Pharos Energy plc

Good afternoon and welcome to the Faros Energy PLC investor presentation. Throughout this recorded presentation, investors will be in listen-only mode. Questions are encouraged and can be submitted at any time via the Q&A tab situated on the right-hand corner of your screen. Simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company can review all questions submitted today and publish responses where it's appropriate to do so. Before we begin, I'd like to submit the following poll. I'd now like to hand you over to Catherine Rowe, CEO. Good morning.

Thank you, Lillian. Good afternoon, everybody. Thank you for taking the time to join our presentation today. Busy time with results, so we appreciate you taking the time. We will be running through a short presentation to deliver some of the key things that we've been working on, the catalysts moving forward, what shareholders and investors have to look forward to, as well as the performance for the first half of this year. So good afternoon and welcome again. I'd like to start with a bit of an overview. We've set here a year of strategic operational and financial delivery. Obviously, first and foremost, this is the first half interim results presentation. But I joined as CEO last year and presented my first set of interim results this time last year and we are here today as my second set. So I thought it might just be helpful to start off with a recap on what we've achieved in that timeframe. I think for those of you that joined last year, we were very clear about the near-term priorities and focus for our business in terms of what we needed to achieve with the existing assets. So on the left-hand side here, we just recap on those. We have two jurisdictions, with producing assets in both Vietnam and Egypt. We have exploration potential in both of those jurisdictions as well. Vietnam is the producer of the majority of our production, is the core part of our business, and it was really critical that we secured those license extensions for our two producing fields, and those were achieved in December last year. What's really important about that is the unlocking of a significant work program that we are about to commence in the coming weeks in Vietnam, not just to arrest the natural decline of these assets, but also to try to deliver incremental production volumes and growth from next year onwards. We'll come on a little bit more later in the presentation on that drilling campaign. In Vietnam, we also have high-impact frontier exploration. Some of you may be aware of this. We've discussed before in blocks 125, 126. This is deepwater offshore frontier exploration. And we also achieved a two-year license extension, which gives us until the end of 2027. Why is that important? Because we really need to seek a farming partner in order to give us the ability to drill our first prospect, which we would ideally like to do next year. We've put ourselves in the best possible position to do that. We've started a new structured formal process, partially to feed in some of the historic bilateral conversations, but also to attract some fresh interest. And we have also managed to secure long lead items and that two year extension to provide maximum optionality to find a partner. So that was also achieved, that extension was granted to us in June of this year. Just announced yesterday, we have successfully agreed new fiscal terms for our existing licences in Egypt. We have far better economics, far better improved terms and importantly, additional time on those licenses by consolidating into one new fresh agreement. You'll see here that's given us an immediate uplift in value. We have a 25% uplift in TP, largely a function of that additional time on the licenses. And again, importantly, going forward, it means a very healthy and attractive financial framework for further reinvestment, which we haven't been doing so far this year. We're also important to us to achieve the strength in our balance sheet after many years of having to service that legacy RBL facility. That was repaid last year. We remain debt-free and building cash on the balance sheet, as Sue will come on to. Again, flexible financial and strategic optionality We have fully funded capital investment programmes from our internally generated free cash flow and obviously not having to service debt allows us even more flexibility. It also means we have a clean balance sheet which provides further flexibility going forward if we needed to leverage. Very important to us that we maintain the shareholder dividend. This has been part of our policy for some years. And we're now trying to strike the right balance between continuing that return to shareholders through the dividend whilst also trying to achieve a capital return by reinvesting back into our assets. We've also achieved a strengthening in the board. We appointed a new chairman to the board in June. That's received alignment with our major shareholders and is working well with the rest of the board. And there's alignment in terms of strategic progress of our business, what next? And that leads quite nicely into the right-hand side here of what is next? What do we have to look forward to? Where does the growth in our business come from? So really, really important in this six-world drilling campaign in Vietnam. It's the largest investment campaign that we've had into our existing assets since the original development. So really, really important. We believe it's capable of extracting and delivering additional value through those increased production from next year and beyond. We'll talk a little bit more about that. And as I mentioned, we also have this formal process ongoing for the expiration, which is again a new, fresh look at how best to find a partner to deliver, hopefully, a drilling campaign next year. Egypt, more non-core part of the business, but still equally valuable. Those new terms make a huge difference in terms of our economics and provide that attractive framework. We're now going to work with our partner in-country to put together the near-term drilling programme, and again, all designed to increase production from the existing volumes that we see today. It does remain an absolute priority for us at Pharos to see a material recovery in our existing receivable balance And Sue will talk a little bit about our current receivables position. And we are in discussions with EGPC, our government stakeholder, about seeing that materially reduced, giving us the confidence and the ability to reinvest, but only in a very disciplined and self-funded framework. I think having said all of that, we do still recognise that we need to add scale to our business. We're in very good shape. We've got lots to look forward to with organic growth, but we would also like to add to that. And we're now in the fortunate position that we're operationally and financially strong enough to look at additional opportunities that fit the strategy and can build additional scale. And that's very much a priority as we move forward. So I just wanted to set the scene with where we are, hand over to Sue. on some of the interim results and then come back.

Thank you. Thanks, Catherine. So just in terms of the first half, just some highlights there from the first half, as you say. So revenue, we were able to maintain our position there of just over 65 million for the first half, which compares very similar with 2024. That was actually despite a sort of $12 reduction in Brent price in the period. And really that revenue has been maintained because we were able to bring in some of our inventory that we held at the year end. So that inventory supporting the revenue number there. In terms of the net cash, again, a good build from first half 24. to 22.6 as we left the half year. Cash flow from operations, 16.1. That's down quite a bit from the 24 number. If you recall, in March 24, we received a one-off dollar payment, 10 million from EGPC. We didn't receive that in the first half this year. We are very much after that in the second half And we've just come back from Egypt, Catherine herself and our new chair. And we believe hopefully there is something coming very shortly into the second half there. So hopefully we'll prop up that in the second half. In terms of the hedging, despite having got rid of the or paid down the RBL, we still have a 26% hedging position there for the second half, just supporting... us with a floor of $60. So again, very helpful to have in our portfolio. In terms of the Egyptian receivables, 33.5 as we finished the half year. That's down since then as we've managed to collect a bit more receivables in this third quarter. So as I say, 5.6 in this quarter that we've just received. but we are hopeful that we will get a reasonable dollar amount in the coming month or two. And just to say, in terms of the production guidance, we've narrowed the guidance from five to, it was originally five, we brought that up, and it was originally six to, we brought that down. So just narrowing that guidance as we know more as we get towards the year end. And if we could move to the next slide. Thank you. So in terms of the cash flow itself, so 34 million in there from inflow from operations, of course, taxes to governments, which gets you down to the 16.1, which you mentioned, of the OCF. A modest capital programme in the first half, 8.2. Essentially, the big capital programme comes in the second half, as we start that drilling campaign, that six-world drilling campaign in Vietnam, which Catherine will pick up later. In terms of where we finish for free cash flow, so 7.5, we have had 0.7 in from the contingent consideration from our partner. There is a further 2.5 due from them which should come into the second half, so something to bring into the second half there. And if we could move to, in terms of shareholder returns, as you know, we're committed to the sustainable dividend for our shareholders there. We have announced a 10% increase in prior year dividends, so just under 0.4 per share, which will be paid in January. And just to say that the buyback, which we've been running for some time, completed in January and we haven't renewed that at this point. And with that I'll hand back to Catherine. Thank you Sue.

So we've just got a couple of slides here just on activity for the second half, looking forward into what are we doing with our assets and how do we maximise value to drive that production growth that I talked about at the beginning. Just here on Vietnam, you can see on the left-hand side to start with our first-half production comfortably within our annual guidance range and it's very steady, stable production, very low break-even. So even in this challenging macro environment that we find ourselves in with fluctuating Brent price, we are continuing. with healthy production and healthy free cash generation. We expect that production to remain stable throughout the rest of this year, but of course, where do we see next year and beyond for these producing fields? Can we achieve more growth? Yes, we think we can, but it requires this capital programme to do so. So just taking TGT first there, our first field, you can see the the existing production from those green blobs. The call-out boxes are our infill wells that are part of our programme and the yellow are the appraisal wells. So we have a four-well programme in TGT. We will most likely start with an infill well in the next few weeks. We have two rigs. They're on their way. We have all of the drilling preparations underway This has been going on for this year in order to get prepared. And we're expecting to start our first one of this programme, as I say, in early to mid-October. What's really important here is that bottom left corner of the field. And again, the yellow call out boxes, 18X is our first identified appraisal well, which we're likely to start this year. If that's successful, we are looking to unlock that to date undeveloped part of the field. They are challenging wells. There is risk to this and obviously we need to see how we get on with that appraisal well. If we are successful, it potentially opens up that additional development that you see there in the white call-out boxes and that will really drive incremental volumes and production. We're likely to know the outcomes of this drilling campaign in Q1, Q2 next year, because they are challenging wells, does take time. So whilst a lot of the activity will happen this side of Christmas, we'll be sharing the outcome in the first half of next year. Similar story in CNV, the next field there, we have one committed appraisal well and we expect to do one in Fillwell again in Q4 of this year. hopefully, again, successful to unlock further potential. I did mention blocks 125 and 126. I think it is worth saying, again, that we have deliberately put a structured framework around this process. We do believe that there are some new interested parties, partly helped by the macro environment being a little bit more conducive to high-risk exploration again, frontier exploration. There are very few frontier basins left to explore and that certainly attracted a bit more interest than might have done a few years ago. So we have got some encouraging discussions. We've been guiding that we would like to be able to give an update on that process before the end of the year. But we've done everything we can to put ourselves in the best possible position. We've secured that two-year licence extension to give us time We've committed to the long lead items. We have all of the data information. We have a full physical data room. So we have everything that we can do to ensure we have the best possible chance of finding a suitable partner and seeing the drilling of that first prospect hopefully next year. So lots to look forward to in Vietnam. Very exciting. Excellent alignment with our joint operating company, which is ourselves and our partners. Our partner includes Petro Vietnam, the government. So again, hopefully the delivery of the license extension just helps to tangibly show the strength of that relationship with the government. It's absolutely critical to how we do business. And that again is coming through and strong alignment on this drilling campaign. and we're all excited to see the outcome. So that's Vietnam. Just moving on to Egypt. As I mentioned, we announced yesterday that we have improved fiscal terms agreed with the government. Again, really important that stakeholder relationship with EGPC, our government entity in Egypt, a very collaborative approach to ensure that we have terms that work for us and they have a committed, developed a committed work programme that incentivises us to put further reinvestment back into our existing assets. We have been given an extension of time, as you can see there, and that's really helped drive that immediate uplift in value. So on the back of our announcement yesterday, we have a 25% uplift in TP reserves from the end. of last year and that's really based on that long extra time on the licences but also very much on the improved fiscal terms. We've put on the right-hand side here just a bit of the timeline. It is a long process. There are peers that you might have seen that have gone through a similar process. It is very iterative and requires a lot of discussion and collaboration with the government. It's not easy to get to where we've got to, and we're really pleased that we have. Really also importantly is that we have managed to agree a retroactive effective date, and what this means is that we do not need to wait for formal parliamentary ratification before those new terms apply. So those new terms can take effect from formal board approval, which we're expecting in the next week. and equally helps to start our planning for that reinvestment programme. So it works for us and it also works for the government. We have shared the exact terms of that agreement in our announcement yesterday, if you want to see the detail of that. But we've put the key points here, increase in cost of oil, significantly higher profit for oil share, and that signature bonus has been agreed from... from a relatively different place from where we started, but ultimately it can be offset against our receivables. So it's a non-cash commitment. So I think, what does that mean for capital allocation? So just take you on to this slide. We've presented this before about our capital allocation for this year. We do take capital allocation very seriously. We have to be disciplined and we have to ensure we have enough financial flexibility to run the business and whether any shocks that we might see, particularly in our sector and given the global challenges that we all face. So we balance that with a sensible, careful reinvestment back into the existing assets And then also the other piece is that shareholder return through the sustainable dividend, which is really important to us. Majority of the capital this year is going into that Vietnam campaign. Again, really important to note that that's the largest investment campaign we've had since the initial development. So we really think that we will see some value coming out of that. And we're fortunate that we're able to fully fund our investment program from internally generated cash flows. So it's a fully funded program. without needing any dilution or additional leverage. What we're just showing here in the pie chart is where that just sits in terms of this year and next year. It's a 25 programme, but some of the actual expense will fall into 2026. That's just a function of timing as we move through and start drilling and incurring the costs of that programme. We've just put on the bottom half here what that programme looks like and what that capex relates to, but we've just covered that, so hopefully that's clear. I think just on the outlook, again, for those of you less familiar, really worth reinforcing the low break-even position we have in Vietnam. We're very fortunate when there's challenges to the oil price, we not only get a premium to Brent in Vietnam, but we have that low break-even position So oil price has to fall a long way before Vietnam becomes economic, and that's clearly not something that we're concerned with. And that license extension that we achieved just before the end of last year allows us to have healthy economics on that capital reinvestment program. Egypt has been a low CapEx first half, and we have seen relatively... underwhelming production volumes. We are a little bit lower than expected and that partly contributes to that narrowed guidance for the year that Sue referenced earlier. And that's partly deliberate because we needed to see those improved fiscal terms, improved economics and also very, very key reduction in the receivables balance before we can justify and defend further reinvestment. We're making really good progress new terms into effect yesterday. And as Steve mentioned, we're in live discussions with our partner, government partner, in terms of reducing that receivables balance. It is a constant risk in Egypt, but we do understand that there will be liquidity coming into Egypt, particularly for the oil and gas sector. So we hope to benefit from that and we'll obviously be sharing that with the market when we can. So I think that wraps things up from us. We do have a brief outlook here which just summarises what we're trying to do. We call it protected growth because we have a very robust protected platform but also the ability to grow additional volumes from our existing assets organically but also starting to look at how we can add to the portfolio to build that scale that we mentioned. We are very fortunate that we've got good quality assets that are capable of delivering that free cash flow. We just need to build on that and that's very much the priority going forward. So supported our downside, lots to look forward to on the growth and hopefully we've demonstrated that we do that in a disciplined way and remain focused on delivery and execution and ensuring that we can deliver on the things that we say we can. So thank you for listening. We appreciate the support of all our shareholders and those that are looking at investing in Pharos. We do believe we are differentiated from a lot of our peers and we're obviously here to take any of your questions.

thank you again for listening and i think we'll hand over to the q a catherine sue thank you very much for your presentation this afternoon ladies and gentlemen please do continue to submit your questions just by using the q a tab situated on the top right hand corner of your screen just while the company takes a few moments to review those questions submitted today i'd like to remind you that recording of this presentation along with a copy of the slides and the published q a can be accessed by your investor dashboard as you can see we have received a number of questions throughout today's presentation Minh Anh, if I could hand back to you to share the Q&A, and then I'll pick up from you at the end.

That's great. Thank you, Lily, and thank you, Catherine and Sue. I will now go through some of the questions that were pre-submitted to the company, starting off with Vietnam. We were hoping that the license extensions in Vietnam may have led to a more aggressive development drilling campaign. Why has the development drilling campaign been timid? It hasn't been anything more than what we've seen on average over the past number of years, i.e. two to four wells.

Thanks Binan, I can probably take that. I think it's really important again to note that you need the right economic framework in order to reinvest so that you have a return on your invested capital. And we needed the license extensions in Vietnam to justify and support reinvesting back into the assets with significant drilling. These are complex wells. It's not straightforward drilling. We do have a lot of expertise and experience having been producing in Vietnam for 20 years, but we do still need to be very careful about the investment program and the return on capital. So what I would say is that the license extensions achieved just before Christmas allowed us that leeway, that runway of time to recover costs, but also to have sufficient economics. And we've driven very hard. The license extensions were approved in December. By early January, we were already in the planning stages. And this is the earliest that we can drill in October, given the weather window and the long lead items. So there's been a very, very big push, I would say, between ourselves, Petro-Vietnam, and our partner to drill as quickly as possible. And so I do think it's aggressive. I think it's aggressive and it's exciting and it's the first time in many years that we've done a campaign of this scale in nature. And as I say, you really needed the right economics and environment to justify deploying that capital. So I think the outcome of this Sixth World Programme will be really interesting for us.

Thank you, Catherine. When is Block 125 going to be drilled?

Well, I think I partly answered that in the presentation. We do have an identified prospect, so we would really like to be in a position to drill next year. Again, there's certain planning required and we do need a partner, which is what we're We're in the process of trying to secure at the moment. We do have the license until the end of 27. So we could drill this year or drill next year or 2027. Obviously, we'd rather sooner if we can have everything lined up. But what we have done is put ourselves in the best possible place we can. We are dependent on rig availability and that farming partner being appropriate and agreeing appropriate terms So that's what we're hoping for. But we've just given ourselves optionality. We can't control everything, but we can put ourselves in the best possible position and give ourselves maximal optionality. And we feel we've done that at this point.

Thank you. On the same topic, if blocks 125, 126 are as good as the company has been saying, why has industry uptake been so poor? We've been trying to farm them out for nearly half a decade.

I can take that as well. I'm not sure it's been half a decade. I know it has been several years. I would say it's difficult to attract interest in a frontier basin, deep water. This is an expensive, risky drilling campaign. I think exploration for frontier basins has been challenging for the macro environment. A lot of the majors have not been focused on this over the last few years. And where they have, there have been other parts, maybe West Africa, for example, where a lot of that capital has been allocated. There is a discrete amount of capital for deep water offshore exploration drilling. But I think what we're seeing now is a change in that macro environment. exploration is very much back on the agenda for a lot of the majors. And that's the new bit of interest that we're seeing coming through. And there just aren't very many frontier basins, undiscovered frontier basins left in the world. So it's a lot about timing and a lot about getting the right person at the right time. And that feels like a bit of a shift.

That's great. Thank you. The next question is, Given where the share price language at the moment, surely the most value of creative acquisition the company could make is buying itself. What are the board's latest thoughts on reinstating the share buyback or, better still, enacting a tender offer to buy out the persistent seller?

I mean, share buyback is always part of our board discussions. It's there as an agenda item all the time. particularly in relation to capital allocation. So when we discuss best use of capital, we have, as you probably know, or for those of you who don't, we had a share buyback programme for many years. When we were not in this position to reinvest in the assets because of the economic environment, we also had less financial flexibility and our own liquidity due to the legacy debt. So now we're in a position where we're in the right framework ourselves financially, but also the economics in Vietnam and Egypt, where we can reinvest back into those assets. And we believe that will drive more growth. Shared buybacks, there are pros and cons. We have low liquidity. There's only an element of how much you can actually buy back. And at this point, we do want to put our capital to work. We think that capital can work harder by reinvesting back into the existing asset. That obviously doesn't mean that we're not very conscious of shareholder returns, which is why we also ensure that we sustain the dividend. And if at any given point we calculate the share buyback provides a better return to shareholders, then that's what we would do. We would reinstate that.

That's great. Thank you, Catherine. Moving on to the financials. On a previous webinar, you stated that the best time to secure debt is when you don't need it. It was also mentioned that different types of debt instruments were being discussed and considered. Can you please give an idea of the progress made in this regard, and when do you think the company may be in a position to give us a detailed update on this?

Yeah, I mean it's one thing that we've been looking at obviously after getting rid of the or paying down the RBL last year and clearly something in our toolkit if you like, you know, with a balance sheet that hasn't got any debt in it, you know, a great opportunity for the potential M&A activity. So, yeah, we have been looking out in the market. Clearly, there is interest in the market. And I think once we identify some good opportunities, then I think we should be able to get that to come home, if you like. I don't know if you want to say anything else.

No, I agree, Sue. I think the exercise that we've been through demonstrates there's access to capital. for us at the right time for the right transaction. And that obviously helps support some of the conversations. Having robust production and an unlevered balance sheet gives us that toolkit, as you say.

Yeah. I mean, we'd only do it for the right opportunity. Yeah. I think that's the key.

That's great. Thank you, Sue. The next question is, Capricorn Energy has informed the market that EGPC communicated to them that it intends to make payments of approximately $130 million through the remainder of 2025, which is approximately 90% of their 2024 revenues and more than double the amount they received in 2024 from EGPC. Have you received similar assurances from EGPC?

The short answer is yes. It's a conversation that we have with EGPC, as do all of our peers. As I said before, we do understand that liquidity is coming into Egypt, particularly for our sector, and ourselves, Capricorn, and all of the international oil and gas companies are in the same position. So we do expect a material reduction in our receivables in the near term.

Thank you. Along the same line, are there any levers that can be pulled to expedite the receipts of the Egyptian receivables other than choosing to continue to hibernate?

Well, I think, you know, having agreed these new fiscal terms on the consolidation, having that, you know, clearly the idea from the government's perspective is that comes with a committed work programme. It is phased and we have... deliberately agreed a relatively modest programme that we not only hope to meet but also exceed. But it depends on recovery of receivables and certainly the timing of that investment will be dependent on that recovery of receivables. So that's the leverage, if you like.

That's very helpful. Thank you, Catherine. The next question is, Have you had further discussions with the activist investor who attempted to vote out the majority of the board of directors? What are his concerns? What strategic shifts is he looking for? Activism by unknown activists who hasn't communicated via an open letter with the wider investor base is very concerning to private investors.

Thank you Min and I would say that we talk regularly with all of our shareholders, including our largest shareholder. We don't hide away from communication. We do try to be as accessible as the management team and board as possible. So yes, we have active dialogue. I think it's really, really important at the end of the day we're here to run the business on behalf of shareholders. It's really important to us that we listen understand shareholder concerns, frustrations, ambitions, etc. We did have a change in our chairman and he has again settled very well and been well received by our major shareholders. So we feel that we have stability and there's been no concern at this stage at the board level regarding that shareholder. We have a resilient, strong and stable board which importantly is aligned about the future for our business.

Thank you, Catherine. Is the key jurisdiction for any potential inorganic growth Southeast Asia?

I think the answer to that is we need to leverage what we're good at. If we sit back and think what are we good at at Pharos, we've been in country in Vietnam for, for 20 plus years and we have a very strong stakeholder relationship with Petro Vietnam. We're well regarded in country and can clearly see the support that we get with the license extension. So we'd like to do more, leverage that relationship. That does expand into Southeast Asia as well because it's a high growth region, lots of opportunities. It's where we're seeing that GDP growth in the Southeast Asian economies And they all, again, are seeing that need for increased energy. So there are lots of opportunities in Southeast Asia, and that is more of a priority at this stage. But, again, it all comes down to the type of transaction and the return that it can deliver. And we're very focused on that. And I think that's what we try to get across when we say disciplined and focused.

Wonderful. Thank you, Catherine. I will now move on to read out some of the questions that were submitted live to the company during the presentation. The first question is from Sam S. Can you please provide the key differences between the new structured formal process versus what was carried out previously?

Sure, yeah. Previously, with the format of 125.126, I think there's been a consistent message throughout Farros' history that a partner is required. Again, it's a real challenge for a small business to drill that well, sole risk that well, just from a cost and a risk reward perspective. So we've always been trying to find a partner. The difference is historically it's been done on a bilateral basis, which means that conversations have been happening between pharaohs and parties at any given time. And what's new here is that we've tried to put a formal structure around. We have a third-party advisor running the process for us. That creates a bit of competitive tension. It creates some timeframes. It creates structure in terms of the steps between entering into a CA, a confidentiality agreement, to receiving data, to visiting the physical data, et cetera. So it just creates a little bit more of a formal process. And I think what it's achieved for us is a wider and deeper testing of the market and accessing people that we wouldn't necessarily have been able to access on our own. So that's what's different.

That's great. Thank you, Catherine. The next question from Peter. Can you give us an idea of the scale of the upside in TGT and CMV that could be unlocked with the appraiser wealth?

I mean, it's hard to put a number on that, which is why we haven't to date. But as I say, we think it could be materially beyond arresting the decline of current production. So what does that mean? You'll see we're sort of relatively stable at the 4,000, 5,000. We want to see that growing. So we want to be seeing 6,000, 7,000. plus thousand barrels a day from those fields if we have appraisal success.

Thank you. A few questions from Keith about 125. What are the parameters you seek in terms of number of the wells committed, etc.? What are the target expectations for the well of the identified in 125?

I think all of this depends on the negotiation with the partner at the time. It depends who the partner is. If there's an ability for a couple of the majors, they have a different budget and they can commit to not only just the exploration programme but possibly a development programme in a success case. We have a one well commitment. So that is obviously the priority to cover the first initial exploration well But when we look at and show potential partners our detail and our work, we have a couple of different prospects. So it really depends, and we're not quite at the stage that we can share that detail.

That's helpful. Thank you, Catherine. Switching on to financials, why are you still carrying a hedging position? The company was unhedged prior to the RBL.

Yeah, no, it's a good question and obviously one that we ask ourselves internally. I think the key for hedging is it supports your underbelly. So when you're stress testing at very different oil prices, we've seen crashes in the oil price before, etc. I think it's an important tool to make sure that you're supporting, as I say, your underbelly, as I call it. But I think, you know, you want to keep, you know, quite a bit in the top side for, you know, clearly if share prices pop up, not share prices, but if rent price pops up, you want to see that ability to take some of that. So this is really about supporting the underside.

Yeah, yeah.

Protecting, isn't it?

Protecting. Without reducing our exposure. Yeah, absolutely.

The next question is, what is more risky about the six-well programme this time?

The risk is really around the appraisal wells. So of the six-well programme, four of those are infills. They're relatively well understood and low risk. So the risk is really around the appraisal because it's looking at a different part of the field that is previously not producing. So where that appraisal well, for example, in TGT 18X, that is not currently a producing part of the field. So that's where the risk lies. And likewise in CNV, which CNV is even more of a complex well. It's complex geologically, but also operationally. So there's some risk there, but I would say the infill wells are are relatively straightforward. We've got a lot of experience of having done those. So I hope that answers that question.

That's great. Thank you, Catherine. I believe that is all the time we have for today. So I will now hand it back to the Investor Meet Company team.

Catherine, thank you for answering all those questions you can for investors. And of course, the company can review all questions submitted today and will publish those responses on the Investor Meet Company platform. Just before redirecting investors to provide you with their feedback, which I know is particularly important to the company, Catherine, could I please ask you for a few closing comments?

Thank you. And I just want to say thank you again to everybody for taking the time to listen. We do appreciate it. And we look forward to updating the market and shareholders with new news as we move forward. It's a really important half for us as we move towards the end of the year. So we look forward to further updates. And thank you again for your time.

Catherine, Sue, thank you for updating investors today. Can I please ask investors not to close this session as you'll now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations. This will only take a few moments to complete and I'm sure will be greatly valued by the company. On behalf of the management team of Farosan and GPLC, we'd like to thank you for attending today's presentation and good afternoon to you all.