Randy Neely, Chief Executive, Capricorn Energy PLC said:
'2024 was a pivotal year for Capricorn during which we continued to improve the operational performance of the Egyptian business and continued our culture of financial discipline, which helped the Company achieve the upper end of production guidance.
A key milestone in unlocking further value in our asset base will be achieved through the amendment to the terms of our concession agreements. In Q3 2024, together with our operating partner Cheiron Oil and Gas Limited (“Cheiron”), Capricorn proposed an amendment to consolidate the eight existing Egyptian concession agreements where we have an equal working interest into a new, single integrated concession agreement. Negotiations have gained real momentum since the Egyptian General Petroleum Corporation (“EGPC”) formally convened an investment committee in September 2024 to assess the proposal, with the process expected to complete in 2025. A new concession agreement would include the commercial terms and additional investment that would support increased production and reserves, through enhanced activity levels, and strengthened returns, to the benefit of all parties.
We were pleased to report that the Company received $50m in January 2025 related to our disposal of the Sangomar asset to Woodside Energy (“Woodside”). Capricorn’s stated desire to return the $50m payment has been impacted by the requirement to retain cash for any future tax obligations in Senegal related to the divestment, along with Waldorf Production UK’s (“Waldorf's”) failure to pay Capricorn $22.5m when due in January 2025.
Growth and diversification of operations and cash flows will be a key focus for 2025. Our goal is to ultimately deliver consistent shareholder returns and we are evaluating M&A opportunities in the UK North Sea and MENA region, through a strict set of financial and strategic criteria, to facilitate this. With a solid foundation being established in Egypt, we are well positioned for positive developments this year.'
FY 2024 Operational and financial highlights
- Development drilling in Egypt concentrated on a liquids focused strategy
- Revenues of $147m; with an average oil price of $79.3/boe and gas price of $2.9/mscf
- Production costs of $42m, equivalent to $4.8/boe on a WI basis
- $63m capex on Egypt producing assets
- Group net cash of $23m; comprising $123m cash and $100m debt
- WI Egypt oil and gas production of 23,763 boepd at the upper end of guidance of 20,000 - 24,000 boepd, comprising 44% liquids; net entitlement sales volumes 9,737 boepd
- Net cash inflows of $66m from Egypt operations post-capex, including $135m cash receipts
- Egyptian receivables position of $184m with $9m expected credit loss adjustments
- Gross G&A of $24m*
- $57m cash returned to shareholders via a $50m special dividend paid in June 2024 and $7m share buyback completed in November 2024
- Profit of $11m; loss from continuing operations of $12m, profit from discontinued operations of $23m
* Before depreciation and share-based payment charges including $2m legacy costs
2025 Outlook
- Post year end $50m Senegal contingent payment received from Woodside in January 2025
- Production in 2025 is guided in the range of 17-21,000 boepd, 39% of which is forecast to be liquids
- Capex guidance of $85m - $95m
- In 2025 operating costs are forecast to be $5-7/boe
- Completion of a new concession agreement, consolidating the eight existing concession agreements where we have an equal share with Cheiron into a single, integrated agreement in preparation for final approval by the Egyptian competent authorities. The Alam El Shawish West (AESW) joint venture (20% WI) is also expected to commence negotiations to improve the concession agreement terms in 2025
- Development drilling will continue to focus on the delineation and development of the Abu Roash G (ARG) reservoir in Badr El Din (BED) and the continuing implementation of waterflood. In Q1 2025 two wells will be drilled on the AESW concession, targeting the ARG reservoir
- Exploration drilling in Egypt commenced in February 2025 with the spudding of WEF-1X, the first of up to six wells, fulfilling outstanding commitments on the South East Horus (SEH), West El Fayoum (WEF) and North Um Baraka (NUMB) concessions.
- M&A opportunities in the UK North Sea and MENA region continue to be evaluated in line with our strict set of strategic, financial and returns criteria to diversify and expand our operations
- The Company will continue to pursue the recovery of Waldorf’s missed payment of $22.5m and the additional $7m should the Columbus acquisition expire on the long stop date (31 March 2025)
- Post year end $25m Shell contingent payment paid
- Post year end appointed Canaccord Genuity Limited as joint corporate broker
Source: Capricorn Energy
