WTI (July) $65.29 +71c, Brent (Aug) $67.04 +57c, Diff -$1.75 -14c
USNG (July) $3.64 -14c, UKNG (July) 82.71p -2.1p, TTF (July) €35.19 -€0.8

Oil price

With the US/Sino talks in London starting yesterday and apparently going quite well, ‘fruitful’ was the word used, markets are clutching at straws as usual…

I’ve been mentioning the Baker Hughes rig count a lot more than usual recently as the inexorable decline continues. Last week it got worse again, overall the number was down 4 rigs to 559 but in oil the number was down 9 to 442. No excuses…

Pharos Energy

Pharos has announced that it has received approval from the Vietnamese Government for the two-year extension of the Exploration Period (from 9 November 2025 to 8 November 2027) of the Blocks 125 & 126 Production Sharing Contract (PSC).                                                                                                           

Katherine Roe, Chief Executive Officer, commented: 
“We are pleased to have secured approval from the Vietnamese Government for the two-year extension of the Blocks 125 & 126 Exploration Period. This approval reflects the Government’s continued support as we progress our active discussions with potential farm-in partners and rig contractors to complete all necessary preparations ahead of drilling the commitment well on Block 125. We are committed to pursuing this exciting opportunity, and this extension allows us to retain optionality for the prospect to be drilled, whilst investing in near term production growth in our producing assets in Vietnam.”

Excellent news for Pharos that they have received approval from the Vietnamese Government for a two year extension to the exploration period on Block 125/126 which will now run through to November 2027. This will reduce time pressure on company management to complete a farm-out and in due course commit to drilling what is going to be a high-impact exploration well. 

In the meantime I expect the company to concentrate on production and capex across the portfolio with a big programme of work in Vietnam. Egypt should be aided by the consolidation of of its two onshore concessions, a process that the industry has noted is ongoing and I would not be surprised to see some action this year.

Shareholders can now expect to see increased investment activity in 2H on the Vietnam producing fields and in Egypt following the final piece of the consolidation/extension jigsaw fits in place and following that production growth is likely, substantially building portfolio production growth. 

Pharos is continuing to get stronger, this year these asset extensions are contributing to what will be higher production, increased investment and an exciting future. This is backed up by a strong balance sheet with growing net cash and with no debt, receivables have been falling and I would expect that to continue in due course. 

Today’s announcement reinforces that senior management has clearly established and developed excellent relationships with the Vietnamese authorities which are reaping rewards which I expect to be reflected in a growing share price in the future. Pharos is a strong member of the Bucket List with its high quality management, strong and growing financials and huge opportunity down the line.

A little while ago I interviewed Katherine Roe, Pharos CEO, here I repeat the interview for interest’s sake.

Core Finance CEO Interview: Katherine Roe of Pharos Energy

Tower Resources

Tower has announced that its subsidiary, Tower Resources Cameroon SA (“TRCSA”), has issued a Letter of Award to Advanced Energy Systems S.A.E (“ADES”), an affiliate of ADES Holding, for the provision of a jack-up rig, proposed to be the Admarine 510, to drill the NJOM-3 well on Tower’s Thali license in Cameroon in Q4 2025.

The Admarine 510, a GustoMSC CJ-46-X100-D triangular design three-legged jackup unit, built in 2019, and capable of operating in water depth up to 375 ft, is just completing its five-yearly recertification project in Bahrain. The rig has also recently been awarded a contract with Addax Petroleum for operations in Cameroon, to commence in late 2025, and it is intended that the rig will drill the NJOM-3 well for Tower before beginning operations with Addax Petroleum.

The commercial terms of the ADES proposal to TRCSA are confidential, but the fact that the Admarine 510 was already committed to move to Cameroon for other operators has facilitated the discussions with the rig owner and resulted in more favourable terms than the owner could have offered otherwise. The terms are well in line with the Company’s previous projections and compare very favourably to offers received from other rig owners earlier this year and last year.

The Letter of Award is subject to contract and usual conditions precedent, including receipt of Government approvals in Cameroon and completion of TRCSA’s farm-out to Prime Global Energies Limited as announced on 10 January 2025.

Tower Resources Chairman & CEO, Jeremy Asher, commented:
“We are delighted to make this award, and are looking forward to working with ADES on the NJOM-3 well this year. Our rig selection process has been made a little more complex by the opportunity to coordinate our timing with that of other nearby oil and gas companies, including Addax Petroleum in particular, however I believe it has resulted in a very good commercial outcome for all parties.”

Great news for Tower shareholders as Jeremy Asher pulls off another excellent deal in which he gets his rig to drill the well at Thali and on great terms as well. The idea of the well being drilled this year is most exciting, admittedly after a bit of a wait…

Prospex Energy

Prospex yesterday informed shareholders that it has been advised by the Operator of the Viura field, HEYCO Energia Iberia S.L, that the workover rig to repair a leak in the completion tubing in the Viura-1B well is currently on site and operational.  The Operator has also advised that the reinstatement of production from the Viura-1B well is therefore imminent.  The Viura‑1B well was shut in during April-2025 owing to a leak in the completion tubing which required a rig intervention to reinstate production.

Prospex owns 7.24% of the Viura field through its ownership of 7.5% of HEI.  Prospex is accruing 14.47% of the production income from the Viura gas field until payback of its capital investment (expected to be ≈£8 million) plus the accrued 10% p.a. interest thereon.

Mark Routh, Prospex’s CEO, commented:
“This is good news from HEYCO that the planned workover is on target to deliver the resumption of production from the Viura field later this month.

“I will continue to keep shareholders updated with regular progress reports as the well interventions proceed.”

Good news indeed from Prospex as the workover rig is repairing the damaged completion tubing at Viura, more data is needed to get an idea of the production levels achieved but its a start.

Original article   l   KeyFacts Energy Industry Directory: Malcy's Blog