Pharos Energy is shuffling its executive team, moving Jann Brown to the post of CEO and with Ed Storey shifting to focus on Vietnam, as the company nears completion of its Egyptian farm-out deal.
The deal, with IPR Energy, involves the sale of a 55% stake and operatorship in the El Fayum and North Beni Suef concessions. Pharos said it would complete the deal in the first quarter of this year.
Once the sale is completed, Brown will become CEO and one of two executive directors, alongside CFO Sue Rivett. Brown joined Pharos in 2017, having previously worked at Cairn Energy.
Storey has led Pharos since it joined London’s main market in 1997. He will continue as president of Vietnam for Pharos, a valuable source of production and revenue.
Also on the way out are Mike Watts and Rob Gray, both leaving the board. As a result, Pharos will cut its board from nine directors to six.
Pharos bought the Egyptian assets in 2019 from Merlon International, through the payment of $136 million and the issue of a 16.5% stake in itself.
The El Fayum concession is producing 3,318 barrels per day of oil, accounting for all of Pharos’ Egyptian production. Production peaked at around 7,000 bpd in April 2020 but, with oil prices crashing, Pharos cut drilling plans and launched a farm-out process.
The company began a three-well development drilling programme in November 2021. It will complete this work in February.
IPR will pay up to $115mn for its 55% stake in the two licences. This will consist of $5mn of cash and covering Pharos’ share of costs up to $38.43mn. Additional payments of up to $20mn may be paid each year from 2022 to 2025, depending on Brent oil prices.
Once IPR has completed the deal, it will begin a new drilling campaign. This should start in the first half of this year.
Egypt is also improving fiscal terms. Pharos said it expected the contractor share of revenue to increase from 42% to 50% during full cost recovery. This incentive will lower development breakevens.
Pharos, working with ERCE, has put together a plan to boost production to more than 10,000 bpd from El Fayum, within 24 months of the IPR deal’s completion. This would involve drilling 57 new wells, of which 48 would be producers and nine water injectors.