Operational and trading update

Capricorn Energy PLC

28 January 2025

 

FOR IMMEDIATE RELEASE                                                                                           28 January 2025

CAPRICORN ENERGY PLC ("Capricorn" or "the Company")

Operational and trading update

In advance of announcing its 2024 full year results and 2025 guidance on 27 March 2025, Capricorn provides the following update on operations and trading performance. This information is unaudited and subject to further review.

Randy Neely, Chief Executive, Capricorn PLC said:

"I am delighted to report that our continued focus on financial and operational discipline in 2024 resulted in Capricorn achieving the top end of production guidance and a return to profitability. Throughout the year, we kept the market abreast of Woodside's progress with the Sangomar asset and were very pleased to confirm the receipt of $50m on 22 January. As previously guided, the Company remains committed to returning any available proceeds of this contingent payment to our shareholders, the precise amount and timing of which remains subject to any disputed tax obligations.

In 2025, we will continue to focus on maximising the value from our self-funding Egyptian business unit, ensuring revenues from the assets provide the cash flow to sustain and eventually grow investment in country. Our ongoing negotiations to amend, extend and consolidate the terms of our production sharing contracts (PSCs) to support increased investment and strengthened returns continue to progress well and we expect this process to complete within the timeline guided in September 2024.

Outside of Egypt, our priority is to develop the scale and longevity of the business to increase cash flows and deliver consistent shareholder returns. Our objective is to diversify and expand operations by leveraging our core corporate capabilities to identify, acquire and exploit the right assets in the right locations. We are currently evaluating M&A opportunities in the UK North Sea and in the MENA region against a strict set of strategic, financial and returns criteria, and look forward to updating the market on our efforts when appropriate."

Corporate and Finance highlights

Ø Financial performance for the year ended 31 December 2024:

·     Revenues of $143m; provisional entitlement sales volumes of 3.5mmboe (39% liquids), production costs of $41m ($4.6/boe) with average oil price of $79.3boe and gas price of $2.94/mmscf

·     Capex of ~$60m

·     Group net cash of $23m; comprising $123m cash and $100m debt following receipt of payments in Egypt of $135m

·      Net cash inflows of $72m from Egypt operations, post capex

·      Receivables of ~$180m before expected credit loss adjustments

·    Gross G&A of ~$25m, inclusive of ~$3m in legacy restructuring costs but excluding share-based payments

·     $25m share buyback completed in November 2024

Ø   Senegal contingent payment of $50m from Woodside received on 22 January 2025. The precise amount and timing of distribution remains subject to any disputed tax obligations in Senegal

Operational update

Ø    FY 2024 WI Production of 23,739 boepd (44% liquids)

Ø    Development drilling continued through the latter part of 2024 with a remaining focus on the Abu Roash G (ARG) reservoir development and management in the Badr El Din (BED) area

Ø    Exploration drilling will commence in Q1 2025 with a sequence of wells drilled on the South East Horus (SEH), West El Fayoum (WEF) and North Um Baraka (NUMB) concessions, fulfilling outstanding exploration commitments

Outlook

Ø    Capricorn continues to work with its partner Cheiron to progress negotiations with the Egyptian General Petroleum Corporation towards an improved PSC on those concessions held 50:50. The Alam El Shawish West (AESW) joint venture will also be pursuing improvement in the concession terms in 2025

Ø    Continue to evaluate M&A opportunities in the UK North Sea and MENA region to diversify and expand our operations

Egypt Production

WI production in 2024 across the four main concession areas of Obaiyed (Capricorn 50% WI), BED (Capricorn 50% WI), North East Abu Gharadig (Capricorn 26% WI) and AESW (Capricorn 20% WI) averaged 23,739 boepd (44% oil) for the year, at the upper end of the guidance range for WI production of 20,000 - 24,000 boepd.

Over the year Capricorn focused on improving knowledge of and optimising the producing assets in Egypt with the goal of establishing a more predictable operations base.  Working with our operating partner Cheiron, the Company prioritised liquid-focused operations in the BED area and efforts continue to actively manage reservoirs with water injection, to add production and reserves. Cash receipts totalled $135m during the year across all concessions.

Development drilling activity is planned to continue in 2025 with a continuation of the strategy that has been taken at BED. In addition, wells will be drilled on the AESW concession, targeting the ARG reservoir. Workovers are an important, cost-efficient mechanism to maintain production and Capricorn will continue to proactively high-grade opportunities, supporting the Operator in prioritising economic projects.

Egypt Exploration

Exploration drilling will resume in Q1 2025 with a work programme to fulfil the outstanding commitments on the WEF, SEH and NUMB concessions. The Operator is planning up to six exploration wells in total. The first of these will commence in February with the WEF-1X well. In addition to targeting several conventional objectives the well will also test the emerging Abu Roash unconventional play.

Senegal tax dispute

The tax dispute related to Capricorn's disposal of its interest in the Sangomar Field is ongoing. The Government of Senegal continues to argue that registration duties and capital gains tax were applicable to this transaction. Woodside, as recipient of the tax assessment, has filed an action with the High Court of Dakar with the next hearing taking place in February 2025. Woodside is also considering its position under international treaties in relation to this matter. Capricorn's position remains that these taxes were not applicable as the transaction took place prior to production commencing on the project. Payment of $50m from Woodside was received on 22 January 2025. The precise amount and timing of any Senegal-related distribution remains subject to appropriate provisioning for the ongoing tax process.

UK North Sea contingent payment update

Capricorn continues to evaluate options to recover the defaulted final settlement payment of $22.5m payable by Waldorf on 3 January 2025 (which increases to $29.5m if the Columbus acquisition does not complete by end Q1 2025). Capricorn is currently in discussions with Waldorf's secured creditors.

All figures are unaudited and displayed in US dollars.

Ends

Enquiries to:

Analysts / Investors
Nathan Piper, Commercial Director	Tel: [phone]
Media
Diana Milford, Corporate Affairs	Tel: [phone]
Billy Clegg / Georgia Edmonds, Camarco	Tel: [phone]

Capricorn Energy

Capricorn is an Egypt-focused energy producer, with an attractive portfolio of onshore exploration, development and production assets in the Western Desert.

For more information on Capricorn visit: https://www.capricornenergy.com

Glossary

boe                         barrels of oil equivalent

boepd                     barrels of oil equivalent per day

G&A                        general and administrative expenses

m                            million

MENA                     Middle East and North Africa

mmboe                   million barrels of oil equivalent

mmscf                    million standard cubic feet

WI                           working interest

 

END