Serica Energy Agrees $194M Pharos Energy Acquisition
July 27, 2026
Serica Energy has agreed to acquire Pharos Energy in a cash deal valuing the London-listed oil and gas producer at approximately $194.5 million (£145.7 million), prompting Pharos to withdraw its recommendation for a rival takeover offer from Ratio Petroleum.
Serica said the acquisition would expand its operations into Vietnam and Egypt, increasing its pro forma 2P reserves by 13% to 156.8 million barrels of oil equivalent, 2C resources by 15% to 129.4 million boe, and raising its expected 2026 exit production rate to about 70,000 boepd.
The combined group would also acquire approximately $45 million of cash held by Pharos as of June 30, 2026.
The transaction will be implemented through a court-sanctioned scheme of arrangement and remains subject to shareholder approval, court approval and regulatory clearances in Vietnam and Egypt. Serica expects the acquisition to become effective in the first half of 2027.
Under the terms of the recommended acquisition, Pharos shareholders will receive 28.6683 pence per share in cash, plus a 4 pence per share special dividend, for a total value of 32.6683 pence per share. Including a previously paid final dividend, shareholders will receive 33.6 pence per share.
The offer represents a 20.7% premium to the cash and special dividend consideration under Ratio's competing bid and a 28.6% premium to Pharos' closing share price on June 23, the last trading day before Ratio announced its offer.
The Pharos board said it had unanimously withdrawn its recommendation for Ratio's bid and now intends to recommend Serica's offer to shareholders, while adjourning shareholder meetings scheduled for Aug. 17 to consider the rival proposal.
“The acquisition of Pharos is a compelling opportunity to deliver a first step in our long-standing strategic objective of adding to the diversification of our business through international expansion, on terms that are accretive on a per share basis across all key metrics, with multiple embedded growth options. Upon completion the transaction will boost our reserves, resources and add materially cash-generative production, while at the same time delivering an attractive liquidity route for Pharos shareholders.
“Pharos brings a highly experienced regional team and an operating model that mirrors our own focus on cash generation funding both growth and returns. As we continue to invest in the UK North Sea, with a multi-well rapid return drilling programme set to begin in 2027, this presents a complementary platform from which to grow in South East Asia, a region with increasing energy demand that benefits from a supportive environment for upstream investment,” said Chris Cox, Serica's Chief Executive Officer.
“As announced in our recent trading update, the business is benefitting from strong operational momentum. At the same time, the Board of Pharos is delighted to be recommending this offer from Serica, which delivers shareholders a material premium in cash to the Ratio Offer,” said Katherine Roe, Pharos' Chief Executive Officer.
