Pharos Energy (PHAR ) released its interim results on 18 September with the group reporting net income of US$15.3m compared to a loss of US$14.3m a year earlier. This increase was mainly due to a reversal of impairments. The most impressive feature was that Pharos has shown a major strengthening of its balance sheet, with the group moving to net cash as it benefits from strong cash flow, additional payment of receivables from Egypt and a relatively low level of capex. These factors have combined to allow management to increase returns to shareholders, as well as moving the business back onto a growth footing. The operational delivery is impressive, and there is clear potential for more.