will continue to be paid and that typical
payment terms will be applied to future oil
sales. Most importantly, a key milestone
in unlocking further value in our Egyptian
assets was the approval by EGPC of the
consolidation of our two concessions,
El Fayum and North Beni Suef, into a
single new concession agreement. We
expect the new agreement, incorporating
an extension of up to 20 years to the
development leases to be signed later
in 2026, following ratification by the
Egyptian Parliament. The improved fiscal
terms under the consolidated concession
agreement will have retrospective effect
from 5 October 2025, and set an attractive
investment environment for both Pharos
and our partners to pursue additional
production volumes and reserves. We
will nonetheless continue our cautious
approach to capital allocation whilst we
continue the recovery of our outstanding
receivables.
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
24
Protected balance sheet to
pursue opportunities and
deliver returns
Oil prices decreased substantially during
2025 due to challenging supply-demand
imbalance and persistent geopolitical
risks. This underpins the need to ensure
independent E&Ps like Pharos maintain
a resilient business model to weather
unpredictable oil price cycles. Throughout
the years, our operations in Vietnam have
remained robust even in low oil price
environments thanks to high premiums
and low break-even prices. In Egypt,
the flexibility that our onshore operations
offer means we remain agile in changing
economic landscapes and can adjust the
pace of investment into the assets based
on the receivable recovery rate. Pharos is
protected on the downside, and we have
a portfolio of upside potential to pursue
across the assets.
We believe the oil price outlook will remain
challenging in 2026 due to volatility initiated
by the US, Israel, Iran conflict. Therefore, a
diversified portfolio with robust operational
and financial strength is crucial for Pharos’
next phase of growth. Our financial
discipline and debt-free position not only
give us the optionality to identify and
pursue the right opportunities, both within
the current portfolio and externally, but also
take a pragmatic and balanced approach
to shareholder returns. Today, the Board
have recommended a final dividend for
the 2025 financial year which, subject to
shareholders’ approval at the Company’s
2026 AGM, would take the 2025 full
year dividend to 1.331 pence per share.
The Board will continue to consider an
appropriate level of returns to shareholders
given the strength of the balance sheet
whilst managing capital allocation for
growth.
Blocks 125 & 126 – Unique
frontier exploration in
South East Asia
We are proud to have a basin-opening
frontier play with world-class potential
in our current portfolio. Thanks to the
diligent efforts and technical capability
of our in-country team, we now have a
well-understood, drillable prospect with
detailed engineering studies, 2D and 3D
seismic data, long lead items, mature
leads and prospects, and an independent
reserves report supporting Pharos’ internal
assessment. All our work to date has
highlighted the scale and potential of these
basin-opening exploration blocks, and
we are motivated to pursue this incredible
opportunity whilst still preserving the
resilience of the business and stability of
the balance sheet. Last year we initiated
a formal, structured process to identify a
farm-in partner and complete all necessary
preparatory and planning work to drill
the first exploration well. Additionally,
the two-year licence extension, granted
by the Vietnamese Government in June
last year, has strengthened our position
and provided optionality as we progress
discussions with rig contractors and
third-party buyers. We are intentional in
our testing of the market at a time when
exploration has moved up the agenda
for many majors, and discussions with
potential partners are in advanced stages.
We strive to deliver the best value for our
shareholders and will look to monetise the
asset at the right terms and the right time.
We look forward to updating the market
with more news in mid-2026.
Scale and business
resilience
We recognise that the operating
environment for independent E&Ps
remains challenging. While Pharos has
consistently delivered strong results, the
Board understands that scale, strategic
relevance and efficiencies remain a key
priority. Further growth will give us the
scale that is increasingly important in our
industry, creating resilience against adverse
macro changes, providing access to
additional investment capital, thus allowing
us to compete more effectively in the
energy market and create long-term value.
In recognition of this, the Board regularly
evaluates strategic priorities, ensuring
that we direct resources to opportunities
that can drive growth and returns for
shareholders. As a result, in evaluating
prospects outside the existing portfolio, we
are return-driven rather than jurisdiction-
driven. Nevertheless, we continue to
leverage our technical expertise, long-
standing presence in South East Asia,
and positive relationships with our host
government partners to identify the right
assets that can deliver the best returns for
us.
Our role in the energy
transition
Pharos is fortunate to operate in
jurisdictions with thriving economic and
investment landscapes. Oil and gas
demand in Asia-MENA is expected to
remain robust, driven by population
expansion and a move away from more
GHG emissions-intensive fuel sources,
such as coal, for power generation.
The Egyptian Government recognises
the industry’s need to encourage more
upstream investment, and Egypt’s Minister
of Petroleum and Mineral Resources
has outlined his intent to improve the
investment environment to boost oil and
gas production in the country, satisfying
domestic demand and reducing the
country’s reliance on imports. In Vietnam,
since our entry into the country in 1996,
our producing fields TGT and CNV have
contributed to the replacement of coal as a
cleaner energy source. We are proud that
100% of Pharos’ oil and gas production is
sold and consumed domestically, providing
low cost and reliable energy access to
alleviate energy poverty and promote
sustainable economic development across
the region.
CHIEF EXECUTIVE OFFICER’S STATEMENT - CONTINUED
Additional Information
Governance Report
Financial Statements
25
Strategic Report
Outlook
Pharos made significant strides in
2025 to strengthen the underlying
business, being one with a
stable asset base, solid financial
performance, well-protected cash
flows, and an exciting mix of
opportunities to pursue in 2026
and beyond.
We have near-term upside in both
jurisdictions to grow our production,
as well as stemming natural
production decline. In Vietnam, we
continue our fully funded six-well
infill and appraisal drilling programme
which is expected to conclude
by mid-2026. The four infill wells
are intended to maintain existing
production levels, whilst success
at both appraisal wells, TGT-18X
and CNV-5X, could deliver up to a
20% increase in Vietnam production
volumes and also de-risk additional
development opportunities. We
expect to update the market on the
results of the testing in April or early
May. In Egypt, following EGPC’s
approval of the consolidation of our
two existing concessions in October
2025 and a $20 million payment
from EGPC towards the receivable
balance at year end, we enter the year
with a much-improved investment
environment to unlock further value
from these assets. Preparation for the
agreed six-well work programme on
El Fayum and North Beni Suef is well
underway, and we expect to be more
operationally active in Egypt in 2026.
On the exploration side, we are in
advanced discussions with potential
farm-in partners on Blocks 125 &
126 and look forward to updating the
market in mid-2026.
We are pleased to start 2026 from a
position of strength. Our investment
proposition remains compelling, with
significant operational momentum, a
healthy balance sheet, a portfolio of
quality assets with growth catalysts,
and a sharp focus on developing the
scale and relevance of the business
with inorganic opportunities, all with
the right team in place to deliver on
our strategic goals.
I would like to thank my colleagues
and stakeholders for their continued
support and look forward to another
year of strength and delivery in 2026.
CHIEF EXECUTIVE OFFICER’S STATEMENT - CONTINUED
Our goal is to be a positive presence in
the regions where we operate by providing
responsible and sustainable development,
creating value for host countries and
local communities as well as for our own
shareholders and employees. In our
view, oil and gas will remain an important
component of the global energy mix for
many years to come. We recognise and
actively consider the impact of climate
change and energy transition as immediate
challenges facing Pharos and will continue
to operate our business in a safe,
environmentally sustainable, and socially
responsible way.
Mutually beneficial
partnerships to deliver
shared prosperity
We announced in June 2025 the
appointment of João Saraiva e Silva as
Non-Executive Chair, succeeding John
Martin who announced his retirement from
the Board at the Company’s 2025 AGM in
May. We are delighted to welcome João
to the Board and believe we now have a
stable, refreshed Board with a balanced
mix of skills and experience to guide
Pharos through its next phase.
The Board is committed to maintaining a
high standard of governance. We are once
again pleased to report full compliance
with the UK Corporate Governance
Code for the financial year, including as
it relates to regular engagement with
major shareholders. Our team continued
the regular and proactive dialogue with
key shareholders and wider stakeholders
throughout the year, and we appreciate
and understand the importance of their
views as owners and partners of the
business. The 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, and we are
grateful for their ongoing support.
KATHERINE ROE
Chief Executive Officer
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
26
Our strategic ambition is to
deliver value for all our
stakeholders through the
responsible management of
our current portfolio and the
careful selection of growth
opportunities.
Additional Information
Governance Report
Financial Statements
27
Strategic Report
Reporting on our performance
KEY METRICS
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 are regularly
tested for relevance against our strategy and policies.
* Read More | Non-IFRS measures on page 211.
2025 Financial Measures
CASH OPERATING COST
$/BOE *
19.39
2023
2024
17.80
15.70
2025
19.39
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 $19.39/boe in 2025, an
increase of 9% over 2024, largely due to 6% fall in production from
Vietnam. Production from Egypt was also 10% lower.
Outlook
We continue to target improvements in 2026 and beyond through
managing costs and increasing production.
Links to strategy
• Deliver value through
growth
Associated risks
• Partner alignment risk
• Political and regional risk
Links to Directors’ Remuneration Committee Report (See page 137).
CAPITAL EXPENDITURE
CASH $M (includes abandonment funding)
27.6
2
023
2
024
26.1
26.7
2
025
27.6
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 2025 cash capital expenditure was 6% higher than 2024. On
TGT, two infill wells on the H1 and H5 fault blocks were completed
and were brought into production by year end. TGT-18X appraisal well
and CNV-8P infill well on CNV field also commenced in December
2025 and operations are ongoing.
Outlook
The cash capex forecast for 2026 is expected to be c.$50m, c.$31m
of which is carried forward from 2025 to complete the TGT and CNV
drilling campaigns in Vietnam and Blocks 125 & 126 long lead items.
Additional cash capex of c.$19m includes a six-well drilling campaign
in Egypt and abandonment provisions in Vietnam.
Links to strategy
• Deliver value through
growth
• Investment growth
Associated risks
• Commodity price risk
• Partner alignment risk
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
28
NET CASH/(DEBT)
$M
40.2
2023
2024 16.5
(6.6)
2025
40.2
Description
Pharos has 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 $40.2m at year end,
following the recovery of $20m from EGPC on 31 December 2025,
and continues to be debt free.
Outlook
Capital discipline and financial stability have always been key to the
Company and continue to underpin the business.
Links to strategy
• Deliver value through
growth
• Return to shareholders
Associated risks
• Commodity price risk
• Insufficient funds to meet
commitments
RETURNS TO SHAREHOLDERS
PENCE PER ORDINARY SHARE
1.21
2
023
2
024
1.10
1.00
2
025
1.21
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 2025 AGM of a final dividend in
respect of the year ended 31 December 2024 of 0.847 pence per
share, amounting to $4.7m and paid on 18 July 2025. Including the
payment of the interim dividend of 0.363 pence per share on 22
January 2025, the full year 2024 dividend was 1.21 pence per share,
amounting to $6.5m 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.
Links to strategy
• Deliver value through
growth
• Investment growth
Associated risks
• Commodity price risk
• Climate change risk
• Sub-optimal capital
allocation risks
KEY METRICS - CONTINUED
2025 Financial Measures - continued
Additional Information
Governance Report
Financial Statements
29
Strategic Report
KEY METRICS - CONTINUED
Operational Measures
LOST TIME INJURY FREQUENCY (“LTIF”)
PER MILLION MAN-HOURS WORKED
0
2
023
2
024 0
2
025
0
0
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 2025, 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.
Links to strategy
• Focus on stakeholders
Associated risks
• HSES risk
• Partner alignment risk
Links to Directors’ Remuneration Committee Report (See page 137).
GROUP NET PRODUCTION
BOEPD
5,398
2
023
2
024
5,801
6,508
2
025
5,398
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 2025 working interest production was 4,095 boepd (2024:
4,361 boepd) and Egypt 2025 working interest production was 1,303
bopd (2024: 1,440 bopd).
Outlook
Group working interest 2026 production guidance is 5,200 – 6,400
boepd net. Vietnam 2026 working interest production guidance is
4,000 – 4,950 boepd, and Egypt 2026 production guidance is 1,200
– 1,450 bopd.
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 137).
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
30
KEY METRICS - CONTINUED
SOCIAL AND ECONOMIC INVESTMENT
$
917,867
2023
2024
759,889
747,373
2025
917,867
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 2025, in addition to the aforementioned training levy funds (which
totals to $500,000), a further $417,867 was invested in a total of 28
healthcare, education, infrastructure and community projects. Since
inception, Pharos has contributed c.$2.9m 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 pages 70 to 72.
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.
Links to strategy
• Focus on stakeholders
Associated risks
• Commodity price risk
• Insufficient funds to meet
commitment
• Business conduct and
bribery
EMPLOYEES UNDERTAKEN ANTI-BRIBERY AND
CORRUPTION TRAINING %
100
2023
2024
100
2025
100
100
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 2025.
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.
Links to strategy
• Deliver value through
growth
• Investment growth
Associated risks
• Partner alignment risk
• Business conduct and
bribery
Additional Information
Governance Report
Financial Statements
31
Strategic Report
OPERATIONAL REVIEW
Operational Review
Vietnam
Pharos has two producing assets, Te Giac Trang (TGT) and Ca Ngu Vang (CNV), and two exploration
blocks (Blocks 125 & 126) in Vietnam.
The Group’s 2025 working interest production was 5,398 boepd net, in line with the
Group’s production guidance of 5,200 to 6,000 boepd.
VIETNAM
CAMBODIA
NHA TRANG
VIETNAM
CAMBODIA
4,095 boepd
2025 Vietnam production (net)
4
Blocks in Vietnam
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.
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.
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.
Block 16-1 TGT Field
Block 9-2 CNV Field
Block 125
Block 126
D: Development
P: Production
E: Exploration
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
32
Vietnam Production
Production in 2025 from the TGT and CNV
Fields net to the Group’s working interest
averaged 4,095 boepd. This is in line with
the 2025 production guidance for Vietnam
of 3,600 – 4,600 boepd net.
TGT production averaged 10,792 boepd
gross and 3,202 boepd net to the Group.
CNV production averaged 3,572 boepd
gross and 893 boepd net to the Group.
Vietnam Development and
Operations
TGT & CNV Fields
In 2025, Pharos commenced its six-well
infill and appraisal drilling programme,
the most significant investment into
its Vietnamese assets since the initial
development, that is designed to drive
material production growth from both
fields. The programme, which comprises
four TGT wells and two CNV wells,
employs two drilling rigs running in
parallel. Drilling operations on TGT will be
completed using the GunnLod Drilling Rig,
and CNV using the Thor Drilling Rig.
On TGT, the first two infill wells,
targeting the H1 and H5 fault blocks,
were completed by the year end with
encouraging results in line with pre-drill
expectations. Both wells have already
been brought into production. We reached
total depth (TD) on the final infill well on the
H4 fault block on 21 March 2026, and we
expect to bring this well into production in
April.
Drilling of the TGT-18X appraisal well,
targeting the field’s untapped south-
western area, completed on time and
budget in February, and testing is currently
ongoing. We expect to update the market
on the results of the testing in April or early
May.
On CNV, drilling of the CNV-8P infill well
commenced in December and completed
in mid-March. The well is expected to be
on production in a couple of weeks. The
rig has now moved and is drilling the CNV
appraisal well, CNV-5X, and is expected to
finish mid-2026.
Vietnam Exploration
Blocks 125 & 126
The Company continued to optimise its
prospects and leads portfolio with detailed
drilling engineering studies for the well on
Prospect A. Most notably, the application
for a two-year extension of the Blocks 125
& 126 PSC Exploration Period was granted
by the Vietnamese Government in June
2025, extending the Exploration Period to
8 November 2027. This extension reflects
the Government’s continued support for
Pharos and underlines our commitment to
the region.
Additionally, in 2025, Pharos engaged an
independent third-party adviser to support
a formal process intended to identify a
potential farm-in partner before exploration
drilling commences with very encouraging
engagement. In parallel, discussions
continue with rig contractors to retain
optionality for the prospect to be drilled.
2026 Vietnam Work
Programme
TGT & CNV Fields
The six-well programme on the TGT and
CNV Fields will continue and is expected to
finish by mid-2026.
The four infill wells in the programme, once
completed and brought on to production,
are planned to maintain production at
2025 levels. Successes at both appraisal
wells, TGT-18X and CNV-5X, could
deliver up to a 20% increase in Vietnam
production volumes and de-risk additional
development opportunities.
Vietnam production
guidance for 2026 is
4,000 – 4,950
boepd net.
OPERATIONAL REVIEW - CONTINUED
Additional Information
Governance Report
Financial Statements
33
Strategic Report
CAIRO
EGYPT
EGYPT
CAIRO
OPERATIONAL REVIEW - CONTINUED
Egypt
The Group has a 45% non-operating interest in two concessions in Egypt - El Fayum and
North Beni Suef.
1,303 bopd
2025 Egypt production (net)
12
Development leases in El Fayum
and North Beni Suef
El Fayum (D,P, E)
The El Fayum concession in the Western
Desert produces oil 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.
El Fayum Concession
D: Development P: Production E: Exploration
North Beni Suef Concession
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
34
OPERATIONAL REVIEW - CONTINUED
Egypt Production
Production in 2025 from the El Fayum
and NBS concessions net to the Group’s
working interest averaged 1,303 bopd.
This is slightly lower than 2025 production
guidance for Egypt of 1,400 – 1,600
bopd net. This reflects natural decline in
production from the existing wells without
investment while awaiting approval
from EGPC of the consolidation of the
two concessions and the associated
commitment work programme.
El Fayum production averaged 2,768 bopd
gross and 1,246 bopd net to the Group.
NBS production averaged 127 bopd gross
and 57 bopd net to the Group.
Egypt Development and
Operations
El Fayum
Following its commercial discovery in
February 2025 and the subsequent award
of the Development Lease, the East Saad-
1X well was put on production from 1 July.
Egypt Exploration
North Beni Suef
The processing and interpretation of
c.130 km
2
of 3D seismic data on NBS
is complete, with a number of targets
identified and two wells included in the
2026 work programme.
Egypt Commercial
On 23 September, Pharos announced that
it had received approval from the Executive
Board of EGPC for the consolidation of the
El Fayum and North Beni Suef Concession
Agreements into a new consolidated
concession agreement (the “Consolidated
Concession”). Pharos will retain a 45%
working interest in the Consolidated
Concession, with IPR continuing as
operator with a 55% working interest. In
addition to the 12 development leases
of the EF and NBS Concessions, the
Consolidated Concession will include three
new exploration areas.
The Consolidated Concession unlocks
significant value in the Western Desert
by improving certain fiscal terms,
extending the duration of the licenses,
and committing the Contractor parties
(Pharos Group and IPR) to additional work
programmes to deliver production growth.
Based on Pharos’ Competent Person’s
Reports as at 31 December 2024, the
Consolidated Concession could result in
moving approximately 3.1 MMstb from
contingent resources to 2P reserves, or a
25% increase from year end 2024, net to
Pharos working interest.
The Consolidated Concession is subject
to customary approvals and to Egyptian
Parliamentary ratification, which is
expected to take place in 2026. Once
ratified, the improved fiscal terms will have
retrospective effect from 5 October 2025,
the date of full EGPC Board approval.
2026 Egypt Work
Programme
El Fayum & North Beni Suef
Egypt production
guidance for 2026 is
1,200 – 1,450
bopd net.
Preparations for the agreed work
programme in El Fayum and North Beni
Suef are underway, with one drilling rig
now secured for El Fayum, and another
being contracted for North Beni Suef.
The programme, which includes four
wells on El Fayum and two on North Beni
Suef, is expected to commence shortly.
The two rigs will run simultaneously and
are expected to finish drilling operations
by the end of 3Q. Once completed, the
full programme is expected to increase
production from Egypt by c.20% by 2027
compared to year end 2025 level.
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) in 2025. The health and safety of our workforce remain 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, during 2025, while Pharos had no recordable spills in Vietnam, we recorded one spill in Egypt
due to an overturned road tanker truck on the Cairo-Suez desert road. The concerted efforts from the Suez Civil Protection
Authority, SOPC, Petrosilah, Al Nasr Petroleum Company (NPC) and White Eagle Company helped to completely clear the
accident site, clean up remaining hydrocarbon spill and reopen the road to traffic. The incident was investigated and lessons
learned as appropriate and actions to prevent recurrence were implemented.
On emissions, while operational activities in 2025 have increased compared to 2024, our total emissions have continued to
decrease year-on-year. This is driven by the JOCs’ continued careful management of gas flaring by monitoring and optimising
the processing facilities in the TGT FPSO in Vietnam. In Egypt, we have continued to deploy gas generators at the well sites,
connected the camp and mess hall in Silah base to the electricity grid and successfully installed the first hybrid fuel (solar
photovoltaics and diesel) pump system in Silah. These actions have reduced diesel consumption and associated emissions
from our operations in Egypt and keep us 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.
Additional Information
Governance Report
Financial Statements
35
Strategic Report
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.
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 it’s 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 s.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 2025, the Board held its annual
Strategy Day to assess and evaluate the
Company’s strategy to deliver long-term,
sustainable value for all our stakeholders,
our scale and strategic relevance in the
energy industry, 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.
For more information on how
the Board consider decisions
with regards to the long-term
consequences for the business, in
light of the principal and emerging
risks to the Company and its
business, see pages 45 and 46
of the Risk Management report.
For more information on how the
Board evaluates strategic priorities
to address scale and business
resilience, see page 24 of the Chief
Executive Officer’s Statement.
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
36
SECTION 172(1) - CONTINUED
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
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, asset and project
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 calls and
remote 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. During the first
half of the year, John Martin, as Chair of
the Board and the 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.
Following John’s retirement from the
Board in June 2025, Geoffrey Green was
appointed in his place as Non-Executive
Director responsible for workforce
engagement. Geoffrey held town hall
meetings with all employees in September
2025, 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 challenges
arising from their work and working
environment, including those related
to hybrid and remote working. 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 two meetings with their line manager
during the year to discuss and agree the
objectives and to review progress mid-
year. Line managers also provide additional
support where needed and assist the
employee in overcoming any difficulties
they might be facing. Employees also
have access to both the Company’s
grievance procedure, set out in the
regularly reviewed and updated employee
handbook, a confidential and anonymous
whistleblowing facility, discussed in more
detail in section (e) below.
For more information on
the Board’s engagement with
employees, see page 110 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 and
interviews with media journalists and
analysts to foster open and communicative
relationships with key figures in the
industry. Also during the year, the
Company’s Chief Executive Officer, Chief
Financial Officer, and the new Chair of
the Board, 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, and our partner in Egypt, IPR.
The meetings with the key stakeholders
in Egypt were particularly valuable in
helping the Company achieve significant
milestones to enhance the value of its
asset base, such as reducing its year-end
2025 receivable balance to its lowest level
since December 2021 and receiving EGPC
Board approval for the consolidation of
its two existing Egyptian concessions,
including significant improvements to fiscal
terms. In March and September 2025,
following the announcement of full year
and interim financial results respectively,
the Executive Directors participated in
roadshows coordinated through our
corporate brokers in order to engage with
a wide group of existing shareholders
and prospective investors. In addition to
the Company’s existing analyst coverage
houses, Peel Hunt, Shore Capital, Auctus
Advisors, and Progressive, in 2025, the
Company also on boarded Cavendish
as a new analyst house to ensure a
broad and relatively diverse mix of equity
research and investment opinion are
available to all shareholders. Further ad-
hoc engagements with sell-side analysts
and prospective investors were also held
throughout the year.
We plan to continue to engage in a
personal and meaningful way with our
stakeholders, such as host governments,
joint venture partners, shareholders,
suppliers and others in the future.
For more information on how the
Company fosters relationships with
stakeholders, see page 25 of our
CEO’s Statement and page 111 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
Environmental, Social and Governance
(ESG) in the sector through its Corporate
Responsibility report, Task Force on
Climate - related Financial Disclosures
(TCFD) report and ESG Committee report
in the 2025 Annual Report & Accounts.
Pharos reports transparently on various
Corporate Responsibility metrics such
as lost time injuries, GHG emissions,
energy consumption, waste produced and
recycled, and freshwater usage. Over the
past seven years, Pharos has participated
in the CDP (formerly Climate Disclosure
Project) Climate Change Questionnaire.
In 2025, Pharos maintained scores of B
for both our Climate Change and Water
Security disclosures. 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 later than 2050. In
Additional Information
Governance Report
Financial Statements
37
Strategic Report
SECTION 172(1) - CONTINUED
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
2025 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
97 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 2025, a total of
$417,867 was invested in 28 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. Our internal Charity and Community
Projects committee, established in 2024 to
support the Board-level ESG Committee,
continued its responsibility of selecting
worthy causes and projects championed
by representatives from local offices in the
UK, Vietnam, and Egypt.
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 2025, the value of the Fund
was c.$964,000.
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.
For more information on the
Board’s commitment to ESG and
considerations on the community
and the environment, see pages
119 to 120 for the ESG Committee
report, pages 17 to 18 for the Chair’s
Statement, and pages 59 to 80 for
the Corporate Responsibility report.
For more information on
Board oversight on business
activities, financial position and
the environment of the Group’s
operations, see page 46 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, updated and re-approved by
the Board annually, and all policies and
procedures have been followed rigorously
in 2025 with no known or reported
breaches. The Code of Business Conduct
and Ethics is placed at 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 corporate crime 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, such as the
introduction of a Group Sanctions Policy
and working group in response to the
Russian/ Ukraine conflict and the waves
of economic and other sanctions that
have followed in response. The Board
recognises that 2025 has seen a further
increase in geopolitical instability, with far
reaching effects on the global economy,
international trade and the security and
sovereignty of nation states. This instability,
and the risks it poses to the Group and
its business, are discussed in more detail
in the Risk Management Report on page
47. The Group continues 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.
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.
For more information on the
Company’s commitment to
maintaining high standards of
business conduct, see pages 45 to
50 of the Risk Management Report
and page 66 of the Corporate
Responsibility report.
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
38
SECTION 172(1) - CONTINUED
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
Additional Information
Governance Report
Financial Statements
39
Strategic Report
Strong financial
performance and
cash growth
CHIEF FINANCIAL OFFICER’S STATEMENT
SUE RIVETT
Chief Financial Officer
Our operations delivered a solid financial
performance and cash generation in 2025,
further strengthening our liquidity position
despite the challenges of lower commodity
prices. We remain debt free following the full
and voluntary repayment of the RBL facility
in the prior year and our net cash position
has grown to $40.2m compared to $16.5m
reported at the end of December 2024.
This was partially achieved through the
successful recovery of a bullet payment
of $20 million from EGPC on 31
December 2025. This reduced
our outstanding Egypt
receivable balance to $7.4m,
our lowest receivable balance
since December 2021.
Returns to shareholders have been delivered through the completion in January
2025 of the third $3m share buyback programme and the payment of an interim
dividend for 2024 of 0.363 pence per share, $1.8m equivalent, in January 2025.
A final dividend for 2024 of 0.847 pence per share, $4.7m equivalent, following
approval at the AGM in May 2025, was paid to shareholders in July 2025. In
addition, an interim dividend of 0.3993 pence per share, $2.2m equivalent, in
respect of the year ended 31 December 2025 was paid to shareholders in January
2026, and a final dividend to be paid in July 2026 of 0.9317 pence per share,
$5.2m equivalent, will be proposed to shareholders at this year’s AGM.
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
40
CHIEF FINANCIAL OFFICER’S STATEMENT - CONTINUED
Operating performance
Revenues
Group revenues of $114.6m, with no
hedging gain or loss realised during the
year (2024: $136.1m prior to realised
hedging loss of $0.1m), were adversely
affected by a 13% fall in realised
commodity prices and a 1% decrease in
sales volumes.
Revenues for Vietnam of $99.8m (2024:
$115.4m) decreased as a result of lower
realised prices, as sales volumes were
comparable year on year at 4,156 boepd
(2024: 4,161 boepd). The average realised
crude oil price was $74.29/bbl (2024:
$85.52/bbl), a 13% decrease year on year,
and the premium to Brent was over $5/bbl
on average which was comparable to prior
year. Production was lower at 4,095 boepd
(2024: 4,361 boepd) and, combined with
lower commodity prices, this has led to
an inventory reduction of $3.1m for the
Vietnam producing fields compared to
an inventory build of $6.0m during 2024,
following the maintenance shutdown at
the BSR-owned Dung Quat refinery during
the first part of 2024. As inventories are
valued at net realisable value, this has led
to $9.1m adjustment in cost of sales as a
result of changes in inventory year on year.
The revenue for Egypt of $14.8m (2024:
$20.7m) decreased year on year, inclusive
of $0.4m (2024: $1.9m) gross-up for
corporate income taxes to be paid by
EGPC on behalf of Pharos El Fayum.
The average realised crude oil price, after
discounts, was $63.73/bbl (2024: $74.83/
bbl), a decrease of 15%. 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 were just
under $6/bbl for the year (2024: just under
$6/bbl). Production from Egypt was lower
at 1,303 bopd (2024: 1,440 bopd).
Hedging
During 2025, the Group entered into zero
cost collar hedges to protect the Brent
component of forecast oil sales and to
provide downside protection to cash flows
in the event of commodity prices falling.
At 31 December 2025, the commodity
hedges run until March 2026 and are
settled monthly. Our hedging positions for
the year resulted in no realised gain or loss
(2024: realised loss of $0.1m). Additionally,
the fair value as at 31 December 2025 was
an unrealised loss of $0.2m (31 December
2024: unrealised gain of $0.1m).
For full year 2025, 29% of the Group’s total
oil entitlement production was hedged,
securing average floor and ceiling prices
for the hedged volumes at $62.6/bbl and
$87.1/bbl, respectively.
Operating costs
Group cash operating costs, defined in the
Non-IFRS measures section on page 211,
were $38.2m (2024: $37.8m). Vietnam
decreased by 5% from $29.1m to $27.7m
in 2025. The decrease is partly due to
costs relating to the FPSO as a result of
higher 3rd party production throughput
from the TLJOC, which decreased the
HLJOC’s share of the costs (TLJOC had
26.4% cost share in 2025 compared to
23.4% in 2024).
Cash operating costs in Egypt increased
by 21% from $8.7m to $10.5m in 2025.
The increase was mainly due to higher well
workover costs during 2025 and a higher
proportion of cost allocations to operating
expenditure, due to a reduced capital
drilling programme.
Cash operating cost per barrel
1
2025
$m
2024
$m
Cost of sales
2
96.4
87.3
(Less)/add
Depreciation, depletion
and amortisation
(46.4)
(47.1)
Production based taxes
(7.3)
(9.2)
Change in inventories
(3.2)
6.0
Trade receivables expected
credit loss
1.3
2.5
Other cost of sales
(2.6)
(1.7)
Cash operating costs 38.2
37.8
Production (BOEPD) 5,398
5,801
Cash operating cost
per BOE ($)
19.39
17.80
1) Cash operating cost per barrel and DD&A per
barrel are alternative performance measures.
See page 211 for definitions.
2) Includes impairment reversal of financial asset
DD&A
Group DD&A associated with the
producing assets decreased to $46.4m
(2024: $47.1m). DD&A charges from
Vietnam decreased marginally to $41.4m
(2024: $42.1m) and this was driven by
6% fall in production year on year, partially
offset by the impact of higher book
values of TGT and CNV assets following
the impairment reversals recorded in
December 2024. The combination of
these factors meant that DD&A per barrel
for Vietnam increased 5% to $27.70/boe
(2024: $26.38/boe).
DD&A charges from Egypt stayed the
same year on year at $5.0m, as the
decrease in production was offset by the
impact of the impairment reversal recorded
in 2024. DD&A per bbl for Egypt is $10.51/
boe (2024: $9.49/boe).
Administrative expenses
Administrative expenses in 2025 of $8.8m
(2024: $9.1m) were lower than prior year.
After adjusting for non-cash IFRS2 Share
Based Payments of $1.6m (2024: $0.9m),
the underlying administrative expenses
were lower by 12% at $7.2m (2024:
$8.2m).
Other operating expenses
Other operating expenses in 2025 were
$0.3m (2024: $0.8m). In 2024, other
operating expenses 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
in the prior year related to closure costs in
respect of the US office, where the former
CEO of the Company was based.
Additional Information
Governance Report
Financial Statements
41
Strategic Report
CHIEF FINANCIAL OFFICER’S STATEMENT - CONTINUED
Operating profit
Operating profit from continuing operations
for the year was $8.7m (2024: $38.0m),
excluding the net impairment reversal of
$26.3m, reflecting the combined impact
of a decrease in production volumes and
a lower commodity price environment
during the year (2024: $38.0m, excluding
the net impairment reversal of $26.3m,
reflecting the combined impact of a
decrease in production volumes and a
lower commodity price environment during
the year). In 2025, after considering the
existence of any internal and external
indicators of impairment, the Group
determined that no impairments or
impairment reversal indicators were
identified on any of the Group’s oil and gas
producing properties and no impairment
tests were considered necessary as at 31
December 2025.
(Loss)/gain on fair value
movement of financial asset
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
yearly and is capped at a maximum
total payment of $20.0m. The change in
contingent consideration is booked under
(loss)/gain on fair value movement of
financial asset. During 2025, contingent
consideration of $2.9m in respect of the
average Brent price during 2024 was
received from IPR and a further $0.3m
will be received in 2026. At 31 December
2025, $1.7m of contingent consideration
was included in current trade and other
receivables (2024: $5.1m, $3.3m in current
trade and other receivables and $1.8m in
other non-current assets).
The loss on fair value movement of
financial asset for the year of $0.5m (2024:
$0.3m gain) is due to downwards revision
of the contingent consideration, which
reflected a reduction in the forward Brent
price estimation.
Finance costs
Finance costs significantly decreased
to $2.2m (2024: $3.9m), following full
voluntary repayment of the Group’s RBL
facility during September 2024. In 2024,
interest expense and similar fees of $1.1m
were incurred in relation to the RBL facility
and National Bank of Egypt (UK) Limited
(NBE UK) credit facility. The unwinding of
discount on Vietnam decommissioning
provisions for 2025 was $2.3m (2024:
$2.2m). There was also net foreign
exchange gains of $0.1m (2024: foreign
exchange losses of $0.6m).
Taxation
The overall net tax charge of $13.1m
(2024: $37.1m) principally relates to tax
charges in Vietnam of $12.7m (2024:
Vietnam tax charges of $26.8m and
the deferred tax charge on impairment
reversals of $8.4m).
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 the historic tax loss position
since first production had reversed in
full during 2024, this led to a $0.4m tax
charge being recorded (2024: $1.9m).
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 hedging
losses of $0.1m recorded in 2024 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.
(Loss)/profit post-tax
The post-tax loss for the year was $6.6m
(2024: $23.6m post-tax profit).
Cash flow
Operating cash flow (before movements
in working capital) was $56.5m (2024:
$84.3m), which is consistent with the
reduction in realised commodity prices.
After tax charges of $30.3m (2024:
$35.3m), restructuring and exceptional
expenses of $nil (2024: $0.4m), working
capital inflow of $29.0m (2024: $5.0m)
and net interest received of $0.4m
(2024: $0.4m), the cash generated from
operations was $55.6m (2024: $54.0m).
Cash generated from operations, after
tax charges, exceptional expenses and
working capital movements, is the basis of
our dividend framework.
The decrease in receivables was $26.2m
(2024: $11.3m). The movement in 2025 is
primarily driven by $20.6m decrease from
Egypt (2024: $4.8m) following a $20m
bullet payment from EGPC on the last day
of the year, which reduced the outstanding
receivable balance to $7.4m; its lowest
level since December 2021.
There was a further $5.5m decrease from
Vietnam (2024: $6.4m) due to 22% lower
volume of cargoes lifted in December 2025
compared to prior year, combined with the
reduction in commodity prices. Payments
for the December 2024 cargoes were
received in January 2025 and December
2025 cargoes were received in January
2026.
Capital expenditure for the year was 6%
higher at $27.6m (2024: $26.1m). In
Vietnam, a fully funded six-well offshore
drilling programme commenced operations
on 18 October 2025. On TGT, there was
the completion of two infill wells on the
H1 and H5 fault blocks and both wells
were brought into production by the end
of the year. The TGT-18X appraisal well,
targeting the block’s untapped south-
western area, and the CNV-8P infill well,
also commenced in December 2025 and
operations on both wells are ongoing.
Net cash outflows from financing activities
of $7.0m (2024: $51.6m outflow) included
$0.3m in relation to completion of the final
$3.0m tranche of the company’s share
buyback programme in January 2025
(2024: $2.9m) and $6.5m outflow (2024:
$5.9m) following payment of the interim
and final dividends of $1.8m and $4.7m
respectively for the 2024 financial year. The
final dividend for the 2024 financial year
was approved by shareholders at the AGM
in May 2025.
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
42
CHIEF FINANCIAL OFFICER’S STATEMENT - CONTINUED
Financing activities for 2024 also included
outflows in relation to the Group’s Reserve
Based Lending (RBL) facility of $30.0m.
The RBL facility, which was secured only
over the Group’s interest in the Vietnam
producing assets, matured in July 2025.
In addition, there was a net outflow of
$9.2m from the NBE UK revolving credit
facility. This facility allows Pharos El Fayum
Limited to draw down 60% of the value of
each El Fayum invoice in USD. The amount
drawn under the NBE UK facility as at 31
December 2025 and 31 December 2024
was $nil and the Group remains debt free.
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.
Our Tax Strategy statement can be found
on our website at www.pharosenergy/
responsibility/policy-statements/. The
Group supports greater transparency
in tax reporting to build and maintain
stakeholder trust. 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 2025, the total payments to
governments for the Group amounted
to $133.6m (2024: $160.3m), of which
$116.5m or 87% (2024: $138.7m or 87%)
was related to the Vietnam producing
licence areas, of which $77.8m (2024:
$92.9m) was for indirect taxes based
on production entitlement. In Egypt,
payments to government totalled $14.6m
(2024: $19.1m), of which $14.2m (2024:
$18.5m) related to indirect taxes based on
production entitlement.
Balance sheet
Intangible assets increased during the
year to $26.5m (2024: $21.8m). Additions
for the year related to charges for Blocks
125 & 126 in Vietnam of $6.9m, including
$3.7m of drill casings and long-lead items
ahead of drilling the first commitment well,
and Egypt of $0.7m.
In Egypt, as part of the planned work
programme for 2024, an exploration well,
the East Saad-1X well, was drilled on El
Fayum in August 2024. Testing of the
well was carried out at the beginning of
February 2025. Following testing, IPR,
the operator of the El Fayum Concession,
applied to EGPC for declaration of a
commercial discovery and early production
permission in February 2025. The East
Saad Development Lease was awarded
and first production commenced in July
2025. As a result, exploration costs of
$2.9m were reclassified to property, plant
and equipment in 1H 2025.
Impairments and Impairment
Reversals
We have evaluated each of our oil and
gas producing properties for impairment
or impairment reversal triggers. For each
producing property with such triggers, the
recoverable amount held on the books
would be determined using the value in
use method. The recoverable amount is
calculated using a discounted cash flow
valuation of the 2P production profile.
The average Brent price forecast as at
Dec 2025 fell by 9% for 2026 to 2030
and 7% in the longer-term compared to
the forecast at the end of 2024 and does
not indicate a significant change in the
underlying value of oil and gas assets.
Furthermore, there were no significant
changes to macroeconomic factors
such as risk-free rate, equity market risk
premium and country risk premiums,
plus the overall market outlook remains
stable. Forecast production volumes for
Vietnam remain comparable to year end
2024 forecast, and the Group is currently
in the process of a drilling campaign
in Vietnam, with two infill wells that
completed before year end and were
brought into production. For Egypt assets,
there were some delays in the execution
of the El Fayum development plan, but not
significant enough to adversely impact the
asset valuation.
As a result, after examining both internal
and external indicators of impairment, the
Group determined that no impairment
or impairment reversal indicators were
identified on any of the Group’s oil and gas
producing properties and no impairment
tests were considered necessary as at 31
December 2025.
As at 31 December 2025, the carrying
amount of the TGT oil and gas producing
property, after additions of $10.8m,
increase in decommissioning asset of
$2.0m and DD&A of $32.9m, is $133.5m
(2024: $153.6m). As at 31 December
2025, the carrying amount of the CNV oil
and gas producing property, after additions
of $4.8m, increase in decommissioning
asset of $1.1m and DD&A of $8.5m, is
$57.6m (2024: $60.2m).
As at 31 December 2025, the carrying
amount of the El Fayum oil and gas
producing property, after additions of
$1.4m, transfer from intangibles of $2.9m
and DD&A of $4.8m, is $58.0m (2024:
$58.5m). As at 31 December 2025, the
carrying amount of the NBS oil and gas
producing property, after additions of
$0.1m and DD&A of $0.2m, is $1.0m (Dec
2024: $1.1m).
Other assets and liabilities
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 2025, the Group’s
total contribution to the funds was $59.9m
(2024: $56.0m).
Oil inventory was $6.1m at 31 December
2025 (2024: $9.3m), of which $6.0m
related to Vietnam and $0.1m to Egypt.
Trade and other receivables decreased to
$19.4m (2024: $47.9m) of which $8.6m
(2024: $14.5m) relates to Vietnam and
$10.4m (2024: $32.7m) relates to Egypt.
Egypt trade receivables include $7.3m
from EGPC, after expected credit loss
provision of $0.1m recognised under IFRS
9, where collection has been delayed
by EGPC as a result of macroeconomic
factors highlighted in previous preliminary
and interim results (2024: trade receivables
from Egypt $28.1m after expected credit
loss position of $1.4m).
Additional Information
Governance Report
Financial Statements
43
Strategic Report
Cash and cash equivalents at the end of
the year were $40.2m (2024: $16.5m)
and the increase was mainly driven
by net $29.0m inflow from working
capital, following $20m recovery of trade
receivables from EGPC before the end of
the year. During 2024, there was $39.2m
net repayment of borrowings following
settlement of the RBL facility.
Trade and other payables, inclusive of VAT
payable and payroll taxes, were marginally
higher at $14.5m (2024: $14.3m), of which
$4.1m (2024: $5.4m) predominantly relates
to Egypt net JV payables in relation to
operations and Stratton royalty obligation.
$7.2m (2024: $5.1m) relates to Vietnam
payables, mainly royalties and amounts
owed to the JOCs in respect of TGT and
CNV operations, and $3.2m (2024: $3.8m)
Head Office payables. Tax payables
decreased to $1.6m (2024: $3.2m) and
relates to corporate income taxes on
Vietnam oil and gas revenues.
Long-term provisions comprise the
Group’s decommissioning obligations for
the Vietnam fields. The decommissioning
provision increased from $51.1m at 2024
year end to $56.5m at 31 December
2025, as there was $2.3m unwind of the
decommissioning provision, $1.0m impact
of the new appraisal and infill wells on TGT
and CNV respectively and $2.4m impact
of a decrease in discount rate from 4.58%
to 3.94%, partially offset by $0.3m revision
to the TGT abandonment plan. The
amounts set aside into the abandonment
funds total $59.9m (2024: $56.0m). 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 2025, the trust held 2,203,106 shares
(2024: 3,784,406 shares), representing
0.53% (2024: 0.89%) of the issued share
capital.
In addition, as at 31 December 2024,
the Company held 9,122,268 treasury
shares which represented 2.15% of the
issued share capital. On 23 July 2025,
pursuant to a resolution of the Board
of Directors, the entire treasury holding
of 9,122,268 ordinary shares of £0.05
each were cancelled in accordance
with the provisions of section 729 of
the Companies Act 2006. Following the
cancellation, the Company holds no
ordinary shares 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
$3m share buyback programme in 2024,
taking the total committed to share
buybacks to $9 million since initiation of
the programme in July 2022. The final
stage of the programme completed in
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.
In September 2024, 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.
A final dividend of 0.847 pence per share
in respect of the year ended 31 December
2024, $4.7m equivalent, was approved by
the shareholders at the Company’s AGM
in May 2025 and subsequently paid on 18
July 2025 to shareholders on the register
at the close of business on 13 June 2025.
This took the 2024 full year dividend to
1.21 pence per share, an increase of 10%
on the prior year.
In accordance with dividend policy, the
Board has resolved to pay an interim
dividend of 0.3993 pence per share,
$2.2m equivalent, in respect of the year
ended 31 December 2025 and was paid
on 21 January 2026 to shareholders on
the Company’s register as at 19 December
2025.
The Board have recommended a final
dividend in respect of the year ended
31 December 2025 of 0.9317 pence
per share subject to approval of the
shareholders at the Company’s 2026
AGM. Subject to this approval, the final
dividend will be paid in full on 17 July 2026
in Pounds Sterling to ordinary shareholders
on the register at the close of business on
12 June 2026, with an ex-dividend date
of 11 June 2026. This would take the
2025 full year dividend to 1.331 pence per
share, which is 10% higher than prior year.
CHIEF FINANCIAL OFFICER’S STATEMENT - CONTINUED
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
44
CHIEF FINANCIAL OFFICER’S STATEMENT - CONTINUED
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
for the going concern assessment
that utilises oil prices of $62.4/bbl in
2026 and $66.0/bbl in 2027. The key
assumptions and related sensitivities
include a “Reasonable Worst Case”
(RWC) scenario, where the Board has
taken into account the risk of reduction
in oil prices by 10% to $56.0/bbl in
March 2026 for the next twelve months,
concurrent with 5% reductions in Vietnam
and Egypt production compared to our
base case from March 2026. Additionally,
CNV appraisal well 5X is assumed to
be a dry hole and Egypt is based on 1P
production in the RWC scenario. Both the
base case and RWC take into account
the effect of hedging that has already
been put in place at 31 December 2025
and subsequent hedges placed in Q1
2026, now covering c.19% of total group
entitlement production for 2026. These
are a combination of zero cost collars,
premium collars and put options. We
have therefore secured an average floor
price and ceiling price of c.$59.0/bbl and
c.$74.7/bbl, respectively, for the entire
hedged volumes in 2026. Under the RWC
scenario, we have identified appropriate
mitigating actions, including drawdown
on the NBE credit facility in Q2 2026,
reduction in head office administrative
expenses and a decision not to pay
dividends to shareholders from 2027.
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. The likelihood of Brent price
dropping to such levels is considered to be
remote.
Our business in Vietnam continues to be
robust, with a low breakeven oil price. On
TGT, appraisal well TGT-18X completed
in February 2026 and is undergoing
perforation testing. On CNV, infill well CNV-
8P commenced in December 2025 and
will complete in March 2026. The Group
remains debt-free.
In Egypt, approval was received in
September 2025 from the EGPC Executive
Board for the consolidation of our two
Concession Agreements in Egypt, subject
to customary approvals and Egyptian
Parliamentary ratification, expected during
2026. Once ratified, the improved fiscal
terms within the consolidated Concession
Agreement will be effective from 5 October
2025, the date of full EGPC Board
approval.
On the basis of the forecasts provided
above, the Group is expected to have
sufficient financial headroom for the period
up to 31 March 2027. 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 2026 with a number of
value catalysts:
• Continuation of six-well
drilling programme currently
underway in Vietnam, with the
final four wells expected to
finish by mid-2026
• Look forward to Egyptian
Parliamentary ratification
of the consolidation of our
concessions in Egypt with
improved fiscal terms and
increased longevity
• A strong and stable balance
sheet, debt free and with
improved liquidity position
• Continued improvement in the
economic situation in Egypt,
following the bullet payment
from EGPC of $20m on 31
December 2025, unlocking
our remaining outstanding
receivables
Stable returns to shareholders
are expected in 2026, with the
dividend policy of no less than
10% of OCF.
SUE RIVETT
Chief Financial Officer
Additional Information
Governance Report
Financial Statements
45
Strategic Report
RISK MANAGEMENT REPORT
Risk Management Report
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, our 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
2025 and continues to monitor closely
the prevailing regional and global political
instability and economic uncertainty, with
the Global Peace Index 2025 finding global
levels of conflict at their highest since the
end of the Second World War.
The Group’s risk management activities
during the year focused on the Egyptian
economy, commodity price uncertainty,
volatility in production levels and reserves.
In addition, throughout 2025 and
continuing into 2026, increased emphasis
was placed on the Vietnam drilling
programme, as it is the most significant
investment into our Vietnamese assets
since the initial development.
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 facilitation of tax
evasion, the failure to prevent fraud and
money laundering offences.
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.
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
46
RISK MANAGEMENT REPORT - CONTINUED
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
Principal risks
1 Growth throughout the
business
2 HSE & Social
3 Political and regional
instability, including conflicts
and ensuing sanctions
4 Rising operational cost
5 Climate Change
6 Commodity Price volatility
7 Partner alignment
8 Sub-optimal capital
allocation
9 Cyber security
10 Reserves downgrades
11 Egyptian economy
12 Code of Business and
Bribery
Managing Our Risks
The Pharos Risk Management Framework
requires that all business units within the
Group conduct ongoing risk management
and report to the Audit and Risk
Committee and 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
required to implement the governance
structure and principles of the Risk
Management 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
The BMS 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 reasonable assurance that
material financial irregularities and control
weaknesses can be detected, the process
does not eliminate the possibility 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.
Additional Information
Governance Report
Financial Statements
47
Strategic Report
Geopolitical instability and international sanctions
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
continuing conflict 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
Gaza, multiple ceasefires have been
implemented. None have yet led to a
lasting resolution, with questions over the
observance of ceasefire terms by both
principal parties to the conflict. There is
some encouragement in the form of the
two-phase Gaza peace plan, signed on
9 October 2025 and endorsed by the
United Nations Security Council on 17
November 2025, under which there has
been cessation of certain hostilities and
the release of prisoners and hostages
by both sides. Commencement of the
second phase of the plan was announced
by the US Special Envoy in January 2026,
together with the formation of the National
Committee for the Administration of Gaza,
the constitution and composition of which
has involved significant Egyptian input.
Shortly afterward, the US also announced
a broader “Board of Peace,” including
a Gaza-focused executive board, but
several European nations have declined
the invitation to participate in the Board
of Peace initiative. It has also met with
criticism from within the Israeli government.
Further regional instability with global
economic and political implications was
introduced by the joint US and Israeli
military action that began on 26 February
2026 with surprise airstrikes on multiple
sites and cities across Iran, killing Iranian
supreme leader Ali Khamenei and other
senior Iranian officials. These strikes and
subsequent military action by the US and
Israel, and the retaliatory actions taken by
Iran in response, have resulted in surges in
oil and gas prices, widespread disruption in
aviation, travel and tourism and heightened
volatility in financial markets. The conflict
has also disrupted international trade,
particularly through closure of the Strait
of Hormuz and other key shipping routes
and strikes on gas and oil facilities. The
Group recognises that the conflict, if it
continues for an extended period, could
result in longer term regional and global
inflationary pressure and an increased risk
of recession.
The Group continues to monitor carefully
the wider geopolitical impact and
perception in Egypt of the conflict in the
Middle East, in connection with its assets
and operations in the region. In this
context it should be noted that on 2 March
2026, the Egyptian President, Fattah
El-Sisi, affirmed Egypt’s full support for
the Gulf Cooperation Council states (the
trading bloc comprising Bahrain, Kuwait,
Oman, Qatar, Saudi Arabia and the United
Arab Emirates, all of which have been
targets for Iranian retaliatory action) and its
solidarity with them in confronting various
challenges and crises. El-Sisi also issued a
firm rejection of any attacks targeting Arab
countries and warned of the dangers of
military escalation and its repercussions on
regional stability and economic security.
In addition to heightened geopolitical
instability, 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 remain an important consideration
for the Group and its approach to risk
management.
The scope of international sanctions and
controls related to the Russian invasion
has continued to expand since the
invasion in February 2022. 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 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. More recently, in October 2025,
the International Court of Justice (ICJ)
delivered a long-awaited advisory opinion
highly critical of Israel and its conduct in
the Palestinian occupied territories. The
ICJ ruling requires Israel to facilitate, and
not simply allow, humanitarian aid to be
delivered to those territories, and follows
a previous advisory opinion of the ICJ in
July 2024 finding that Israel’s occupation
of Palestinian territory was unlawful. Israel
has rejected the ICJ verdict and is not
expected to take any action required
by the court in response. Israel also
faces a separate and ongoing ICJ action
alleging breach of the 1948 UN Genocide
Convention in relation to its actions in
Gaza. Despite this, 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 observed by all
parties.
RISK MANAGEMENT REPORT - CONTINUED
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
48
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
Following the policy measure implemented
in early 2024, the Egyptian Government
continued advancing its macroeconomic
stabilization programme through 2025,
supported by substantial external
financing. Under the IMF’s $8 billion
Extended Fund Facility, Egypt has
received cumulative disbursements of
$3.2 billion with the fifth and sixth review
expected to unlock a further $2.5 billion
in early 2026, while an additional $1.3
billion was approved under the Resilience
and Sustainability Facility, of which $0.5
billion has already been disbursed (and a
further $0.2 billion are expected in early
2026). In parallel, Egypt concluded a
landmark agreement with ADQ (an Abu
Dhabi sovereign wealth fund), for the
development of Ras El Hekma coastal city
for $35 billion ($24 billion paid in cash and
$11 billion as conversion of UAE deposits
at the Central Bank of Egypt). This has
been complemented by approximately $14
billion in support from the European Union,
the World Bank and other multilaterals
institutions. Overall, of the $57 billion
“bail-out” package pledged to Egypt in
the Spring of 2024, around $40 billion has
been received to date, with another $2.7
billion expected shortly.
These measures have provided a boost
to confidence and a manoeuvring space
for the Government to tackle structural
reforms, such as removal of subsidies,
privatisation of state- and military-owned
assets and reduced spending in Pharaonic
infrastructure projects. Notwithstanding
structural challenges, particularly
regarding debt sustainability, inflation, and
long-term foreign currency liquidity, the
Government policies have started to bear
fruit. Lower inflation in the second half
of 2025 has allowed the Central Bank to
significantly reduce interest rates, while
foreign currency reserves have continued
to grow (to a record $51.5 billion at end
2025), buying Egypt some additional
breathing space. These led the IMF to be
quite complimentary about the Egyptian
Government in their fourth and fifth loan
review report, even if privatisation remains
a sensitive issue.
Notably, during 2025, another land/real
estate deal (similar to the one for Ras El
Hekma – see above) was signed with a
Gulf neighbour, namely Qatar. Under the
terms of the deal, Egypt is set to benefit
from the Qatari Real Estate sovereign fund
(Diar) for a total of $29.7 billion, including
$3.5 billion in cash for the purchase of
the land (already received). The rest of the
revenues will result from a $1.8 billion “in
kind” element (residential units, once built),
with the rest ($24.4 billion, over the years)
being the estimated value of Egypt’s 15%
of the net project profits, including returns
from the project company and associated
entities controlled by Qatari Diar. Possible
impacts of the regional war on the
schedule of this real estate mega-project
will be closely monitored over the coming
months.
As a result of improved macroeconomic
context and EGPC’s liquidity improving
over the course of 2025, Pharos received
regular payments and an end-of-year
bullet-payment of $20 million reducing
the Company’s receivables by 75%,
down to $7.4 million. As to the residual
receivables, 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.
The Company has access to a US$10
million 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 9 June 2026
but has been extended by agreement on
a number of occasions since its original
grant in 2021.
Climate Change Risks
The 30th Conference of the Parties
(COP30) to the UN Framework Convention
on Climate Change, was held in
Belem, Brazil, in November 2025. The
conference marked a critical milestone
in the implementation phase of the
Paris agreement, with a strong focus
on reviewing countries’ updated climate
commitments and accelerating delivery
following the outcomes of earlier COPs.
COP30 focused on practical
implementation, resulting in the adoption
of the Mutirão Decision, which established
key frameworks for climate finance,
adaptation, and a just transition, alongside
launching the Tropical Forests Forever
Fund, which pledges over $9 billion and
the initiation of discussions on aligning
trade policies with climate objectives.
A formal Just Transition Mechanism was
established through the Belém Action
Mechanism to support workers and
communities affected by the transition
to a low-carbon economy. Additional
initiatives included the launch of a Global
Implementation Accelerator to speed
up delivery of Paris Agreement goals, a
coalition of over 80 countries committing to
transition away from fossil fuels, the Belém
4x pledge to quadruple sustainable fuel
production by 2035, and the creation of a
new fund for tropical forest conservation
with dedicated support for Indigenous
Peoples and local communities.
RISK MANAGEMENT REPORT - CONTINUED
Additional Information
Governance Report
Financial Statements
49
Strategic Report
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 continues to aim to align
our disclosure with the TCFD
recommendations on Governance,
Strategy, Risk Management and Metrics
and Targets.
In 2023, Pharos, with the support of a
TCFD consultant, undertook an initial
scenario analysis exercise to assess the
impact of these physical and transitional
risks and opportunities on our portfolio.
Building on these scenario analyses,
for year-end 2024 and 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. 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 every 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 81 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 to 58 for
the Viability Statement and page 81 for our
TCFD disclosures.
Commodity Price Risk
During 2025, oil prices were influenced by
shifting expectations around global supply
and demand, including changes in OPEC+
production policy, as well as by market
sensitivity to geopolitical developments.
Geopolitical volatility continued to reshape
the market landscape. Tensions in the
Middle East, particularly the Israel-Gaza
conflict, heightened supply security
concerns. Meanwhile, shifts in U.S.
trade and energy policy under the Trump
administration increased uncertainty
across global markets. In late 2025, the
U.S. military actions against Venezuelan
oil exports and tanker seizures increased
price volatility and raised expectations that
more Venezuelan oil would return to the
market, increasing fears of oversupply.
Commodity price uncertainty persists and
is factored into all stages of the planning
process. Please refer to the Viability
Statement on page 57 for more details
of how the Group has stress tested its
assets and projected cash flows against its
principal risks.
Insurance Costs
Despite the trend towards greater
geopolitical instability, there was further
evidence of the insurance market softening
in 2025, with premiums for renewal of the
Group’s energy insurance cover reduced
in real terms relative to 2024. Concerns
that the energy insurance markets are
increasingly difficult to access for oil and
gas exploration and production businesses
have continued to ease. In addition, the
upstream energy market experienced a
record year of low loss activity, likely to
be driven at least in part by improved risk
management and asset quality across
the industry. At the time of writing, the
softening market shows no immediate
signs of abating, signalling the possibility
of continuing reductions in insurance
premiums in 2026.
Notwithstanding the experience of the last
few years, the Group continues to believe
that in the longer term, climate change
risks and broader ESG objectives will
reduce access to the insurance market
for oil and gas exploration and production
businesses. This reduced access can, in
turn, be expected to result in 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.
RISK MANAGEMENT REPORT - CONTINUED
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
50
Operational Cost Risk
Rising operational costs may become
a bigger 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 other global economic, political
and security considerations beyond any
one company’s control, the prospect
of increasing operational costs is an
unavoidable risk for which Pharos can
implement only limited mitigation.
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 risk, to the extent not
already identified by Pharos as principal
risks in the following tables, are those
related to regulatory changes, digital
transformation, and risks of social disorder.
Similar to our principal risks, emerging
risks are identified using our bottom-up
approach with the regular risk assessments
with risk owners and 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 with
organisations such as BRINDEX and
assesses news alerts from such sources
as Oil & Gas UK, FT, 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.
If, during the course of 2026, these
emerging risks develop into principal
risks affecting the Group, an analysis of
those risks and how these are mitigated
to enable the Company to achieve its
strategic objectives will be included in next
year’s report.
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. 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
118 and in the Audit and Risk Committee
Report on pages 129 to 136, where the
significant issues related to the 2025
Financial Statements are also reported.
The Group’s BMS, 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 80.
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 REPORT - CONTINUED
Additional Information
Governance Report
Financial Statements
51
Strategic Report
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
• Re-processed 3D seismic used for improved
well trajectories
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 – current expires November 2027
• Work with another Operator to secure a
drilling slot in a multi-well Drilling Contract
• Work with individual drilling contractors to
secure a drilling slot between longer term
contracts
• Secured Long Lead Items
• Seek carry of well costs/reimbursement for
historical costs by farm-in partner(s)
• Engaged with an independent third party
advisor to conduct a formal process to
identify farm-in partners
3. Growth in
Egypt
• Loss of overall value
driving impairments and
reserve write offs
• 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
• Approval by EGPC of the consolidation of
concessions, improving fiscal terms with
retrospective effect from October 2025 and
encouraging further development
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
52
PRINCIPAL RISKS AND MITIGATIONS - CONTINUED
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
• 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 between
the HSES practices of new
acquisitions and Pharos
Corporate standards
• Increased disparities and
societal risks in health,
technology or workforce
opportunities
• Mature/aging assets in Vietnam
and Egypt
• Active drilling campaign with two
rigs active at the same time in
Vietnam
• Improve structural and Asset Integrity
through strong operational and maintenance
processes which are critical to preserving a
safer environment
• Maintaining a HSE framework within the
Group that establishes a clear governance
structure and principles and seeks to ensure
compliance across the organisation with
applicable legislative/regulatory requirements
• 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
• Working with IPR and PetroSilah on
implementation of a range of mitigations
to enhance road safety and operations
compliance:
− Renewing risk assessment for new road
hazards, particularly on routes far from
populated areas
− Conducting drug tests
− Terminate any truck contract that violates HSE
regulations/policies
− Robust vehicle maintenance programs
− Management of driver fatigue and working
hours
− Run safety awareness campaigns
• Environmental and Social Impact
Assessments relating to, for example:
− climate impacts and need to adapt to
changing climate conditions over the life of
the asset
− 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 reuse
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 including, where
available on economic terms, appropriate
cover for business interruption or loss of
production
Additional Information
Governance Report
Financial Statements
53
Strategic Report
PRINCIPAL RISKS AND MITIGATIONS - CONTINUED
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 - Global transition to a
lower carbon intensity economy
• Inability to find economically
viable CO
2
reduction solutions
• Lack of alignment between our
key stakeholders’ priorities and
climate change concerns
• 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
and debt markets
• Net Zero commitment on all assets by 2050,
detailed roadmap originally published in
December 2023 and updated annually
• 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
• 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 exercise of influence within
JOCs to encourage support of CO
2
emissions
reduction initiatives
• 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
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
54
PRINCIPAL RISKS AND MITIGATIONS - CONTINUED
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
• Unprecedented post-WWII
levels of global conflict and
instability
• Oil commodity hedging
• Close monitoring of business activities,
financial position and cash flows
• Seek where possible to exercise influence
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
• Insufficient funds to
meet commitments/
reinvest in 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 9 June 2026, with further renewals by
agreement)
• Accepting payments in EGP, to be reinvested
in field operations
• Regular dialogue with EGPC on receivables
balance, resulting in regular monthly payments
and a bullet payment of US$20 million in
December 2025
Additional Information
Governance Report
Financial Statements
55
Strategic Report
PRINCIPAL RISKS AND MITIGATIONS - CONTINUED
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
• Ongoing evaluation of projects in existing
and potential new areas of interest and
pursue development opportunities
• Regular reviews of reserves estimates by
independent consultants
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
• JOC and JV partners divergent
views on investment, priorities for
capital allocation and difference in
value-drivers.
• Active participation in JOC management
and influence over decision-making
through direct secondment of personnel
and the JOC Management Committee (in
Vietnam) or via Operating Committee (in
Egypt)
• Close collaboration with JOC partners
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
• Regular personnel training on cyber
security and risk
• Plan upgrade of IT systems
• Implemented enhanced IT security
through UK, Vietnam and Egypt
• Technical data is also stored by operators
and ERCE (outsource provider)
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
• 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
• Corporate governance requirements
for regular refreshing and
independence of non-executive
Board members
• Remuneration Committee retains
independent advisors to test the
competitiveness of compensation
packages for key employees
• Ongoing 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 the
Director with responsibility for workforce
engagement and are free to share
concerns, feedback and views
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
56
PRINCIPAL RISKS AND MITIGATIONS - CONTINUED
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
• Thoroughly evaluate the risks of operating
in specific areas and assess commercial
acceptability, including through a fit-for-purpose
new country entry evaluation process
• 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
• Present in countries with
below average score on the
Transparency International
Corruption Index
• Lack of transparent procurement
and investment policies
• Non-compliance with applicable
laws establishing corporate
criminal offences (e.g. failure to
prevent fraud, failure to prevent
facilitation of tax evasion, various
offences under UK Bribery Act,
money laundering offences,
insider dealing and market
abuse)
• Corruption and human rights
issues
• Annually reviewed Group Code of Business
Conduct and Ethics, supported by detailed
Guidelines for Implementation, communicated
and applicable across the Group and, where
appropriate, also applicable to contractors of
the Group
• 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
• 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 ongoing
implementation of adequate procedures to
prevent facilitation of tax evasion across all
operations
• Comply with the principles of the Extractive
Industries Transparency Initiative
Additional Information
Governance Report
Financial Statements
57
Strategic Report
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 180 of the
Financial Statements. The Audit & Risk
Committee reapproved in December
2025 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
price consensus 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
• Debt free
Strategy & 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 Group’s 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 Full
Field Development Plans (FFDPs).
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 the Group will be
dependent on its cash generating assets
TGT and CNV in Vietnam, and El Fayum
and North Beni Suef concessions in Egypt.
The underlying oil and gas reserves for
Vietnam and Egypt are based on the
YE 2024 certified reserves. These have
been updated by our technical team and
reviewed by the Reserves Committee. In
our model, we have used management’s
best estimate of future commodity prices.
This results in a base oil price of $62/
bbl in 2026, $66/bbl in 2027 and $70/bbl
in 2028, consistent with year-end 2025
price forecast with a prudent approach
and prior to scenario testing. The base
model also includes the Group’s latest life
of field production models and expenditure
forecasts.
Pharos El Fayum has an uncommitted
revolving credit facility through to 9 June
2026 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.
Our base case analysis assumes no credit
facility will be utilised.
VIABILITY STATEMENT
Viability Statement
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
58
VIABILITY STATEMENT - CONTINUED
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.
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 drop in oil price
2,3,4,5,6
10% reduction in the oil price to
$56/bbl from Mar 2026 for a year,
thereafter stepping up to base price
Company remains viable
with mitigating actions
Reduction in production
1,2,3,7,8,9,10,11
5% drop in production from March
2026 throughout the testing period,
and dry hole assumption with CNV
appraisal well 5X and 1P production
for Egypt
Company remains viable
with mitigating actions
Unfavourable event leading to lost
production and price shock
1,2,3,4,5,6,7,8,9,10,11 Combination of tests above
Company remains viable
with mitigating actions
Mitigating actions
Management is confident of being able
to mitigate any liquidity reduction in the
plausible but severe downside scenario.
Potential mitigations include the ability
to control uncommitted expenses and
capital programmes, shareholder returns,
additional hedging and undrawn facilities.
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 2025 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 our licence extension agreement,
the company 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 on the gas production in
Vietnam have been included in our Base
Case and Reasonable Worst Case 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 Egypt. Vietnam is in the
process of developing a pilot carbon
pricing mechanism but do not currently
have a fully operational, comprehensive
national carbon tax or emissions trading
system (ETS) in place. As the pilot phase
will run until year-end 2028, we believe
this reduces the impact and likelihood
of this risk in the three-year VS period.
Furthermore, the imposition of carbon
taxes would likely uplift the Brent prices,
as some of the burden will be passed to
consumers. Although there are currently
no carbon tax policies in Egypt or Vietnam,
our sensitivity analysis assumes a carbon
tax is effective from 2027 at $10/tonne
CO
2
, without assuming any increment in
Brent price and the Group remains viable
over the three-year VS period.
The existing revolving facility with NBE UK
provides us a 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 the VS.
The 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 2028.
Additional Information
Governance Report
Financial Statements
59
Strategic Report
CORPORATE RESPONSIBILITY REPORT
Adding value through responsible,
efficient, and safe energy
production
BUSINESS
ETHICS
PEOPLE
100%
EGYPT OIL
100%
VIETNAM OIL
Oil sold domestically in Egypt and Vietnam in 2025, contributing to host country
development goals and access to energy
(2024: 100%)
(2024: $160.3m)
(2024: 0 LTI) (2024: c.51%)
(2024: 100%)
(2024: 100%)
$133.6m
Taxes and royalties to host governments,
includes host governments share of
production entitlements in 2025
100%
Percentage of staff receiving
anti-bribery and corruption training
by 31 December 2025
0 LTIs
Zero Lost Time Injury
events across Group operations in 2025
c.53%
Female employees across
the Group in 2025
ENVIRONMENT
(2024: 302)
(2024: 0)
356
Tonnes CO
2
e per 1,000 tonnes
of hydrocarbon produced in 2025
1
Oil/chemical spills
(quantities greater than 100 litres) in 2025
SOCIETY
(2024: $500,000)
(2024: $259,889)
$500,000
Combined total training levies
in Vietnam and Egypt for investment in
industry capacity building in 2025
$417,867
Community investments supporting
28 social projects in Egypt, Vietnam
and UK in 2025
2025 Performance
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
60
Governing
Corporate
Responsibility
CORPORATE RESPONSIBILITY REPORT - CONTINUED
Our aim is to add value in everything we do
through responsible, efficient and safe energy
production.
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
Anti-Facilitation of Tax Evasion Policy
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.
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.
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 new 2024
UK Corporate Governance Code (the
2024 Code), applicable to the current
financial year of the Company ending 31
December 2025. This is the first annual
report in which the Company reports
against compliance with the 2024 Code.
The Board’s objective is to be recognised
for its high standard for governance, with
a considerate and pragmatic approach to
its business.
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
61
Strategic Report
CORPORATE RESPONSIBILITY REPORT - 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 integrates 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 & 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 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
Governance Code report on pages 109
to 118. 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 2025, 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 2025 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 considers ’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.
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
62
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 during
pandemic or outbreaks
• 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
CORPORATE RESPONSIBILITY REPORT - CONTINUED
Additional Information
Governance Report
Financial Statements
63
Strategic Report
CORPORATE RESPONSIBILITY REPORT - CONTINUED
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 81 to 96.
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 published in
December 2023 and updated annually in
annual reports, 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 at least 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 seven
years. In 2025, Pharos is pleased to
report that we maintained scores of B
for both our Climate Change and Water
Security disclosures. 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 82.
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
64
CORPORATE RESPONSIBILITY REPORT - CONTINUED
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 Target HSES outcome
High
Blocks 125
& 126
Vietnam 70% Operator
Full application of the
Pharos HSES MS
Moderate
Block 16-1 Vietnam 30.5%
(1)
Joint operating partner (in
Hoang Long Joint Operating
Company)
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)
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 Target HSES outcome
Moderate
El Fayum
Concession
(2)
Egypt 45%
Joint operating partner (in
Petrosilah)
Influence to bring alignment
to the Pharos HSES MS
Moderate
North Beni Suef
Concession
(2)
Egypt 45%
Joint operating partner (in
Petrosilah, to which operating
functions are subcontracted by
PetroBeniSuef)
Influence to bring alignment
to the Pharos HSES MS
2) Pharos received approval from EGPC for the consolidation of the El Fayum and North Beni Suef Concession Agreements into a new consolidated concession
agreement (the “Consolidated Concession”) on 5 October 2025. The Consolidated Concession is subject to customary approvals and to Egyptian
Parliamentary ratification, which is expected to take place in 2026.
Additional Information
Governance Report
Financial Statements
65
Strategic Report
CORPORATE RESPONSIBILITY REPORT - CONTINUED
Key Performance Indicators
KPI Target 2025 2024 2023
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: 658,586
20%
Contractors: 2,678,286
80%
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, 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.
Overall objective
To provide responsible and sustainable development
2025 Objectives 2025 Outcomes 2026 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.
The HLHVJOC’s HSE
Management System
and procedures were
updated and the ISO
14001:2015 certificate for
HLHVJOC’s Environmental
Management System was
maintained. Similarly, in
Egypt, PetroSilah’s HSE
Management System and
policies were reviewed and
updated and ISO 14001
and 45001 certificates were
maintained following the
annual surveillance audit.
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.
Update of the
company HSES
policies and
MS in line with
ISO14001:2026
once published.
Issue revised Crisis
Management Plan
and train staff on
changes to emergency
response procedures.
Crisis Management Plan has
been updated and will be
submitted to the Executive
for approval.
Further training on
crisis management
and emergency
response to be held
in 2026.
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
66
CORPORATE RESPONSIBILITY REPORT - CONTINUED
Overall objective
To conduct our business in an honest and ethical manner.
2025 Objectives 2025 Outcomes 2026 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.
Our objective is to conduct our business in an honest
and ethical manner.
Ethics
100%
Employees and relevant contractors have
undertaken anti-bribery and corruption training by
31 December 2025.
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 81 (+1 since
2024) out of 182 countries in the 2025
CPI. Egypt is ranked at 130 on the same
CPI (no change since 2024). 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 of the
Group’s risk management and internal
control systems, see the Audit and Risk
Committee report page 129. 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 with numbers displayed in
our local offices available 24 hours a day
all year round. Zero calls were made to the
hotline in 2025.
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 2025, the total payments to
governments for the Group amounted
to $133.6m (2024: $160.3m), of which
$116.5m or 87% (2024: $138.7m or 87%)
was related to the Vietnam producing
licence areas, of which $77.8m (2024:
$92.9m) was for indirect taxes based
on production entitlement. In Egypt,
payments to government totalled $14.6m
(2024: $19.1m), of which $14.2m (2024:
$18.5m) related to indirect taxes based on
production entitlement. More information
on payments to host governments can be
found on page 215.
Additional Information
Governance Report
Financial Statements
67
Strategic Report
CORPORATE RESPONSIBILITY REPORT - CONTINUED
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 on 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. In 2025, Pharos
continued to work with our partners in
Vietnam where the HLHVJOCs continued
to maintain a high level of safety. In
Vietnam, the Company recorded zero LTIs
during the year, 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, one motor vehicle crash
was recorded in 2025. On 20 July
2025, a White Eagle road tanker truck
overturned on the Cairo-Suez desert road,
approximately 20 km before reaching the
Suez Oil Processing Company (SOPC),
resulting in a spillage. The accident was
also recorded as a roll-over but did not
result in any physical injury.
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
2025
4
2024 2023
KPI Target rates Pharos IOGP
4
Pharos IOGP
5
Pharos IOGP
4
Fatal Accident Frequency Rate
1
Zero
0 0
0.77
0
0.82
Lost Time Injury (“LTI”) Frequency Rate
2
Zero
0 0
0.24
0
0.24
Total Recordable Injury Rate
3
Zero
0 0
0.81
0
0.84
Million man-hours worked
3.34 3.26
4,159
3.59
3,291
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 2025
5) 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.
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
68
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, we conducted
a comprehensive diversity, equity and
inclusion (DE&I) survey to gain deeper
insight into employee experiences and
perspectives, and complemented this with
cross-company cultural awareness training
designed to enhance understanding,
collaboration, and inclusive behaviours
across all teams. Preliminary discussions
have taken place to understand needs
and resources, forming the basis for more
targeted work in 2026.
The Company aim to enhance
performance management processes to
ensure we promote equity, transparency,
and consistent leadership accountability
across the Group.
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.
CORPORATE RESPONSIBILITY REPORT - CONTINUED
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 2025, there were no Process
Safety Events classified Tier 1 or Tier 2 to
be reported. 11 security incidents were
recorded corresponding to 11 breaches
of wellhead safety zone by fishing boats
in Block 16-1 in Vietnam. All incidents
were investigated and lessons learned
as appropriate and actions to prevent
recurrence were implemented although
breach of the safety zone by fishing boats
is a recurrent issue.
Safety indicators
(for both Pharos employees and
contractors)
Indicator 2025
Lost Time Injury frequency rate
(“LTI”)
0
Fatal Accidents
0
Medical Treatment Cases
0
First Aid Cases
0
Number of Motor Vehicle Crashes
1
Roll-over
1
HSES Near Miss
1
HSES Inspections
811
HSES Audits
959
HSES Toolbox Talks
6,942
HSES Meetings
516
Safety indicators
Indicator 2025
Emergency Response Drills
131
Process Safety Events
(Tier 1 or Tier 2)
0
Other minor events
0
Security indicators
Indicator 2025
Security incidents
11
Safety
& Care
Energy
& Challenge
Openness &
Integrity
Empowerment &
Accountability
Pragmatism &
Focus
2025 statement of compliance with the Listing Rules on
Diversity & 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 LR 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 LR 6.6.6R(9)(a) target with which the Company did not comply in 2025 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.
Unfortunately, the accelerated process to identify and appoint a new Chair during 2025 in
consultation with the Company’s largest shareholders limited the opportunity to consider
minority ethnic candidates for the position. 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. Equality, diversity and inclusion sit at the heart of our recruitment,
development and promotion processes.
Additional Information
Governance Report
Financial Statements
69
Strategic Report
CORPORATE RESPONSIBILITY REPORT - CONTINUED
2025 Gender diversity(*)
Non-Executive Directors
Executive Directors
Senior Management
Other Employees
Male
Female
2
2
3
13 15
1
* Figures correct as at 31 December 2025 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. Under the consolidated
Concession Agreement, when signed,
the Contractor parties expect to make an
annual contribution of up to US$200,000
towards training and development, with
the exact amount dependent on the status
of exploration and development areas
within the Concession from time to time.
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
culture of diversity and inclusion such that diversity is at the core of who we are and where inclusion drives innovation and
solutions.
2025 Objectives 2025 Outcomes 2026 Objectives
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.
We conducted a comprehensive DE&I
Survey to gain deeper insight into employee
experiences and perspectives, and
complemented this with cross-company
cultural awareness training designed to
enhance understanding, collaboration, and
inclusive behaviours across all teams.
Enhance performance management
processes to ensure they promote
equity, transparency, and consistent
leadership accountability.
Develop succession planning
program with focus on diverse
talent.
Preliminary discussions have taken place to
understand needs and resources, forming
the basis for more targeted work in 2026.
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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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. Under the
consolidated Concession Agreement,
when signed, the Contractor parties
expect to make an annual contribution
of up to US$200,000 towards training
and development, with the exact amount
dependent on the status of exploration and
development areas within the Concession
from time to time.
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 addition to the training
levy mentioned above, Pharos and our
local partners also contributed a further
$253,699 in 16 healthcare, education,
infrastructure and other community
projects in Vietnam and Egypt in 2025. 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.
The Group also 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 nine times in
2025, and have supported $164,167 in
12 different social projects across three
different countries. The Committee aims to
continue its work in supporting a diverse
mix of social causes in 2026.
Details of charitable projects supported by
the HLHVJOC Charitable Programme and
Pharos’ Charity and Community Projects
Committee can be found below.
Additional Information
Governance Report
Financial Statements
71
Strategic Report
CORPORATE RESPONSIBILITY REPORT - CONTINUED
Community projects
across the Group
in 2025
UN SDG 1 – No poverty
End poverty in all its forms everywhere
• Monthly living costs support for 20 orphans in Vietnam
• Vietnamese Lunar New Year (Tet) gifts for people from low-income families in various provinces and
communities 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 :
• Madgi Yacoub Foundation – a charitable non-
governmental organisation that provides free medical
and surgical care for underprivileged children with
cardiovascular diseases
• London’s Air Ambulance – to support day-to-day
emergency services
• Vietnamese Heart Surgery Fund – to fund life-saving
heart operations for financially disadvantaged children
with congenital heart defects
• Essential medical equipment to support new-borns and
premature babies in rural areas in Vietnam
• Free Eyes Surgery programme and Congenital Heart
Defect Screening programme
• Renovation for Hemodialys Room in Tien Dien Medical
Center in Ha Tinh, Vietnam
• Association of People with Disabilities, Soldiers and
Matyrs, and Victims of Agent Orange/Dioxin (“VAVA”)
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:
− An education fund for high-achieving students from ethnic minority, low-income backgrounds in Vietnam
− Room to Read – supporting children in communities experiencing deep educational, gender and economic inequities
− Improve learning and teaching experience for students at Hanoi School for the Hearing-impaired in Vietnam
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
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CORPORATE RESPONSIBILITY REPORT - CONTINUED
UN SDG 16 – Peace, justice and strong institutions
Promote peaceful and inclusive societies for sustainable development, provide access to justice for all
and build effective, accountable and inclusive institutions at all levels
• Financial support for Blue Dragon children’s foundation - Protecting Children and Preventing Human Trafficking
UN SDG 9 – Industries, innovation and infrastructure
Build resilient infrastructure, promote inclusive and sustainable industrialisation and foster innovation
• Financial support towards the construction of:
− IT room for students from underprivileged communities in Vietnam
− Construction projects to build education and cultural centres in Thanh Hoa province
− New homes for disadvantaged households living in poverty in Cam Ranh, in collaboration with the Vietnam Red Cross
− Swimming pools in Ha Tinh, Vietnam for children to learn swimming skills
• Donations to support people in provinces affected by recent natural disasters, typhoons, and floods in northern Vietnam
• Donations to repair and upgrade roads and local infrastructure in Phu Tho, Vietnam
• Donations to upgrade the school yard in Yen Loi Primary School, Ninh Binh, Vietnam
Overall objective
To consult with and contribute into our host communities.
2025 Objectives 2025 Outcomes 2026 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
programmes in Egypt and UK
Total $417,867
Additional Information
Governance Report
Financial Statements
73
Strategic Report
CORPORATE RESPONSIBILITY REPORT - CONTINUED
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 is
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
97 to 99 of this Annual Report, which
included 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.$964,000. 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 2025, 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 73, and continue to align
our disclosure with TCFD recommended
disclosures, details of which can be found
in our TCFD report on page 81.
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74
CORPORATE RESPONSIBILITY REPORT - CONTINUED
GHG reported
Pharos reports carbon dioxide (CO
2
),
methane (CH
4
), and nitrous oxide (N
2
O)
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 N
2
O quantities
produced via combustion is 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.
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). On 8 March
2025, electricity from grid was connected
to the Silah camp and mess hall too.
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. Pharos
carried out an annual high-level materiality
assessment review across our portfolio
against the 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.
Pharos have identified a number of
categories determined to have low
materiality threshold or relevance 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 2025, 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 80 and in our TCFD report under ‘4.
Metrics and Targets’ on pages 95 to 96.
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, the corresponding
energy usage would only contribute an
insignificant 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
Governance Report
Financial Statements
75
Strategic Report
CORPORATE RESPONSIBILITY REPORT - 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, 2025), 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
October 2025 at the CNV field, and at
the gas export metering skid of TGT also
in November 2025 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-2, North-East Tersa, South Silah
and Silah Base Separators (EPRI Central
Analytical Labs, 2018), North Silah Deep-1
station production separator (EPRI Central
Analytical Labs, 2026) as well as at the
Aboud 1-3 and NBS-SW-1X well locations
(2024).
In 2025, 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 2025, gas fuel and gas flaring
in TGT remain the largest single contributor
to Pharos total emissions. Flaring accounts
for 24 percent of emissions and venting in
Egypt represented 12 percent of our gross
emissions.
The Group’s total CO
2
e emissions for
2025 are 79,550 tonnes of CO
2
equivalent
based on equity share (287,790 tonnes of
CO
2
equivalent gross). This corresponds to
a decrease of 6 percent compared to 2024
(both on equity share and gross values).
This year-on-year reduction in the Group’s
GHG emissions is results in particular from
a reduction of venting in Egypt with the
introduction of a gas flare at North Silah
2-1, 2-5 and 2-6 pad.
Activity data pertaining to GHG emissions
by the HLHVJOCs and Egypt is reported
to Pharos. TelosNRG assisted with
data collation and GHG emissions
calculations. Verification of the 2025 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. The
majority of GHG emissions arise 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
• 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
• Scope 3, category 11 data from
Pharos’ Egypt operations is considered
to have a higher risk of uncertainty
compared to other scope 3 data
• Egypt’s Silah base reported electricity
use for the first time in 2025,
purchasing electricity from the National
Grid. As such, it is noted that the data
collection and calculation process for
the corresponding emissions is by
nature more uncertain than other, more
established, emissions sources.
• 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 2025 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. In Egypt, we have continued
to deploy gas generators at the well sites,
connected the camp and mess hall in Silah
base to the electricity grid and successfully
installed the first hybrid fuel (solar
photovoltaics and diesel) pump system
in Silah; these actions help reduce diesel
consumption and associated emissions. 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 2025 and
did not obtain any violations from the
Environment Authority in Egypt in 2025.
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76
CORPORATE RESPONSIBILITY REPORT - CONTINUED
GHG emissions and activity data
GHG Data - tonnes of CO
2
equivalent for 2021 to 2025
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
377,767
376,659
313,837
2021 2022 2023
107,063
86,151
2024
104,929
84,402
307,376
2025
287,790
79,550
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
284
297
237
409
553
542
303
326
273
2024
263
536
302
2025
488
356
330
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.
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
42,813 (20.1%)
Gas Fuel - TGT
127,539 (59.8%)
Marine Gasoil (MGO)
22,245 (10.4%)
Gas Flared (CNV)
14,154 (6.6%)
Diesel
6,454 (3%)
Venting
34,003 (46%)
Gas Fuel
14,264 (19.3%)
Diesel
12,073 (16.3%)
Gas Flared
13,190 (17.8%)
Petrol (0.3%)
Electricity from
the grid (0.2%)
Greenhouse Gas Emissions Contributors (Total CO
2
e (t)) for
2025 – Vietnam (Based on total field emissions)
Greenhouse Gas Emissions Contributors (Total CO
2
e (t)) for 2025
– Egypt (Based on total field emissions, including venting)
Vietnam
Total CO
2
e (t)
Egypt
Total CO
2
e (t)
In 2025, 10 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 half of the 20 tonnes for every 1,000 tonnes of total hydrocarbon production reported in 2024. The volume of gas flared in
2024 was particularly high due a problem in the combustion chamber which resulted in a 12-day period during which the produced gas
could not be exported and was flared.
In Vietnam, overall emissions in 2025 have increased slightly at CNV, due to higher flaring volumes, and decreased slightly at TGT, mainly
due to a decrease in gas fuel consumption. In Egypt, emissions decreased due to the introduction of the flare stack at North Silah 2 pad,
as associated emissions are now flared rather than vented.
Normalised emissions (intensity) at Group level have increased from 302 tCO
2
e in 2024 to 356 tCO
2
e per 1,000 tonnes of oil equivalent
produced in 2025. The main reason for the increase in the normalised emissions ratio is the decrease in overall production volume.
Additional Information
Governance Report
Financial Statements
77
Strategic Report
CORPORATE RESPONSIBILITY REPORT - CONTINUED
Venting
Routine venting emissions have been
included in the GHG report since 2021.
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
out through cold vent line to a safe area.
Associated emissions are negligible (136
tCO
2
e) but for the sake of completeness
have been included within the report for
2025.
In 2025, the amount of associated gas
used as fuel in gas generators in Egypt
was 152 mmscf, which resulted in
14,264 tCO
2
e (gross). However, had this
associated gas been vented it would have
resulted in emissions in the order of 47,975
tCO
2
e, or 17 percent of the Group’s total
emissions on a gross basis.
Electricity
The Group’s energy use from grid
electricity was 337,963 kWh in 2025 for
overseas offices in Egypt and Vietnam.
In 2024, the Group’s energy use was
328,060 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, the
corresponding energy usage would only
contribute an insignificant portion of our
total carbon footprint.
Effluents and waste
During 2025, Pharos had no recordable
spills in Vietnam. In Egypt, on 20 July
2025, a White-Eagle road tanker truck
overturned on the Cairo-Suez desert road,
approximately 20km before reaching the
Suez Oil Processing Company (SOPC).
178 of the 364 barrels of crude oil cargo
were spilt on the ground and seeped into
the sand on the right side of the road.
The remaining 186 barrels of oil were
recovered thanks to a vacuum truck.
The concerted efforts from the Suez Civil
Protection Authority, SOPC, PetroSilah, Al
Nasr Petroleum Company (NPC) and White
Eagle Company helped to completely
clear the accident site, clean up remaining
hydrocarbon spill and reopen the road to
traffic.
The incident was investigated and lessons
learned as appropriate and 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
2025, we generated 6.7 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 2025, freshwater
consumption for both Vietnam and Egypt
amounted to 28,888 cubic metres. Our
use of freshwater has decreased by 57
percent compared to 2024.
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
78
CORPORATE RESPONSIBILITY REPORT - CONTINUED
Tonnes (t) of CO
2
e equivalent for 2025 Operations
CO
2
e (t)
CO
2
e (t) per 1000 tonnes
ofhydrocarbon produced
byequityshare
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
314 72 – –
El Fayum Concession
Production 73,656 16,838 488 488
Field development 367 84
Vietnam Cuu
Long Basin
(offshore)
Office Administration (electricity usage) 4 4 –
Blocks 125 & 126 Desktop activities 0 0
Block 9-2 – Ca Ngu
Vang (CNV) field
Production 15,300 3,825 92
330
Field development 2,628 657
Block 16-1 – Te Giac
Trang (TGT) field
Production 185,567 55,113 402
Field development 9,955 2,957 –
Total 287,790 79,550 356
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 2025 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, 1 toe
= 8.68 boe for CNV and 1 toe = 7.72 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.
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.
Additional Information
Governance Report
Financial Statements
79
Strategic Report
CORPORATE RESPONSIBILITY REPORT - CONTINUED
Non-Financial KPIs (HSES)
KPI
Target – 2025 2025 2024 2023
Spills to the environment* 0
1
0 2
* Number of spills reported (quantities greater than 100 litres).
KPI
Target 2025 2024 2023
Solid non-hazardous waste produced (tonnes) Set per project
86
130 100
Percentage of non-hazardous waste reused or recycled Set per project
24
38 14
Solid hazardous waste (tonnes) Set per project
47
175 69
Percentage of hazardous waste reused or recycled Set per project
0
2 5
The higher amount of waste produced in 2024 was linked to the additional drilling activities carried out in Block 16-1 in Vietnam.
Overall objective
To protect the environment and conserve biodiversity
2025 Objectives 2025 Outcomes 2026 Objectives
Obtain all necessary environmental
permits for all drilling programmes /
seismic studies.
All necessary permits for our 2025 field
development operations were obtained
successfully.
Obtain all necessary environmental
permits for all drilling programmes/
seismic studies.
Improve methane emissions
management and reporting.
A GHG data collection protocol
document was produced which
documents data sources, review
processes and calculation methodology
for the different locations and GHG
emission sources.
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.
Different technologies for reduction
the GHG emissions intensity of our
assets have been identified. In 2025,
we successfully implemented a pilot
hybrid fuel (solar PV and diesel) pumping
system 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 & reporting.
Annual review and update of Net Zero
roadmap.
Completed. Updated Net Zero Roadmap
can be found in the 2024 Annual Report
& Accounts.
Continue alignment with TCFD
disclosure & reporting.
Annual review and update of Net Zero
roadmap.
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
80
CORPORATE RESPONSIBILITY REPORT - CONTINUED
Corporate Responsibility
Non-Financial Indicators
2025 2024 2023
Hours worked (million)
3.34
3.26 3.59
Lost Time Injury Frequency Rate (number of lost time injuries per million man-hours)
0
0 0
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
Total Scope 1 &2 GHG emissions (tCO
2
e) by equity
2
79,550
84,402 86,151
Scope 1 total GHG emissions (tCO
2
e) by equity
79,414
84,360 86,109
Scope 2 total GHG emissions (tCO
2
e) by equity
135
42 42
Total Scope 3 total GHG emissions (tCO
2
e) by equity
2
552,971
718,693 853,474
Scope 3 GHG emissions (tCO
2
e) by equity – Business Travel
88
157 178
Scope 3 GHG emissions (tCO
2
e) by equity – Upstream Transportation
1,044
1,089 1,285
Scope 3 GHG emissions (tCO
2
e) by equity – Use of Sold Product
551,839
717,357 851,926
GHG intensity by production
(tonnes of CO
2
e per 1,000 tonnes of hydrocarbon produced by equity share)
356
302 273
Total hydrocarbons flared
(Tonnes of hydrocarbons flared for every 1,000 tonnes of production on a gross basis)
10
20 17
Energy use (grid electricity kWh)
337,963
328,060 330,552
Total energy consumption
(from fuel combustion, other operations and purchased electricity) in MWh
1
246,726
255,243 237,729
Non-hazardous waste produced (tonnes)
86
130 100
Hazardous waste produced (tonnes)
47
175 69
Percentage non-hazardous waste recycled
24
38 14
Percentage hazardous waste recycled
0
2 5
Spills to the environment (>100 litres)
1
0 2
Oil in produced water content (Vietnam Blocks 16-1/9-2)
27
27 28
Freshwater use (cubic metres)
28,888
67,913 66,588
HSES regulatory non-compliance
0
0 0
Community investment spend ($)
417,867
259,889 247,373
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 (N
2
O),
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.
Additional Information
Governance Report
Financial Statements
81
Strategic Report
TCFD index table
TCFD REPORT
Recommended disclosures Status Disclosure location
Governance
a) Describe the board’s oversight
of climate-related risks and
opportunities
• Corporate Responsibility report, page 61
• CEO’s Statement, pages 24 to 25
• ESG Committee report, pages 119 to 120
• Audit and Risk Committee report, pages 129 to 136
• Directors’ Remuneration Committee report, pages 137 to 161
• TCFD report, under 1. Governance, page 83
b) Describe management’s role in
assessing and managing climate-
related risks and opportunities
• Risk Management report pages 45 to 50
• Corporate Responsibility report, pages 60 to 61
• Section 172 (1) statement pages 36 to 37
• TCFD report, under 1. Governance, page 83
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 45 to 56
• TCFD report, under 2. Strategy, pages 84 to 94
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 84 to 94
c) Describe the resilience of the
organisation's strategy, taking into
consideration different climate-
related risks scenarios, including a
2°C or lower scenario
• Viability Statement pages 57 to 58
• TCFD report, under 2. Strategy, pages 85 to 94
Risk
Management
a) Describe the organisation’s
processes for identifying and
assessing climate-related risks
• Risk Management report pages 45 to 49
• TCFD report, under 3. Risk Management, page 95
b) Describe the organisation’s
processes for managing climate
related risks
• Risk Management report pages 45 to 53
• TCFD report, under 3. Risk Management, page 95
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 45 to 53
• TCFD report, under 3. Risk Management, page 95
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 95 to 96
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 80
• TCFD report, under 4. Metrics & Targets. pages 95 to 96
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 95 to 96
• Directors’ Remuneration Committee report, pages 141, 142
and 151
Stakeholder
engagement
Gap
analysis
Internal
alignment
Reporting and
disclosure
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
82
Climate action at
Pharos Energy
TCFD REPORT - CONTINUED
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
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 81 as a quick overview of our
TCFD disclosure.
As at year end 2025, 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 2025
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.
Additional Information
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Financial Statements
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TCFD REPORT - CONTINUED
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 & 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 this
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 main
Board for consideration when they review
the Group’s strategy at each scheduled
Board meeting. In 2025, 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. Our internal Net Zero
Working Group, formed in 2022 and
includes inter-disciplinary representatives
such as Reservoir Engineer, HSE Manager,
Risk Manager, and Investor Relations,
further supports the Executives to drive
progress on our strategy. The Net Zero
Working Group reports to the ESG
Committee 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 2025, 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 ISSB.
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
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
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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 97 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 helping local government
achieve their economic development goals
and prosperity using oil 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 holds 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 2023, Pharos, with the support of a
TCFD consultant, undertook an initial
scenario analysis exercise to assess the
impact of these physical and transitional
risks and opportunities on our portfolio.
Building on these scenario analyses, in
2025 and 2026, 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 below. For example,
risks that have a low likelihood rating are
still deemed to be material if its severity is
considered to 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 informed 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 page 46. 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 of 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 on
pages 86 to 94.
We have aligned our climate-related risks
and opportunities to our cross-industry
metrics and targets in 4. Metrics and
Targets on page 95. For example, the
Emissions Management Fund reflect
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.
Additional Information
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Financial Statements
85
Strategic Report
TCFD REPORT - CONTINUED
Assessing the impact of
transition and physical risks
on our business
1. TRANSITION RISKS AND
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 other commercial, risk and
operational Pharos colleagues. 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 term 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 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), 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):
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 transition pathway (NZE)
assumes a rapid transition away from
fossil fuels. Investment in existing oil and
gas assets continues, although no new
long lead time conventional oil and gas
projects are approved for development
and, after 2030, a number of projects
are closed before they reach the end of
their technical lifetime. Carbon prices are
introduced albeit at different levels for
countries and sectors. The energy sector,
government policy and industry initiatives
focus on CO
2
emissions from production,
as well as incentivising alternative low-
carbon solutions. Under the IEA’s NZE
scenario, oil and gas demand decline by
more than 5% each year on average to
2050, and crude oil prices are projected
to decline significantly to approximately
$33/bbl by 2035 before declining further
to $25/bbl by 2050. For STEPS, total
final consumption grows 1% annually to
2035, with most emerging markets and
developing economies leading demand
growth. It increases more slowly than
in the past decade as efficiency gains
accelerate to 2.2% per year, driven by the
increasing electrification of end-uses. Oil
demand peaks at 102 million barrels per
day (mb/d) around 2030 before gradually
declining. Global electric car sales share
rises from over 20% today to over 50% by
2035. From the 2030s, STEPS assumes
renewables in aggregate meet all additional
global energy demand, and its share in
electricity generation rises from one-third
today to over half by 2035 and two-thirds
by 2050, led by solar and wind power with
support from batteries.
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 currently no carbon tax policies
in Egypt and Vietnam, our sensitivity
test assumed a carbon tax is effective
from 2027 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.
Source: IEA World Energy Outlook 2025
3.0
2.5
2.0
1.5
1.0
0.5
0
2000 2020 2040 2060 2080 2100 NZE
2021
NZE
2022
NZE
2023
NZE
2024
NZE
2025
1.0
0.5
0
1.5
2.0
2.5
CPS
STEPS
NZE
Global average temperature rise, and annual emissions reductions from
peak to 2035 in past NZE Scenario editions
Temperature rise (°C) Annual emissions reductions (Gt)
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
86
TCFD REPORT - CONTINUED
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, 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 forefront
• 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
Major
Moderate
Minor
Low
Very unlikely (<15%)
Unlikely (15-40%)
Medium likelihood (40-60%)
Likely (60-85%)
Very likely (>85%)
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:
Major severity, Medium
likelihood
Medium term:
Major severity, Medium
likelihood
Long term:
Major severity, Likely
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, financial position, cash flows
• Control over procurement costs / effective management of supply chains
• Stress test scenarios and sensitivities via principal compound risk analysis
• Capital discipline with focus on controlling and managing costs
• Discretionary spend actively managed
• Maintain and cultivate good relationships with lenders
Additional Information
Governance Report
Financial Statements
87
Strategic Report
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 & 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:
Moderate severity, Medium
likelihood
Medium term:
Moderate severity, Medium
likelihood
Long term:
Major severity, Likely
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
TCFD REPORT - CONTINUED
Transition risks - continued
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 the proportion of gas, and decrease the proportion of oil,
in the energy mix. 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 MBS industry report,
with the rising demand for new projects in Asia generally, and in Vietnam in particular, 2026 is expected to
see an even stronger push for domestic oil and gas development than in 2025, driven by the urgent need
to replenish the depleting supply of oil and gas from declining fields
• Additionally, 100% of our products are sold and consumed locally, which reduces the impact & likelihood
of this risk in the short and medium term
Potential impact
Short term: $0 Medium term: $2.5m Long-term: $10.6m
(2)
Timeframe, Severity
& Likelihood
Short term:
Minor severity, Unlikely
Medium term:
Moderate severity, Unlikely
Long term:
Moderate severity,
Medium likelihood
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
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
88
TCFD REPORT - CONTINUED
Transition risks - continued
Risk
4. 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 analysis above, 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:
Moderate severity, Medium
likelihood
Medium term:
Moderate severity, Medium
likelihood
Long term:
Major severity, Likely
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
Additional Information
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Financial Statements
89
Strategic Report
TCFD REPORT - CONTINUED
Transition risks - continued
Risk
5. Carbon pricing:
Increased price of carbon through national and international schemes
Description
• Financial impact due to costs associated with carbon emissions pricing
• NZE Scenario assumes that carbon prices are introduced in all regions and most energy sectors, and
prices reach $55/t CO
2
for emerging market and developing economies. Therefore, this risk has potential
impacts on both assets, Egypt and Vietnam
• Egypt is not yet subject to a carbon price. As of year-end 2025, Vietnam is in the process of developing
a pilot carbon pricing mechanism but do not currently have a fully operational, comprehensive national
carbon tax or emissions trading system (ETS) in place. As the pilot phase will run until December 2028,
we believe this reduces the impact and likelihood of this risk in the short term
Potential impact
Short term: $0 Medium term: $2.5m Long-term: $10.6m
(2)
Timeframe, Severity
& Likelihood
Short term:
Moderate severity, Very
unlikely
Medium term:
Moderate severity, Unlikely
Long term:
Major severity,
Medium likelihood
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. We believe that the NZE price curve has already
incorporated carbon tax considerations into their price deck
• Although there is currently no carbon tax in Egypt and Vietnam, we still conduct a sensitivity test where
carbon tax is effective from 2027 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
*Notes:
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.
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
90
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
Global temperature (relative to 1850-1900) in
O
c
TCFD REPORT - CONTINUED
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.
Additional Information
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Financial Statements
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Strategic Report
TCFD REPORT - CONTINUED
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
50km
2
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 on 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
Short term: Negligible Medium term: Negligible Long-term: Negligible
Timeframe, Severity
& Likelihood
Short term:
Minor severity,
Very unlikely
Medium term:
Minor severity, Unlikely
Long term:
Medium likelihood
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
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
92
TCFD REPORT - CONTINUED
Physical risks - continued
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
Short term: Negligible Medium term: Negligible Long-term: Negligible
Timeframe, Severity
& Likelihood
Short term:
Low severity, Likely
Medium term:
Minor severity, Very likely
Long term:
Minor severity,
Very likely
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
Additional Information
Governance Report
Financial Statements
93
Strategic Report
TCFD REPORT - CONTINUED
Physical risks - continued
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 on our operations in Vietnam, particularly during monsoon season. However,
historically, our operational team plans drilling programmes ahead of time and is mindful to avoid
monsoon seasons. We also take every precaution 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: $1.6m Medium term: $1.6m Long-term: $1.6m
Timeframe, Severity
& Likelihood
Short term:
Minor severity,
Medium likelihood
Medium term:
Minor severity,
Medium likelihood
Long term:
Minor severity,
Medium likelihood
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 team plans drilling programmes ahead of time
and is 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
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
94
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: $0.5m Medium term: $1.2m Long-term: $2.6m
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
Adaptions
• 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
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: c.$1m Medium term: $1m Long-term: $1.2m
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
Adaptions
• 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 Vietnam, we 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 and are also piloting our first hybrid (solar PV and diesel) pumping system. This is part of
a broader plan to utilise produced associated gas and solar energy instead of diesel for power generation,
along with flare reductions
• In 2022, Pharos also established an Emission Management Fund to provide support for carbon reduction
projects
Additional Information
Governance Report
Financial Statements
95
Strategic Report
TCFD REPORT - CONTINUED
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.
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 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 in this report. We will continue to
review our risk management framework
when determining the materiality of its
exposure to climate-related risks.
4. METRICS & TARGETS
2025 CLIMATE CHANGE RISK-RELATED METRICS & TARGETS
356 tCO
2
e
Scope 1 & 2 GHG intensity by
production
(2024: 302 tonnes CO
2
e per 1,000
tonnes of hydrocarbon produced)
79,550 tCO
2
e
Total Scope 1 & 2 GHG emissions
(tCO
2
e) by equity
(2024: 84,402 tonnes CO
2
e)
$55.9m
Maximum anticipated impact to the
business in the long term due to a
transition risk
$1.6m
Maximum anticipated impact to the
business in the long term due to a
physical risk
$2.6m
Maximum anticipated benefit to the
business in the long term 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.$964,000
Total capital accumulated in the
Emissions Management Fund as at
year end 2025 to provide support for
emissions management projects
$10-$40
Carbon price range per tonne CO
2
e
from 2027 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 2025 KPI
552,971
Scope 3 total GHG emissions (tCO
2
e)
by equity
(2024: 718,693 tonnes CO
2
e)
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
96
TCFD REPORT - CONTINUED
Our GHG emissions in 2025 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 80.
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 79 and our Corporate Responsibility
Non-Financial Indicators on page 80.
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. The Net Zero Roadmap
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 in this report on pages 97 to
99.
The Company also uses 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
137 to 161.
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. In 2023, Pharos, together with
our climate specialist, carried out an initial
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 2025 and
2026 to better 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 page 74 and in
the Non-Financial Environmental Metrics
table on page 80.
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 2025 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’ 2025
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.
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
98
NET ZERO ROADMAP - CONTINUED
Reducing our
climate impacts
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
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.
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. As at year end 2025, Pharos
is on track to achieve our first interim target
of 5% emissions reduction compared to
2021 baseline level by year end 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.
Scope
1 and 2
e
missions
2026 target
5% reduction
2030 target
15% reduction
Target reduction pathway
2026 2030 2040 2050
Our emissions reduction
pathway with short and
medium term interim
targets until 2050
Additional Information
Governance Report
Financial Statements
99
Strategic Report
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
and are also piloting our first hybrid (solar
PV and diesel) pumping system. This is
part of a broader plan to utilise produced
associated gas and solar energy 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, additional implementation
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 2025, the Fund
has reached a value of c.$964,000. 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.
NET ZERO ROADMAP - CONTINUED
How we are
reaching our target
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
Our decarbonisation levers as part of our net zero pathway
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
100
NET ZERO ROADMAP - CONTINUED
Approval of the Strategic Report
This report was approved by the Board of Directors on
24 March 2026 and is signed on its behalf by
KATHERINE ROE
Chief Executive Officer
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
102
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 119
RESERVES COMMITTEE REPORT 121
NOMINATIONS COMMITTEE REPORT 125
AUDIT AND RISK COMMITTEE REPORT 129
DIRECTORS’ REMUNERATION COMMITTEE REPORT 137
− Annual Report on Remuneration (Audited section) 140
− Notes to the single figure table 141
− Unaudited Section 148
DIRECTORS’ REPORT 162
Strategic Report Additional InformationFinancial Statements
103
Governance Report
Robust corporate
governance to build
value
CHAIR’S INTRODUCTION TO GOVERNANCE
JOÃO SARAIVA E SILVA
Non-Executive Chair
Dear Shareholders,
I am pleased to introduce the Corporate
Governance Report for the year ended
31 December 2025—my first as Chair of
Pharos. Over the past year, the Board has
been deeply engaged in overseeing strategy,
performance and risk, while supporting the
continued development of a culture that
reflects our values and long-term
ambitions. As part of my induction,
I met extensively with Directors,
the executive team and key
stakeholders to gain a rounded
perspective on the business and
the governance environment in
which we operate.
Robust corporate governance remains
essential to building sustainable value and
maintaining the highest standards of safety,
ethics and environmental responsibility.
2025 was the first year in which the 2024
revision of the UK Corporate Governance
Code (the “2024 Code”) applied to
the Company. The Board believes that
the updated Code, supported by new
guidance from the Financial Reporting
Council continues to provide a strong
framework for governance, stewardship,
risk oversight, reporting transparency
and investor confidence. In line with the
updated 2024 Code, we have enhanced
elements of this year’s governance report
to provide clearer insight into key Board
decisions, their outcomes and how they
support Pharos’s strategic objectives.
We have also undertaken significant
preparatory work ahead of the 2026
financial year, when Provision 29 of
the 2024 Code relating to the Board’s
responsibility for monitoring and review
of the effectiveness of the Company’s
risk management and internal control
framework has taken effect. This
preparatory work has included an in-depth
identification and review of Pharos’s
material internal controls, including
financial, operational, compliance and
reporting controls, and implementation
of processes that will enable the Board
to provide the formal annual declaration
of the effectiveness of those material
controls required by Provision 29 in future
annual reports. The review has also
considered how the deficiency in any of
these material controls could impact the
interests of the Company, shareholders
and other stakeholders. This strengthening
of internal control oversight reflects not
only regulatory expectations but our own
continuing commitment to high-quality
governance.
Further details of our governance
arrangements, preparations for Provision
29 and explanations for any areas of
non-compliance are set out in the following
report.
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
104
Maintaining a well-balanced Board is
a priority. We continue to ensure an
appropriate blend of skills, experience and
independence, supported by disciplined
succession planning and a commitment
to diversity. Throughout the year the
composition of the Board complied
with Provision 11 of the 2024 Code,
which requires at least half of the Board,
excluding the Chair, to be non-executive
Directors that the Board considers
independent. The external perspective and
constructive challenge of our independent
non-executives remain integral to the
quality of our decision-making.
The Board’s responsibilities are
wide-ranging: setting Group strategy;
approving budgets and financing;
monitoring performance; talent retention
and remuneration; overseeing relationships
with operators and joint venture partners;
and ensuring effective governance across
the organisation. We also remain focused
on culture—both monitoring it and
assessing how well it is embedded across
the business—so that behaviours and
values consistently support our strategy.
Directors are expected to lead by
example. Our values—Safety & Care,
Energy & Challenge, Openness & Integrity,
Empowerment & Accountability, and
Pragmatism & Focus—continue to guide
the way we work, underpinning disciplined
risk management and operational
excellence in all jurisdictions.
The Board is supported by five principal
committees: the Audit and Risk
Committee, Remuneration Committee,
Nominations Committee, ESG Committee
and Reserves Committee. Each committee
brings specialist focus and is chaired by
an independent non-executive Director. In
response to changes in the 2024 Code,
our Audit and Risk Committee updated its
terms of reference to reflect the transfer of
certain audit-related provisions to the Audit
Committees and External Audit: Minimum
Standard. Further details can be found on
page 130 of the Audit and Risk Committee
Report.
Transparency and accountability remain
central to our approach to remuneration.
In accordance with Provision 38 of the
2024 Code, our Directors’ Remuneration
Report now includes expanded disclosure
on malus and clawback provisions,
detailing when they may be applied, the
relevant timeframes and why they are best
suited to the Company, and any actions
taken during the year. This reinforces the
alignment between executive incentives
and the creation of long-term shareholder
value.
Operationally, 2025 was a year of
significant progress for Pharos. In
Vietnam, our six-well infill and appraisal
programme on TGT and CNV commenced
– representing the most substantial
investment in these assets since their
original development. On Blocks 125
& 126, the two-year extension to the
PSC Exploration Period strengthened
our position as we pursued potential
farm-in partnerships. In Egypt, approval
of a consolidated Concession Agreement
created an improved investment
framework for both us and our partner IPR.
While ending the year with a $20 million
payment from EGPC, doubling our year
end cash balance and reducing receivables
to their lowest level since 2021 materially
strengthened our financial position.
We enter 2026 with positive momentum—
continuing our drilling campaign in
Vietnam, preparing for the new work
programme in Egypt under the improved
fiscal terms of the consolidated
concession, and evaluating opportunities
to unlock further growth from our asset
portfolio. Our position of financial and
operational strength is a testament to the
quality and effectiveness of governance
across the business. We remain steadfast
in our commitment to the highest
standards of safety, ethical conduct
and environmental responsibility and to
deepening our relationships with strategic
partners.
On behalf of the Board, I would like
to thank our employees, Directors,
shareholders, partners, contractors and
other stakeholders for their continued
support throughout 2025. Their dedication
and professionalism underpin all that we
achieve.
JOÃO SARAIVA E SILVA
Non-Executive Chair
CHAIR’S INTRODUCTION TO GOVERNANCE - CONTINUED
Strategic Report Additional InformationFinancial Statements
105
Governance Report
LEADERSHIP AND GOVERNANCE
Leadership and Governance
Board Members
JOÃO SARAIVA E SILVA
Non-Executive Chair and Chair of
Nominations Committee and ESG
Committee
KATHERINE ROE
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
* Independent Non-Executive Directors or, in the case of João Saraiva e Silva, independent on appointment as Chair.
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 2025, the Board comprised six Directors.
Meeting attendance
During each Director’s respective term of office during 2025.
In addition to the four scheduled quarterly
meetings, the Board met in 2025 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 2025. All Directors on the
Board at that time attended the AGM.
Notes:
1) Appointed to the Board on 26 June 2025 as
Non-Executive Chair, and as Chair of the ESG
and Nominations Committees.
2) John Martin stepped down from the Board on
25 June 2025.
3) John Martin recused himself from the June
Board and Nominations Committee meetings.
4) Directors do not participate in decisions
of the Remuneration Committee when the
Committee is considering such Directors’
Remuneration.
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
4
x4
Nominations
Committee
x3
ESG
Committee
x4
Reserves
Committee
x3
João Saraiva e Silva^
1
(Non-Executive Chair)
Katherine Roe (CEO)
Sue Rivett (CFO)
Geoffrey Green^
Dr Bill Higgs^
Lisa Mitchell^
John Martin^
2, 3
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
106
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
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 Saraiva e Silva
(Chair)*
L Mitchell
G Green
Responsible for ensuring
the leadership needs
of the Company are
addressed appropriately
to ensure continued
ability to compete
effectively in the
marketplace.
J Saraiva e Silva
(Chair)
L Mitchell
G Green
S Rivett
B Higgs
K Roe
B Higgs (Chair)
S Rivett
Aldo A. Lopez
Marmolejo **
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 and 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.
** Appointed to the Reserves
Committee on 4 August
2025.
* João Saraiva e Silva
was appointed to the
Board, Nominations &
ESG Committee on
26 June 2025.
LEADERSHIP & GOVERNANCE - CONTINUED
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107
Governance Report
BOARD OF DIRECTORS
Experienced leaders
guiding our future
JOÃO SARAIVA E SILVA
Non-Executive Chair
Appointed: June 2025
João holds a degree in Economics from Nova School of Business and Economics
and completed the Stanford Executive Program in 2017. He has over 25 years of
experience in private equity and investment banking, with a particular focus on the
energy sector. He is currently a Partner at Pamplona Capital Management and serves
as a Non-Executive Director at BlueNord ASA. Previously, he held senior roles leading
energy investments for established asset managers and family offices, including The
Carlyle Group, Och-Ziff, Seatankers, and L1. João began his career at Goldman Sachs
in London, where he spent nine years advising energy clients on capital markets and
M&A transactions.
KATHERINE ROE
Chief Executive Officer
Appointed: July 2024
Katherine has over 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 ten 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.
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
108
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.
DR BILL HIGGS
Non-Executive Director
Appointed: January 2024
Bill has over 35 years of global exploration, development and operations experience,
including more than 15 years in executive and non-executive roles for both public and private
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. 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 Executive Director and 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
previously served in Non-Executive Director roles as Chairman of Chappal Energies Mauritius
Limited and San Leon Energy plc. He is currently serving as Executive Chairman of Natrium
Redox Technologies Limited, a technology company focused on the carbon neutral production
of the primary feedstocks for the steel and cement industries.
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.
BOARD OF DIRECTORS - CONTINUED
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Governance Report
UK CORPORATE GOVERNANCE CODE
2025 statement
of compliance
with the
2024 Code
We are committed to the highest standards of
corporate governance and to compliance with
the 2024 UK Corporate Governance Code,
which sets out the principles that emphasise
the value of good corporate governance to
long-term sustainable success.
In prior years, the Company reported
against compliance with the 2018 UK
Corporate Governance Code. This is the
first annual report in which the Company
reports against compliance with the
2024 Code, under which the majority of
provisions were effective from 1 January
2025. The Company was in full compliance
with the applicable provisions of the 2024
Code throughout the year, though attention
is drawn to the commentary on the
appointment of a new Chair below under
“Composition, Succession and Evaluation”.
The Company has also undertaken
significant preparatory work in advance of
the application of Provision 29 of the 2024
Code (“Provision 29”) to the financial year
commencing 1 January 2026. Provision
29 requires Boards to make a declaration
in relation to the effectiveness of their
material internal controls in the annual
report, together with a description of how
the board has monitored and reviewed
the effectiveness of the Company’s
risk management and internal control
framework and, if applicable, a description
of any material controls which have not
operated effectively and the action taken,
or proposed, to improve them.
In preparation for Provision 29, the
Company has undertaken a holistic review
and evaluation of its risk management and
internal control framework, including:
• determining an appropriate definition
and thresholds for material controls;
• identification of the material internal
controls across the Group and relevant
personnel with responsibility or
ownership, to be maintained, reviewed
and updated on a continuous basis;
• mapping material controls to principal
risks where appropriate within the
Group;
• ascertaining whether the Group’s
policies, procedures and assurance
framework were sufficient to ensure
the effectiveness of material internal
controls and, to the extent that any
gaps or shortcomings were identified,
developing remediation plans or
actions;
• planning a programme of assurance
testing for the effectiveness of material
internal controls;
• establishing a framework for the
continuous review and periodic testing
of material internal controls and for
regular reporting to the Board, including
in relation to any open items requiring
further remedial action.
The Board considers that the Company is
in a position to comply in full with Provision
29 in the financial year commencing 1
January 2026.
The remainder of this section of the
Governance Report sets out in more detail
the Company’s practical application of the
Principles of the 2024 Code as set out in
the five sections below:
• Board Leadership and Company
Purpose;
• Division of Responsibilities;
• Composition, Succession and
Evaluation;
• Audit, Risk and Internal Control; and
• Remuneration.
This Governance Report concludes with a
final summary statement in relation to the
significant votes against certain resolutions
proposed at the 2025 AGM, in accordance
with Provision 4 of the 2024 Code.
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
110
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 cash
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, embedded into day-to-day
operations, and not simply as words on a
page.
Stakeholder engagement
Colleague engagement
The Board understands 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 below.
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 complaints or challenges
arising from their work and working
environment, including those related
to hybrid and remote working. 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 two meetings with their line
manager during the year to discuss
and agree the objectives and to review
progress mid-year. Line managers also
provide additional support where needed
and assist the employee in overcoming any
difficulties they might be facing.
During the first half of the year, John
Martin, as Chair of the Board and the
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.
Following John’s retirement from the
Board in June 2025, Geoffrey Green was
appointed in his place as Non-Executive
Director responsible for workforce
engagement. Geoffrey held town hall
meetings with all employees in September
2025, 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.
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. Employees also have
access to both the Company’s grievance
procedure, set out in the regularly reviewed
and updated employee handbook,
and a confidential and anonymous
whistleblowing facility.
UK CORPORATE GOVERNANCE CODE - CONTINUED
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111
Governance Report
UK CORPORATE GOVERNANCE CODE - CONTINUED
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. In dialogue with
key stakeholders, the Board understands
that scale and strategic relevance remain a
key priority. In recognition of this, the Board
regularly evaluates strategic priorities,
ensuring that we direct resources to
opportunities that can drive growth and
longevity for the business.
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, Auctus
Advisors, Cavendish, 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 2025, 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 2025, 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.
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. Under the
consolidated Concession Agreement,
when signed, the Contractor parties
expect to make an annual contribution
of up to $200,000 towards training and
development, with the exact amount
dependent on the status of exploration and
development areas within the Concession
from time to time.
During the year we sought to align our
social investment programme with the
United Nations Sustainable Development
Goals (UN SDGs). In 2025, in addition
to the training levy mentioned above,
a further $417,867 was invested in 28
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.
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
112
UK CORPORATE GOVERNANCE CODE - CONTINUED
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 2025, the value of the fund was
c.$964,000 (2024: 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 with numbers displayed in
our local offices available 24 hours a day
all year round. Zero calls were made to the
hotline in 2025.
Additionally, the Group’s Code of Business
Conduct and Ethics and associated
policies, which are reviewed, updated, and
re-approved by the Board annually, were
followed rigorously in 2025, 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 corporate
crime 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, such as the
introduction of a Group Sanctions Policy
and working group in response to the
Russian/Ukraine conflict and the waves
of economic and other sanctions that
have followed in response. The Board
recognises that 2025 and 2026 has seen
a further increase in geopolitical instability,
with far reaching effects on the global
economy, international trade and the
security and sovereignty of nation states.
This instability, and the risks it poses to
the Group and its business, are discussed
in more detail in the Risk Management
Report on page 47. The Group continues
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.
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 (CEO) 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 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
Executive Directors and other members of
the Company’s senior management team
meet at least once a week to discuss all
matters relating to the Group, its business
and assets.
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.
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 31 December 2025, the Board
comprised of 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
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• The Remuneration Committee -
responsible for the design, development
and implementation of the Directors’
Remuneration Policy
• The Reserves Committee - 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 2025, 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. In addition, a Corporate
Strategy Day was held in November 2025,
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 2025 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 most significant development in 2025
from the perspective of Board composition
and succession was the retirement of
the former Chair, John Martin, with effect
from 25 June 2025, and the appointment
of his replacement, João Saraiva e Silva,
with effect from 26 June 2025. The
Nominations Committee recognises that
Provision 20 of the 2024 Code states that
an external search consultancy or the open
advertising of vacancies should generally
be used for the appointment of the Chair
and other NEDs. However, in the relation
to the appointment of the Chair in 2025,
neither an external search consultancy nor
open advertising were used.
The Nominations Committee, on behalf
of the Board, considered engaging an
external search consultancy to identify
potential candidates for the position
of Chair, but determined that doing
so would not have been necessary or
proportionate. The Committee consulted
with the Company’s largest shareholders,
who had expressed a desire for refreshed
leadership, and sought recommendations
from industry contacts on potential
candidates. In considering suitability of
candidates for the position of Chair, the
Committee assessed the capabilities
needed to support the Company’s
strategic priorities, with particular weight
given to relevant industry experience.
When a preferred candidate was
identified, a full due diligence process was
undertaken by the Committee, including
interviews, references and an assessment
against the Company’s strategic and
governance requirements. The Committee
also recognised the importance of
selecting a Chair considered independent
on appointment, including when taking into
account the matters set out in Provision 10
to the 2024 Code.
The Committee determined that, taking
into account the preferred candidate’s
close alignment with the role specification,
the robustness of stakeholder
endorsement and the time sensitive nature
of the transition, an external search was
unlikely to produce a stronger candidate.
Accordingly, the Committee determined
that the circumstances were such that a
departure from the 2024 Code’s direction
that open advertising or an external search
consultancy should “generally” be used
was justified. The Committee accordingly
made its recommendation to the Board
of the preferred candidate for Chair, João
Saraiva e Silva. The Board accepted the
Committee’s recommendation and its
rationale for not using open advertising
or an external search consultancy for the
position.
While the Board and the Nominations
Committee recognise the importance
of external search firms in safeguarding
objectivity and widening the candidate
pool, in this case the strength of the
recommendation and the thoroughness
of the Committee’s assessment
provided sufficient assurance of a merit-
based appointment. The Board and
the Committee remain committed to
using open advertising and/or external
search consultancies for future Board
appointments where appropriate.
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 2025, our global staff
comprises 32 people from 10 different
nationalities, of which women accounted
for approximately 50%, 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 results of this survey are
expected to form the basis for a workshop,
seminar or similar event for staff during
2026.
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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 2025, 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 2025
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. Unfortunately, the accelerated
process to identify and appoint a new
Chair during 2025 in consultation with the
Company’s largest shareholders limited
the opportunity to consider minority ethnic
candidates for the position. 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 the
wider organisation. Equality, 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 at the 2025 AGM
following assessments of Board balance,
composition and independence. At the
AGM, all re-election resolutions were
passed, but five of the six resolutions to
re-elect directors (excluding Katherine Roe)
received votes against in excess of 20%
of the votes cast. For further information
on the actions taken by the Company in
response to the voting results at the AGM,
please refer to the section below headed
“Significant Dissenting Votes at the 2025
AGM – Final Summary”.
Board effectiveness and
performance review
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 2025 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 João
Saraiva e Silva as Non-Executive Chair
following the retirement of John Martin,
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.
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UK CORPORATE GOVERNANCE CODE - CONTINUED
Audit, Risk and Internal Control
Financial reporting and
significant accounting issues
During the first half of 2025, 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 there were no significant
changes recommended to the Board by
the Audit and Risk Committee.
Significant issues related to the
2025 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 2025, 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 it considered 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
166 of the Directors’ Report.
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 3 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 3-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 2025 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.
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
2025 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 2025 Financial
Statements on a Going Concern basis.
For more information, please see the
Viability Statement in the Strategic Report
on pages 57 to 58 and Note 2 on page
180.
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 2025, 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 authority to monitor the
effectiveness of the control systems
operated by management. The external
auditor, Ernst & Young LLP, also provides
feedback and recommendations on
controls which are brought to the attention
of the committee.
Internal controls and risk management
issues are discussed and reviewed at each
Audit and Risk Committee meeting, with a
report being provided to the Board.
KPMG LLP was appointed to carry out
various internal audits. During 2024 KPMG
commenced a review of the IT environment
and their review of the operator’s
compliance with the Egyptian Joint
Operating Agreements for the financial year
from 1 July 2023 to 30 June 2024 started
in the first half of 2025.
Internal controls focus for 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.
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.
For more information about the Board’s
internal controls focus, please refer to the
Audit and Risk Committee Report on page
129.
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
116
UK CORPORATE GOVERNANCE CODE - CONTINUED
Risk assessment
The Audit and Risk 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 Group 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 re-appointed as
our external auditor with effect from the
financial year commencing 1 January
2025.
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 Andrew
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.
Principal and emerging risks
On page 46, 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 ongoing 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.
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.
In accordance with Provision 38 of the
2024 Code, the Directors’ Remuneration
Report now includes expanded disclosure
on malus and clawback provisions. Details
of when they may be applied, the relevant
timeframes and why they are best suited
to the Company, and any actions taken
during the year can be found on page 162.
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
last reviewed, updated and approved at
the 2023 AGM, a revised policy will be put
to shareholders for approval at the 2026
AGM. The terms of the proposed new
policy are set out on pages 154 to 156 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.
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UK CORPORATE GOVERNANCE CODE - CONTINUED
Board Leadership and
Company Purpose
Page(s)
Purpose and Culture
7, 14, 68, 69,
110
Colleague engagement
7, 36, 110
Shareholder engagement
36, 110, 118,
128
Local communities, government
and employees
13, 14, 18, 30,
62, 66, 70-72
Conflicts of interests and Ethics
hotline
37, 56, 66, 112,
166
Division of Roles & Responsibilities
Responsibilities of the Board
35-38, 50, 60-
61, 103-106,
109-116
Board composition
105-108
Responsibilities and Composition
of the Committees
106
Time commitment
105, 113
Composition, succession and evaluation
Board composition and
succession
105-108, 113-
114
Diversity and Inclusion
14, 68, 69, 127
Annual re-election of Directors
114, 128, 153
Board effectiveness and
performance review
114, 128
Audit, Risk and Internal Control
Significant reporting and
accounting matters
131
Fair, balanced and
understandable
131, 166
Viability statement and going
concern
44, 57-58, 130-
131, 166, 180
Risk management and internal
controls
45-56, 132, 134-
135
Internal audit
130, 134, 135
External auditor
130, 136, 164
Principal and emerging risks
46
Remuneration
Remuneration principles
116, 138, 139
Remuneration policy
154-156
Pension & Benefits
116, 140, 150,
154, 161, 185, 189
Directors’ shareholdings and
share interests
146
Accountability statement
page references
Accountability
statements Report Page(s)
Strategic objectives
and Business model
Strategic Report 8, 15
Directors’
responsibility
statement
Directors’ Report 166
Auditor’s statement
Independent
Auditor’s Report
169-175
Going concern
CFO Statement 44
Viability statement
Risk Management
Report
57, 58
Critical judgements
and accounting
estimates
Note 4 to
the Financial
Statements
185, 186
Risk Management
and Internal Control
Risk Management
Report
45-56
UK Corporate
Governance Code
Report
109-118
Audit and Risk
Committee Report
129-136
Audit, Risk and
Internal Control
UK Corporate
Governance Code
Report
109-118
Audit and Risk
Committee Report
129-136
Nominations
Committee
UK Corporate
Governance Code
Report
109-118
Nominations
Committee Report
125-128
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UK CORPORATE GOVERNANCE CODE - CONTINUED
Final Summary on Results of 2025 AGM
In accordance with Provision 4 of the 2024
Code, this is a final summary in relation
to votes of 20% or more cast against
resolutions at the 2025 AGM, held on
Thursday 22 May 2025. At the 2025 AGM,
20% or more of votes were cast against
the following resolutions:
• Resolution 3: To approve the
Directors’ Remuneration Report
included in the Annual Report and
Accounts for the financial year ended
31 December 2024
• Resolution 4: To reappoint John Martin
as a Director
• Resolution 5: To reappoint Sue Rivett
as a Director
• Resolution 6: To reappoint Geoffrey
Green as a Director
• Resolution 7: To reappoint Dr Bill
Higgs as a Director
• Resolution 8: To reappoint Lisa
Mitchell as a Director
• Resolution 12: To authorise the
Directors to allot securities (s.551 of the
Companies Act 2006)
• Resolution 13: To disapply pre-
emption rights (s.570 and s.573 of the
Companies Act 2006)
• Resolution 14: To disapply pre-
emption rights (s.570 and s.573 of the
Companies Act 2006) for acquisitions
or specified capital investments
• Resolution 16: To authorise the
Directors to call general meetings of the
Company (other than an annual general
meeting) on not less than 14 clear days’
notice
This is a final summary on the actions
taken by the Company since the 2025
AGM, including the views received
from shareholders. The Company had
previously explained, when announcing the
2025 AGM voting results, what actions it
intended to take to consult shareholders
in order to understand the reasons behind
the result. An update on the views received
from shareholders and actions taken was
then published on the Company’s website
on 13 November 2025.
It is important to set some context to
the significant dissenting votes on the
ten 2025 AGM resolutions listed above.
In each of those resolutions, the votes
against reached or exceeded the relevant
threshold under Provision 4 of the 2024
Code because a single shareholder of
the Company, then holding an interest
in just under 20% of the voting rights,
voted against those resolutions. If this
shareholder had abstained on any of the
resolutions, the remaining percentage of
votes cast against that resolution would be
lower than 5%.
It is also important to note the Board
does not believe that any of the significant
dissenting votes on the 2025 AGM
resolutions set out above are attributable
to any underlying shortcoming in the
Company’s governance. The proxy
and governance advisory services ISS
and Glass Lewis recommended a vote
in favour of all resolutions proposed at
the 2025 AGM, and the Institutional
Voting Information Service awarded all
2025 AGM resolutions a “Blue Top”,
indicating no areas of major concern.
As a consequence, the Board has not
considered it necessary to seek the views
of these advisory services on the significant
dissenting votes cast at the AGM.
Finally, it should be recognised that,
in relation specifically to Resolution
4 proposed at the 2025 AGM, the
Company’s former Chair, John Martin,
announced at the conclusion of the AGM
that he would be stepping down from
the role as soon as a successor could be
identified. He subsequently stepped down
as Chair and director of the Company on
25 June 2025, and on the following day
João Saraiva e Silva was appointed as the
Company’s new Chair. The appointment
was made only after consultation with
the Company’s largest shareholders,
as discussed earlier in this Governance
Report.
In addition to the appointment of a new
Chair, the Board has continued since the
2025 AGM to consult with shareholders
on their views on a range of matters
related to the governance and strategy
of the Company. This has included
active engagement with the largest
shareholder that voted against 2025 AGM
resolutions on their reasons for doing
so. Overall, the Board considers the
feedback from shareholders, including that
shareholder, to be positive. In particular,
no shareholder has expressed concern
on the remuneration of directors or on
the composition of the Board following
replacement of the Chair.
The Board will continue to engage regularly
with shareholders. Specifically in relation
to the Company’s largest shareholder, the
Board has, in advance of the 2026 AGM,
asked the shareholder whether there
are any specific actions or explanations
that would assist that shareholder when
considering the merits of the resolutions to
be proposed at the meeting.
Strategic Report Additional InformationFinancial Statements
119
Governance Report
Environmental, Social
and Governance (ESG)
Committee Report
ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) COMMITTEE REPORT
JOÃO SARAIVA E SILVA
ESG Committee Chair
Dear Shareholders,
I am pleased to present this Environmental,
Social and Governance (ESG) Committee
Report for the year ended 31 December
2025, which sets out the role and work
of the committee during the year. The
ESG Committee has focused its 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.
Meeting attendance
Committee member 2025 attendance
João Saraiva e Silva (Chair) ^
Katherine Roe
Sue Rivett
Geoffrey Green ^
Dr Bill Higgs ^
Lisa Mitchell ^
John Martin ^
KEY
Attended as member
Not attended
^ Independent Directors
Notes:
a) Joao Saraiva e Silva was appointed as Chair of the ESG
Committee on 26 June 2025.
b) John Martin stepped down as Chair of the ESG Committee on
25 June 2025.
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ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) COMMITTEE REPORT - CONTINUED
Membership and
responsibilities
During 2025, the ESG Committee was
comprised of myself as Chair, Katherine
Roe, Sue Rivett, Geoffrey Green, Dr Bill
Higgs, and Lisa Mitchell. John Martin
stepped down from the Board and all
Board Committees on 25 June 2025.
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 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:
• 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 2025
The Committee met four times during
2025. 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 out 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 and practices in place to
ensure a safe workplace
• Updates from the Charity and
Community Projects Committee as a
sub-committee of the ESG Committee
to oversee the 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.
During 2025, the following additional areas
were reviewed and discussed at each
meeting:
March
• 4Q 2024 HSES performance report
• GHG emission performance, noting
reductions in total emissions compared
to previous year
• Budgets for the Charity and Community
Projects Committee
• ESG reporting trends and voluntary
disclosures including the CDP
• Draft ESG Committee report to be
included in the Annual Report 2024
May
• 1Q 2025 HSES performance report
• GHG emission performance, noting
higher emissions intensity due to flaring
and the natural decline of the fields
• HSE audit plans and alignment of HSE
management systems with partners,
focusing on crisis management
• Additional environmental objectives
• Updates on social investment
projects approved by the Charity and
Community Projects Committee
September
• 2Q 2025 HSES performance report
• GHG emission performance, noting
planned maintenance and increased
drilling activity expected in the second
half of the year
• KPIs for safety and environmental
matters, noting no safety incidents and
one spill across the Group
• Updates on decarbonisation projects
across the Group, noting alignment
with the JOCs, the importance of cost/
benefit analyses, and investor focus on
investment returns
• Updates on the Charity and Community
Projects Committee’s terms of reference
and budget
December
• 3Q 2025 HSES performance report
• GHG emissions performance, noting
actions taken and lessons learnt
following the spill incident during 3Q
and IOGP market standards
• ESG disclosure updates, industry
reporting trends and peer reviews
• Update on social investment projects
and committee roles in the Charity and
Community Projects Committee
JOÃO SARAIVA E SILVA
ESG Committee Chair
Strategic Report Additional InformationFinancial Statements
121
Governance Report
Reserves Committee
Report
RESERVES COMMITTEE REPORT
DR BILL HIGGS
Reserves Committee Chair
Dear Shareholders,
I am pleased to present the Reserves Committee
Report for the year ended 31 December 2025
– the second Reserves Committee 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.
Meeting attendance
Committee member
2025
attendance
Dr Bill Higgs (Chair) ^
Sue Rivett
Mohamed Sayed
Aldo Lopez Marmolejo
KEY
Attended as member
Not attended
^ Independent Directors
Notes:
a) Katherine Roe attended all four meetings, all as
non-committee member.
b) Aldo Lopez Marmolejo was appointed to the
Reserves Committee on 4 August 2025.
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
122
Membership and
responsibilities
The Committee was formed in May 2024
and convened for the first time in August
that year. During 2025, the Reserves
Committee was comprised of myself
as Chair, CFO, and Principal Reservoir
Engineer, following the departure of
the COO. 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 a 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 apprised of
any potential significant changes to the
Group’s reserves and resources.
Reserves Committee
meetings in 2025
The Committee met three times during
the year. These meetings were held in
February, 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
• Proposals for next third-party
Competent Person’s Report (CPR)
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 2025 production
performance
The 2025 production versus guidance was
reviewed at all three meetings and it was
noted that the production was within the
guidance range for 2025.
Review of proposed 2026 WP&B
The proposed work programme for 2026
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 2026, including
risks and uncertainties.
Proposals for next third-party
CPR
Pharos Energy usually commissioned a
third-party Competent Person's Report
at the end of the year. This report is an
independent assessment of the Group's
petroleum reserves and resources; it
serves as an additional layer of assurance
to the Group's internal estimates. The
Committee discussed whether the next
third-party CPR should await next year’s
half year update when the Group would
have more performance data, early results
from the Vietnam drilling campaign and
a clearer view on regulatory approvals in
Egypt. The Committee agreed this would
be appropriate unless an earlier report
became necessary for other purposes.
Notable matters discussed
post year end:
Year-end 2025 reserves
assessment
The Committee convened to review and
discuss the Group’s internal assessment of
the year-end 2025 reserves and resources.
The Committee endorsed their assessment
of the 2P Reserves as reflected in the
following tables.
RESERVES COMMITTEE REPORT - CONTINUED
Strategic Report Additional InformationFinancial Statements
123
Governance Report
RESERVES COMMITTEE REPORT - CONTINUED
Group Reserves and Contingent Resources
The Group Reserves Statistics table below summarises our reserves and contingent resources based on the Group’s unitised net working
interest in each field.
Group Reserves Statistics
Net working interest, mmboe Vietnam Egypt Group
Oil and Gas 2P Commercial Reserves
1,2
As at 1 January 2025 8.9 12.4 21.3
Production (1.5) (0.5) (2.0)
Revision (0.2) (0.7) (0.9)
2P Commercial Reserves as at 31 December 2025 7.2 11.2 18.4
Oil and Gas 2C Contingent Resources
1,2
As at 1 January 2025 7.8 8.3 16.1
Revision - 0.7 0.7
2C Contingent Resources as at 31 December 2025 7.8 9.0 16.8
Total of 2P Reserves and 2C Contingent Resources as at 31
December 2025
15.0 20.2 35.2
1) Reserves and Contingent Resources are categorised in line with 2018 SPE/WPC/AAPG/SPEE/SEG/SPWLA/EAGE Petroleum Resource Management System.
2) Assumes an oil equivalent conversion factor of 6,000 standard cubic feet per barrel of oil equivalent.
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
124
RESERVES COMMITTEE REPORT - CONTINUED
DR BILL HIGGS
Reserves Committee Chair
Group’s Net Working Interest Reserves and Contingent Resources
Vietnam at 31 December 2025 (mmboe) (net to Group’s working interest)
Reserves
2
1P 2P 3P
Oil 5.1 6.0 6.7
Gas
1
0.9 1.2 1.3
Total 6.0 7.2 8.0
Contingent Resources
2
1C 2C 3C
Oil 4.1 6.5 8.9
Gas
1
0.8 1.3 1.9
Total 4.9 7.8 10.8
Sum of Reserves and Contingent Resources
3
1P & 1C 2P & 2C 3P & 3C
Oil 9.2 12.5 15.6
Gas
1
1.7 2.5 3.2
Total 10.9 15.0 18.8
1) Assumes oil equivalent conversion factor of 6,000 standard cubic feet per barrel of oil equivalent.
2) Reserves and Contingent Resources have been prepared by the Company.
3) The summation of Reserves and Contingent Resources has been prepared by the Company.
Egypt at 31 December 2025 (mmboe) (net to Group’s working interest)
Reserves
1
1P 2P 3P
Oil 5.8 11.2 13.1
Contingent Resources
1
1C 2C 3C
Oil 3.3 9.0 17.7
Sum of Reserves and Contingent Resources
2
1P & 1C 2P & 2C 3P & 3C
Total 9.1 20.2 30.8
1) Reserves and Contingent Resources have been prepared by the Company.
2) The summation of Reserves and Contingent Resources has been prepared by the Company.
Strategic Report Additional InformationFinancial Statements
125
Governance Report
JOÃO SARAIVA E SILVA
Nominations Committee Chair
Dear Shareholders,
I am pleased to present this Nominations
Committee Report for the year ended 31
December 2025, which sets out the role and
work of the committee during the year. The
Nominations Committee has focused
its 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.
Nominations
Committee Report
NOMINATIONS COMMITTEE REPORT
Meeting attendance
Committee member
2025
attendance
João Saraiva e Silva ^ (Chair)
John Martin^
Lisa Mitchell ^
Geoffrey Green ^
KEY
Attended as member
Not attended
^ Independent Directors
Notes:
a) Katherine Roe, Sue Rivett, and Bill Higgs attended all three
meetings as non-members.
b) João Saraiva e Silva was appointed to the Board on 26 June 2025.
Two of the three meetings of the Nominations Committee in 2025
took place before his appointment.
c) John Martin stepped down from the Board on 25 June 2025.
d) John Martin recused himself from the Committee’s June meeting.
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
126
NOMINATIONS COMMITTEE REPORT - CONTINUED
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 2025 and will continue into 2026,
taking into account the Board composition
and independence requirements of the
2024 UK Corporate Governance Code
(the ‘2024 Code’), the majority of which
came into force for the financial year
commencing 1 January 2025.
Membership
At the start of the year, the Committee
comprised John Martin as Chair, and two
Independent Non-Executive Directors
(‘NEDs’), Lisa Mitchell and Geoffrey Green.
John Martin stepped down from the
Board and as a member of the Committee
on 25 June 2025 and I was appointed
as a Director and assumed the role of
Committee Chair on 26 June 2025. There
were no other changes to the membership
of the Committee during the year.
The qualifications of each of the Chair and
members of the Committee are set out on
pages 107 to 108.
Meetings
The Committee conducted its duties
through three meetings held during 2025.
During the year the following areas were
discussed at the Committee meetings:
2025 Matter
1H
(two
meetings)
• Review and approval
of Nominations
Committee report for
inclusion in the 2025
Annual Report and
Accounts
• Annual review of
Directors’ conflicts of
interest register
• Annual Director
reappointment
• Annual Committee
Performance
Evaluation
• Discussion on search
for a new Chair
• Selection of Chair for
recommendation to
the Board
2H
• Succession planning
As at 31 December 2025, the Board
comprised two Executive Directors and
four NEDs, including the Chair. All of
those NEDs (discounting the Chair, who
the Board determined was independent
on appointment) were considered
independent for the purposes of the 2024
Code.
I serve as Chair of the Board, the
ESG Committee and the Nominations
Committee. Lisa Mitchell serves as Chair
of the Audit and Risk Committee, Geoffrey
Green serves as Chair of the Remuneration
Committee, and Dr Bill Higgs serves as
Chair of the Reserves Committee. Geoffrey
Green is also designated as the Senior
Independent Director and, succeeding
John Martin in this capacity, as the Director
responsible for workforce engagement.
Board refreshment and
succession planning
Board refreshment and succession
planning continue as ongoing processes.
In 2025, a key priority for the Committee
was the process to identify and
recommend a new Chair with Geoffrey
Green the Senior Independent Director
leading this process. This process, and the
Committee’s role within it, is summarised in
“Appointments Process” below.
Appointments Process
Board appointments are made through
a formal process led by the Nominations
Committee.
During 2025, the only new appointment
to the Board was my appointment as
Chair following the retirement of John
Martin. John announced at the 2025
AGM his intention to step down as
soon as a successor could be identified,
after which the Board delegated to the
Committee the process of identifying one
or more candidates for Chair and making
a recommendation to the Board as quickly
as practicable. The Committee consulted
with the Company’s largest shareholders,
who had expressed a desire for refreshed
leadership, and sought recommendations
from industry contacts on potential
candidates. In considering suitability of
candidates for the position of Chair, the
Committee assessed the capabilities
needed to support the Company’s
strategic priorities, with particular weight
given to relevant industry experience.
When a preferred candidate was
identified, a full due-diligence process was
undertaken by the Committee, including
interviews, references and an assessment
against the Company’s strategic and
governance requirements. The eventual
outcome of the process, supported by
the Company’s largest shareholders, was
the Committee’s recommendation to the
Board of my appointment.
Strategic Report Additional InformationFinancial Statements
127
Governance Report
NOMINATIONS COMMITTEE REPORT - CONTINUED
Compliance with the UK
Corporate Governance
Code
The Company has applied the principles
of the 2024 UK Corporate Governance
Codes (the “2024 Code”) throughout the
year. As reported in the UK Corporate
Governance Report on pages 109 to
118, the Company was in full compliance
with the applicable provisions of the 2024
Code throughout the year. However, the
report includes a commentary on my
appointment as Chair in the context of
Provision 20 of the 2024 Code. Provision
20 states that an external search
consultancy or the open advertising of
vacancies should generally be used for
the appointment of the Chair and other
NEDs. The Corporate Governance report
notes that, in relation to my appointment
as Chair, neither an external search
consultancy nor open advertising were
used by the Committee or the Board. An
explanation of the decision not to use
either of these approaches is set out in the
report.
While the Committee recognises the
importance of external search firms in
safeguarding objectivity and widening the
candidate pool, in this case the strength of
the recommendation and the thoroughness
of the Committee’s assessment provided
sufficient assurance of a merit-based
appointment. The Committee remains
committed to using open advertising and/
or external search consultancies for future
Board appointments where appropriate.
Independence
As at the date of this report, the
Committee and the Board are satisfied that
all of the NEDs (discounting the Chair, who
the Board determined was independent
on appointment), are independent. In
reaching this assessment, the Committee
and the Board have taken into account
the considerations described in the 2024
Code.
Board balance
The Committee assesses the
Board’s balance of skills, experience,
independence, diversity, tenure and
knowledge annually. My appointment as
Chair in June 2025 reflects the Company’s
leadership needs within the context
of growth and long-term strategy. The
Committee considers the balance of the
Board appropriate but keeps it under
review.
The Board’s current balance and
composition in 2025 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 international and global perspective
achieved has enhanced the Board’s
discussions on business development,
M&A and operational and financial
integration. The Committee, and the
Board as a whole, recognises the value
of diversity across the organisation,
including but not limited to better decision-
making, higher employee engagement
and productivity, increased innovation
and an improved understanding of risks
and opportunities within the business.
Diversity is an important component in
the Committee’s decision-making process
as it relates to Board appointments and
succession planning.
At present, the Board scores highly
on gender diversity, with 50% female
representation. The Company meets the
requirement for at least one senior Board
role to be held by a woman. The average
age of the Board is 60.75. The Company
does not currently meet the UK Listing
Rules target of having at least one Director
from a minority ethnic background,
although the Group’s wider workforce
is more ethnically diverse. The board is
committed to broadening outreach through
existing Board, executive and industry
networks and peers to identify candidates
from a minority ethnic background.
At Senior Leadership Team level, the team
comprises both operational managers and
Executive Directors. Female representation
is present at Executive Director level,
whilst the operational management cohort
is currently all male. The Committee
recognises the importance of developing
a broader pipeline to ensure gender and
ethnic diversity is represented across
all tiers of senior leadership. Below
SLT level, the Group’s wider workforce
reflects a more diverse profile across
gender, ethnicity, and background, and
the Committee is focussed on ensuring
this diversity is nurtured and progresses
through the talent pipeline into future
leadership roles.
As part of its commitment to diversity
within the organisation, the Committee
also conducts an annual review of the
Board and management, taking into
consideration diversity of gender, age,
demographics, skills, professional
backgrounds, experience and education.
Where this review identifies any gaps or
areas for potential improvement, such as
the absence of a Board member from a
minority ethnic background, the Committee
will take that into consideration in
succession planning and when determining
the process for future appointments.
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
128
NOMINATIONS COMMITTEE REPORT - CONTINUED
Board performance
In line with the 2024 Code, at the
end of 2025, 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 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:
• Continued development and
implementation of strategy
• Ongoing assessment and management
of risk
• Enhancement of shareholder and
stakeholder interests
• Talent 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.
All six Directors holding office at the 2025
AGM retired and offered themselves for
re-election at that meeting. At the meeting,
John Martin announced he would be
stepping down as Chair and as a Director
as soon as a successor could be identified
and appointed. All Directors were duly
re-elected or, in the case of Katherine Roe,
elected for the first time at the AGM.
Five of the resolutions, with the exception
of the resolution to reappoint Katherine
Roe, received more than 20% of votes
cast against the resolutions. In response
to the significant number of votes against
these resolutions, and in accordance
with Provision 4 of the 2024 Code, the
Company explained, when announcing
the voting at the AGM, what actions it
intended to take to consult shareholders
in order to understand the reasons behind
the result. The Company then published
on its website an update statement on 13
November 2025 commenting on the views
received from shareholders and actions
taken. A final summary, also required by
Provision 4 of the 2024 Code, is contained
in the Corporate Governance Report on
page 118.
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 my case, I will seek election by
shareholders for the first time at the 2026
AGM, having been appointed by the Board
since the 2025 AGM. The Committee
and the Board both recommend that
shareholders vote in favour of my election
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
The Committee also includes within its
scope of responsibility the review of the
Board’s engagement with staff across the
Group.
In his role as Non-Executive Director
responsible for workforce engagement,
Geoffrey Green joined London office staff
for a meeting at which staff members
were able to discuss matters of interest.
In addition to this event, I held individual
meetings with each regional office and
encouraged colleagues that to approach
me directly to discuss matters related to
the Company or the business.
The Board’s commitment to regular
and meaningful workforce engagement
across the Group has proved an effective
communication route for the employees
and underpins the Pharos guiding
principles of openness and integrity.
Board development,
information and support
Throughout 2025, 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 performance review and discussed
with the Chair.
Conflicts of interest
The Board may authorise actual or
potential conflicts of interest in accordance
with section 175 of the Companies Act
2006 and the Company’s Articles, subject
to appropriate conditions. Directors must
notify the Company of any conflicts or
potential conflicts, including those relating
to connected persons. Only non-conflicted
Directors may approve such matters,
acting in good faith to promote the
Company’s success, and may impose
limits or conditions as needed—for
example regarding confidential information
or attendance at meetings.
All Directors have reported either the
existence or absence of conflicts. The
Board reviews each notification on its
merits and conducts ongoing monitoring
throughout the year, including a scheduled
annual review in March.
JOÃO SARAIVA E SILVA
Nominations Committee Chair
Strategic Report Additional InformationFinancial Statements
129
Governance Report
Dear Shareholders,
I am pleased to present this Audit and
Risk Committee Report for the year
ended 31 December 2025, 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.
Audit and Risk
Committee Report
AUDIT AND RISK COMMITTEE REPORT
LISA MITCHELL
Non-Executive Director
Meeting attendance
Committee member 2025 attendance
Lisa Mitchell (Chair) ^
Geoffrey Green ^
KEY
Attended as member
Not attended
^ Independent Directors
Notes:
a) Sue Rivett and Katherine Roe attended all four meetings, Dr Bill
Higgs attended one meeting and John Martin and João Saraiva e
Silva attended two meetings, all as non-committee members.
b) John Martin stepped down from the Board on 25 June 2025.
c) João Saraiva e Silva appointed as Non-Executive Chair from 26
June 2025.
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
130
AUDIT AND RISK COMMITTEE REPORT - CONTINUED
Membership and
responsibilities
During 2025, the Audit and Risk
Committee comprised of two members,
me as Chair and Geoffrey Green.
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
at 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 2025
The committee met four times during
2025. 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.
During 2025, 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, Policy on the Provision of Non-
Audit Services by External Auditors,
Water Resource Management Policy,
Security Policy, Anti-Facilitation of
Tax Evasion Policy, the 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 2024
Financial Statements, including reviews
that they were fair, balanced and
understandable, reviews of the Going
Concern and Viability Statements;
• Review of the 2024 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;
• Review and discuss KPMG’s report
on IT risk and the cyber security
assessment process;
• Update on partner’s responses to the
prior year audit findings of the Joint
Venture in Egypt.
May
• Finance update including the Internal
Controls Report, Treasury review and
update on Risks;
• Reviewed and discussed KPMG’s
update on IT risk and the cyber security
assessment process.
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;
• Verbal update on Material Controls
in connection with the upcoming
requirements of Provision 29 of the
2024 UK Corporate Governance Code,
applicable to the Group with effect
from the financial year commencing 1
January 2026;
• Review of 2025 year-end planning,
including the external auditor’s Audit
Planning Report;
• Review and approval of the 2025
Interim Accounts, including presentation
by the external auditor, EY, and Audit
and Risk Committee comments.
December
• Finance update including Treasury, Risk
and Internal audit update;
• Review and discuss KPMG’s report
on the operator’s compliance with the
Egyptian Joint Operating Agreements;
• Verbal update on Material Controls
in connection with the upcoming
requirements of Provision 29 of the UK
Corporate Governance Code;
• Review of the 2025 Actuals versus
Budget;
• Annual Review and Approval of the
Terms of Reference of the Audit and
Risk Committee.
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During the year, the committee focused on the following matters:
Financial reporting and
significant accounting issues
During the first half of 2025, 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
2025 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 2025, being key
issues which may be subject to heightened
risk of material misstatement.
Fair, balanced and
understandable
The committee advised the Board
whether it considered 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
166 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 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
2025 Financial Statements.
Following its review of management’s
committee paper and in-depth walk
through of assumptions, the committee is
satisfied that it is appropriate to prepare
the 2025 Financial Statements on a going
concern basis.
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AUDIT AND RISK COMMITTEE REPORT - CONTINUED
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. The
variation in the long-term average Brent
price forecast does not indicate any
significant change in the underlying
value of oil and gas assets.
Reviewed the Group’s discount rates for impairment
testing, where applicable
The Group’s discount rates were reviewed.
Macroeconomic factors, including the risk-
free rate, equity market risk premium, and
country risk premium, have not changed
significantly, and the overall market outlook
remains stable.
Internal and external indicators of impairment and
reversal of impairments were reviewed
No impairment or reversals
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
supportable assumptions.
Reviewed risks of management override of controls No exceptions were noted
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.
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.
Reviewed the Group’s guidelines and policy for
compliance with oil reserves disclosure regulations;
including governance and control
Reviewed exploration costs No impairment or reversals
Reviewed at each committee meeting the status of all
updated estimates
• In 2024 the Company formed
a Reserves Committee of the
Board (pages 121 to 124) to
provide enhanced governance
over the Company’s Reserves and
Resources.
• For 2025 YE reserves, the Reserves
Committee reviewed, in conjunction
with management, the reserves
audit conducted internally for all the
group’s producing fields.
• The reserves are described in the
Reserves Committee report on
pages 123 to 124.
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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 2025,
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 with
long lead items ordered to progress the
opportunity. The Company 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. Following the impairment review, the
committee recommended to the Board
that no impairment had been triggered
for Block 125. Whilst ongoing costs for
exploration are therefore forecasted and
funds are available for future exploration,
there is insufficient certainty of full recovery
to justify the reversal of the previous
impairment charges in 2020.
In Egypt, as part of the planned work
programme for 2024, an exploration well
was drilled on El Fayum in August 2024.
Testing of the well was carried out at the
beginning of February 2025. IPR, the
operator of the El Fayum Concession,
applied to EGPC for commercial
discovery declaration and early production
permission in February 2025. The
development lease was approved and first
production commenced at the end of June
2025. As a result, exploration costs of
$2.9m were reclassified to property, plant
and equipment in 1H 2025.
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 2025,
the Group’s PP&E oil and gas assets
comprised its two Vietnam producing
licences, TGT and CNV, as well as the El
Fayum and NBS Concessions in Egypt.
These are described in the Reserves
Committee report on pages 123 to 124.
This review focused on examining
both internal and external indicators of
impairment. 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 no
impairment or impairment reversals were
made on the two Vietnam fields and on the
two Egypt fields.
Disposal of 55% interest in
Egypt Concessions
On 21 March 2022 the farm-out
transaction of Egyptian assets was
completed.
Under the Farmout Agreement, 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
c.$90/bbl, respectively). The contingent
consideration is calculated yearly and is
capped at a maximum amount of $5.0m
per year (maximum total payment of
$20.0m in four years).
As at 31 December 2025, the final tranche
of the contingent consideration, due and
payable on 1 June 2026 in respect of
the average Brent Price during the 2025
calendar year, amounts to $1.7m (2024:
$5.1m, of which $3.3m related to current
assets and $1.8m to non-current assets).
A further $0.3m remains outstanding in
respect of the contingent consideration
due on 1 June 2025.
Certain adjustments relating to the final
consideration are still under discussion
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.
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
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AUDIT AND RISK COMMITTEE REPORT - CONTINUED
Egypt Foreign Currency Risk
The committee took into consideration the
economic environment in Egypt in respect
of the trade receivables due from EGPC,
assessing the risk of non-payment.
In Egypt, 2025 has brought about a
general improvement in the macro-
economic situation.
Following the policy measure implemented
in early 2024, the Egyptian Government
continued advancing its macroeconomic
stabilisation programme through 2025.
i) Loans with the International Monetary
Fund (IMF)
a) Under the Extended Fund Facility
of $8 billion, Egypt has received
successive disbursements totalling of
$3.2 billion. The fifth and sixth review,
which has been completed by the
IMF in December 2025, will unlock a
further $2.5 billion in early 2026;
b) Under the Resilience and
Sustainability Facility, the IMF
approved access to around $1.3
billion, of which $0.5 billion has
already been disbursed and another
$0.2 billion is expected to be paid
together with the abovementioned
$2.5 billion;
ii) Landmark agreement with ADQ (an Abu
Dhabi sovereign wealth fund), under
which ADQ acquired development
rights for 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
iii) Additional support from the European
Union, the World Bank and other
multilaterals institutions, amounting to
approximately $14 billion.
Overall, out of the total of $57 billion
pledged to Egypt in the Spring of 2024, we
understand that approximately $40 billion
has been received to date, with another
$2.7 billion from the IMF and EUR1 billion
from the European Union expected shortly.
In addition, and very notably, in November
2025 another land/real estate deal (similar
to the one for Ras El Hekma – see above)
was signed with a Gulf neighbour, namely
Qatar, in the Alam El Roum Area (on the
Mediterranean coast). Under the terms of
the deal, Egypt is set to benefit from the
Qatari Real Estate sovereign fund (Diar)
for a total of $29.7 billion, including $3.5
billion in cash for the purchase of the
land (already received). The rest of the
revenues will result from a $1.8 billion “in
kind” element (residential units, once built),
with the rest ($24.4 billion, over the years)
being the estimated value of Egypt’s 15%
of the net project profits, including returns
from the project company and associated
entities controlled by Qatari Diar.
These measures have provided a boost
to confidence and a manoeuvring space
for the Government to tackle structural
reforms, such as removal of subsidies,
privatisation of state- and military-owned
assets and reduced spending on mega
infrastructure projects. Notwithstanding
existing structural challenges, particularly
regarding debt sustainability, inflation, and
long-term foreign currency liquidity, the
Government policies have started to bear
fruit. Lower inflation in the second half
of 2025 has allowed the Central Bank to
significantly reduce interest rates, while
foreign currency reserves have continued
to grow (to a record $51.5 billion at end
2025), buying Egypt some additional
breathing space.
In this improved liquidity context, which
reflected in a significantly enhanced ability
by EGPC to pay down their arrears,
Pharos’ receivables have decreased to
$7.4m at 31 December 2025 prior to the
application of a risk factor provision of
$0.1m (2024: $29.5m receivables prior to
the application of a risk factor provision of
$1.4m).The movement in 2025 is primarily
driven by $20.6m decrease from Egypt
(2024: $4.8m) following $20m bullet
payment received from EGPC on the
last day of the year, which reduced the
outstanding receivable balance to $7.4m;
its lowest level since December 2021.
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 future devaluation of the EGP.
Commodity hedging –
treasury management
The committee assessed the hedging
programme and the approach adopted for
hedging.
The Group actively managed its exposure
to commodity price risk by entering into
an ongoing programme of hedging. The
objective of the hedging programme is to
provide downside protection to cash flows
in the event of commodity prices falling.
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
2025, there were no realised gains or
losses (2024: loss of $0.1m).
Internal controls and risk
management systems
The Group’s internal control and risk
management framework is designed to
ensure that risk identification, assessment
and mitigation is properly embedded
throughout the organisation. It provides the
Board and the committee with reasonable
assurance that financial irregularities
and control weaknesses are identified to
mitigate risks that could potentially have
a material adverse impact on the Group’s
operations, earnings, liquidity and financial
position.
The Board is responsible for maintaining
a sound system of internal controls to
safeguard shareholders’ investment and
the assets of the Company. The committee
has been delegated the responsibility to
monitor and assess the effectiveness of the
control systems operated by management.
During 2025, the Group continued to
carry out comprehensive reviews of the
overall effectiveness of its internal controls
framework and continued to work on
improvements.
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. The external
auditor, EY, also provides feedback and
recommendations on controls which are
brought to the attention of the committee.
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AUDIT AND RISK COMMITTEE REPORT - CONTINUED
The Board approved the appointment of
KPMG to carry out various internal audits.
The programme of work for 2025 included
the completion of a review of IT and Cyber
security commenced in 2024, and a
review of the operator’s compliance with
the Egyptian Joint Operating Agreements
during the financial year from 1 July 2023
to 30 June 2024.
The Treasury Committee continued to
meet regularly to review compliance of the
RBL covenants during first half of 2025
prior to final maturity of that facility, 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 applicable provisions
of the 2024 UK Corporate Governance
Code, in the UK Corporate Governance
Code Report on page 109. In addition, it
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. This
review included consideration of significant
financial reporting issues, key 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 2025. These will be reviewed
again during 2026.
Following its annual review, the committee
and Board concluded that the Group’s risk
management and internal control systems
were operating effectively.
The committee recognises that the oil and
gas industry continues to face significant
technical, financial, environmental and
political challenges alongside the dual
imperatives of production growth and
progressing the transition to a low-carbon
future. In this context, the Company’s
Net Zero roadmap to achieve net zero
greenhouse gas (GHG) emissions by 2050
was reviewed and updated in 2025, and
further details can be found on pages 97
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 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.
Risk and internal control
framework
Provision 29 of the 2024 UK Corporate
Governance Code requires boards to
monitor and review the effectiveness of
their Company’s internal controls and risk
management framework.
In readiness for these changing
requirements, the company is actively
preparing to meet the requirements of
Provision 29 ahead of the declaration
of effectiveness of material controls,
with management initiating a review of
the Group’s internal controls and risk
management framework.
During the year, this review included a gap
analysis conducted by management of the
existing control framework and presented
its findings to the committee identifying
enhancements to the company’s key
business processes and controls to
comply with the new Code requirements.
Recommendations the committee
considered were refinements to the
Group’s risk management framework, a
formalisation programme of the Group’s
business management system to introduce
greater rigour and standardisation
to processes and controls, and the
implementation of a documented material
controls assurance programme.
During the year, the committee reviewed
and approved a revision to the Group’s risk
management framework, revalidated the
Group’s risk appetite position, approved
management’s proposed definition of
material controls for the Group.
In addition, management presented a
roadmap to the committee setting out key
actions required in advance of the first
internal control declaration to be made in
relation to the 2026 year end, including
the agreed definition of material controls
to be applied in identifying which controls
fall into the scope of the declaration.
The committee will continue to oversee
management’s progress against this plan
to compliance during 2026.
We are aiming to report our compliance
with Provision 29 within the 2026 Annual
Report and Accounts, to be published in
April 2027.
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AUDIT AND RISK COMMITTEE REPORT - CONTINUED
External auditor
Ernst & Young LLP was re-appointed as
our external auditor with effect from the
financial year commencing 1 January
2025.
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 Andrew
Smyth, in his second year as lead audit
partner.
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 2025
were $0.7m and $0.2m respectively. The
committee approved all non-audit services
provided by the external auditor in 2025.
The principal non-audit fees during 2025
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 applicable
provisions of the 2024 UK Corporate
Governance Code and associated
guidance.
LISA MITCHELL
Audit and Risk Committee Chair
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Governance Report
Dear Shareholders,
On behalf of the Board, we are pleased to
present the Directors’ Remuneration
Committee Report for the financial year
ended 31 December 2025. 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).
Directors’
Remuneration
Committee Report
DIRECTORS’ REMUNERATION COMMITTEE REPORT
GEOFFREY GREEN
Remuneration Committee Chair
Role of the 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.
Meeting attendance
Committee member 2025 attendance
Geoffrey Green (Chair) ^
Lisa Mitchell ^
KEY
Attended as member
Not attended
^ Independent Directors
Notes:
a) Sue Rivett and Katherine Roe attended four meetings, João
Saraiva e Silva attended two meetings, and Dr Bill Higgs and
John Martin attended one of the meetings, all as non-committee
members.
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
138
DIRECTORS’ REMUNERATION COMMITTEE REPORT - CONTINUED
Highlights of Committee
actions in 2025
The year has seen significant progress with
our strategy. Activities undertaken by the
Committee include:
• Board changes – At the AGM, John
Martin announced his retirement and a
new Chair, João Saraiva e Silva, joined
on 26 June 2025
• Setting robust and stretching
performance targets for the annual
bonus scheme and LTIP
• Monitoring developments in market
practice and reporting regulations
• Responding to shareholder feedback
from the 2025 AGM vote on
remuneration
An update statement on the results of
the 2025 AGM was published on 13
November 2025 and noted that the
low voting outcomes for a number of
resolutions, which included that approving
the 2024 Directors’ Remuneration Report,
were principally due to the dissenting
actions of a single shareholder. The
Committee does not believe that there
was any underlying concern with the
governance or implementation of the
remuneration policy as evidenced by
the support of proxy and governance
advisory services ISS and Glass Lewis
recommending a vote in favour of all
resolutions proposed at the AGM, and
the Institutional Voting Information Service
awarded all AGM resolutions a “Blue Top”,
indicating no areas of major concern. As
a consequence, the Committee has not
considered it necessary to take any further
action.
Performance factors
reflected in the pay of our
Executive Directors
As reported throughout the Strategic
Report, 2025 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, including a significant recovery of
receivables in Egypt which doubled our
bank balance at the end of the year. During
the year, we were able to commence
our six well drilling campaign in Vietnam,
being the largest campaign since the
original development and we delivered
stable production performance in both
Egypt and Vietnam. This has allowed the
Board to continue our commitment to
sustainable shareholder returns. In 2025,
we returned $6.8m to shareholders. 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 2025 to employees other
than the Executive Directors. A further
interim payment was made in December
with a final payment representing the final
outturn for 2025 results being made in
January 2026. Employees continue to
receive support with their travel expenses,
a policy that was introduced in 2023.
Strategic
Underpinned by a strengthened balance
sheet and steady production base across
the portfolio, Pharos continues to execute
its 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
2025, we returned $4.7m to shareholders
via a final dividend for the 2024 financial
year of 0.847 pence 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 and 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 Vietnam were
in line with guidance and Egypt marginally
below.
Financial performance was strong, with
cost control, cash generation and funding
ahead of expectations. Safety results
were excellent in Vietnam, continuing our
record of zero LTIs since operations began,
but unfortunately there was a recordable
oil spill during 2025 in Egypt, where a
contracted road tanker overturned on the
Cairo-Suez desert road.
Following a robust assessment of the
performance criteria the Committee
determined the formulaic out-turn for
bonuses at 76.96% of the maximum
potential. 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 March 2022 LTIP
awards vested in part in March 2025,
having met some of the performance
criteria as set out in detail on page 144.
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139
Governance Report
Directors’ Remuneration
Policy
The current Directors’ Remuneration
Policy was approved at the 2023 AGM.
The Company is required to review and
propose to shareholders the Directors’
Remuneration Policy at least once every
three years and, accordingly, we will
propose a revised Policy to shareholders
for approval at the 2026 AGM, the details
of which are listed in pages 153 to 156.
The Committee believes that the current
Policy largely 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. Accordingly, following
a consultation process, there are only
modest revisions proposed to the Policy
to be submitted to the 2026 AGM for
approval. These changes are considered
to assist with the administration and
operation of the Policy without changing
any of the main terms or quantum.
Implementation of Policy
for 2026
Base salaries for the Executive Directors
were increased by 3.5% effective from
2026. The CEO, Katherine Roe, also
received a further increase of 6.1%
effective from 2026 noting that this resulted
in a salary consistent with the 2024 level
for the previous CEO, following her earlier
substantially lower salary level on joining
the company. Across the UK employee
population, the average increase for 2026
is 6.2% which follows an increase of 6%
in 2025.
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 2025 are a fair
reflection of the context in which
decisions had to be made. A
revised Directors’ Remuneration
Policy with only modest
revisions to the current Policy
will be submitted for approval
at the AGM, and the Committee
believes that the new Policy
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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PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
140
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 2025.
2025
Fees/
Salary
£000’s
Benefits
£000’s
Bonus
Cash
1
£000’s
Bonus
Deferred
1
£000’s
LTIP
4
£000’s
Pension
£000’s
Total
£000’s
Fixed
£000’s
Variable
£000’s
Executive Directors
K Roe 415 14 319 160 -
62 970 477 493
S Rivett 306 21 235 118 330 46 1,056 352 704
Non-Executive Directors
J Martin
2
93 - - - - - 93 93 -
J Saraiva e Silva
3
90 - - - - - 90 90 -
L Mitchell 82 - - - - - 82 82 -
G Green 98 - - - - - 98 98 -
Dr B Higgs 82 - - - - - 82 82 -
Total 1,166 35 554 278 330 108 2,471 1,274 1,197
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 2025 of £373k; b) Cash bonus paid in January 2026 of £181k
following finalisation of 2025 annual bonus measures and out-turns; c)
Deferred bonus of £278k granted under the Deferred Share Bonus Plan
2) J Martin stepped down from the Board on 25 June 2025
3) J Saraiva e Silva was appointed to the Board as Chair on 26 June 2025
4) Value of the LTIP reflects the March 2022 LTIP awards which vested
following the end of the performance period in March 2025. Value of
awards vesting based on share price on 24 March 2025 (being £0.2755)
Comparative figures for 2024 are provided in the table below:
2024
Fees/
Salary
£000’s
Benefits
£000’s
Bonus
Cash
1
£000’s
Bonus
Deferred
1
£000’s
LTIP
6
£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) J Brown stepped down from the Board on 30
April 2024
3) K Roe was appointed to the Board as CEO on
1 July 2024
4) M Daryabegui stepped down from the Board on
23 May 2024
5) Dr B Higgs was appointed to the Board on 16
January 2024
6) Value of the LTIP reflects the October 2021
LTIP awards which vested following the end of
the performance period in October 2024. Value
of awards vesting based on share price on 6
October 2024 (being £0.2035)
The aggregate emoluments of all Directors during the year was £2.5m (2024: £2.3m).
DIRECTORS’ REMUNERATION COMMITTEE REPORT - CONTINUED
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Governance Report
Notes to the single figure table
Base Salaries
The salary for the CEO was increased by 12% effective from January 2025 to £415,000, which consisted of a normal salary increase
of 3% and an additional 9% to bring her salary more into line with the market given the low positioning on appointment. The salary for
the CFO was increased by 3% effective from January 2025 to £305,704, which was lower than the average inflationary impact salary
increase of just under 6% across the wider workforce.
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 2025 was 150% of salary.
2025 annual bonus measures and out-turns
Metric Weight Bonus awarded
Environmental, Social and Governance 20.00% 17.00%
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% 0.00%
Link to strategy
• Sound oil field practices
• Management of our carbon
footprint wherever we work
Target
• Zero reportable environmental spills
Performance
• In Egypt, a contracted road tanker
overturned on the Cairo-Suez
desert road, leading to a spillage of
178 barrels of oil
Outcome
• Not Achieved
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142
DE&I 3.00% 3.00%
Link to strategy
• Strong governance and personal
code of conduct
Target
• Champion DE&I throughout the
Group
Performance
• DE&I Group wide survey launched
and 100% of responses received
• 1:1 sessions with CFO at Head
Office, along with Egypt and
Vietnam operations
• Online cultural awareness course
Outcome
• Achieved
GHG Emissions 5.00% 5.00%
Link to strategy
• Sustainability
Target
• Decarbonisation initiatives utilising
the Emissions Fund
Performance
• Vietnam – Process optimisation to
reduce gas flaring and annual tree
planting completed
• Egypt – replacement of diesel
electricity generators for 20
production and water injection
wells, recovering gas that would
have been vented or flared
− Camp electricity supply from
grid, resulting in reduced diesel
consumption
− Solar PV trial – installation of solar
power plants to supply electricity
to Silah 1 and Silah 1-1
Outcome
• Achieved
Metric Weight Bonus awarded
Financial and capital structure 30.00% 23.75%
Increase OCF 25.00% 18.75%
Link to strategy
• Control expenditure
• Sustain shareholder returns
Target
• Underlying operating costs < 2024
• Underlying G&A < 2024 by 5%
• Increase OCF
• Sustain dividends
Performance
• Operating costs increased 1% to
$38.2m (2024: $37.8m)
• Underlying G&A decreased by
12% to $7.2m
• OCF increased by 3% to $55.6m
(2024: $54.0m)
• Consistent return to shareholders
Outcome
• Not achieved
• Achieved
• Achieved
• Achieved
Debt management 5.00% 5.00%
Link to strategy
• Liquidity management
Target
• Ensure funds are in place for
drilling campaign and portfolio
optimisation
Performance
• No requirement for further
borrowings and funded from
existing operations
• Two sidetrack wells on TGT
– TGT-H1-19IPST and TGT-H5-
32IPST – drilling completed during
December 2025
• Appraisal well TGT-H5-18X
commenced drilling on 22
December 2025
• Appraisal well on CNV – CNV-
8P – commenced drilling on 3
December 2025
Outcome
• Achieved
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Governance Report
Metric Weight Bonus awarded
Operational 10.00% 3.71%
Production 10.00% 3.71%
Link to strategy
• Prudent Management
Target
• Vietnam production volumes 3,540
– 4,580 boepd
• Egypt production volumes 1,460 –
1,620 bopd
Performance
• Vietnam production outturn was
4,095 boepd
• Egypt production outturn was
1,303 bopd
Outcome
• Partly achieved
for Vietnam,
within guidance
• Not achieved for
Egypt
Metric Weight Bonus awarded
Business plan 40.00% 32.50%
Vietnam drilling campaign 10.00% 10.00%
Link to strategy
• Continued development of Vietnam
assets
Target
• Commence drilling campaign on
TGT and CNV following approval of
licence extensions
Performance
• Two sidetrack wells on TGT
– TGT-H1-19IPST and TGT-H5-
32IPST – drilling completed during
December 2025
• Appraisal well TGT-H5-18X
commenced drilling on 22
December 2025
Outcome
• Achieved
Vietnam Exploration 17.50% 10.00%
Link to strategy
• Continued development of Vietnam
assets
Target
• Secure licence extension on Block
125
• Secure funding partner for Block
125
Performance
• Licence extension formally
approved in June 2025
• Negotiations ongoing with
interested parties
Outcome
• Achieved
• Not achieved
Egypt Consolidation 7.50% 7.50%
Link to strategy
• Continued development of Egypt
assets
Target
• Progress consolidation of El Fayum
and NBS concessions to achieve
better commercial terms
Performance
• EGPC Executive Board approval
received, Egyptian Parliamentary
ratification expected 2026.
Outcome
• Achieved
Stakeholder Engagement 5.00% 5.00%
Link to strategy
• Mutually beneficial partnerships
Target
• Engage transparently and
constructively with stakeholders
Performance
• Increased CEO/CFO engagement
with key shareholders and
government stakeholders
• Analyst lunches
• Increased interaction with
journalists/media
Outcome
• Achieved
OVERALL 100% TOTAL ASSESSMENT 76.96%
DIRECTORS’ REMUNERATION COMMITTEE REPORT - CONTINUED
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144
The Committee felt that the overall performance and the experience of stakeholders in 2025 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 2025, the total Directors’ bonuses include the following: a) Cash bonus paid in December 2025
of £373k; b) Cash bonus paid in January 2026 of £181k following finalisation of annual bonus measures and out-turns and (c) Deferred
bonus of £278k 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
K Roe 215 104 160 479 76.96%
S Rivett 158 77 118 353 76.96%
LTIP vesting in 2025
Part of the March 2022 LTIP awards vested in March 2025, having met the performance criteria. The performance conditions, targets
and outcomes are set out below. Overall performance outcomes and the number of awards ultimately vesting was determined following
the end of the TSR performance period which ended 25 March 2025. The table below sets out an overview of Pharos’s relative TSR
performance during that period.
Measure
Relative TSR
-Performance against
comparator group Absolute TSR
Cash flow from
operations
Return on
Capital
Employed ESG
Weighting
40% 15% 15% 15% 15%
Threshold – 25% vesting
Median (Rank of 8) 20%
$150m over
3 years
6% average
over 3 years
10% reduction
in emissions
intensity
Maximum- 100% vesting
Upper Quartile (Rank
of 4.25)
30%
$200m over
3 years
10% average
over 3 years
15% reduction
in emissions
intensity
Actual result
Above Upper Quartile
(Rank of 5.05)
-10.6% $152.3m 13.7%
4.4% reduction in
emission intensity
Vesting
83.92% 0% 28% 100% 0%
Vesting overall total 52.8%
The resulting values for awards which vested are set out in the table below and the value is included in the single total figure table:
No. of awards granted
No. of dividend
equivalents
No. of awards
vesting
Value of awards
vesting
1
S Rivett
2,032,667 95,860 1,196,429 £329,616
1) Value of awards vesting based on share price on 24 March 2025 (being £0.2755)
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.
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Governance Report
LTIP award grants made in 2025
The LTIP awards are usually made in March. For Katherine Roe and Sue Rivett this represented 200% of contractual salary at the time
the award was made. It is anticipated that future grants, including the grants to be made in March 2026, will be made following the
announcement of the preliminary results in March. These were made on a similar basis to prior years, with awards to Executive Directors
over shares worth two times salary and subject to the same measures as in recent years.
Date of grant No. of shares Face value of award Award as % of salary
K Roe
27 March 2025 3,593,073 £830,000 200%
S Rivett
27 March 2025 2,646,787 £611,408 200%
Face value based on share price at the time of awards were determined on 26 March 2025 (being £0.231)
The performance measures for the 2025 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
Cash flow from operations
15% $150m to $200m over the three-year period
Return on Capital Employed
15% 6% to 10% average for the three-year period
ESG medium term measures
15% 10% to 15% reduction in emissions
Deferred Share Bonus Plan awards granted in 2025
The DSBP awards were granted in January 2025 in relation to the 2024 annual bonus outcome.
Date of grant No. of shares Face value of award
K Roe
24 January 2025 265,304 £65,397
S Rivett
24 January 2025 425,434 £104,869
Face value based on share price at the time of awards were determined on 23 January 2025 (being £0.2465)
DIRECTORS’ REMUNERATION COMMITTEE REPORT - CONTINUED
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
146
Directors’ interests as at 31 December 2025
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 2025 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
2025
Beneficially owned
shares as at the
date of this report
Awards subject
to performance
conditions as at
31 December
2025
1
Awards subject to
Option Price 120
pence as at 31
December 2025
Awards subject
to service
conditions as at
31 December
2025
1
(% of
salary)
Achieved
(Yes/No)
Executive
K Roe
2
200% No 106,318 119,167 6,861,852 – 276,905
S Rivett
2
200% No 1,829,053 1,837,562 8,491,907 90,000 875,677
Non-Executive
João Saraiva
e Silva
3
– – 250,000 250,000 – – –
G Green
– – 95,000 95,000 – – –
L Mitchell
4
– – 51,958 51,958 – – –
B Higgs
– – – – – – –
J Martin
5
– – N/A – – – –
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) Appointed to the Board on 26 June 2025.
4) These shares are held by Alexander Barblett (husband of L Mitchell), and a closely associated person to L Mitchell.
5) J Martin held 237,000 shares when he stepped down from the Board on 25 June 2025 and is not required to disclose his shareholding after that date.
6) Our share price at the close of business on 31 December 2025 was 21.1p and the range of the middle market price during the year was 17.9p to 27.5p.
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 2025 other than as set out above and as described
in the notes to the table above.
DIRECTORS’ REMUNERATION COMMITTEE REPORT - CONTINUED
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Governance Report
Share awards outstanding at 31 December 2025
Type of
award
As at
1 Jan 2025
Granted/
awarded Adjusted
1
Lapsed Vested
3
Released
As at
31 Dec 2025
Date
potentially
vested
2
Expiry
date
K Roe
4,5
LTIP 2,934,899 – 176,765 - - – 3,111,664 01.07.27 01.07.34
LTIP - 3,593,073 157,115 - - - 3,750,188 27.03.28 27.03.35
DSBP - 265,304 11,601 - - - 276,905 24.01.27 24.01.35
S Rivett
3,4,5,6
LTIP 2,229,008 - 35,240 1,067,819 1,196,429 1,196,429 - 25.03.25 25.03.32
LTIP 2,729,298 - 164,381 - - - 2,893,679 23.03.26 23.03.33
LTIP 2,674,616 - 161,088 - - - 2,835,704 30.04.27 30.04.34
LTIP - 2,646,787 115,737 - - - 2,762,524 27.03.28 27.03.35
DSOP 25,000 – – – - – 25,000 31.05.19 31.05.26
DSOP 65,000 – – – - – 65,000 31.05.19 31.05.26
DSBP 416,411 - 6,583 - 422,994 422,994 - 13.01.25 13.01.33
DSBP 407,121 - 24,519 - - - 431,640 30.04.26 30.04.34
DSBP - 425,434 18,603 - - - 444,037 24.01.27 24.01.35
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 vest subject to the achievement of certain performance conditions and subject to a further holding requirement. The performance measures for
the 2025 LTIP are set out on page 145. DSBP awards vest subject to continued service over a two-year vesting period.
3) The performance measures for the 2022 LTIP awards were partially met resulting in 52.84% of the awards vesting.
4) DSBP Awards to K Roe and S Rivett were structured as nil-cost options.
5) LTIP Awards to K Roe and S Rivett were structured as nil-cost options.
6) 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, and no payments have been made to former Directors of the Company.
DIRECTORS’ REMUNERATION COMMITTEE REPORT - CONTINUED
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
148
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
Pharos Energy FTSE All Share Oil, Gas & Coal TSR Comparator Group
2015 2016 2017 2018 2019 2020 2021 2022
100
300
2023
200
400
500
2024
600
700
800
2025
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:
2016 2017 2018 2019 2020 2021 2022
1
2023 2024
2
2025
CEO single figure of remuneration (£000s) 1,632 1,716 1,829 1,567 669 894 909 925 804
970
Annual bonus pay-out (% of maximum) 35% 65% 105% 50% 0% 58% 66% 65% 71%
77%
LTIP vesting (% of maximum) 46% 0% 0% 0% 0% 0% 0% 0% 0%
0%
1) 2022 includes the total remuneration of E Story for 1 January 2022 to 22 March 2022, reflecting the period he served on the Board as CEO. J Brown’s total
remuneration is then presented for the period 23 March 2022 to 31 December 2022.
2) 2024 includes the total remuneration of J Brown for 1 January 2024 to 30 April 2024, reflecting the period she served on the Board as CEO. K 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
2025
2024
Wages and Salaries ($m)
Shareholder Returns (Dividends) ($m)
Shareholder Returns (Share buyback) ($m)
5.9
8.4
8.9
6.5
2.9
0.3
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Governance Report
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
(2025/
2024)
% change
in salary
(2024/
2023)
% change
in salary
(2023/
2022)
% change
in salary
(2022/
2021)
3
% change
in benefits
(2025/
2024)
% change
in benefits
(2024/
2023)
% change
in benefits
(2023/
2022)
% change
in benefits
(2022/
2021)
% change
in annual
bonus
(2025/
2024)
1
% change
in annual
bonus
(2024/
2023)
% change
in annual
bonus
(2023/
2022)
% change
in annual
bonus
(2022/
2021)
J Brown
2
N/A N/A 8.0% 35.1% N/A N/A -10.3% -0.8% N/A N/A -7.7% -5.4%
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
3.0% 6.0% 1.1% N/A 5.0% -77.3% 450% N/A 12.1% 16.2% -0.7% N/A
J Martin
5
N/A 13.3% 4.9% 26.7% N/A N/A N/A N/A N/A N/A N/A N/A
J Saraiva e
Silva
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
M Daryabegui
7
N/A N/A 5.3% 26.7% N/A N/A N/A N/A N/A N/A N/A N/A
L Mitchell
2.5% 6.7% 6.3% 26.7% N/A N/A N/A N/A N/A N/A N/A N/A
G Green
5.4% 5.7% 11.2% 40.6% N/A N/A -100.0% 100.0% N/A N/A N/A N/A
Dr B Higgs
8
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
8.3% 6.4% 9.9% 29.5% 2.5% 10.0% -9.3% 15.5% 11.3% 16.2% 8.1% 24.1%
1) Bonuses are normally awarded in respect of the calendar year.
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) J Martin stepped down from the Board on 25 June 2025.
6) J Saraiva e Silva was appointed to the Board on 26 June 2025.
7) M Daryabegui stepped down from the Board on 23 May 2024.
8) Dr B Higgs was appointed to the Board on 16 January 2024.
Chief Executive Officer’s pay ratio
The Company currently has 16 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 total remuneration as per Note 11 to the Financial Statements compared to shareholder returns, which would
include capital returns, dividends and share buybacks.
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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. During 2025, no Executive Director had non-executive appointments on any other board.
Implementation for 2026
Base salary
The following table shows the Executive Director base contractual salary levels.
2026 Base salary 000s 2025 Base salary 000s Increase from 2025 %
K Roe £455 £415
9.6%
S Rivett £316 £306
3.5%
The normal salary increases of 3.5% for the Executive Directors for 2026 are lower than the average inflationary impact salary increase
of just over 6% across the workforce. Katherine Roe receives an additional 6.1% 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 2026, benefits available to Executive Directors will be consistent with those set out in the Directors’ Remuneration Policy to be
approved at the 2026 AGM.
Pension
For 2026, 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 January 2027. 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
on the next page sets out the weighted performance measures which will be applied in determining annual bonus awards for 2026, and
identifies the link from each of these measures to our core strategy of:
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2026 KPI’s
Metric Weight Performance criteria which will be considered
Operational & Business Plan
65%
Strategic objectives: to replace produced
reserves and add to the reserve base in a way
which is value and/or cash flow accretive.
• Group working interest production guidance between 5,200 boepd and 6,400
boepd
• Successful drilling campaign in Vietnam
• Secure funding partner for Block 125
• Unlock value in Egypt
• Agree M&A target to SPA which is materially value accretive, adding to future
scale and cash flow
Financial
15%
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 > 2025 actuals
• Underlying Operating Costs < budget on a bbl basis
• Sustain dividends
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 < 0.8
• Zero reportable environment spills
• GHG emissions – utilising the emissions fund
• Successful reporting under new accounting system
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 year end 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 further reviewed and updated in 2025, further details can be found on pages 97 to 99.
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 2026, 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 2026 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%
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%
ESG medium term measures
Achieve 10% reduction over a three-year period, sliding scale to 15% for the full 15%
15% 10% to 15% reduction in emissions
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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.
The recovery period extends to two years post vesting (i.e. up to five years from grant for LTIP awards) which may be extended if action
or conduct is under investigation. This is considered to be a sufficient period in which to identify any issues which require consideration of
malus or clawback.
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 2026 Fee from 1 January 2025
Chair of the Company
£175,000
£185,400
Non-Executive Director
£65,508
£65,508
Additional fee: Senior Independent Director
£13,647
£13,647
Additional fee: Chair of Audit and Risk Committee
£16,377
£16,377
Additional fee: Chair of Remuneration Committee
£16,377
£16,377
Additional fee: Chair of Reserves Committee
£16,377
£16,377
Additional fee: Workforce Engagement Nominated Director
£5,459
£5,459
For 2026, benefits available to Non-Executive Directors will be consistent with those set out in the Policy to be approved at the 2026
AGM. Non-Executive Directors are not eligible for participation in the Company’s incentive or pension schemes.
Service Contract (reference Table A on page 163)
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 Lisa Mitchell and Geoffrey Green as Remuneration Committee Chair.
The Committee received assistance from 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 £19,215 were paid in
2025 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.
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Governance Report
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 (2025 AGM)
Directors’ Remuneration Policy (2023 AGM)
Votes % Votes %
Votes in favour
126,339,902 59.51%
200,307,051 84.59%
Votes against
85,976,095 40.49%
36,478,777 15.41%
Total votes
212,315,997 100.00%
236,785,828 100.00%
Votes withheld
8,463 –
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.
Policy Report
This Remuneration Policy will be effective from the date of the 2026 AGM, subject to shareholder approval at that meeting.
The Policy is intended to apply for a period of three years. However, the Committee monitors the Remuneration Policy on a continuing
basis including consideration of evolving market practice and relevant guidance; shareholder views and results of previous voting; policies
applied to the wider employee base; and with due regard to the current economic climate. Should the Committee resolve that the
Remuneration Policy should be revised, such revisions will be subject to a binding shareholder vote.
The overarching aim is to operate a Remuneration Policy which rewards senior Executives 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 through a heavy focus on the use of equity. The Committee is comfortable that the structure and operation of the Policy
does not create any environmental, social and corporate governance matters and is managed within an acceptable risk profile.
When reviewing the Policy, the Committee involved the use of our external advisers to provide data and opinion on market practice
and developments in corporate governance. The Committee also reviewed the business strategy and wider employee context. The
Committee made its decisions based on the outcomes of its own deliberations and considering feedback provided from shareholders
and proxy agencies who were consulted at an early stage.
The Committee considered that the current Policy is operating effectively and supporting the business strategy. Therefore, only modest
changes are proposed for the new Policy and are included in the following sections.
When considering the development of the new Policy, the Committee has had regard to the following factors:
• Clarity
• Risk
• Proportionality
• Simplicity
• Predictability
• Alignment to culture
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Policy table for Executive Directors
The table below summarises our Policy for each component of Executive Directors’ Remuneration:
Fixed pay
Base salary
Core element of remuneration set at a sufficient level to attract and retain people of the necessary calibre to shape and execute the
Company’s strategy.
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 will not
exceed the maximum under the previous
Policy ($924,000) plus RPI from the date of
approval of the prior Policy.
N/A
BENEFITS
• 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, plus RPI from
the date of approval of the prior Policy.
In addition to the above cap, the Company
may contribute to relocation expenses up to
100% of salary.
N/A
PENSION
• Provides 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.
The rate applicable to the wider workforce
from time to time (currently 15% of base
salary per annum).
N/A
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VARIABLE PAY
ANNUAL BONUS
• Incentivises 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 payout (negatively or positively) to
ensure it reflects the performance of either the
individual or the Company.
One-third of any bonus payout is subject to
deferral into Pharos shares under the Deferred
Share Bonus Plan. If an Executive Director has
already met the share ownership requirement
(as set out in the Shareholding guidelines
below), the Committee may choose to defer a
lesser amount or pay the entire bonus in cash.
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
• Incentivises 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 close
period.
Vesting of the awards is dependent on the
achievement of performance targets, which
are typically measured over a three-year
performance period.
Awards (net of 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). This holding period will continue
post-employment in accordance with the post
cessation shareholding guidelines.
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 Directors’
Remuneration Committee Report.
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SHAREHOLDING GUIDELINES
• Further increase 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 is
also operated. Executive Directors will be
expected to retain the shares then held up to
200% of salary for a two-year post-cessation
period (unless the Committee exceptionally
determines that it is appropriate to release
this requirement). Pharos shares which vest in
future from deferred bonus and LTIP awards
will be retained in so far as necessary to meet
the 200% post-cessation requirement. Post
cessation, all LTIP holding periods will end
on the earlier of 2 years from cessation and 2
years from vesting (and awards will in any case
be retained in so far as necessary to meet the
200% post cessation requirement).
Shares purchased in the market by Executive
Directors from their own funds will not be
subject to the post-cessation guideline.
N/A N/A
Notes to the Policy table
Discretion
The Committee reserves the right to make any remuneration payments and payments for loss of office (including exercising any
discretions available to it in connection with such payments) that are not in line with the Policy set out above where the terms of the
payment were agreed:
• Before the Policy came into effect; or
• At a time when the relevant individual was not an Executive Director of the Company and, in the opinion of the Committee, the
payment was not in consideration for the individual becoming an Executive Director of the Company
For these purposes, (i) ‘payments’ includes satisfying awards of variable remuneration and (ii) an award over shares is “agreed” at the time
the award is granted.
The Committee will operate the annual bonus, LTIP and share option plan in accordance with the relevant plan rules. In line with best
practice, the Committee retains discretion on the operation and administration of these plans, including as follows:
• Dividend equivalents may be paid on awards up to the point of vesting or, if later, expiry of any award holding period
• Awards will be subject to recovery and withholding provisions and therefore may be reduced at the discretion of the Committee for
instances of serious misconduct, an error in calculation, a misstatement of the Company’s financial results or for serious reputational
damage to the Company (as determined by the Committee). Provisions will apply for a period of three years from date of payment/
vesting
• The Committee may settle an award in cash
• In the event of a variation of share capital or any other exceptional event which, in the reasonable opinion of the Committee, requires
an adjustment, the Committee may adjust the number of shares or the exercise price
• If an event occurs which results in the performance conditions for outstanding incentive plans being no longer appropriate, then
the Committee may adjust the measures and/or targets, with the caveat that they will, in the opinion of the Committee, be no less
challenging to achieve
Any use of the above discretions would, where relevant, be explained in the Annual Report on Remuneration and may, as appropriate, be
the subject of consultation with the Company’s major shareholders.
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Governance Report
Takeover or other equivalent
corporate event
On a takeover or other equivalent
corporate event, outstanding deferred
bonus awards will vest in full as soon
as practicable after the date of the
event, unless the Committee determines
otherwise. For outstanding LTIP and share
option awards, on a takeover or other
equivalent corporate event, generally
the performance period will end on the
date of the event. The Committee will
determine the extent to which performance
conditions have been achieved at this
point and whether to apply time pro-
rating to awards to reflect the shortened
performance period. In doing so, the
Committee will determine the extent
to which it may be appropriate to vary
these and/or their vesting outcomes
taking into account such factors as it may
consider appropriate which may include
performance of the Company, the Group,
or the individual. Outstanding LTIP and
share option awards may be subject
to rollover, with the agreement of the
acquiring company.
Minor changes
The Committee may make minor
amendments to the Policy set out in this
report (for regulatory, exchange control,
tax or administrative purposes or to take
account of a change in legislation) without
obtaining shareholder approval for the
amendment.
Legacy commitment
The Committee has the right to honour
the commitments entered into with
current Directors if permitted by the
shareholder-approved Policy at the time
of the commitment was made and/ or any
commitment made prior to a Director’s
appointment to the Board. Details of any
legacy arrangements will be set out in
future Directors’ Remuneration Reports as
they arise.
Performance measures and
target setting
The Policy table for Executive Directors
describes the policy for setting
performance measures used for the annual
bonus and LTIP, which are intended to
ensure that executives are appropriately
focused on the successful delivery of the
strategic plan over both the short and
medium term. When setting the relevant
performance targets, the Committee will
take into account a number of internal and
external reference points that are linked to
Pharos’ strategic priorities, as well as the
economic environment.
Illustration of Policy
The charts below show the illustration of
Policy
£0
£500
£1,000
£1,500
£2,000
£2,500
£3,000
Min Target Max Max with
growth
CEO CFO
£537
£’000
Min Target Max Max with
growth
£1,106
£2,130
£2,585
£384
£1,490
£779
£1,806
100%
49%
30%
21%
25%
21%
32%
26%
43%
35%
18%
100%
49%
31%
20%
26%
32%
42%
21%
27%
35%
17%
Total Fixed Remuneration Annual Bonus
Performance Share Plan Share Price Growth
Illustrations of application of remuneration policy
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Levels of performance Assumptions Performance criteria
Fixed pay
All scenarios
• Total fixed pay comprises base salary, benefits and pension
• Base salary – effective as at 1 January 2026
• Benefits – based on benefit cost for 2025
• Pension – 15% of salary, the benefit currently set for all Executive
Directors
Variable pay
Minimum performance
• No payout under the annual bonus and no vesting under the LTIP
Performance in line with expectations
• 50% of the maximum payout under the annual bonus (i.e. 75% of
salary)
• 25% vesting under the LTIP (i.e. 50% of salary)
Maximum performance
• 100% of maximum payout under the annual bonus (i.e. 150% of salary)
• 100% of maximum vesting under the LTIP (i.e. 200% of salary)
Maximum performance with growth
• As above but with 50% share price growth assumed on the LTIP
vesting
Policy table for Non-Executive Directors
Component
• Pharos’ approach
Chairman fees
• Comprises an all-inclusive fee for Board and Committee positions
• Determined by the Remuneration Committee and approved by the Board
Non-Executive Director
• Comprises a basic fee in respect of their Board duties
• Further fees may be paid in respect of additional Board or Committee roles
• Recommended by the Chair and Chief Executive Officer and approved by the Board
Other
• In the event of a temporary but material increase in the time commitment required, fees
may be increased on a pro-rata basis to reflect the additional workload
• Reasonable business-related expenses will be reimbursed (including any tax payable
thereon)
No Director plays a role in determining their own remuneration. The Committee consults with the CEO in determining the Chairman’s fee.
Fees for all Non-Executive Directors reflect the time commitment and responsibilities of the role and are set at a level sufficient to attract
and retain individuals with the required skills, experience and knowledge to allow the Board to carry out its duties. The fees set out above
are the sole element of Non-Executive Director remuneration. They are not eligible for participation in the Company’s incentive or pension
plans. Fees of non-executive Directors may be settled in cash and/or in shares.
The fees have been set within the aggregate limits set out in the Company’s Articles of Association (currently £800,000) and approved by
shareholders.
DIRECTORS’ REMUNERATION COMMITTEE REPORT - CONTINUED
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Governance Report
Recruitment Principles
On the appointment of a new Executive
Director, we seek to apply the following
principles when determining the
remuneration arrangements:
• The package should be competitive to
facilitate the recruitment of individuals
of the calibre needed to shape and
execute Pharos’ strategy and build
shareholder value
• The Committee reserves the right not
to apply the caps contained within
the Policy table for fixed pay, either on
joining or for any subsequent review
within the Policy period, although,
in practice, the Committee does not
envisage exceeding these caps
• The Committee will consider all relevant
factors as appropriate. This may
include, but is not limited to, the calibre
and experience of the individual, market
practice and the current Directors’
Remuneration Policy. The Committee
will be mindful that any arrangements
must be structured in the interests of
Pharos’ shareholders without paying
more than is necessary
• Typically, a new appointment will
have (or be transitioned onto) the
same framework that applies to other
Executive Directors as set out in the
Policy table above. Salaries would
reflect the skills and experience of the
individual, and may be set at a level to
allow future salary progression to reflect
development and performance in the
role
• An Executive Director may initially be
hired on a contract requiring up to 24
months’ notice which then reduces pro-
rata over the course of the first year of
the contract, to requiring not more than
12 months’ notice
• It would be expected that the structure
and quantum of the variable pay
elements would reflect those set out in
the Policy table for Executive Directors
• Depending on the timing of
appointment it may be necessary to
set different performance measures
and targets to those used for existing
Executive Directors, although this would
only be expected to operate for the
remainder of the first financial year of
appointment
In the remuneration report following
appointment, the Committee will explain
the rationale for any such relevant
arrangements.
The Committee retains discretion to make
appropriate remuneration decisions outside
the standard policy to meet the individual
circumstances of recruitment when:
• An interim appointment is made to fill an
Executive Director role on a short-term
basis
• Exceptional circumstances require that
the Chair or a Non-Executive Director
takes on an executive function on a
short- term basis
Buy-outs
To facilitate recruitment, the Committee
may make compensatory payments and/or
awards for any remuneration arrangements
subject to forfeit on leaving a previous
employer. Such payments or awards
could include cash as well as performance
and non- performance related share
awards and would be in such form as
the Committee considers appropriate
taking into account all relevant factors
such as the form, expected value, timing,
impact of any performance conditions
and the anticipated vesting of the forfeited
remuneration. There is not a specified
limit on the value of such awards, but
the estimated value awarded would be
equivalent to the value forfeited.
Recruitment of Non-Executive
Directors
On the appointment of a new Chair or
Non-Executive Director, remuneration
arrangements will be consistent with the
Policy set out in this report.
Policy on payment for loss of
office
Where an Executive Director leaves
employment, the Committee’s approach to
determining any payment for loss of office
will normally be based on the following
principles:
• The Committee’s objective is to find an
outcome which is in the best interests
of both Pharos and its shareholders
while taking into account the specific
circumstances of cessation of
employment
• The Committee must satisfy any
contractual obligations agreed with the
Executive Director. This is dependent on
the contractual obligations not being in
contradiction with the Policy set out in
this report
• The Committee may seek to
compromise any claims made against
the Company in relation to a termination
and reserves the right to pay reasonable
legal fees and/or for outplacement
services if considered necessary
• The Committee may make an annual
bonus payment for the year of
cessation depending on the reason
for leaving. Typically, the Committee
will take into consideration the
period served during the year and
the individual’s performance up to
cessation. Any such payment is at the
discretion of the Committee
• The treatment of outstanding share
awards will be governed by the relevant
plan rules as set out in the table shown
on the next page.
DIRECTORS’ REMUNERATION COMMITTEE REPORT - CONTINUED
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
160
Plan Automatic good leaver Treatment for good leaver Treatment for all other reasons
Deferred
bonus
• Death
• Ill-health, injury or disability
• Redundancy
• Retirement with agreement of the
employer
• Any other reason as determined at
the discretion of the Committee
• Awards will usually vest on the
normal vesting date
• The Committee retains the
discretion to accelerate vesting
so that awards vest as soon as
practicable following cessation
• Awards will normally lapse in full
(unless otherwise determined by
the Committee)
LTIP and
share option
plan
• Death
• Ill-health, injury or disability
• Redundancy
• Retirement with agreement of the
employer
• Any other reason as determined at
the discretion of the Committee
• The Committee will determine the
proportion of the award that will
vest, normally taking into account
the achievement of the relevant
performance conditions at the
vesting date and the time elapsed
between the date of grant and
cessation of employment
• The vesting date for such award
will normally be the original vesting
date, although the Committee
has the flexibility to determine that
awards can vest upon cessation of
employment
• Where options are granted, vesting
options will typically be exercisable
within a period of six months, or
12 months in the event of death,
commencing on the later of the
date on which such options vest
(being either the date of cessation
or the original vesting date as
determined by the Committee as
per above) or the expiry of any
post-vesting holding period (subject
to any decision to permit early
vesting)
• The Committee has the discretion
to vary the period in which vested
options are exercisable
• For grants under the share option
plan, vested options will remain
exercisable for six months
• All other awards will normally lapse
in full (unless otherwise determined
by the Committee)
DIRECTORS’ REMUNERATION COMMITTEE REPORT - CONTINUED
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Governance Report
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 at the
Company’s registered office.
Consideration of pay and
employment conditions
elsewhere in Pharos and
differences in Directors’
Remuneration Policy compared
with other employees
The Committee monitors the remuneration
of senior management and makes
recommendations as deemed appropriate.
Pay and employment conditions elsewhere
in the Company are taken into account to
ensure the relationship between the pay of
the Executive Directors and its employees
is consistent throughout the Company.
Similar benchmarking techniques are
applied to non-Board employees using
relevant market data and the Committee
monitors staff remuneration packages
during the review of Executive Directors’
remuneration packages.
All eligible employees have the same
access to the same pension contribution
rate (15% of salary) and access to a similar
level of benefits.
As for our Executive Directors, it is
intended that a meaningful amount of
employee pay is weighted towards variable
remuneration. All employees participate in
the annual bonus plan, with the emphasis
between corporate and individual goals
dependent on the role and its level of direct
influence on Pharos’ Group-wide results.
All employees have an opportunity to share
in the success of the Company through
participation in the LTIP scheme.
The Committee does not formally consult
with employees when formulating the
Directors’ Remuneration Policy, but during
the course of the year, Non-Executive
Directors have attended various workforce
engagement sessions where, amongst
other issues, executive pay has been
discussed.
Consideration of shareholder
views
The Committee takes an active interest in
shareholder views and these help shape
the structure of the Directors’ remuneration
arrangements at Pharos. In advance of
any significant changes in the Policy or its
operation, the Committee will liaise with
major shareholders (and relevant proxy
agencies) to seek out their views. Any
feedback is shared with the Committee
and will form part of the consideration
when finalising our approach.
The Committee also monitors published
shareholder guidelines and will incorporate
further requirements and best practice
features as appropriate.
GEOFFREY GREEN
Remuneration Committee Chair
24 March 2026
DIRECTORS’ REMUNERATION COMMITTEE REPORT - CONTINUED
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
162
DIRECTORS’ REPORT
Directors’ Report
The Directors present their Annual Report along with the audited
Financial Statements of the Group for the year ended 31
December 2025.
The following sections of this report are incorporated
herein by reference and form part of this Directors’ report.
Page(s)
STRATEGIC REPORT 5 to 100
BOARD OF DIRECTORS 107 to 108
UK CORPORATE GOVERNANCE CODE REPORT 109 to 118
ESG COMMITTEE REPORT 119 to 120
RESERVES COMMITTEE REPORT 121 to 124
NOMINATIONS COMMITTEE REPORT 125 to 128
AUDIT AND RISK COMMITTEE REPORT 129 to 136
DIRECTORS’ REMUNERATION REPORT 137 to 161
FINANCIAL STATEMENTS 169 to 208
ADDITIONAL INFORMATION 211 to 219
Developments during the 2025 reporting
period
An indication of the likely future developments in the business of
the Group is included in the Strategic Report on pages 5 to 100.
The reporting period saw a continued focus on shareholder
returns, together with progress on the exciting opportunities within
our asset base.
During 2025, the Group focused on enhancing shareholder
returns while progressing its core assets. In Vietnam, activity
accelerated with the start of the fully funded six-well offshore
drilling programme in October. The Group also secured a two-year
extension for Blocks 125 & 126 to November 2027 and continued
to progress the structured farm-in process.
In Egypt, EGPC approved the consolidation of the two Egyptian
Concession Agreements in October, incorporating improved
fiscal terms with retrospective effect from the approval date.
Interpretation of 3D seismic at North Beni Suef identified new
prospects, while in El Fayum the Group drilled its second
exploration commitment well and brought a development well
into production in December. The processing and interpretation
of 3D seismic data on NBS is complete, with a number of targets
identified and two wells included in the 2026 work programme.
Against continuing macroeconomic uncertainty, the Board
maintained disciplined capital allocation and closely monitored
receivables.
The Group upheld its strong safety performance of zero LTIs.
Pharos ended the year debt-free with approximately $40 million in
cash. Group revenue was around $115 million, predominantly from
Vietnam, and year-end cash benefited from a $20 million EGPC
payment, reducing Egyptian receivables to $7.4 million at year
end 2025 (31 December 2024: $29.5m). Cash capex totalled $28
million, and the Company returned $6.5 million to shareholders
under its dividend policy.
Dividends
During 2025, 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 announced in 2025:
• following approval by shareholders at the 2025 AGM, a final
dividend in respect of the year ended 31 December 2024 of
0.847 pence per share, amounting to $4.7m, was paid on 21
July 2025; and
• an interim dividend of 0.3993 pence per share, amounting to
$2.2m, in respect of the year ended 31 December 2025 was
paid on 21 January 2026.
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 have recommended a final dividend in respect of the
year ended 31 December 2025 of 0.9317 pence per share subject
to approval of the shareholders at the Company’s 2026 AGM.
Subject to this approval, the final dividend will be paid in full on
17 July 2026 in Pounds Sterling to ordinary shareholders on the
register at the close of business on 12 June 2026, with an ex-
dividend date of 11 June 2026. This would take the 2025 full year
dividend to 1.331 pence per share, which is 10% higher than prior
year.
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,
one Director of the Company ceased to hold office during 2025:
John Martin, formerly Chair of the Board, stepped down as a
Director with effect from 25 June 2025.
The Non-Executive Directors’ 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.
The Board completed its annual performance review in line with
the 2024 Code, with resulting actions now being implemented.
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163
Governance Report
DIRECTORS’ REPORT - CONTINUED
The disclosures required by the UK Listing Rules in connection
with Board diversity and the ethnic background and gender
identity of the Board and executive management are contained
in the report of the Nominations Committee on pages 125 to
128. The report also sets out the Company’s policy on, and
commitment to, diversity and inclusion in relation to appointments
and succession planning for the Board and senior management,
together with the other information required by Provision 23 of the
2024 Code.
In accordance with the provisions of the 2024 Code, all Directors
will retire at the 2026 AGM and, being eligible, offer themselves
for reappointment. Relevant details of the Directors, which include
their Committee memberships, are set out on pages 105 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 report
commencing on page 137.
Table A: Directors holding office during 2025 and up to the
date of signing of this report
Director Date of appointment
João Saraiva e Silva - Chair** 26 June 2025
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
John Martin
Stepped down 25 June
2025
* Denotes those determined by the Board to be Independent
Non-Executive Directors as described on page 126. Geoffrey
Green is the designated Senior Independent Director.
** The Chair was determined to be independent on appointment
when assessed against the circumstances set out in Provision 10
of the 2024 Code.
Contributions
The Group’s policies prohibit political donations.
AGM
An explanation of the resolutions to be proposed at the 2026
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.
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 Listing Rules whereby certain employees of the Company
require approval of the Company to deal in the Company’s shares.
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
164
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
2026 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 2025. 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 2026 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 2026 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 2025 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 129 to 136. 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 80.
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, money laundering offences and the
new failure to prevent fraud offence introduced by the Economic
Crime and Corporate Transparency Act 2023, all of which are now
embedded within the Group’s business ethics programme.
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.
The Board has reviewed the effectiveness of the Group’s risk
management and internal control framework during the year,
covering financial, operational and compliance controls. In this
connection, the Group has undertaken significant preparatory
work for the application of Provision 29 of the 2024 Code from
the financial year commencing 1 January 2026. Further details of
this preparatory work are set out in the UK Corporate Governance
Code report on pages 109 to 118.
DIRECTORS’ REPORT - CONTINUED
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Governance Report
DIRECTORS’ REPORT - CONTINUED
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
2
84,300,226 20.25 Direct
Aberforth Partners LLP 59,357,027 14.26 Direct
Ettore Contini 32,613,577 7.83 Direct and indirect
Blue Albacore Business Ltd 31,260,296 7.51 Direct
Barbara Contini 27,444,382 6.59 Direct
The Estate of the late Ed Story 16,271,613 3.91 Direct and indirect
1) As at 24 March 2026, the total voting rights attached to the issued share capital of the Company comprised 416,320,478 Ordinary shares each of £0.05
nominal value. The Company holds no shares in treasury.
2) As at 31 December 2025: Bradley Radoff held 83,052,656 Shares representing 19.95% of the voting rights in the Company at that time.
During the period between 31 December 2025 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 2025 other than as
shown in the footnotes to the table above. For further information on Directors’ interests, please see page 146.
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 LR 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 Report
pages 137 to 161
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 206
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 201
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
166
DIRECTORS’ REPORT - CONTINUED
Whistleblowing procedure
The Board has reviewed, and is satisfied
with, the Group’s Whistleblowing Policy
and associated procedures, ensuring
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
with numbers displayed in our local offices
available 24 hours a day all year round.
Zero calls were made to the hotline in
2025.
Additionally, the Group’s Code of Business
Conduct and Ethics and associated
policies, which are reviewed, updated, and
re-approved by the Board annually, were
followed rigorously in 2025, 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 corporate
crime E-Learning training every year to
ensure that the expected standards of
business conduct are communicated and
recognised across the organisation.
Corporate Culture
The Directors continued to assess and
monitor the Group’s culture throughout
2025 and has taken steps to strengthen
and embed the desired culture across the
organisation. This has been reinforced
through mandatory business ethics and
compliance training, refreshed conduct
policies, and active promotion of expected
behaviours in all operational locations.
Business Relationships
Pharos maintains strong relationships with
suppliers and customers through a robust
pre-award engagement and due diligence
process, ensuring accurate records and
timely payment. Where possible, payment
terms are 30 days from receipt of a valid
invoice. A contracts register supports
effective post-award management,
including renewal and termination
oversight. We work constructively with
all suppliers, customers and partners
to maintain productive, long-term
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 date of approval
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 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 Companies Act 2006.
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 176 to 208, 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 56; 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.
SUE RIVETT
Chief Financial Officer
24 March 2026
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
168
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF PHAROS ENERGY PLC 169
CONSOLIDATED FINANCIAL STATEMENTS 176
− Consolidated Income Statement 176
− Consolidated Statement of Comprehensive Income 176
− Balance Sheets 177
− Statements of Changes in Equity 178
− Cash Flow Statements 179
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 180
Strategic Report Additional Information
Governance Report
169
Financial Statements
Report on the audit of the
financial statements
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF PHAROS ENERGY PLC
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 2025 and of the group’s
loss 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
2025 which comprise:
Group Parent company
Balance sheet as at 31 December 2025
Balance sheet as at 31
December 2025
Consolidated income statement for the
year then ended
Statement of changes in
equity for the year then
ended
Consolidated statement of omprehensive
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 37 to
the financial statements,
including: material
accounting policy
information
Cash flow statement for the year then
ended
Related notes 1 to 37 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 company and we
remain independent of the group and the parent company in
conducting the audit.
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
170
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF PHAROS ENERGY PLC - CONTINUED
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 2027 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;
• 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 to external data and testing
the going concern model for mathematical accuracy;
• 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, assessing the
likelihood of its occurrence and verifying the impact on the
reverse stress test of mitigating actions within management’s
control;
• assessing whether the disclosures in the financial statements
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 to 31 March 2027.
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
Materiality
• Overall group materiality of $1.55m which represents 2.8% of EBITDAX.
An overview of the scope of the parent
company and group audits
Tailoring the scope
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, with input from our component auditors, 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 and parent company
investment in subsidiaries
All in scope components
Share based payments All in scope components
Oil and gas reserve
estimates
All in scope components
Strategic Report Additional Information
Governance Report
171
Financial Statements
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
component of the group as individually relevant due to materiality
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. All audit work for the
Egypt component was undertaken by the group audit team.
During the current year’s audit cycle, a site visit was undertaken
by the Senior Statutory Auditor and a senior member of the
group audit team to Egypt in July 2025. This visit involved visiting
site operations and meetings with local management, including
members of both finance and operations teams.
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
86 to 89 in the required Task Force On Climate Related Financial
Disclosures and on pages 52 to 54 in the principal risks and
uncertainties. They have also explained their climate commitments
on pages 97 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. 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.
The group’s producing fields are likely to be fully depreciated
within 10 years, during which timeframe it is expected that global
demand for oil will remain robust. Accordingly, there are no
significant judgements or estimates relating to climate change in
the notes to the financial statements.
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 82 to 96 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 we have not identified the impact of climate
change on the financial statements to be a key audit matter or to
impact a key audit matter.
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172
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF PHAROS ENERGY PLC - CONTINUED
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
(2025: $250.1 million; 2024: $273.2 million)
Refer to the Audit and Risk Committee Report (pages 129
to 136); Accounting policies (page 182); and Note 16 of
the Consolidated Financial Statements (page 191)
In the current year, judgement is required in determining
whether indicators of impairment or impairment reversal
exist at the reporting date. This includes assessing
movements in long-term oil prices, discount rates,
reserves and production profiles, changes in market
capitalisation relative to net assets, and changes in the
legal and operating environment. In the current year,
management concluded that no indicators of impairment
or impairment reversal were present; therefore no
impairment tests were performed and no impairment
charges or reversals were recognised.
As the recoverability of the parent company’s investment
in subsidiaries is realised through the future cash flows
of oil and gas producing assets, the impairment indicator
assessment for these assets is directly linked to the
impairment indicators assessment at the parent company
level.
We considered this area to be a key audit matter because
the determination of whether impairment indicators exist
involves significant judgement and includes analysis
of various estimates to assess whether there is an
impairment indicator.
The risk has remained consistent with the prior year due
to the absence of significant changes in the operating
environment and the continued geopolitical uncertainties
We performed the following procedures to address the risk:
• confirmed our understanding of Pharos’ impairment indicator
assessment process, as well as the controls implemented by
management;
• evaluated management’s assessment of whether impairment or
impairment reversal indicators were present for each producing asset,
considering the completeness of their analysis across external and
internal sources of information;
• assessed the reasonableness of management’s oil price assumptions
by comparing them with EY commodity price analysis and peer data;
• reviewed movements in market interest rates and the underlying
WACC components, including an independent recalculation of
discount rates by EY valuations specialists, to determine whether
changes in market conditions indicate a significant change in asset
values;
• gained an understanding of management’s reserves estimation
process, evaluated the competence and objectivity of management’s
internal reserves expert and analysed movement in reserves for
indicators of impairment or impairment reversal;
• performed budget versus actual analysis and made inquiries of
operations teams in Vietnam and Egypt on delays in drilling work
programme execution to evaluate whether any variances indicated a
structural decline in asset performance;
• reviewed internal reporting such as management reporting packs,
minutes and legal papers to identify any internal indicators of
impairment, including obsolescence, idling of assets or changes in
future use;
• assessed management’s analysis of the Group’s market capitalisation
relative to net assets, including understanding structural factors such
as low share liquidity and concentrated ownership, and evaluated
whether these characteristics reasonably limited the reliability of
market value as an impairment indicator; and
• benchmarked the group’s net assets to market capitalisation ratio
against relevant peers to assess whether the observed market
discount was consistent with broader sector trends, supporting
management’s conclusion that the shortfall was not, in isolation,
indicative of an impairment trigger.
Key observations communicated to the Audit and Risk Committee
We reported to the Audit and Risk Committee that, based on the procedures performed including our review of external and internal
indicators, reserves movements, operational performance, oil price outlook, discount rate inputs and market factors, we did not identify any
impairment indicators, consistent with management’s conclusions. We also reported that the related disclosures in the financial statements
were appropriate.
How we scoped our audit to respond to the risk
Our audit response was executed by the group audit team, covering all assets at risk of impairment or impairment reversal.
Strategic Report Additional Information
Governance Report
173
Financial Statements
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF PHAROS ENERGY PLC - CONTINUED
In the prior year, our auditor’s report included a key audit matter
in relation to the impairment of investment in subsidiaries in the
parent company. In the current year, this has not been considered
a key audit matter as no impairment or impairment reversal
indicators were identified for the Group’s producing assets and
the incremental procedures required in assessing impairment
or impairment reversal indicators for the parent company’s
investment in subsidiaries did not require significant audit team
effort or executive involvement.
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 $1.55 million
(2024: $2.15 million), which is 2.8% (2024: 2.5%) of 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. The decrease in
materiality in the current year is primarily due to lower EBITDAX.
We determined materiality for the Parent Company to be $4.67
million (2024: $4.50 million), which is 1.5% (2024: 1.5%) of net
assets.
During the course of our audit, we reassessed initial materiality to
align with the actual performance for the year.
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 75% (2024:
50%) of our planning materiality, namely $1.16m (2024: $1.08m).
We have set performance materiality at this percentage due to our
expectations of misstatements that may occur within the financial
statements. Performance materiality was set at 50% in the
previous year due to it 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 $0.3m to $1.0m (2024: $0.4m to $1.0m).
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
$0.08m (2024: $0.11m), 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 166, 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 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.
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174
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF PHAROS ENERGY PLC - CONTINUED
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 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 166;
• 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 166;
• Board’s confirmation that it has carried out a robust
assessment of the emerging and principal risks set out on page
164;
• 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 130.
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement
set out on page […], 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.
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Governance Report
175
Financial Statements
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF PHAROS ENERGY PLC - CONTINUED
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 the group
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
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.
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 2 years, covering the
years ended 31 December 2024 and 31 December 2025.
• 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.
for and on behalf of Ernst & Young LLP , Statutory Auditor London,
United Kingdom
24 March 2026
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
176
| 2025 | 2024 | ||
| Notes | $ million | $ million | |
Revenue | 5, 6 | ||
Cost of sales | 7 | ( | ( |
Impairment reversal – Financial asset | 7 | ||
Gross profit | |||
| Administrative expenses | ( | ( | |
Other operating costs | 6, 8 | ( | ( |
Pre-licence costs | 6 | ( | ( |
Impairment charge – Intangible assets | 6, 15 | ( | |
Impairment reversal – Property, plant and equipment | 6, 16 | ||
Operating profit | |||
Other/restructuring expense | 8 | ( | |
(Loss)/gain on fair value movement of financial asset | 6, 20 | ( | |
Investment revenue | 5 | ||
Finance costs | 9 | ( | ( |
| Profit before tax | 6 | ||
Income tax charge | 6, 12 | ( | ( |
| (Loss)/profit for the year | 30 | ( | |
| (Loss)/profit per share (cents) | 14 | ||
| Basic | ( | ||
| Diluted | ( |
Consolidated Statement of
Comprehensive Income
for the year to 31 December 2025
| 2025 | 2024 | ||
| Notes | $ million | $ million | |
(Loss)/profit for the year | 30 | ( | |
Other comprehensive (loss)/income that may be reclassified to profit or loss in subsequent periods (net of tax): | |||
Fair value loss arising on hedging instruments during the year | 25 | ( | ( |
| Less: Loss arising on hedging Instruments reclassified to profit or loss | |||
Total comprehensive (loss)/income for the year (net of tax) | ( |
The above consolidated income statement and consolidated statement of comprehensive income should be read in conjunction with
the accompanying notes.
Consolidated Income Statement
for the year to 31 December 2025
CONSOLIDATED FINANCIAL STATEMENTS
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177
Financial Statements
CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Balance Sheets
as at 31 December 2025
Group | Company | ||||
| 2024 | |||||
| 2025 | Restated 1 | 2025 | 2024 | ||
| Notes | $ million | $ million | $ million | $ million | |
| Non-current assets | |||||
Intangible assets | 15 | – | – | ||
Property, plant and equipment | 16 | 0.1 | – | ||
Right of use asset | 16, 33 | – | – | ||
Investments | 17 | 290.0 | 287.0 | ||
Loans to subsidiaries | 17 | 13.2 | 18.4 | ||
Other assets | 18 | – | – | ||
| 303.3 | 305.4 | ||||
| Current assets | |||||
Inventories | 19 | – | – | ||
Trade and other receivables | 20 | 0.4 | 0.5 | ||
| Tax receivables | 0.2 | 0.2 | |||
Cash and cash equivalents | 21 | 10.9 | 0.8 | ||
| 11.5 | 1.5 | ||||
| Total assets | 314.8 | 306.9 | |||
| Current liabilities | |||||
Trade and other payables | 22 | ( | ( | (2.8) | (3.8) |
Lease liabilities | 33 | ( | – | – | |
| Tax payable | ( | ( | – | – | |
| ( | ( | (2.8) | (3.8) | ||
| Non-current liabilities | |||||
Other payables | 22 | ( | – | – | |
Deferred tax liabilities | 23 | ( | ( | – | – |
Long term provisions | 26 | ( | ( | – | – |
| ( | ( | – | – | ||
| Total liabilities | ( | ( | (2.8) | (3.8) | |
| Net assets | 312.0 | 303.1 | |||
| Equity | |||||
Share capital | 27 | 32.4 | 33.1 | ||
Share premium | 27 | 58.0 | 58.0 | ||
Other reserves | 28 | 243.3 | 202.0 | ||
Retained (deficit)/earnings | 30 | ( | ( | (21.7) | 10.0 |
| Total equity | 312.0 | 303.1 |
The above consolidated and company balance sheets should be read in conjunction with the accompanying notes.
1) See Note 2(s)
The profit for the financial year in the accounts of the Company (Co number 3300821) was $14.1 m inclusive of dividends from
subsidiary undertakings (2024: $35.0 m). 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.
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
178
CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Statements of Changes in Equity
for the year to 31 December 2025
| Group | ||||||
| Called up | Share | Retained | ||||
| share capital | premium | Other 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 2024 (Restated 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 ) | ( | |||||
Loss for the year | 30 | ( | ( | |||
Other comprehensive income | 27, 28, 30 | ( | ( | |||
Share buy back | 27, 28, 30 | ( | ( | ( | ||
Share-based payments | 28 | |||||
Treasury shares cancelled | 27, 28, 30 | ( | ( | |||
Distributions to shareholders | 29, 30 | ( | ( | |||
Transfer relating to share-based payments | 28, 30 | |||||
As at | ( |
1) See Note 2(s)
Company
Notes
Called up
share capital
(see Note 27)
$ million
Share
premium
(see Note 27)
$ million
Other
reserves
1
(see Note 28)
$ million
Retained
earnings/(deficit)
(see Note 30)
$ million
Total
$ million
As at 1 January 2024 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 1 January 2025 33.1 58.0 202.0 10.0 303.1
Profit for the year
13, 30
– – – 14.1 14.1
Share buy back
27, 28, 30
(0.1) – 0.1 (0.3) (0.3)
Share-based payments
28
– – 1.8 – 1.8
Treasury shares cancelled
27, 28, 30
(0.6) - 39.7 (39.1) –
Distributions to shareholders
29, 30
– – – (6.5) (6.5)
Transfer relating to share-based payments 28, 30 – – (0.3) 0.1 (0.2)
As at 31 December 2025 32.4 58.0 243.3 (21.7) 312.0
1) Includes a Merger reserve of $137.1m (2024: $137.1m) which is distributable in accordance with the Companies Act 2006. Total distributable reserves at 31
December 2025 are $115.4m.
The above consolidated and company statements of changes in equity should be read in conjunction with the accompanying notes.
Strategic Report Additional Information
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Financial Statements
CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Cash Flow Statements
for the year to 31 December 2025
Group | Company | ||||
| 2025 | 2024 | 2025 | 2024 | ||
| Notes | $ million | $ million | $ million | $ million | |
| Net cash from/(used in) operating activities | 32 | (7.6) | (11.2) | ||
| Investing activities | |||||
| Purchase of intangible assets | ( | ( | – | – | |
| Purchase of property, plant and equipment | ( | ( | (0.1) | – | |
Payment to abandonment fund | 18 | ( | ( | – | – |
Consideration in relation to farm out of Egyptian assets 1 | – | – | |||
Contingent consideration received in relation to farm out of Egyptian assets | 20 | – | – | ||
Assignment fee in relation to farm out of Egyptian assets | 22 | ( | – | – | |
| Loans from subsidiaries | 6.0 | 4.7 | |||
| Loans to subsidiaries | (1.3) | – | |||
| Dividends received from subsidiary undertakings | 23.0 | 14.3 | |||
| Investment in subsidiary undertakings | (10.9) | – | |||
| Return of capital from subsidiary undertakings | 7.9 | – | |||
| Net cash (used in)/from investing activities | ( | ( | 24.6 | 19.0 | |
| Financing activities | |||||
Share purchase | ( | – | – | ||
Repayment of borrowings | 24 | ( | – | – | |
Proceeds from borrowings | 24 | – | – | ||
Interest paid on borrowings | 24 | ( | – | – | |
Lease payments | 33 | ( | ( | – | – |
Share buy back | 30 | ( | ( | (0.3) | (2.9) |
Dividends paid to shareholders | 29 | ( | ( | (6.5) | (5.9) |
Net cash used in financing activities | ( | ( | (6.8) | (8.8) | |
| Net increase/(decrease) in cash and cash equivalents | ( | 10.2 | (1.0) | ||
| Cash and cash equivalents at beginning of year | 0.8 | 1.7 | |||
| Effect of foreign exchange rate changes | ( | ( | (0.1) | 0.1 | |
Cash and cash equivalents at end of year | 21 | 10.9 | 0.8 |
1) During 2024 IPR, acting as operator and agent, was authorised to settle its operating liabilities of $3.7 m and investing liabilities of $1.3 m against the
consideration due from the associated carry debtor (Note 20) amounting to $5.0 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 total carry of $35.9 m was utilised in full by April 2024, hence there
are no cash inflows in 2025.
The above consolidated and company cash flow statements should be read in conjunction with the accompanying notes
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
180
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Financial Statements
1. General information
incorporated in England and Wales
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 31 to 34 and 39 to 44, respectively.
and except where otherwise indicated the following accounting
policies apply to both the Group and the Company.
2. Material accounting policies information
Strategic Report Additional Information
Governance Report
181
Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
182
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Strategic Report Additional Information
Governance Report
183
Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
184
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Strategic Report Additional Information
Governance Report
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Financial Statements
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.
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.
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
186
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
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 124.
The estimate is reviewed at least twice a year and revisions
during 2025 have been prepared by the Company. As a result of
the ongoing drilling campaign in Vietnam, and the Group is also
awaiting parliamentary approval of the consolidated concession
agreements in Egypt, with improved fiscal terms, the Reserves
Committee agreed that the next Competent Person’s Report
(CPR) by third party reservoir engineers will take place ahead of
preparing the Interim Results for the six months ended 30 June
2026. 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.
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.
As at 31 December 2025, following an assessment of both internal
and external indicators of impairment, no impairment indicators
were identified in respect of the Group’s producing oil and gas
assets and, accordingly, no impairment tests were required. The
assessment was based on a post-tax nominal discount rate of
9.0% for Vietnam assets and 12.5% for Egypt assets, and a Brent
oil price assumption of $62.0/bbl in 2026, $66.0/bbl in 2027,
$70.0/bbl in 2028, $72.0/bbl in 2029 and $73.0/bbl in 2030 plus
inflation of 2.0% thereafter. Further information relating to the
specific assumptions and uncertainties relevant to management’s
impairment assessments are discussed in Note 16.
5. Total revenue
An analysis of the Group’s revenue is as follows:
| 2025 | 2024 | |
| $ million | $ million | |
| Oil and gas sales (see Note 6) | 114.6 | 136.1 |
| Realised losses on commodity hedges | – | (0.1) |
| (see Note 6 and Note 25) | 114.6 | 136.0 |
| Investment revenue | 0.5 | 0.4 |
| 115.1 | 136.4 |
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187
Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
6. Segment information
The Group has one principal business activity being oil and gas exploration and production. The Group’s operations are located in South
which the Group reports its segment information.
| 2025 | ||||
| SE Asia | Egypt | Unallocated 1 | Group | |
| $ million | $ million | $ million | $ million | |
| Oil and gas sales (see Note 5) | 99.8 | 14.8 | – | 114.6 |
| Realised loss on commodity hedges (see Note 5 and Note 25) | – | – | – | – |
| Total revenue | 99.8 | 14.8 | – | 114.6 |
| Cost of sales | (81.0) | (16.7) | – | (97.7) |
| Impairment reversal – Financial asset (see Note 20) | – | 1.3 | – | 1.3 |
| Administrative expenses | – | – | (8.8) | (8.8) |
| Depreciation, depletion and amortisation - Oil and gas (see Note 7 and Note 16) | (41.4) | (5.0) | – | (46.4) |
| Depreciation, depletion and amortisation - Other (see Note 16) | – | (0.2) | – | (0.2) |
| Other operating costs (see Note 8) | – | – | (0.3) | (0.3) |
| Pre-licence costs | – | – | (0.4) | (0.4) |
Loss on fair value movement of financial asset 2 (see Note 20) | – | (0.5) | – | (0.5) |
Profit/(loss) before tax | 16.5 | (1.3) | (8.7) | 6.5 |
| Tax charge on operations (see Note 12) | (12.7) | (0.4) | – | (13.1) |
| 2024 | |||||
| SE Asia | Egypt | Unallocated 1 | 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 2 (see Note 20) | – | 0.3 | – | 0.3 | |
Profit/(loss) before tax | 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 reversals (see Note 12) | (8.4) | – | – | (8.4) |
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.
2) Relates to the revision of contingent consideration due from the farm-out of the Egyptian concessions with IPR, partially offset by the movement in contingent
liability (assignment fee) owed to EGPC.
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 $99.8m and $14.8m which arose from the Group’s two
customers, who contributed more than 10% to the Group’s oil and gas revenue (2024: $115.4m and $20.7m in South East Asia and
Egypt from the Group’s two customers).
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
188
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
| 2025 | 2024 | |
| $ million | $ million | |
Vietnam | 99.8 | 115.4 |
Egypt | 14.8 | 20.7 |
114.6 | 136.1 |
| 2025 | 2024 | |
| $ million | $ million | |
Vietnam | 217.6 | 233.5 |
Egypt | 59.1 | 62.0 |
United Kingdom | 0.2 | – |
276.9 | 295.5 |
| 2025 | 2024 | |
| $ million | $ million | |
Depreciation, depletion and amortisation (see Note 16) | 46.4 | 47.1 |
| Production operating costs | 40.8 | 39.5 |
| Production based taxes | 7.3 | 9.2 |
| Change in inventories | 3.2 | (6.0) |
| 97.7 | 89.8 | |
| Impairment reversal – financial | (1.3) | (2.5) |
| asset (see Note 20) | 96.4 | 87.3 |
| 2025 | 2024 | |
| Other operating costs | $ million | $ million |
| Share based payments | – | 0.6 |
| Other | 0.3 | 0.2 |
| 0.3 | 0.8 |
| 2025 | 2024 | |
| Other/restructuring expense | $ million | $ million |
| Redundancy costs | – | 0.4 |
| – | 0.4 |
| 2025 | 2024 | |
| $ million | $ million | |
| Unwinding of discount on provisions | 2.3 | 2.2 |
| (see Note 26) | ||
| Interest expense and similar fees | – | 1.1 |
| (see Note 24) | ||
| Net foreign exchange (gains)/losses | (0.1) | 0.6 |
| 2.2 | 3.9 |
| 2025 | 2024 | |
| $000s | $000s | |
| Fees payable to the Company’s auditor | ||
and their associates for the audit of the Company’s annual accounts | 746 | 781 |
| Total audit fees | 746 | 781 |
| Audit related assurance services – half year | 119 | 141 |
| review | ||
| Other assurance services | 35 | – |
| Total non-audit fees | 154 | 141 |
Strategic Report Additional Information
Governance Report
189
Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
11. Staff costs
The average monthly number of employees of the Group including
Executive Directors was 33 (2024: 35), of which 29 (2024: 31)
were administrative personnel and 4 (2024: 4) were operations
personnel. Their aggregate remuneration comprised:
| Group | ||
| 2025 | 2024 | |
| $ million | $ million | |
| Wages and salaries | 5.4 | 6.1 |
| Share-based payment expense | 1.4 | 1.2 |
| (see Note 31) | ||
| Social security costs | 0.8 | 0.8 |
| Other pension costs under money purchase | 0.5 | 0.5 |
| schemes | ||
| Other benefits | 0.3 | 0.3 |
| 8.4 | 8.9 |
In accordance with the Group’s accounting policy $4.4m (2024:
$3.7m) of the Group’s head office staff costs above have been
capitalised, of which $3.4m (2024: $2.8m) relates to our Vietnam
assets and $1.0m (2024: $0.9m) relates to our Egypt assets.
In 2025, total staff costs were $8.4m (2024: $8.9m) 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 6%
year on year to $5.0m (2024: $5.3m).
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. Income tax charge
| 2025 | 2024 | |
| $ million | $ million | |
| Current income tax | ||
| Current income tax charge | 29.4 | 36.0 |
Adjustments to tax charge in respect of prior years | (0.2) | 1.8 |
| 29.2 | 37.8 | |
| Deferred tax | ||
| Deferred tax credit on operations (see Note | (16.1) | (9.1) |
| 23) | ||
| Deferred tax charge on net impairment | – | 8.4 |
| reversal (see Note 16 and 23) | (16.1) | (0.7) |
| Income tax charge reported in the | 13.1 | 37.1 |
consolidated income statement
The Group’s corporation tax is calculated at 50% (2024: 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 on behalf of the Group. During 2025 and
2024, 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:
| 2025 | 2024 | |
| $ million | $ million | |
| Profit before tax | 6.5 | 60.7 |
| Tax at 50% (2024: 50%) | 3.3 | 30.4 |
| Effects of: | ||
| Non-taxable income | – | (5.8) |
| Non-deductible expenses | 6.5 | 8.1 |
| Egypt taxation at different rate to Vietnam | (0.1) | (2.0) |
| effective tax rate | ||
| Tax losses not recognised | 3.6 | 4.9 |
| Utilisation of tax losses | – | (0.3) |
| Adjustments to tax charge in respect | (0.2) | 1.8 |
| of prior years | ||
| Tax charge for the year | 13.1 | 37.1 |
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
190
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
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 $4.5m (2024: $6.2m). 2025 also includes $1.2m
of non-deductible expenses for Egypt operations. A further $0.8m
(2024: $0.9m) relates to non-deductible corporate costs including
share scheme incentives. In 2024, non-deductible expenses also
included the tax impact of Egypt intangible impairment charges of
$1.0m.
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 $0.4m (2024:
$1.9m) tax charge being recorded.
The effect from tax losses not recognised in 2025 and 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 attributable to Pharos Energy plc
The profit for the financial year in the accounts of the Company
was $14.1m inclusive of dividends from subsidiary undertakings
(2024: $35.0m). 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 | ||
| 2025 | 2024 | |
| $ million | $ million | |
| (Loss)/gain for the purposes of basic | (6.6) | 23.6 |
| earnings per share | ||
| Effect of dilutive potential ordinary shares – | – | (0.9) |
| Cash settled share awards and options | ||
| (Loss)/gain for the purposes of diluted | (6.6) | 22.7 |
| earnings per share |
| Number of shares | ||
| (million) | ||
2025 | 2024 | |
| Weighted average number of ordinary | 413.1 | 417.0 |
| 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/ | 413.1 | 419.7 |
| (loss) per share |
In accordance with IAS 33 “Earnings per Share”, the effects of
13.0m antidilutive potential shares have not been included when
calculating dilutive earnings per share for the year ended 31
December 2025, as the Group was loss making.
| Group | ||
| 2025 | 2024 | |
| $ million | $ million | |
| Exploration and evaluation expenditure | ||
| As at 1 January | 21.8 | 18.2 |
| Additions | 7.6 | 5.6 |
| Transfer to property, plant and equipment | (2.9) | – |
| Impairment – Intangibles | – | (2.0) |
| As at 31 December | 26.5 | 21.8 |
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Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
| Group | ||||
| Oil and gas | ||||
| properties | Other | Total | ||
| $ million | $ million | $ million | ||
| Cost | ||||
As at 1 January 2024 | 1,114.1 | 1.3 | 1,115.4 | |
Additions | 17.8 | – | 17.8 | |
Revision to decommissioning (see Note 26) | (4.9) | – | (4.9) | |
As at 1 January 2025 | 1,127.0 | 1.3 | 1,128.3 | |
Additions | 17.1 | 0.2 | 17.3 | |
Transfer from intangible assets | 2.9 | – | 2.9 | |
Disposals | – | (0.2) | (0.2) | |
Revision to decommissioning (see Note 26) | 3.1 | – | 3.1 | |
As at 31 December 2025 | 1,150.1 | 1.3 | 1,151.4 | |
| Depreciation, depletion and impairment | ||||
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 | 1 January 2025 | 853.6 | 1.0 | 854.6 |
Charge for the year | 46.4 | 0.2 | 46.6 | |
Disposals | – | (0.2) | (0.2) | |
As at 31 December 2025 | 900.0 | 1.0 | 901.0 | |
| Carrying amount | ||||
As at 31 December 2025 | 250.1 | 0.3 | 250.4 | |
As at 31 December 2024 | 273.4 | 0.3 | 273.7 | |
Property, plant and equipment | 250.1 | 0.3 | 250.4 | |
Right of use asset (see Note 33) | – | – | – | |
As at 31 December 2025 | 250.1 | 0.3 | 250.4 | |
Property, plant and equipment | 273.2 | 0.3 | 273.5 | |
Right of use assets (see Note 33) | 0.2 | – | 0.2 | |
As at 31 December 2024 | 273.4 | 0.3 | 273.7 |
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192
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
| TGT | CNV | El Fayum | NBS | Total | |
| Summary of Impairments - Oil and Gas properties | $m | $m | $m | $m | $m |
| 2025 | |||||
| Pre-tax impairment reversal | – | – | – | – | – |
| Deferred tax charge | – | – | – | – | – |
| Post-tax impairment reversal | – | – | – | – | – |
| Reconciliation of carrying amount: | |||||
| As at 1 January 2025 | 153.6 | 60.2 | 58.5 | 1.1 | 273.4 |
| Additions | 10.8 | 4.8 | 1.4 | 0.1 | 17.1 |
| Transfer from intangible assets | – | – | 2.9 | – | 2.9 |
Revision to decommissioning 1 | 2.0 | 1.1 | – | – | 3.1 |
| DD&A | (32.9) | (8.5) | (4.8) | (0.2) | (46.4) |
As at 31 December 2025 | 133.5 | 57.6 | 58.0 | 1.0 | 250.1 |
| 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 |
Revision to decommissioning 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 |
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Financial Statements
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 | ||||||
| Pharos Energy Israel Limited | UK | Israel | Extraction of crude | 100 | 1 | b |
| petroleum |
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
194
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
| Investments | ||
| 2025 | 2024 | |
| $ million | $ million | |
| Subsidiary undertakings | ||
| As at 1 January | 287.0 | 261.5 |
Additions 1 | 10.9 | 0.9 |
Repayments 2 | (7.9) | – |
| Impairment reversal | – | 24.6 |
As at 31 December | 290.0 | 287.0 |
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Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
| investments in subsidiaries in relation to the underlying net asset values of Vietnam and Egypt operations). | |||||
| 2025 | 2025 | 2024 | |||
| (Impairment)/ | Carrying | (Impairment)/ | 2024 | ||
| Trigger for 2024 | reversal | value | reversal | Carrying value | |
| Impairment | $ million | $ million | $ million | $ million | |
| Pharos Exploration Limited | 1 | – | 32.7 | (0.2) | 21.8 |
| Pharos SEA Limited | 2 | – | 172.0 | 15.3 | 179.9 |
| Group | ||
| 2025 | 2024 | |
| $ million | $ million | |
| Abandonment security fund | 59.9 | 56.0 |
| Contingent consideration on Egypt farm-out (see Note 20) | – | 1.8 |
| 59.9 | 57.8 |
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
196
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
19. Inventories
| Group | ||
| 2025 | 2024 | |
| $ million | $ million | |
| Crude oil and condensate | 6.1 | 9.3 |
| 6.1 | 9.3 |
Crude oil and condensate are valued at net realisable value with changes in hydrocarbon inventories adjusted through cost of sales (see
Note 7).
Group | Company | |||
| 2025 | 2024 | 2025 | 2024 | |
| $ million | $ million | $ million | $ million | |
| Amounts falling due within one year | ||||
| Trade receivables | 14.6 | 40.5 | – | – |
| Other receivables | 4.4 | 4.5 | – | – |
| Prepayments and accrued income | 0.4 | 2.8 | 0.4 | 0.5 |
| Derivative financial instruments (see Note 25) | – | 0.1 | – | – |
| 19.4 | 47.9 | 0.4 | 0.5 |
21. Cash and cash equivalents
As at 31 December 2025, cash and cash equivalents was $40.2m (2024: $16.5m). Of this balance, $4.8m (2024: $0.1m) were in Money
Market Funds that are valued at quoted prices of the funds in the active markets for the financial instruments.
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Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Group | Company | |||
| 2025 | 2024 | 2025 | 2024 | |
| $ million | $ million | $ million | $ million | |
| Amounts falling due within one year: | ||||
| Other payables | 9.4 | 8.0 | 0.9 | 1.7 |
| Accruals and deferred income | 3.3 | 4.2 | 1.1 | 1.2 |
| Other taxation and social security | 1.8 | 2.1 | 0.8 | 0.9 |
| 14.5 | 14.3 | 2.8 | 3.8 | |
| Amounts falling due after one year: | ||||
| Other payables | – | 0.2 | – | – |
| – | 0.2 | – | – |
| Accelerated tax | Other temporary | ||
| depreciation | differences | Group | |
| $ million | $ million | $ million | |
As at 1 January 2024 restated 1 | 61.5 | 1.8 | 63.3 |
Credit/(charge) to income (see Note 12) | (3.7) | 3.0 | (0.7) |
As at 1 January 2025 restated 1 | 57.8 | 4.8 | 62.6 |
| Credit to income (see Note 12) | (14.5) | (1.6) | (16.1) |
| As at 31 December 2025 | 43.3 | 3.2 | 46.5 |
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
| Group | |||||
| 2025 | 2025 | 2025 | 2024 | ||
| $ million | $ million | $ million | $ million | ||
| Credit | Total | Total | |||
facility | RBL | Borrowings | Borrowings | ||
| Borrowings: | |||||
| Carrying value as of 1 January | – | – | – | 40.5 | |
| Proceeds from Uncommitted Revolving credit facility | – | – | – | 2.2 | |
| Repayments of borrowings | – | – | – | (41.4) | |
Interest expense and similar fees | (see Note 9) | – | – | – | 1.1 |
| Interest paid during the year | – | – | – | (2.4) | |
| Carrying value as of 31 December | – | – | – | – |
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Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
| 1Q26 | |
| Production hedge per quarter - 000/bbls | 60 |
| Min. Average value of hedge - $/bbl | 58.00 |
Group | Company | |||
| 2025 | 2024 | 2025 | 2024 | |
| $ million | $ million | $ million | $ million | |
| Decommissioning provision | 56.5 | 51.1 | – | – |
| 56.5 | 51.1 | – | – |
| Group | ||
| 2025 | 2024 | |
| Movement in decommissioning | $ million | $ million |
| As at 1 January | 51.1 | 53.8 |
| New provisions and changes in estimates | 3.1 | (4.9) |
| Unwinding of discount (see Note 9) | 2.3 | 2.2 |
As at 31 December | 56.5 | 51.1 |
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
200
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
| Group and Company | ||||
| 2025 | 2024 | 2025 | 2024 | |
| Shares | Shares | $ million | $ million | |
| Issued and fully paid | 416,320,478 | 424,178,662 | 32.4 | 33.1 |
| Group and Company | ||
| 2025 | 2024 | |
| $ million | $ million | |
| As at 1 January | 33.1 | 33.7 |
| Share buy back | (0.1) | (0.6) |
| Treasury shares cancelled (see Note 28) | (0.6) | – |
| Issued and fully paid | 32.4 | 33.1 |
| Group and Company | ||
| 2025 | 2024 | |
| $ million | $ million | |
| As at 1 January and 31 December | 58.0 | 58.0 |
| Group | ||||||
| Capital | ||||||
| redemption | Merger | Hedging | Share-based | |||
| reserve | reserve | Own shares | reserve | payments | Total | |
| $ million | $ million | $ million | $ million | $ million | $ million | |
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 1 January 2025 | 102.1 | 194.0 | (41.3) | 0.1 | 3.2 | 258.1 |
Other comprehensive income | – | – | – | (0.3) | – | (0.3) |
Share buy back | 0.1 | – | – | – | – | 0.1 |
Treasury shares cancelled | 0.6 | – | 39.1 | – | – | 39.7 |
Share-based payments | – | – | – | – | 1.8 | 1.8 |
Transfer relating to share-based payments | – | – | 1.6 | – | (1.6) | – |
As at 31 December 2025 | 102.8 | 194.0 | (0.6) | (0.2) | 3.4 | 299.4 |
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Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
| Company | |||||
| Capital | |||||
| redemption | Merger | Share-based | |||
| reserve | reserve 1 | Own shares | payments | Total | |
| $ million | $ million | $ million | $ million | $ million | |
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 1 January 2025 | 102.1 | 137.1 | (40.3) | 3.1 | 202.0 |
Share buy back | 0.1 | – | – | – | 0.1 |
Treasury shares cancelled | 0.6 | – | 39.1 | – | 39.7 |
Share-based payments | – | – | – | 1.8 | 1.8 |
Transfer relating to share-based payments | – | – | 1.2 | (1.5) | (0.3) |
As at 31 December 2025 | 102.8 | 137.1 | – | 3.4 | 243.3 |
| 2025 | 2024 | |||
| 2025 | Pence per | 2024 | 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 | 1.8 | 0.363 | 1.7 | 0.330 |
| Prior year final dividend, paid in the year | 4.7 | 0.847 | 4.2 | 0.770 |
| Total dividend, paid in year | 6.5 | 1.210 | 5.9 | 1.100 |
| Interim dividend for the year ended 31 December 2025 | 2.2 | 0.3993 | ||
| Proposed final dividend for the year ended 31 December 2025 | 5.2 | 0.9317 |
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202
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
| Group | |||
| Retained | Unrealised currency | ||
| (loss)/profit | translation differences | Total | |
| $ million | $ million | $ million | |
As at 1 January 2024 (Restated 1 ) | (72.1) | 5.1 | (67.0) |
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 1 January 2025 (Restated 1 ) | (58.6) | 5.1 | (53.5) |
Loss for the year | (6.6) | – | (6.6) |
Share buy back | (0.3) | – | (0.3) |
Treasury shares cancelled | (39.1) | – | (39.1) |
Distributions to shareholders | (6.5) | – | (6.5) |
Transfer relating to share-based payments | 0.1 | – | 0.1 |
As at 31 December 2025 | (111.0) | 5.1 | (105.9) |
| Company | |||
| Retained | Unrealised currency | ||
| (loss)/profit | translation differences | Total | |
| $ million | $ million | $ million | |
As at 1 January 2024 | 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 1 January 2025 | 232.1 | (222.1) | 10.0 |
Profit for the year | 14.1 | – | 14.1 |
Share buy back | (0.3) | – | (0.3) |
Treasury shares cancelled | (39.1) | – | (39.1) |
Distributions to shareholders | (6.5) | – | (6.5) |
Transfer relating to share-based payments | 0.1 | – | 0.1 |
As at 31 December 2025 | 200.4 | (222.1) | (21.7) |
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Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
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 Report on pages 137 to 161. The Group recognised total expenses of $1.4m (2024: $1.2m) 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 Report
for further details.
Awards would normally be part cash and part equity-settled through a transfer at nil consideration of the Company’s ordinary shares.
2,169,171 awards were exercised during 2025 (2024: 3,525,696 shares exercised). The Company has no legal or constructive obligation
to repurchase or settle awards in cash. Details of awards outstanding during the year are as follows:
| 2025 | 2024 | |
| No. of share | No. of share | |
| awards | awards | |
| As at 1 January | 22,114,651 | 20,153,833 |
Adjustments 1 | 1,369,874 | 998,049 |
| Granted | 7,454,860 | 7,042,038 |
| Exercised | (2,169,171) | (3,525,696) |
| Forfeited during the year | (3,298,420) | (2,553,573) |
| As at 31 December | 25,471,794 | 22,114,651 |
| Exercisable as at 31 December | 4,266,529 | 2,893,353 |
1) In accordance with Share Scheme rules, adjustments were made for the payment of dividends.
The weighted average market price at the date of exercise during 2025 was £0.21 (2024: £0.22). The weighted average exercise price
£nil. Awards outstanding at the end of the year have a weighted average remaining contractual life of 1.09 years (2024: 1.13 years). The
weighted average market price and estimated fair value of the 2025 grants (at grant date) were £0.23 and £0.18, respectively.
The fair value of the LTIPs granted during 2025 has been provided by a Remuneration Consultant, which estimates the Company’s
performance against the targets using a Stochastic and Black Scholes model. The future vesting proportion in 2025 was 87% (2024:
90%).
The main assumptions for the calculation are as follows:
| 2025 | 2024 | |
| Volatility | 2.35% | 3.04% |
| Risk free rate of interest | 4.39% | 4.53% |
| Correlation with comparator group | n/a | n/a |
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
204
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
| No. of share | No. of share | |
| awards | awards | |
| As at 1 January | 4,327,835 | 4,860,374 |
Adjustments 1 | 211,552 | 233,075 |
| Granted | 1,388,555 | 1,501,418 |
| Forfeited during the year | (105,064) | (27,413) |
| Exercised | (1,932,930) | (2,239,619) |
| As at 31 December | 3,889,948 | 4,327,835 |
| Exercisable as at 31 December | 852,915 | 1,012,762 |
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Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
32. Reconciliation of operating profit/(loss) to operating cash flows
Group | Company | |||
| 2025 | 2024 | 2025 | 2024 | |
| $ million | $ million | $ million | $ million | |
| Operating profit/(loss) | 8.7 | 64.3 | (9.3) | 20.6 |
| Share-based payments | 1.6 | 0.9 | 1.6 | 0.9 |
| Depletion, depreciation and amortisation | 46.6 | 47.3 | – | – |
| Impairment (reversal)/charge | – | (26.3) | 0.4 | (31.2) |
| Taxes paid-in-kind | (0.4) | (1.9) | – | – |
Operating cash flows before movements in working capital | 56.5 | 84.3 | (7.3) | (9.7) |
| Decrease/(increase) in inventories | 3.2 | (6.0) | – | – |
Decrease/(increase) in receivables 1 | 26.2 | 11.3 | – | (1.7) |
| Decrease in payables | (0.4) | (0.3) | (0.6) | (0.1) |
Cash generated by (used in) operations | 85.5 | 89.3 | (7.9) | (11.5) |
| Interest received | 0.5 | 0.4 | 0.3 | 0.3 |
| Interest paid | (0.1) | – | – | – |
| Other/restructuring expense outflow | – | (0.4) | – | – |
| Income taxes paid | (30.3) | (35.3) | – | – |
Net cash from (used in) operating activities | 55.6 | 54.0 | (7.6) | (11.2) |
1) Includes $1.3m decrease (2024: $2.5m) in expected credit losses in respect of Egypt trade receivables.
During the year, a total of $2.0m of trade receivables due from EGPC in Egypt were settled by way of non-cash offset, of which $0.9m
relates to preliminary bond for SWER concession, $0.3m relates to training and development lease bonuses/commitment paid to EGPC,
$0.3m participation in a bid round process and $0.5m solidification of shortfall on El Fayum licence commitment.
During 2024, 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.
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.
| 2025 | 2024 | |
| $ million | $ million | |
Lease liability recognised as at 1 January | 0.2 | 0.5 |
| Principal repayments | (0.2) | (0.3) |
Lease liability recognised as at 31 December | – | 0.2 |
| Of which are: | ||
| Current lease liabilities | – | 0.2 |
Right of use assets recognised as at 1 January | 0.2 | 0.5 |
| New leases | – | – |
| Depreciation | (0.2) | (0.3) |
Right of use asset recognised as at 31 December | – | 0.2 |
| Of which are: | ||
| Oil & Gas properties | – | 0.2 |
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
206
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 | 2025 | 2024 |
| by segment | $ million | $ million |
| SE Asia | 8.4 | 9.9 |
| Egypt | 0.5 | 0.3 |
| 8.9 | 10.2 |
At 31 December 2025, the Group is committed to its share of
$9.2m (2024: $9.6m) 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.
| 2025 | 2024 | |
| $ million | $ million | |
| Short-term employee benefits | 3.5 | 4.0 |
| Post-employment benefits | 0.1 | 0.2 |
| Share-based payments | 1.0 | 1.0 |
| 4.6 | 5.2 |
Strategic Report Additional Information
Governance Report
207
Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
208
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
37. Subsequent events
Further regional instability in the Middle East, with global economic
and political implications, was introduced by the joint US and
Israel military action that began on 26 February 2026 with surprise
airstrikes on multiple sites and cities across Iran. These strikes and
subsequent military action by the US and Israel, and the retaliatory
actions taken by Iran in response, have resulted in surges in oil
and gas prices, widespread disruption in aviation, travel and
tourism and heightened volatility in financial markets. The conflict
has also disrupted international trade, particularly through closure
of the Strait of Hormuz and other key shipping routes and strikes
on gas and oil facilities. The Group recognises that the conflict,
if it continues for an extended period, could result in longer term
regional and global inflationary pressure and an increased risk of
recession.
The Group continues to carefully monitor the wider geopolitical
impact and perception in Egypt of the conflicts in the Middle East,
in connection with its assets and operations in the region.
Strategic Report
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Financial Statements
211
Additional Information
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, EBITDAX, free cash
flow, operating cash per share and return on capital employed.
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.
2025
$ million
2024
$ million
Cost of sales
96.4
87.3
(Less)/add:
Depreciation, depletion and amortisation
(46.4)
(47.1)
Production based taxes
(7.3)
(9.2)
Change in inventories
(3.2)
6.0
Trade receivables expected credit loss
1.3
2.5
Other cost of sales
(2.6)
(1.7)
Cash operating costs 38.2
37.8
Production (BOEPD)
5,398
5,801
Cash operating cost per BOE ($)
19.39
17.80
Cash operating cost per barrel by
segment (2025)
Vietnam
$ million
Egypt
$ million
Total
$ million
Cost of sales 81.0 15.4
96.4
Depreciation, depletion and
amortisation
(41.4) (5.0)
(46.4)
Production based taxes (7.2) (0.1)
(7.3)
Change in inventories (3.1) (0.1)
(3.2)
Trade receivables expected
credit loss
– 1.3
1.3
Other cost of sales (1.6) (1.0)
(2.6)
Cash operating costs
27.7 10.5
38.2
Production (BOEPD)
4,095 1,303
5,398
Cash operating cost per BOE ($)
18.53 22.08
19.39
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 the 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.
2025
$ million
2024
$ million
Depreciation, depletion and amortisation
46.4
47.1
Production (BOEPD)
5,398
5,801
DD&A per BOE ($)
23.55
22.18
DD&A per barrel by segment (2025)
Vietnam
$ million
Egypt
$ million
Total
$ million
Depreciation, depletion and
amortisation
41.4 5.0
46.4
Production (BOEPD)
4,095 1,303
5,398
DD&A per BOE ($) 27.70 10.51
23.55
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
212
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.
2025
$ million
2024
$ million
Operating profit
8.7
64.3
Depreciation, depletion and amortisation
46.6
47.3
Pre-licence costs
0.4
0.8
Impairment reversal
–
(26.3)
EBITDAX 55.7
86.1
Free cash flow
Free cash flow is calculated by subtracting capital cash
expenditure from net cash from operating activities.
2025
$ million
2024
$ million
Net cash from operating activities
55.6
54.0
Capital cash expenditure
(27.6)
(26.1)
Free cash flow 28.0
27.9
Operating cash per share
Operating cash per share is calculated by dividing net cash from
(used in) operating activities by number of shares in the year.
2025
$ million
2024
$ million
Net cash from operating activities
55.6
54.0
Weighted number of shares in the year
413,061,183
417,019,506
Operating cash per share 0.13
0.13
Return on capital employed (ROCE)
ROCE is calculated by dividing operating profit by total assets less
current liabilities. ROCE measures a company’s profitability and the
efficiency with which its capital is employed.
2025
$ million
2024
$ million
Operating profit
8.7
64.3
Total assets less current liabilities
386.1
409.6
ROCE 2.3%
15.7%
NON-IFRS MEASURES (UNAUDITED) - CONTINUED
Strategic Report
Governance Report
Financial Statements
213
Additional Information
FIVE YEAR SUMMARY (UNAUDITED)
Five Year Summary (Unaudited)
Year to
31 Dec 2025
$ million
Year to
31 Dec 2024
$ million
Year to
31 Dec 2023
$ million
Year to
31 Dec 2022
$ million
Year to
31 Dec 2021
$ million
Consolidated Income Statement
Oil and gas revenues
114.6
136.1 168.1 221.6 163.8
Commodity hedge losses
–
(0.1) (0.2) (22.5) (29.7)
Gross profit
18.2
48.7 56.7 82.3 19.5
Operating profit/(loss)
8.7
64.3 (18.1) 100.2 48.3
(Loss)/profit for the year
(6.6)
23.6 (48.8) 24.4 (4.7)
2025
$ million
2024
Restated
1
$ million
2023
Restated
1
$ million
2022
$ million
2021
$ million
Consolidated Balance Sheet
Non-current assets
336.8
353.3 356.6 457.4 460.3
Net current assets
50.1
56.3 52.3 56.4 51.6
Non-current liabilities
(103.0)
(113.9) (128.8) (183.2) (207.5)
Net assets
283.9
295.7 280.1 330.6 304.4
Share capital and Share premium
90.4
91.1 91.7 92.3 92.9
Other reserves
299.4
258.1 255.4 253.6 250.5
Retained deficit
(105.9)
(53.5) (67.0) (15.3) (39.0)
Total equity
283.9
295.7 280.1 330.6 304.4
1) See Note 2(s)
Year to
31 Dec 2025
$ million
Year to
31 Dec 2024
$ million
Year to
31 Dec 2023
$ million
Year to
31 Dec 2022
$ million
Year to
31 Dec 2021
$ million
Consolidated cash flow statement
Net cash from operating activities
55.6
54.0 44.9 53.4 10.8
Capital expenditure
27.6
26.1 26.7 31.9 41.8
Distributions
6.5
5.9 5.6 – –
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
214
RESERVES STATISTICS (UNAUDITED)
Reserves Statistics (Unaudited)
Net working interest, MMBOE
Vietnam Egypt Group
Oil and Gas 2P Commercial Reserves
1,2
As at 1 January 2025 8.9 12.4 21.3
Production (1.5) (0.5) (2.0)
Revision (0.2) (0.7) (0.9)
2P Commercial Reserves as at 31 December 2025 7.2 11.2 18.4
Oil and Gas 2C Contingent Resources
1,2
As at 1 January 2025 7.8 8.3 16.1
Revision – 0.7 0.7
2C Contingent Resources as at 31 December 2025 7.8 9.0 16.8
Total of 2P Reserves and 2C Contingent Resources as at 31 December 2025 15.0 20.2 35.2
1) Reserves and Contingent Resources are categorised in line with 2018 SPE/WPC/AAPG/SPEE/SWLA Petroleum Resource Management System.
2) Assumes oil equivalent conversion factor of 6,000 standard cubic feet per barrel of oil equivalent.
Risks associated with reserves evaluation and estimation uncertainty are discussed in Note 4(b) to the Financial Statements.
Strategic Report
Governance Report
Financial Statements
215
Additional Information
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 2025
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 2025.
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 2025 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 2025, 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.
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
216
TRANSPARENCY DISCLOSURE 2025 (UNAUDITED)
Transparency Disclosure 2025
(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 16–1 847 58,613 24,104 6,647 – – 78 – 89,442 – – – – –
Block 9-2 334 19,166 6,735 1,100 – – 75 – 27,076 – – – – –
Total Vietnam 1,181 77,779 30,839 7,747 – – 153 – 116,518 – – – – –
Egypt
El Fayum 211 13,574 – – – 135 – – 13,709 112 – 4 12 128
North Beni Suef 11 647 – – – 90 – – 737 – – – – –
Total Egypt 222 14,221 – – – 225 – – 14,446 112 – 4 12 128
United Kingdom (UK)
Corporate – – – – – – – – – 2,505 – – – 2,505
Total UK – – – – – – – – – 2,505 – – – 2,505
Pharos Total 1,403 92,000 30,839 7,747 – 225 153 – 130,964 2,617 – 4 12 2,633
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
– – 30,839 7,747 – – – – 38,586 – – – – –
Customs Office – – – – – – – – – – – – – –
PetroVietnam
E&P Corp
(PVEP)
1,181 77,779 – – – – 153 – 77,932 – – – – –
Total Vietnam 1,181 77,779 30,839 7,747 – – 153 – 116,518 – – – – –
Egypt
Egyptian General
Petroleum
Corporation
(EGPC)
222 14,221 – – – 225 – – 14,446 – – – – –
Tax department – – – – – – – – – 112 – 4 12 128
Total Egypt 222 14,221 – – – 225 – – 14,446 112 – 4 12 128
United Kingdom (UK)
HMRC – – – – – – – – – 2,505 – – – 2,505
Total UK – – – – – – – – – 2,505 – – – 2,505
Pharos Total 1,403 92,000 30,839 7,747 – 225 153 – 130,964 2,617 – 4 12 2,633
* Joint Operating Company Project’s tax payments reported on Pharos Net Working Interest Basis.
Strategic Report
Governance Report
Financial Statements
217
Additional Information
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
BOSIET
Basic Offshore Safety Induction and
Emergency Training
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
CDP
Carbon Disclosure Project
CEO
Chief Executive Officer
CFO
Chief Financial 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
D, E & I
Diversity, Equity, and Inclusion
E
EBITDAX
Earnings before interest, tax, DD&A,
impairment of PP&E and intangibles,
exploration expenditure and other/
restructuring items in the current year
EBT
Employee Benefit Trust
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 2025
FOET
Further Offshore Emergency Training
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
HSES
Health, Safety, Environmental and Social
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
IOGP
International Association of Oil & Gas
Producers
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
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
218
GLOSSARY OF TERMS - CONTINUED
M
m
Million (where used to describe a monetary amount)
mmboe
Million barrels of oil equivalent
MMstb
Millions of stock tank barrels
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, published in December 2023
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 National Industry – Energy 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
PV
Solar photovoltaic
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 facility
RFDP
Revised field development plan
RPI
Retail Price Index
T
TGT
Te Giac Trang field located in Block 16-1, Vietnam
T-HUET
Tropical Helicopter Underwater Escape Training
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
TSR
Total Shareholder Return
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
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
Strategic Report
Governance Report
Financial Statements
219
Additional Information
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
1 Centenary Square, Birmingham
B1 1HQ, 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
* Some images used in this
report are stock photos and
are for illustrative purposes only.
PHAROS ENERGY ANNUAL REPORT AND ACCOUNTS 2025
220
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