Katherine Roe, CEO, Pharos Energy

SINGAPORE – Katherine Roe, CEO of Pharos Energy, shares how she’s unlocking value across Vietnam and Egypt. She discusses capital discipline, stakeholder trust, and the next phase of growth through partnerships and exploration.

You came to Pharos having steered Wentworth Resources through optimisation, growth, and ultimately a successful sale. What drew you to Pharos, and what did you see in the portfolio that others might have missed? 

I was attracted to Pharos because I believed the core assets in Vietnam were high quality assets and capable of additional growth from the fields by producing further volumes. The two producing fields in Vietnam underpin the business and I saw an opportunity to extract further value from these assets given the strengthening balance sheet. I also saw an improvement in the macro environment in Egypt, specifically in relation to recovery of historical receivables thereby reducing the payment risk in-country. The Company had also commenced negotiations to improve fiscal terms in the existing assets in Egypt so, again, I saw an opportunity to progress these negotiations and extract unlocked value from the exiting assets which had historically underperformed relative to expectations. Overall, I would say there was a chance for me to re-position the business, strengthen the foundations and achieve growth to deliver incremental value to shareholders. After nearly two years, we have delivered on all these ambitions.

Pharos has been operating in Vietnam since 1997 – nearly three decades. How has the relationship with the Vietnamese government and PetroVietnam evolved over that time, and what does long-term operator presence actually buy you that a newer entrant can’t replicate?

What kind of partners are you currently looking for, and what does Pharos bring to the table that makes you an attractive proposition for an incoming investor?

We are looking for a like-minded partner for our high impact exploration blocks, 125 and 126. We would like a well-funded partner with aligned ambitions to drill and unlock a new frontier basement, one of the few remaining on the global scale. Recent macro events have only served to ensure energy security remain at the top of the political agenda and frontier exploration is a key strategic objective again for the super-majors and majors. Our long-standing presence in-country and our strong stakeholder relationships, especially with PetroVietnam, will benefit a partner greatly particularly a new country entrant.

Pharos operates in two very different geopolitical environments – Vietnam and Egypt. How do you manage that duality as CEO, and which market presents the more complex operating challenge right now?

I find it helpful to have more than one jurisdiction in our portfolio whereby you can learn challenges and opportunities from each that can be applicable and relevant to the other. Whilst there are obvious differences operationally and structurally, there are many similarities in how we conduct our daily business as well as evaluating additional opportunities. We pride ourselves on strong in-country relationships which we can leverage to our advantage. Building trust and a reliable, positive track record goes a long way in achieving our growth ambitions which must also work for the country. Again, we are proud that we produce oil and gas for our host countries for domestic consumption supporting and contributing to the domestic energy needs.

How does your finance background shape the way you think about capital allocation, balance sheet discipline, and when to push for growth versus preserve optionality?

My finance background definitely shapes the way I look at capital allocation; any new opportunity must always be capable of self-financing and delivering a return on capital employed. But this also needs to be balanced with financial discipline and flexibility to avoid putting the business at risk in challenging macro environments over which we have no control. Careful leverage is key, if applicable, as is maintaining a tangible return to shareholders through our dividend policy. This financial discipline also demonstrates the quality of the underlying assets and that is a key consideration for any new business: quality of the asset being reviewed and the financial case around it. We take a dispassionate view of assets and ensure everything is reviewed through a lens of maximum shareholder return.

Pharos has maintained a debt-free balance sheet and continued paying dividends through a period of oil price volatility. What’s the philosophy behind that, and at what point would you be willing to accelerate the growth strategy?

As above, we do believe a strong business creates resilience to withstand difficult macro events whilst also being able to take advantage of a high oil price environment. Our debt free position has allowed us to naturally hedge with oil price volatility driving cash flow generation. This is turn can help support and finance additional growth reducing overall cost of capital and driving higher returns.

As a listed independent operating across Southeast Asia and MENA, you’re exposed to every macro headwind – oil prices, geopolitics, ESG pressure from capital markets. Which of those is at the forefront of your mind at the moment, and what does Pharos look like in five years if all goes well?

This is very true and these headwinds change over time. The key is to maintain a strong foundation but be nimble enough to adjust accordingly through the cycles. Whilst we have seen ESG pressure reduced over the past few years, critical HSSE measures remain core to how we do business and that will always be the case. Importance and relevance for our sector from the capital markets ebbs and flows so it is important to have a diverse pool of investors to call on. Geopolitical factors will always be a factor; a diversified approach helps to mitigate this risk. In five years’ time, we would like to see Pharos as a larger business with more assets providing that enhanced diversification producing more oi and gas to support emerging market jurisdictions, helping contribute to energy needs whilst delivering returns to shareholders who fundamentally own the business.

About Katherine Roe, CEO, Pharos Energy

Katherine joined Pharos as CEO on 1 July 2024. Katherine has over 20 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.