Petroleum Africa
Find us on: 
Wednesday, July 14, 2021
Pharos Energy plc issued a Trading and Operations update in advance of the Company’s half-year results on 15 September 2021 which includes highlights on its operations in the El Fayum license in Egypt.
Production for the first half of 2021 from the El Fayum Concession averaged 3,718 bopd. Production levels were impacted by well maintenance issues in the first half and plans are in place to accelerate production enhancement in the second half of the year.
The cessation of drilling operations and maintenance, plus reduced investment in the El Fayum fields since the beginning of the pandemic in March 2020, has resulted in a number of remedial well maintenance interventions being required. The workover rig assigned to the planned 9-month Phase 1B waterflood program has frequently been re-assigned to work on well intervention work on producing wells requiring maintenance (predominantly ESP and sucker rod pump replacements). This has inevitably delayed some work on the Phase 1B waterflood program and has had an overall detrimental effect on production. To resolve this issue, a second workover rig is due to arrive on site early August, and will be kept on for such time as is needed to return production to the guidance levels.
It is anticipated that the recently drilled Batran exploration discovery well will be tested in the next quarter.
Egypt Commercial Update
The company is in advanced negotiations with its preferred farm-out counterparty on both the El Fayum and North Beni Suef Concessions, with other interested parties still engaged. The prolonged COVID-19 travel restrictions have made this process more protracted than Pharos had anticipated but it continues to make good progress and an announcement of the details will be made as soon as possible. All major operations are on hold until the process has been completed.
The El Fayum Third Amendment agreement (which includes the fiscal cost recovery change and the license term extension) approved by EGPC has been submitted to the Parliamentary energy committee. Parliament is in summer recess so approval of the Third Amendment and its ratification by the President is likely to be from September at the earliest.
The improved fiscal terms will lower the break-even and increase the contractor share of revenue by around 20% while in full cost recovery mode.
Ed Story, President and Chief Executive Officer, commented: “In Egypt, work on our farm-out, which will provide the investment for future development, is progressing well with all major drilling activity in the meantime having been put in abeyance until the process has been concluded.
“Battening down the hatches and restructuring the company during the downturn has been a difficult but a necessary step in order to reposition it for robust growth and careful capital allocation in the best interest to all stakeholders. I look forward to updating the market further as we progress our plans for the year in both Egypt and Vietnam.”
" alt="First LNG Realized at the Greater Tortue Ahmeyim Project">
" alt="United Energy Acquires Western Desert Producer APEX">
" alt="Baker Hughes Announces Major Gas Technology Orders for Venture Global LNG">
" alt="ReconAfrica: Naingopo Results Demonstrate a Working Petroleum System">
" alt="Tullow Highlights 2025 Operational Plans in Ghana">
" alt="TotalEnergies to Supply 1.5 TWh to STMicroelectronics in France Over 15 years">
" alt="Rockhopper Reaches Final Settlement with United on Egypt’s Abu Sennan Concession">
" alt="Oil & Gas Crucial for African Growth: AEC Calls for Industry Support to Defend African Market">
