FOR IMMEDIATE RELEASE
23 May 2024
Capricorn Energy PLC
("Capricorn" or the "Company")
Annual
General Meeting Chief Executive's Statement
Randy Neely, Chief Executive of
Capricorn Energy PLC, will make the following statement at the
Company's Annual General Meeting for shareholders at 11am on May
23, 2024. The Company will announce
half-year results on September 19, 2024.
The significant
efforts of the team over the past year have strengthened
Capricorn's ability to effectively execute its
strategy to create value for shareholders through maximising
the efficient development of the Egyptian production and
development base and realising the potential value of other held
assets. Today the Company offers investors a clear and compelling
investment proposition with a significant value opportunity
underpinned by our Egypt portfolio.
The return of excess capital to
shareholders will continue to be a focus of the Board, and the
recently announced special dividend of $50m is expected to be paid
on 7 June 2024. Subject to shareholder approval, the dividend
payment will be accompanied by a share consolidation.
We continue to work with our partner
in Egypt to develop and optimise our asset base, and we are eager
to progress discussions with the Egyptian General Petroleum
Corporation (EGPC) regarding an amendment to the terms of our
Production Sharing Contracts. Improved terms will support further
investment and growth in country, ultimately increasing both
Egyptian Government and Capricorn's revenues.
Reducing the Company's receivables
position remains a key priority, and we were pleased to report
progress on this following a $30m payment from EGPC in March.
Inclusive of that payment, this brings total receipts over the
first four months of 2024 to $71m. With an improved fiscal
landscape in Egypt, we are confident that we will see regular and
predictable cash flows going forward.
With increased confidence in the
Government to deliver regular and material payments, the Company
has approved a 2024 capital budget of $57m, which includes various
infrastructure projects and the drilling of 12 development and
three committed exploration wells. We expect investment in Egypt
will continue to be aligned with funds available to Capricorn
in-country.
The Company has considerably
improved its understanding of the Egyptian asset portfolio over the
past year through in-depth technical analysis, and we have provided
detail of this on our website in the form of an external reserves
evaluator-generated competent persons report.
Average production for the year to
date is in line with the midpoint of guidance for 2024 of
20,000-24,000 boepd. An update on production performance will be
provided later in the year once we have a clear understanding of
the impact our near-term return to drilling activities will have
over the remainder of 2024. Our expectations are that this year's
development activities will have a greater impact on 2025
production than 2024.
Closing the gap between the
underlying net asset value and market value is a management
priority. The market capitalisation of Capricorn implies that the
market values of Egypt are heavily risked, however Egypt has never
defaulted on oil and gas debts, and we remain confident that Egypt
has the capacity to address our overdue receivables. Egypt
will benefit from the more than $50bn of recently announced
financial support, and the country's credit rating outlook has
improved from 'stable' to 'positive' at the beginning of the month
(Fitch).
Outside Egypt, we are turning our
attention to growing a non-operated production base in the UK North
Sea. The acquisition of the 25% non-operated working interest in
the Columbus gas field allows us to maintain and leverage our
expertise in the UK North Sea. The acquisition is expected to
complete during Q2 2024, following which Capricorn will benefit
from an anticipated net of ~400 boepd from Columbus. We continue to
actively evaluate opportunities to create shareholder value in the
UK North Sea.
In Senegal, Capricorn may be
entitled to a contingent payment of up to $50m in Q1 2025 from
Woodside Energy's Sangomar Field Development if first oil is
achieved in the first half of 2024 and the average Brent oil price
during the first six months of production exceeds the $55/bbl or
$60/bbl thresholds. In April 2024, Woodside announced that the
project was 96% complete at the end of Q1 2024 and maintained its
target for first oil in mid-2024. We expect to return any
contingent payment received to shareholders.
Since year end, Capricorn's cash
position improved from $190m to $209m at 30 April 2024. Over the
same period, receivables in Egypt have reduced from $169m to $151m,
and debt drawn has reduced from $114m to $108m. Subsequent to 30
April, the Company has settled the $25m contingent consideration
due to Shell related to the acquisition of the Egypt
assets.
As announced last month, Craig van
der Laan, who has been Non-Executive Chair since February 2023, is
stepping down, while Maria Gordon, Non-Executive Director, will
become the Company's Non-Executive Chair, subject to re-election by
shareholders. I would like to thank Craig for his important role in
the transformation of the Company, and I am
confident that our revitalised team will ensure that Capricorn
successfully navigates the challenges ahead.
Ends
Enquiries to:
Analysts / Investors
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Nathan Piper, Commercial
Director
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Tel: 0131 475 3000
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Media
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Diana Milford, Corporate
Affairs
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Tel: 0131 475 3000
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Billy Clegg/Owen Roberts,
Camarco
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Tel: 0203 757 4980
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About Capricorn Energy
PLC
Capricorn
is a cash flow-focused energy producer, with an attractive
portfolio of onshore exploration, development and production assets
in the Egyptian Western Desert and, subject to completion, a
producing position in the UK North Sea. For further information,
visit www.capricornenergy.com.