Capricorn Energy (CNE) H1 2024 earnings summary

Executive summary

• Over $600 million returned to shareholders since Q1 2023 through dividends and buybacks, with further returns planned, including proceeds from the Senegal contingent receipt expected in early 2025.

• Renewed focus on operational alignment, cost reduction, and asset optimization, especially in Egypt and the UK North Sea.

• H1 2024 saw a return to profitability with $1.8 million net profit, compared to a $65 million loss in H1 2023, driven by improved production and cash collections in Egypt.

• Continued exit from non-core activities, including closure of the Mexico office and an ~80% reduction in G&A costs targeted from 2022 to 2025.

• Strategic objectives include maximizing value from Egyptian assets and seeking value-accretive North Sea opportunities.

Financial highlights

• H1 2024 average production was ~26,200 boepd, with 42% liquids; Egypt revenue was $80 million at an average oil price of $78.60/bbl and gas price of $2.97/mscf.

• Group cash at 30 June 2024 was $148 million, with net cash of $40 million after debt; $53 million returned to shareholders in H1 2024.

• Operating profit was $26.9 million, a turnaround from a $35 million loss in H1 2023.

• OpEx was $4.70/boe, higher than forecast due to EGP devaluation but slightly down from H1 2023.

• Receivables collections in Egypt improved, with $93 million collected in H1 2024, reducing outstanding receivables to $155 million.

Outlook and guidance

• FY24 production guidance is 20,000–24,000 boepd, with capex forecast at $50–60 million and opex expected below $6/boe.

• Drilling and workover activity focused on liquids, with 2024 drilling expected to impact 2025 production more significantly.

• Anticipates receipt of $50 million from Senegal and final Waldorf payment in early 2025, subject to tax and operational conditions.

• Ongoing negotiations to amend and extend Egyptian PSCs, aiming for improved investment incentives.

• Continued focus on asset optimization, M&A, and value creation in the UK North Sea.