Pharos Energy Secures Two-Year License Extension at TGT Field

Pharos Energy, and oil and gas company formerly known as Soco International, has been granted a two-year license extension for the TGT offshore field license in Vietnam.

The company said Tuesday the license had been formally granted to the Joint Operating Company's (JOC) by the Ministry of Industry and Trade in Vietnam. 

"The license now runs to 7 December 2026, as the first stage of the full five-year license extension, and the Company remains confident in securing a license extension of a further three years to 2029, which will be pursued in due course in accordance with the license terms," Pharos said.

The license is operated by Hoang Long Joint Operating Company. Pharos owns a 30.5% working interest.

"This accelerated two-year extension enables the JOC to make investments under the proposed TGT Full Field Development Plan (FFDP), and provides financial flexibility to potentially increase the tenor of the RBL [Reserve Based Lending], which currently has a term until 2023, by a further two years," Pharos said.

Pharos said that the FFDP, due to start drilling in Q4 2021, includes drilling six producer wells, has been approved by all Partners, and is awaiting final approval from the Ministry of Industry and Trade.

The company also said the scheduled half-yearly redetermination of the Reserve Based Lending Facility (RBL) over the Group's producing assets in Vietnam is now complete.  

"As set out in the most recent Trading and Operational Update on 9 July 2020, repayments totalling $31.7m have now been made in accordance with the redetermination and, the Borrowing Base amount currently stands at $64.3m against a Facility Agreement of $125m plus a further $125m on an uncommitted "accordion" basis. As at 31 July 2020 net debt stands at c.$32m," the company said.

Ed Story, President and Chief Executive Officer, said: "We are pleased to have received the formal grant of our two-year extension at TGT, which is very welcome news and allows us to embark on our FFDP with confidence as we look to increase production in Vietnam. With the two-year extension, we will look to increase the tenor of the RBL and have confidence that the remaining period of a full five-year extension will be granted as our plans for future TGT drilling and enhanced oil recovery unfold over time. 

"Moreover, the support and encouragement of the Government of Vietnam at this time of industry distress and uncertainty speaks volumes regarding our future in Vietnam."

Production from TGT began in 2011. According to Pharos' website 41 wells have been drilled so far and an estimated 78 mmboe produced. Oil from TGT is transported by a sub-sea pipeline to a nearby leased Floating Production Storage and Offloading vessel, where it is processed and then exported by tanker. Gas from TGT is processed at nearby facilities and transported by pipeline to shore, to supply the Vietnamese domestic market.

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