Capricorn Energy plc has committed to returning some US$575 million excess cash flow to shareholders.
ACTIONS
The company said the funds, due over the coming 12 months, were not needed for its future operational focus.
A total $100m depends on negotiations with stakeholders and licence extensions in Egypt, actual oil and gas prices and the conclusion of the new board‘s strategic review started in February 2023.
In Capricorn’s 2022 full year results and strategic review report, chairman Craig van der Laan said that the return of capital to shareholders was one of five areas of “decisive strategic action” based on the review’s initial findings.
The company will also make “significant” cost reductions to preserve shareholder cash, curtail expensive exploration outside of Egypt, improve the Egypt business, and change the company’s culture.
“Our review of strategy continues, and I look forward to updating shareholders on our medium to long term findings in the months ahead,” added Mr Laan,
“I would like to be very clear on our intention in the near term, and on an ongoing basis, to return all excess capital to our shareholders.”
FINANCES
For the full year 2022, the company reported working interest of Egypt oil and gas production 34,200 boepd, comprising 42% liquids and within revised guidance of 33,000-36,000 boepd.
Revenues from Egypt production amounted to $229m.
The company received a tax refund of $1.06 billion during Q1 2022 on resolution of the Indian tax dispute.
A total of $529m was returned to shareholders in H1 2022 via tender offer and a share repurchase programme.
At the year-end, group cash and cash equivalents were $757m with net cash of $597m after debt drawn to 31 December 2022 of $160m.
Group capital expenditure on oil and gas assets totalled $162m.
The company reported an operating loss after tax of $160m from continuing operations, with post-tax losses of $51m.
NET ZERO
Capricorn added it aimed to reach net zero by 2040, with “good progress” made on decarbonisation.
The company is on course for 15% GHG equity emissions reduction by 2025.
Capricorn working interest production will average 32,000-36,000 boepd, remaining broadly flat on 2022 and continuing to focus on liquids opportunities.
Current estimates of 2023 capital expenditure total approximately $155-175m.
The company has committed non-Egypt exploration expenditure of up to $30m, including costs associated with the Yatzil well in Mexico which was drilled in Q1 2023.