REG - Capricorn Energy PLC - Full Year Results Announcement
27/03/2025 07:15
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RNS Number : 3988C Capricorn Energy PLC 27 March 2025
27 March 2025
CAPRICORN ENERGY PLC ("Capricorn" or "the Company")
Full Year Results Announcement for the year ended 31 December 2024
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
Ø Development drilling in Egypt concentrated on a liquids focused strategy
Ø Revenues of $147m; with an average oil price of $79.3/boe and gas price of
$2.9/mscf
Ø Production costs of $42m, equivalent to $4.8/boe on a WI basis
Ø $63m capex on Egypt producing assets
Ø Group net cash of $23m; comprising $123m cash and $100m debt
Ø 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
Ø Net cash inflows of $66m from Egypt operations post-capex, including $135m
cash receipts
Ø Egyptian receivables position of $184m with $9m expected credit loss
adjustments
Ø Gross G&A of $24m*
Ø $57m cash returned to shareholders via a $50m special dividend paid in June
2024 and $7m share buyback completed in November 2024
Ø 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
Ø Post year end $50m Senegal contingent payment received from Woodside in
January 2025
Ø Production in 2025 is guided in the range of 17-21,000 boepd, 39% of which
is forecast to be liquids
Ø Capex guidance of $85m - $95m
Ø In 2025 operating costs are forecast to be $5-7/boe
Ø 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
Ø 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
Ø 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.
Ø 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
Ø 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)
Ø Post year end $25m Shell contingent payment paid
Ø Post year end appointed Canaccord Genuity Limited as joint corporate broker
Enquiries to:
Analysts / Investors
Nathan Piper, Commercial Director Tel: 0131 475 3000
Media
Diana Milford, Corporate Affairs Tel: 0131 475 3000
Georgia Edmonds / Violet Wilson / Fergus Young, Camarco Tel: 020 3757 4980
Presentation
The results presentation slides will be available on the website from 09:00
GMT.
Analyst conference call
You can listen to the results presentation by dialling in to a conference call
5-10 minutes prior to 09:00 GMT using the below dial-in details. Analysts who
wish to ask a question should use the conference call facility.
Dial-in Details:
United Kingdom (Local): +44 (0)330 551 0200
Access code: Quote 'Capricorn Full Year' when prompted by the operator.
Webcast
A live webcast of the presentation including Q&A will be held today at
09:00 GMT for investors and analysts and will be available via our website at
www.capricornenergy.com (https://www.capricornenergy.com/) or on
https://brrmedia.news/CNE_FY_24 (https://brrmedia.news/CNE_FY_24) . This will
be available for playback after the event.
Corporate overview
2024 was an important year for Capricorn. Following the strategic reset of the
business in 2023 to become the cash flow-focused energy producer that we are
today, we have made significant progress on delivering our business plan to
unlock further value from our assets.
Operational review
Highlights for the year include regular and meaningful cash collections in the
first half which, combined with a commitment to a more favourable fiscal
environment in Egypt and improved operational alignment with our JV partner,
enabled the resumption of investment in June 2024 with a full year total net
capex spend of $63m. This included various infrastructure projects and the
drilling of 11 development wells, focused on the ARG reservoir in the BED
area.
Capricorn and its operating partner, Cheiron, continued to make good progress
with the amendment to the terms of its concession agreements with EGPC, with
the process expected to complete this year. All Parties have committed to
conclude, as soon as possible, negotiations to consolidate the eight existing
Egyptian concession agreements in which Capricorn and Cheiron each have a 50%
working interest (WI) into a single, new integrated concession agreement, in
preparation for final approval by the Egyptian competent authorities. A new
integrated concession agreement would include the commercial terms and
additional investment that would support increased production, through
enhanced activity levels, and strengthened returns.
Full year production was 23,763 boepd (44% liquids), generating revenues of
$147m at an average realised oil price of $79.3/bbl and gas price of
$2.9/mscf. Our average total production costs were $4.8/boe. Net cash
generated from Egypt oil and gas production was $106m, with overall Group net
cash of $23m, comprising $123m cash and $100m debt.
Reserves
Capricorn engaged GLJ Ltd. (GLJ) to undertake an independent oil and gas
reserves evaluation on the Company's Egypt assets, to document the 2024 year
end reserves position. GLJ undertook a full review of the producing assets and
the inventory of new well opportunities to assess total proved developed
producing (PDP), total proved (1P), total proved plus probable (2P), and total
proved plus probable plus possible (3P) reserves. The reserves were prepared
in accordance with the latest SPE Petroleum Resources Management System (PRMS)
approved definitions of Reserves and Resources. GLJ based their evaluation on
information and data provided by Capricorn. The highlights of the reserves
report are summarised below:
· Relative to year end 2023, 2024 production reduced net
entitlement interest reserves by 3.6 mmboe
· Developed reserves additions in 2024 replaced 24% of production with
98% of this addition occurring in the BED area
· 54% of the 2P reserves are categorised as undeveloped
· The net present value (NPV) of future net entitlement revenues,
discounted at 15% (NPV15) for the 2P basis is $169m.
2P Oil & Condensate reserves (mmbo) 2P Natural Gas (bcf) Reserves Total 2P Reserves Boe (mmboe)
Net WI Net Entitlement Net WI Net Entitlement Net WI Net Entitlement
17.8 7.0 125.9 48.3 40.3 15.6
Upon ratification of the new terms associated with the consolidation of the
eight development concessions held equally with Cheiron, Capricorn intends to
publish an updated competent persons report to describe the improved impact on
the reserves position of these new terms and licence extension. A similar
process of concession agreement renegotiation has begun on the nearby AESW
block where the Company has a 20% working interest.
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 23,763 boepd (44% liquids) 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 better understanding
of resource potential and correspondingly forecasting of future production.
Working with our operating partner Cheiron, the Company prioritised liquids
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. Capricorn anticipates that the
consolidation of the eight development concessions shared equally with Cheiron
will provide a catalyst for increased development activity and work is
progressing with the Operator to ensure operational readiness and a
comprehensive understanding of the opportunities across the portfolio.
Exploration
Exploration drilling resumed 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 commenced 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 assessment
In November 2023 Capricorn received notice under the sales agreement from the
purchaser that it has received an assessment from the Senegal tax authorities
relating to operations in Senegal, with two assessments raised that would
impact Capricorn. The Company believes that neither claim is valid and is
working with the purchaser to defend the Group's position. The purchaser has
filed an action with the High Court of Dakar disputing the tax assessment from
the Senegalese tax authorities. The purchaser is also preserving its rights
under its Host Government Agreement and international treaties in relation to
this matter. No provision has been made in the financial statements at the
balance sheet date.
UK North Sea contingent payment
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 should the Columbus acquisition not complete by end Q1
2025). The Company is currently in discussions with Waldorf in the context of
the Restructuring Plan proposed by Waldorf.
Outlook
Capricorn continues to work with its partner Cheiron to progress the
negotiated terms of an improved concession agreement on those concessions
where we have an equal working interest and expect this process to complete in
2025. The AESW joint venture (Capricorn 20% WI) will be pursuing improved
concession agreement terms in 2025.
We are continuing to evaluate M&A opportunities in the UK North Sea and
MENA region to diversify and expand our operations.
The Company will continue to prioritise shareholder returns where
possible. Our stated desire to return the net proceeds received from Woodside
to shareholders has been negatively impacted by Waldorf's default in January
2025 as well as the ongoing tax dispute in Senegal.
Principal risks and uncertainties
Managing the Group's key risks, and associated opportunities is essential to
Capricorn's long-term success and sustainability. The Group endeavours to
deploy capital in such a way that offers an appropriate level of return whilst
ensuring the levels of associated political, commercial, and technical risk
remain within the defined risk appetite of the Group.
The Group's risk management framework provides a systematic process for the
identification and management of the key risks and opportunities which may
affect the delivery of the Group's strategic objectives. Key Performance
Indicators are set annually to determine the level of risk the Group is
willing to accept in the pursuit of these objectives and form a fundamental
component of the Group's risk management framework.
Overall responsibility for the system of risk management and internal control
and reviewing the effectiveness of such systems rests with the Board.
Principal risks, as well as progress against key risk projects, are reviewed
at each Board meeting, and at least once a year the Board undertakes a
dedicated risk workshop to review the Group's principal risks. This integrated
approach to risk management has been and continues to be critical to the
delivery of our strategic objectives.
Responding to Changing Risks during 2024
Capricorn has assessed the principal risks and uncertainties at the end of
2024. The principal risks are:
· Increasing EGPC receivables balance
· Volatile oil and gas prices
· Underperformance of Egypt assets
· Failure to replace long-term reserves and resources
· Political and fiscal uncertainties
· Lack of adherence to HSSE policies
· Future challenges and costs as markets transition to net zero
Within the Group's risk assessment framework, emerging risks are considered as
part of the identification phase. These are risks that cannot yet be fully
assessed, risks that are known but are not likely to have an impact for
several years, or risks which are unknown but could have implications for the
business moving forward.
Capricorn's concessions in Egypt are the Group's primary revenue-generating
assets and any material political or fiscal country destabilisation could
potentially disrupt or, in the extreme, immobilise the Group's Egyptian
operations. The Group is actively looking to grow the asset base and considers
potential emerging macroeconomic exposures which could degrade the value of
opportunities.
Financial Review
Key production statistics
Year Year
ended ended
31 December 31 December 2023
2024
Production - net WI share (boepd) 23,763 30,044
Sales volumes - net EI oil (boepd) 3,847 5,367
Sales volume - net EI gas (mscfd) 32,980 38,049
Average price per bbl ($) 79.3 81.2
Revenue from production ($m) 147 200
Average production costs per boe ($) 4.8 5.4
( )
Profit/(Loss) for the Year
Year Year
ended ended
31 December 31 December
2024 2023
$m $m
Profit/(Loss) from the Egypt business operating segment 1 (60)
Loss from other Group continuing operations (13) (82)
Profit/(Loss) from discontinued operations 23 (2)
Profit/(Loss) after taxation 11 (144)
Egypt business operating segment results
In Egypt, total revenue was $147m (2023: $200m). $112m (2023: $159m) was
generated on sale of liquids with an average price of $79.3 per bbl (2023:
$81.2 per bbl) on net entitlement sales volumes of 1,408,300 bbls (2023:
1,959,000 bbls). Gas revenue was $35.2m (2023: $40.8m) from volumes of
12,071,000 mscf (2023: 13,887,800 mscf) at the contracted rate of $2.9/mscf
(2023: $2.9/mscf). Additional expected credit loss provisions against revenue
receivable led to a charge of $4m (2023: $9m) to the Income Statement.
Cost of sales in the year were $42m (2023: $60m), including inventory
movements. Production costs decreased slightly to $4.8 per boe (2023: $5.4 per
boe), on working interest production over the year, while depletion charges
were $85m (2023: $120m), at a weighted average rate of $25.2 per boe (2023:
$22.8 per boe) across the concessions.
Capricorn records other income on additional production that is notionally
allocated to the Group to cover tax due on profits from the concessions. This
is offset by an equal and opposite tax charge. In the current year, the value
of this income and notional tax gross-up is $30m (2023: $54m).
At the balance sheet date, Capricorn and our partner Cheiron were sufficiently
advanced in negotiations with EGPC to amend the terms of the concession
agreements on the 50:50 concessions in the BED and Obaiyed areas to allow the
modified terms and extended field lives to be incorporated into fair value
models used for impairment testing, now performed on a single cash generating
unit. The increase in value generated through the expected terms of the new
concession is sufficient to reverse previously recorded impairment across the
Obaiyed concession area. $16m of an impairment reversal was recorded in the
year, with a related deferred tax charge of $7m. In the prior year, impairment
was recorded on producing assets of $29m and goodwill of $15m. Related
deferred tax credits were $67m. Impairment of goodwill does not reverse in
subsequent years.
A fair value loss of $5m (2023: $8m) on the mark-to-market valuation of
deferred consideration due relating to the 2021 business combination was
recorded in the year, increasing the final instalment due under this
transaction to the maximum $25m, which was paid in January 2025.
Net finance costs in Egypt of $18m (2023: $17m), includes loan interest and
charges and the total tax charge on Egypt operations for the year is $32m
(2023: $40m), being the tax gross-up charge of $30m and a deferred tax charge
of $2m.
Results from other continuing operations
The loss on other continuing operations of $13m (2023: $82m) includes
unsuccessful exploration costs of $6m (2023: $18m) with no further general
exploration costs in the year (2023: $16m) as the Group ceased all exploration
activity outside Egypt. $5m (2023: $16m) of unsuccessful exploration costs
related to Mexico and $1m to historic UK licences (2023: $2m across all other
countries). Capricorn continued to monitor opportunities to add producing
assets to the portfolio, particularly in the UK and MENA, with costs relating
to business development activities absorbed within administration charges in
the current year.
Net finance income of $7m (2023: $14m) includes interest earned on cash and
cash equivalents of offset by finance charges and foreign exchange losses, the
lower values in the current year a reflection of reduced cash on the balance
sheet following last year's shareholder returns.
A current tax credit of $5m (2023: nil) was recorded in the year in respect of
tax refunds due on tax withheld on dividends due from shares previously held
in India. The dividends themselves remain subject to ongoing legal challenge
and remain a contingent asset.
General and administrative costs (G&A)
Following the restructuring of Capricorn across 2023, reducing the Group's
overhead charge has been a key priority. Gross departmental administration
charges of $24m (2023: $79m), excluding non-cash depreciation and amortisation
charges and share-based payment charges, include redundancy payments in 2023
of $16m. Once remaining historic legacy contracts end, Capricorn expects to
achieve further savings bringing total gross G&A down to the Board's
stated target of ~$20m per year after adjusting for inflation.
Net administration costs were $24m (2023: $62m) after including the non-cash
items above and after deducting timewriting recharges to assets. $3m of net
administrative costs related to Egypt (2023: $2m) with the remaining $20m
(2023: $60m) incurred in the UK.
Discontinued operations
The Group made a profit from discontinued operations of $23m during the year
following recognition of $50m Senegal contingent consideration offset by
losses of $27m relating to historical transactions in the North Sea. No
provision for any possible Senegal tax liability has been recorded.
Settlement of earnout consideration due on disposal of UK Producing assets
Under the 2023 settlement agreement Capricorn was due to receive $22m in
January 2025 and Waldorf's 25% WI in the Columbus gas field in the UK North
Sea. However, Waldorf's ongoing default on its obligations make it highly
unlikely that the $22m will be received in full and Capricorn have reduced
this receivable to $2m in the balance sheet, reflecting Waldorf's revised
settlement offer. The Columbus transfer is also not expected to complete and
the related $7m long-term receivable has been fully impaired. A $26m loss has
been recorded in the year (2023: net loss of $2m, being a fair value loss on
earnout receivable of $40m and a loss on completion of the settlement
agreement of $2m offset by a refund of historic costs of $4m and interest
received on earnout payments due of $2m).
Further consideration on Senegal asset sale and ongoing tax assessment
Capricorn disposed of its interests in Senegal in 2020. Under the sale
agreement, Capricorn was due further consideration of $50m which was received
in January 2025. As all conditions relating to the payment of this additional
consideration had been met by the balance sheet date, the receivable was
recorded during the year, generating income of the full $50m.
In November 2023, Capricorn received notice under the sales agreement from the
purchaser, that it had received an assessment from the Senegal tax authorities
relating to operations in Senegal, with two assessments raised that could
impact Capricorn relating to capital gains tax and registration duties.
Capricorn's belief is that neither claim is valid and is working with the
purchaser to defend the Group's position. No provision has been made in the
financial statements at the year end and it is increasingly likely that
international arbitration will be required to resolve this disputed
assessment.
Net cash outflow for the Year
$m
Opening net cash as at 1 January 2024 76
Dividend paid and share repurchase (57)
Net cash inflow from Egypt operations (1) 106
Net cash inflow from UK discontinued operations 2
Exploration expenditure - Legacy assets (1)
Development expenditure - Egypt (40)
Deferred consideration - Egypt (25)
Proceeds on disposal of financial asset 3
Administration expenses, corporate assets, and office lease costs (22)
Net finance costs, equity and other movements (20)
Tax refund 1
Closing net cash as at 31 December 2024 23
(1) Operating cash flow from Cash Flow Statement of $86m, plus add back of
$20m of administrative and other costs reallocated
Cash and cash equivalent balances at 31 December 2024 of $123m (2023: $190m)
were offset by borrowings in Egypt of $100m (2023: $114m), excluding prepaid
facility fees and accrued interest. Cash held outside of Egypt was $78m
(2023: $184m), while the net debt of the Egypt business was $54m (2023:
$106m). Capricorn have committed not to inject further cash into the Egypt
business, other than to meet committed exploration spend and deferred
consideration payments, both covered by Parent Company Guarantee. Loan
facilities are non-recourse to the Group's non-Egypt assets. Restricted cash
balances of $3m (2023: $5m) and $46m (2023: $5m) exist in the UK and Egypt
respectively. Egypt restricted cash may be used to fund non-operated
concessions in Egypt and make principal and interest payments on the loan
facilities.
Total loan repayments in the year were $14m (2023: $48m). The facilities are
subject to bi-annual redetermination processes. During the latest
redetermination process, the modelling bank discovered an error in its model
that had been present since inception and should have resulted in higher
repayments falling due from September 2023 onward. Following positive
discussions with lenders to resolve this error, the borrowers agreed to higher
than previously modelled repayments falling due on the Senior Facility in Q1
2025, with the remaining amounts repayable across 2025 and 2026 as previously
forecast. The higher cash balances held in Egypt at the 2024 year end reflect
the expected principal and interest payments due to lenders in Q1 2025. The
latest banking model was approved in February 2025 and therefore the balance
sheet classification of amounts falling due within and greater than one year
do not reflect the latest changes.
Balance Sheet
The Group's net asset position at 31 December 2024 is summarised as follows:
$m
Development assets and goodwill - Egypt 222
Other long-term assets 13
Working capital - non-Egypt 124
Cash and cash equivalents 78
Trade and other receivables and payables, and provisions 46
Working capital - Egypt 31
Trade and other receivables and payables, and inventory 85
Net debt, including total loan liabilities and unamortised facility fees (54)
Lease liabilities due after one year (5)
Well abandonment provisions due after one year (7)
Deferred consideration on business combination (25)
Net deferred tax liabilities (4)
Net assets 349
Development assets and goodwill
Over H1 2024, Capricorn did not approve further drilling activity in Egypt
until there was an improvement in the receivables positions from EGPC. By the
end of February 2024, only one rig was operating, completing pre-approved
producing wells, down from a maximum of six during 2023. Receipts of $93m
across H1 2024 led to a resumption of a three-rig drilling programme in late
June 2024. A further $43m was received in H2 2024.
Reduced additions in 2024 of $63m (2023: $91m) reflect this pause in activity
and Capricorn will continue to ensure that future drilling commitments are
aligned to ongoing cash collections.
Depletion charges in 2024 of $85m (2023: $120m) are based on booked reserves
as at 31 December 2024 and take no account of expected upward revisions
following the amendment of terms to the concession agreement. Reserves booked
at the year end decreased due to the reclassification of reserves not expected
to be extracted within the existing licence term. The impairment reversal of
$16m includes a restriction to reflect depletion that would have arisen on a
higher cost base in the calculation.
Goodwill remains unchanged from the prior year end at $11m.
Other long-term assets
Non-oil and gas property, plant and equipment and intangible assets at the
year end totalled $13m (2023: $15m) which includes $7m (2023: $7m) relating to
unamortised carbon credits and $5m (2023: $7m) of leasehold offices held as
right-of-use assets. Carbon credits are tested for impairment within the Egypt
cash generating unit.
Prior year assets included amounts due from Waldorf which have either been
reclassified to current assets and impaired or written off in full as
previously noted.
Working capital
Working capital outside of Egypt includes the $50m due in relation to Senegal
first oil offset by residual balances from the Group's previous international
exploration activities and funding of corporate activities.
Egypt trade receivables at the year end were $175m (2023: $169m), an increase
of $6m across the year, net of expected credit loss adjustments. $168m (2023:
$143m) of this amount was overdue.
Net working capital liabilities across the Egypt concessions were $100m (2023:
$66m), with the increase reflecting a build-up in the payables position at the
gross joint venture level as Capricorn preserved cash to ensure debt
repayments can be met.
Tax assets and liabilities
Deferred tax assets of $18m (2023: $8m) and deferred tax liabilities of $22m
(2023: $10m) are recorded across the concessions in Egypt. Assets and
liabilities are calculated on a concession-by-concession basis, having regard
to availability of future profits when considering the recognition of deferred
tax assets. Although tax is paid on the contractors' behalf by EGPC under the
Egypt concession agreements, the liability remains with the contractor until
the point of settlement, hence the recording of assets and liabilities on the
balance sheet.
The non-Egypt current tax receivable of $4m relates to the India tax refunds
and is included in working capital above.
Equity movements
Across 2024 Capricorn returned $57m (2023: $560m) to shareholders, $50m (2023:
$541m) by way of dividends and $7m (2023: $19m) in share repurchases, bringing
the latter programme to an end. The Company undertook share consolidations in
conjunction with the payment of these dividends in both years.
Across the year, Capricorn acquired $11m (2023: $20m) of its own shares to
meet anticipated share awards to current and past employees. $10m (2023: $28m)
of shares vested in the year.
Capricorn Energy PLC
Group Income Statement
For the year ended 31 December 2024
2024 2023
Note $m $m
Continuing operations
Revenue 2.1 147.8 201.0
Other income 2.1 30.1 54.1
Cost of sales 2.1 (41.6) (59.6)
Depletion charge 2.3 (85.1) (120.4)
Gross profit 51.2 75.1
General exploration costs (1.1) (26.9)
Unsuccessful exploration well costs 2.2 (8.9) (20.5)
Impairment reversal/(Impairment) of property, plant & equipment - 2.3 15.7 (29.1)
development/producing assets
Impairment of goodwill - (14.6)
Expected credit loss adjustment on revenue receivable (3.9) (9.0)
Pre-award costs - (1.1)
Other operating income 1.0 0.6
Administrative and other expenses 4.2 (23.9) (61.9)
Operating profit/(loss) 30.1 (87.4)
Fair value loss - deferred consideration on business combinations 3.4 (5.2) (8.0)
Other (losses)/gains through profit or loss (0.1) 0.8
Impairment of an asset held-for-sale - (4.0)
Finance income 4.3 9.5 21.8
Finance costs 4.4 (20.4) (25.3)
Profit/(Loss) before tax from continuing operations 13.9 (102.1)
Taxation
Tax charge 5.1 (26.5) (40.5)
Loss from continuing operations (12.6) (142.6)
Profit/(loss) from discontinued operations 6.1 23.2 (1.4)
Profit/(Loss) for the year attributable to equity holders of the Parent 10.6 (144.0)
Loss per share for loss from continuing operations:
Loss per ordinary share - basic and diluted ($) 4.5 (0.16) (0.74)
Profit/(Loss) per share for profit/(loss) attributable to equity holders of
the Parent:
Profit/(Loss) per ordinary share - basic and diluted ($) 4.5 0.14 (0.75)
Group Statement of Comprehensive Income
For the year ended 31 December 2024
2024 2023
$m $m
Profit/(Loss) for the year attributable to equity holders of the Parent 10.6 (144.0)
Other comprehensive (expense)/income - items that may be recycled to the
Income Statement
Currency translation differences (1.2) 5.1
Currency translation differences recycled on liquidation of subsidiaries (0.4) -
Other comprehensive (expense)/income for the year (1.6) 5.1
Total comprehensive income/(expense) for the year attributable to equity
holders of
the Parent 9.0 (138.9)
Total comprehensive (expense)/income from:
Continuing operations (14.2) (137.5)
Discontinued operations 23.2 (1.4)
9.0 (138.9)
Capricorn Energy PLC
Group Balance Sheet
As at 31 December 2024
2024 2023
Note $m $m
Non-current assets
Intangible exploration/appraisal assets 2.2 - 2.5
Property, plant & equipment - development/producing assets 2.3 210.8 217.6
Goodwill 10.8 10.8
Other property, plant & equipment and intangible assets 13.0 14.5
Other long-term receivables 2.4 - 27.6
Deferred tax asset 5.2 18.3 7.6
252.9 280.6
Current assets 123.4 189.5
Cash and cash equivalents 3.1
Inventory 8.0 8.3
Trade and other receivables 3.3 231.4 186.0
Current tax receivables 4.0 -
366.8 383.8
Asset held-for-sale - 3.2
Total assets 619.7 667.6
15.4
Current liabilities 26.4
Loans and borrowings 3.2
Lease liabilities 1.0 1.0
Deferred consideration on business combinations 3.4 25.0 25.0
Trade and other payables 3.5 110.6 82.0
Provisions - well abandonment 0.5 -
163.5 123.4
Non-current liabilities 72.9 96.4
Loans and borrowings 3.2
Lease liabilities 5.1 6.4
Provisions - well abandonment 6.8 5.5
Deferred consideration on business combinations 3.4 - 19.8
Deferred tax liabilities 5.2 22.1 9.6
106.9 137.7
Total liabilities 270.4 261.1
Net assets 349.3 406.5
Equity attributable to equity holders of the Parent 7.3 7.6
Called-up share capital
Share premium 0.9 0.8
Shares held by ESOP/SIP Trusts (6.7) (6.3)
Foreign currency translation (87.3) (85.7)
Merger and capital reserves 46.2 45.9
Retained earnings 388.9 444.2
Total equity 349.3 406.5
Capricorn Energy PLC
Group Statement of Cash Flows
For the year ended 31 December 2024
2024 2023
Note $m $m
Cash flows from operating activities:
Profit/(Loss) before tax from continuing operations 13.9 (102.1)
Profit/(Loss) before tax from discontinued operations 6.1 23.2 (5.5)
Profit/(Loss) before tax including discontinued operations 37.1 (107.6)
Adjustments for non-cash income and expense and non-operating cash flows:
Other income - tax entitlement volumes (30.1) (54.1)
Unsuccessful exploration well costs 8.9 20.5
Depreciation, depletion and amortisation 86.8 127.1
Impairment of goodwill - 14.6
(Reversal of impairment)/Impairment of property, plant & equipment - (15.7) 29.1
development/producing assets
Expected credit loss adjustment on revenue receivable 3.9 9.0
Share-based payments charge 1.9 2.5
Fair value loss - deferred consideration on business combinations 5.2 8.0
Other losses/(gains) through profit or loss 0.1 (0.8)
Loss/(Gain) on financial assets at fair value through profit or loss - - 10.4
discontinued operations
Impairment of an asset held-for-sale - 4.0
Loss on disposal of a financial asset - discontinued operations 26.1 1.7
Loss on disposal of a subsidiary - discontinued operations 0.7 -
Gain on disposal of oil and gas asset - discontinued operations (50.0) -
Finance income (9.5) (21.8)
Finance costs 20.4 25.3
Adjustments to operating cash flows for movements in current assets and
liabilities:
0.3 (0.2)
Inventory movement
Trade and other receivables movement 3.3 (9.1) (69.0)
Trade and other payables movement 3.5 9.1 (38.6)
Net cash flows from/(used in) operating activities 86.1 (39.9)
Cash flows from investing activities: (1.0) (16.4)
Expenditure on intangible exploration/appraisal assets
Expenditure on property, plant & equipment - development/producing assets (39.7) (44.2)
Expenditure on other property, plant & equipment and intangible assets (0.9) (0.3)
Deferred consideration received - discontinued operations 2.0 182.4
Deferred consideration paid on business combination (25.0) (25.0)
Proceeds on disposal of financial assets 3.1 -
Tax refund received on investing activities 1.4 -
Interest received and other finance income 8.8 24.3
Net cash flows (used in)/from investing activities (51.3) 120.8
3.2 (13.5) (48.3)
Cash flows from financing activities:
Repayment of borrowings
Lease payments (0.9) (2.2)
Dividends paid (50.1) (542.1)
Share repurchase (7.3) (18.9)
Other interest and charges (14.8) (16.0)
Proceeds from issue of shares 0.2 0.8
Cost of shares purchased (10.9) (19.5)
Net cash flows used in financing activities (97.3) (646.2)
Net decrease in cash and cash equivalents (62.5) (565.3)
Opening cash and cash equivalents at beginning of year 189.5 756.8
Foreign exchange differences (3.6) (2.0)
Closing cash and cash equivalents 3.1 123.4 189.5
Capricorn Energy PLC
Group Statement of Changes in Equity
For the year ended 31 December 2024
Equity share Shares held by Foreign Merger Retained Total
capital and ESOP/ Currency translation and capital earnings equity
share SIP Trusts reserves
premium
$m $m $m $m $m $m
At 1 January 2023 503.4 (15.3) (90.8) 45.5 678.8 1,121.6
Loss for the year - - - - (144.0) (144.0)
Currency translation difference - - 5.1 - - 5.1
Total comprehensive expense - - 5.1 - (144.0) (138.9)
Dividends paid - - - - (541.1) (541.1)
Share repurchase (0.4) - - 0.4 (18.9) (18.9)
Share-based payments - - - - 2.5 2.5
Exercise of employee share options 0.8 - - - - 0.8
Share premium cancelled (495.4) - - - 495.4 -
Cost of shares purchased - (19.5) - - - (19.5)
Cost of shares vesting - 28.5 - - (28.5) -
At 31 December 2023 8.4 (6.3) (85.7) 45.9 444.2 406.5
Profit for the year - - - - 10.6 10.6
Currency translation differences - - (1.2) - - (1.2)
Currency translation differences recycled on liquidation of subsidiaries - - (0.4) - - (0.4)
Total comprehensive income - - (1.6) - 10.6 9.0
Dividends paid - - - - (50.1) (50.1)
Share repurchase (0.3) - - 0.3 (7.3) (7.3)
Share-based payments - - - - 1.9 1.9
Exercise of employee share options 0.1 0.1 - - - 0.2
Cost of shares purchased - (10.9) - - - (10.9)
Cost of shares vesting - 10.4 - - (10.4) -
At 31 December 2024 8.2 (6.7) (87.3) 46.2 388.9 349.3
Section 1 - Basis of preparation
1.1 Material accounting policies
a) Basis of preparation
The Consolidated Financial Statements of Capricorn Energy PLC ("Capricorn" or
"the Group") for the year ended 31 December 2024 were authorised for issue in
accordance with a resolution of the Directors on 27 March 2025. Capricorn is a
limited company incorporated and domiciled in the United Kingdom whose shares
are publicly traded. The registered office is located at 50 Lothian Road,
Edinburgh, Scotland, EH3 9BY. The registered company number is SC226712.
Capricorn prepares its Financial Statements on a historical cost basis, unless
accounting standards require an alternate measurement basis. Where there are
assets and liabilities calculated on a different basis, this fact is disclosed
either in the relevant accounting policy or in the notes to the Financial
Statements. The Financial Statements comply with the Companies Act 2006 as
applicable to companies using UK-adopted International Financial Reporting
Standards (IFRS).
All accounting policies have been applied consistently across all years
disclosed.
The Group's Financial Statements are prepared on a going concern basis.
b) Accounting standards
The Financial Statements of Capricorn has been prepared in accordance with
UK-adopted international accounting standards and with the requirements of the
Companies Act 2006 as applicable to companies reporting under those standards.
During the year, no new standards or amendments to standards were adopted that
had a material impact on Capricorn's results or Financial Statement
disclosures.
There are no new standards or amendments issued by the International
Accounting Standards Board and endorsed under the Companies Act, which have
yet to be adopted by the Group that will materially impact the Group's
Financial Statements.
c) Annual report and accounts
Full accounts are due to be made available on the Company's website in April
2025 and will be available at the Company's registered office, 50 Lothian
Road, Edinburgh, EH3 9BY. The Annual General Meeting is due to be held on
Thursday 22 May 2025 at 10am.
Section 1 - Basis of preparation (continued)
1.2 Going concern
The Directors have considered the factors relevant to support a statement of
going concern. In assessing whether the going concern assumption is
appropriate, the Board considered the Group cash flow forecasts under various
scenarios, identifying risks and mitigating factors. The cash flow forecasts
assessed for the going concern assessment cover the period to March 2026.
As the Directors will not commit to investing further Group funds into the
Egypt business, separate cash flow forecasts have been run for Capricorn Egypt
Limited, the Egypt asset-holding subsidiary and the remaining Capricorn Energy
PLC Group. Capricorn Egypt is a party to the Junior and Senior borrowing
facilities entered in connection with the Group's Egypt assets, however these
facilities are non-recourse to the rest of the Capricorn Group. At the year
end and at the date of this report, events of default exist on the facilities.
Group cash flow forecasts have been run on base-case and downside assumptions.
Base case assumptions include committed exploration costs for which a parent
company guarantee has been issued and forecast administrative costs. A
downside scenario includes an increase to administrative costs, a tax
settlement payable in Senegal and additional payments coming due under joint
and several obligations. Scenarios run exclude future returns to shareholders.
For Egypt cash flows, along with base-case assumptions, a downside scenario
run modelled a return to lower oil prices, with an oil price of $65/bbl over
the first six months of 2025 falling to $60/bbl thereafter, a 20% reduction in
forecast production from 2026 onward and reductions to collections against
outstanding Egypt trade receivables. An oil-price crash scenario assumes a
fall in the oil price to $40/bbl at the end of Q1 2025 with a recovery to
$50/bbl by the end of 2026. All Egypt cash-flow forecasts assume that the
lenders do not enforce current events of default and seek immediate repayment
of the facility.
Under both Group scenarios Capricorn continue to operate as a going concern
with sufficient cash balances, allowing the Group to meet its current and
contracted commitments outside Egypt as and when they fall due for a period of
at least 12 months from the date of signing these Financial Statements.
In addition, Capricorn Egypt Limited is forecast to have sufficient resources
to meet its contractual obligations as they fall due across all three
scenarios, though headroom is limited at certain points across the going
concern period. If any unforeseen changes in assumptions were to adversely
impact the subsidiary, and with no further injection of funds from the parent,
it may not be able to meet all debt repayments that fall due in the period
which could result in lenders taking control of the assets. While the assets
would then be heavily impaired to expected recoverable amounts, the remaining
Capricorn Energy PLC Group would be unaffected and would continue as a going
concern.
Further, under the terms of the borrowing facilities, Capricorn Egypt Limited
jointly and severally guarantee the performance of the obligations of the
joint venture counterparty. Should the counterparty fail to meet its repayment
obligations, the lender could enforce this guarantee, though other routes to
recovery would be more likely. Though considered remote, a default by the
counterparty could also result in the lenders assuming control of the Egypt
subsidiary to recover amounts due. Again, the remaining Capricorn Energy PLC
Group would be unaffected and would continue as a going concern.
The Board and Audit Committee assessments of risk and mitigants to the Group's
operational existence beyond this 12-month period is included in the Viability
Statement.
Section 2 - Oil and gas assets and operations
2.1 Gross profit: revenue and cost of sales
Year ended Year ended
31 December 31 December
2024 2023
$m $m
Oil sales 111.6 159.1
Gas sales 35.2 40.8
Revenue from oil and gas sales 146.8 199.9
Royalty income 1.0 1.1
Total revenue 147.8 201.0
Other Income - Tax entitlement volumes 30.1 54.1
Other Income
30.1 54.1
Production costs and inventory movements
(41.6) (59.6)
Cost of sales (41.6) (59.6)
Depletion (note 2.3) (85.1) (120.4)
Gross profit 51.2 75.1
Revenue
Capricorn recognised oil and gas revenue on eight producing concessions in
Egypt, based on an entitlement interest. Payment terms are within 30 days from
the date of the invoice for oil sales and 45 days from the date of the invoice
for gas sales. All sales in the year were domestic sales.
Oil and gas revenue in Egypt for the year ended 31 December 2024 was $146.8m
(2023: $199.9m), from net entitlement production of 3.6 mmboe (2023: 4.4
mmboe) of which ~39% (2023: ~45%) was liquids. Oil sales averaged $79.3/boe
(2023: $81.2/boe) and with gas sales at $2.9/mcf (2023: $2.9/mcf). Other
income represents tax paid on Capricorn's behalf by EGPC - see section 5.
Production costs over the period were $41.6m (2023: $59.6m), or $4.8/boe
(2023: $5.4/boe) (on a working interest (WI) basis).
Section 2 - Oil and gas assets and operations (continued)
2.2 Intangible exploration/appraisal assets
Egypt Other countries Total
$m $m $m
Cost
At 1 January 2023 - 1.0 1.0
Additions 5.1 16.9 22.0
Unsuccessful exploration costs (2.6) (17.9) (20.5)
At 31 December 2023 2.5 - 2.5
Additions - 6.4 6.4
Unsuccessful exploration costs (2.5) (6.4) (8.9)
At 31 December 2024 - - -
Net book value
At 31 December 2021 - 1.0 1.0
At 31 December 2023 2.5 - 2.5
At 31 December 2024 - - -
Additions to intangible exploration/appraisal assets were funded through cash
and working capital, including increased provisions for well abandonment
costs.
Egypt
Unsuccessful exploration costs of $2.5m relate to work performed on well
locations that are no longer expected to be drilled.
Other countries
Additions of $6.4m (2023: $16.9m) relate to an increase of $1.7m (2023: $1.9m)
on estimated historic UK well abandonment costs, and $4.7m (2023: $15.0m) of
past costs no longer expected to be recovered following the exit of from all
remaining licences in Mexico. All additions were immediately written off as
unsuccessful exploration costs.
Section 2 - Oil and gas assets and operations (continued)
2.3 Property, plant & equipment - development/producing assets
Egypt
$m
Cost
At 1 January 2023 480.9
Additions 91.3
At 31 December 2023 572.2
Additions 62.6
At 31 December 2024 634.8
Accumulated depletion and impairment
At 1 January 2023 205.1
Depletion charge 120.4
Impairment 29.1
At 31 December 2023 354.6
Depletion charge 85.1
Reversal of impairment (15.7)
At 31 December 2024 424.0
Net book value
At 31 December 2022 275.8
At 31 December 2023 217.6
At 31 December 2024 210.8
Egypt
Additions have been funded through cash and working capital wholly within the
Egypt business. Capricorn continue to align capital investment in the Egypt
assets with payments received against the outstanding trade receivables
balance. Additions in the year predominantly relate to the costs of producing
wells drilled. Only one well completed in the first half of the year as
Capricorn paused investment pending collection of receivables due from EGPC.
Drilling recommenced on 29 June 2024 and a further 12 wells were completed
before the end of the year, with a further well that spudded on 18 December
completing in January 2025. All but one of the wells was drilled in the BED
concession, with the other drilled in the AESW concession.
Depletion of $85.1m (2023: $120.4m) was charged to the Income Statement based
on entitlement interest production during the year. The costs for depletion
include future capital costs-to-complete consistent with the life-of-field
reserve estimates used in the calculation.
Impairment review
At 31 December 2024, the Group's development/producing assets in Egypt were
reviewed for indicators of impairment or reversal of previous impairments.
Following significant progress on the revised PSC with EGPC at the year end,
the anticipated increased field lives and improved commercial terms were an
indicator that previous impairments may be reversed. Impairment tests were
conducted across the BED and Obaiyed concessions as a single CGU and resulted
in the full reversal of prior year impairment after adjusting for additional
notional depletion. Given the significant headroom generated by the increase
in fair value under the improved terms, there are no reasonable changes to
assumptions that would reduce the reversal of impairment recorded, therefore
no sensitivity analysis has been provided. AESW and NEAG concessions were
reviewed for indicators of impairment but as no indicator was identified, no
impairment tests have been performed.
At 31 December 2023, indicators of impairment were identified where a pause in
development drilling activity had resulted in downgrades to reserves volumes
booked, with previously booked reserves no longer expected to be recovered
within the licence term. Subsequent impairment tests identified impairment of
$29.1m.
Section 2 - Oil and gas assets and operations (continued)
2.4 Other long-term receivables
At At
31 December 31 December
2024 2023
$m $m
Other long-term receivable - 7.0
Deferred consideration - 20.6
- 27.6
Under the earnout consideration settlement agreement with Waldorf, Capricorn
agreed for part-settlement of consideration due through the receipt of
Waldorf's 25% WI non-operated interest in the UK Columbus gas field, subject
to approval from the North Sea Transition Authority ("NSTA"). The settlement
agreement provided that a $7.0m payment to Capricorn would be due should the
transfer not receive NSTA approval, and this sum was recorded as an other
long-term receivable in the prior year. With Waldorf's liquidity issues and
proposed restructuring, NSTA approval of the transfer is not expected and, as
recovery of the cash alternate appears highly unlikely, the receivable has
been impaired in full. The $20.6m of deferred consideration due at 31 December
2023, also relating to the Waldorf settlement agreement, were reclassified as
current assets during the year where amounts due were further impaired.
Section 3 - Working capital, financial instruments and long-term liabilities
3.1 Cash and cash equivalents
At At
31 December 31 December
2024 2023
$m $m
Cash at bank 16.2 12.8
Bank deposit less than three months - 20.0
Money market funds 107.2 156.7
123.4 189.5
At 31 December 2024, $48.7m (2023: $10.6m) of cash and cash equivalents are
restricted and not available for immediate ordinary business use. This
includes $45.5m (2023: $5.6m) of cash and cash equivalents in Egypt.
3.2 Loans and borrowings
Year ended Year ended
31 December 31 December
2024 2023
Reconciliation of opening and closing liabilities to cash flow movements: $m $m
Opening liabilities 111.8 158.6
Loan repayments disclosed in the Cash Flow Statement:
Senior Debt Facility (13.5) (48.3)
Non-cash movements:
Accrued debt facility interest 0.1 0.6
Amortisation of debt arrangement fees 0.9 0.9
99.3 111.8
Closing liabilities
Amounts due less than one year 26.4 15.4
Amount due greater than one year 72.9 96.4
Closing liabilities 99.3 111.8
Capricorn Egypt Debt Facilities
In September 2021, Capricorn Egypt Limited entered into a $325.0m Senior Debt
Facility and an $80.0m Junior Debt Facility jointly with Cheiron, the joint
operation partner in Egypt, to finance the acquisition of the Egyptian Western
Desert portfolio. The facility commitments are split 50:50 with Cheiron.
Facility commitments began amortising in September 2022 and the maximum
drawdown available to Capricorn at 31 December 2024 was $60.1m (2023: $73.6m)
for the Senior Debt Facility and $40.0m (2023: $40.0m) for the Junior Debt
Facility. All drawings in the year were denominated in US dollars.
With effect from 1 July 2023, the Secured Overnight Financing Rate (SOFR)
replaced LIBOR as the benchmark for calculating interest on the two
facilities. Interest on debt drawn is charged at the appropriate SOFR for the
currency drawn plus an applicable margin. The Senior Debt Facility remains
subject to biannual redeterminations, has a market standard suite of
covenants, including biannual liquidity tests, and is cross-guaranteed by the
Group companies party to the facility, including Cheiron. Capricorn has
provided no guarantee outside the subsidiary holding the Egypt assets.
At 31 December 2024, the borrowers have agreed a rollover of the debt, giving
the Group the ability to defer settlement of the loan in accordance with the
last approved banking model. Capricorn and Cheiron were seeking a waiver from
the lenders for events of default under the facilities that had occurred
previously together with approval of the latest banking model and
redetermination.
In conjunction with the waiver request, a revised banking model was approved
in February 2025 on completion of the latest redetermination process and
increases the principal amounts repayable by Capricorn under the Senior
Facility to $42.6m in 2025, with the balance of $17.6m due over the period
from 1 January 2026 to end of September 2026. The Junior Facility is forecast
to be repayable across 2026 and 2027. The increase in the principal repayment
in 2025 corrects an error identified in the banking model, which was used to
determine previous payment profiles and the allocation between current and
long-term liabilities at the year end.
Section 3 - Working capital, financial instruments and long-term liabilities (continued)
3.3 Trade and other receivables
At At
31 December 31 December
2024 2023
$m $m
Trade receivables 175.4 168.5
Other receivables 54.1 11.0
Prepayments 0.8 1.5
Joint operation receivables 1.1 5.0
231.4 186.0
Trade receivables relate to the Group's producing assets in Egypt. Capricorn
remain in discussions with EGPC to manage the receivables position and retain
the capability to restrict further investment in Egypt to match revenue
collections. At 31 December 2024, the expected credit loss adjustment
offsetting receivables is $8.7m (2023: $9.0m). $4.2m of prior year expected
credit loss adjustments were offset against historic invoices where no further
recovery is expected leaving a net charge of $3.9m to the Income Statement in
the year.
Trade receivables are initially recorded at fair value, adjusting for expected
credit losses, and subsequently measured at amortised cost. Revenue is
recognised at the point in time where title passes to the customer and payment
becomes unconditional. The fair value measurement of revenue for oil and gas
sales in Egypt includes adjustments to invoiced quantities for expected
entitlement share adjustments.
The other receivables balance of $54.1m (2023: $11.0m) includes $50.0m of
contingent consideration due from Woodside (see note 6.1 for details) (2023:
$nil), interventure receivables of $0.6m (2023: $1.4m), VAT recoverable in the
UK of $0.1m (2023: UK and Mexico $3.6m), money market interest receivable of
$0.9m (2023: $0.6m) and the earnout settlement receivable of $1.5m (2023:
$2.0).
Reconciliation of opening and closing receivables to operating cash flow Year ended Year ended
movements:
31 December 31 December
2024 2023
$m $m
Opening trade and other receivables 186.0 142.5
Closing trade and other receivables (231.4) (186.0)
Increase in trade and other receivables (45.4) (43.5)
Foreign exchange (1.4) (1.2)
Senegal consideration receivable 50.0 -
Decrease in joint operation receivables relating to investing activities (7.7) (18.5)
Decrease in other receivables relating to investing activities (4.4) (4.2)
Decrease in prepayments relating to investing activities - (2.2)
Increase/(Decrease) in prepayments and other receivables relating to financing 0.3 (1.4)
activities
Trade and other receivables movement on earnout settlement (0.5) 2.0
Trade and other receivables cash flow movement (9.1) (69.0)
The movements in joint operation receivables relating to investing activities
relate to the Group's share of the receivables of joint operations in respect
of exploration, appraisal and development activities.
Section 3 - Working capital, financial instruments and long-term liabilities (continued)
3.4 Financial liabilities at fair value through profit or loss
At At
31 December 31 December
2024 2023
Financial liabilities $m $m
Non-current liabilities
Financial liabilities at fair value through profit or loss - deferred - 19.8
consideration on business combination
- 19.8
Current liabilities
Financial liabilities at fair value through profit or loss - deferred 25.0 25.0
consideration on business combination
25.0 25.0
Financial liabilities at fair value through profit or loss - deferred consideration on business combination
Deferred consideration was due to Shell following the Egypt business
combination in 2021, with amounts due linked to the average annual dated Brent
oil price for each year up to and including the current year end. A maximum
$50.0m is due for each year, split 50:50 between Capricorn and Cheiron, with
both parties joint and severally guaranteeing settlement by the other, where
the average oil price exceeds $75/bbl. The full $25.0m was payable in respect
of 2023 and 2024 and settled in May 2024 and January 2025 respectively. No
further amounts are due to Shell from Capricorn though the Group remain joint
and severally liable were Cheiron to default on their remaining payment due.
During the year, the Group made a loss of $5.2m (2023: $8.0m) on fair value movements increasing the financial liability to the full $25.0m due.
3.5 Trade and other payables
At At
31 December 31 December
2024 2023
$m $m
Trade payables 0.1 0.3
Other taxation and social security 0.6 0.5
Accruals and other payables 6.3 7.9
Joint operation payables 103.6 73.3
110.6 82.0
Joint operation payables include $13.7m (2023: $6.4m) and $89.9m (2023:
$66.9m) relating to exploration/appraisal asset and development/producing
asset costs respectively. $99.6m relates to the Group's operations in Egypt
At At
31 December 31 December
2024 2023
Reconciliation of opening and closing payables to operating cash flow $m $m
movements:
Opening trade and other payables (82.0) (84.9)
Closing trade and other payables 110.6 82.0
Increase/(Decrease) in trade and other payables 28.6 (2.9)
Foreign exchange (0.5) 1.6
Decrease in trade payables relating to investing activities - 0.7
Increase in joint operation payables relating to investing activities (18.2) (38.1)
Increase in accruals and other payables relating to investing activities (0.7) -
(Increase)/Decrease in accruals and other payables relating to financing (0.1) 0.1
activities
Trade and other payables movement recorded in operating cash flows 9.1 (38.6)
Movements above for investing activities relate to exploration, appraisal and
development activities through the Group's joint operations. Movements
relating to production activities are included in amounts through operating
cash flows.
Section 4 - Income Statement analysis
4.1 Segmental analysis
The segment results for the year ended 31 December 2024 are as follows:
Other Capricorn Energy Group
$m
Other
Egypt Mexico countries Total
$m $m $m $m
Revenue 146.8 - - 1.0 147.8
Other income 30.1 - - - 30.1
Cost of sales (41.6) - - - (41.6)
Depletion charges (85.1) - - - (85.1)
Gross profit 50.2 - - 1.0 51.2
General exploration costs (1.1) - - - (1.1)
Unsuccessful exploration costs (2.5) (4.7) (1.7) - (8.9)
Impairment reversal of property, plant & equipment - development/producing 15.7 - - - 15.7
assets
Expected credit loss adjustment on revenue receivable (3.9) - - - (3.9)
Other operating income - - - 1.0 1.0
Depreciation - purchased assets - - - (0.1) (0.1)
Amortisation - right-of-use assets (0.3) - - (0.7) (1.0)
Amortisation of other intangible assets - (0.1) - (0.5) (0.6)
Other administrative expenses (2.6) (0.3) (0.5) (18.8) (22.2)
Operating profit/(loss) 55.5 (5.1) (2.2) (18.1) 30.1
Fair value loss - deferred consideration (5.2) - - - (5.2)
Other (losses)/gains through profit or loss - - - (0.1) (0.1)
Interest income 1.8 0.1 - 7.1 9.0
Interest expense (13.7) - - (0.4) (14.1)
Other net finance (expense)/income (5.6) (1.1) (0.2) 1.1 (5.8)
Profit/(Loss) before tax from continuing operations 32.8 (6.1) (2.4) (10.4) 13.9
Tax charge (31.9) - - 5.4 (26.5)
Profit/(Loss) for the year from continuing operations 0.9 (6.1) (2.4) (5.0) (12.6)
Profit from discontinued operations - - - 23.2 23.2
Profit/(Loss) attributable to equity holders of the Parent 0.9 (6.1) (2.4) 18.2 10.6
63.5
Balances as at 31 December 2024: Capital expenditure
62.6 - - 0.9
Total assets 469.5 1.6 7.5 141.1 619.7
Total liabilities 246.9 4.3 7.5 11.7 270.4
Non-current assets 221.8 - - 12.8 234.6
Revenue in the Egypt segment contains revenue generated from eight concessions
in the Western Desert, onshore The Arab Republic of Egypt. 94.0% ($138.0m) of
revenue related to sales to a single customer.
All transactions between segments are carried out on an arm's length basis.
Section 4 - Income Statement analysis (continued)
4.1 Segmental analysis (continued)
The segment results for the year ended 31 December 2023 are as follows:
Other Capricorn Energy Group
$m
Other
Egypt Mexico countries Total
$m $m $m $m
Revenue 199.9 - - 1.1 201.0
Other income 54.1 - - - 54.1
Cost of sales (59.6) - - - (59.6)
Depletion charges (120.4) - - - (120.4)
Gross profit 74.0 - - 1.1 75.1
Pre-award costs (0.7) - - (0.4) (1.1)
General exploration costs (10.4) (10.3) (6.2) - (26.9)
Unsuccessful exploration costs (2.6) (16.0) (1.9) - (20.5)
Impairment of property, plant & equipment - development/producing assets (29.1) - - - (29.1)
Impairment of goodwill (14.6) - - - (14.6)
Expected credit loss adjustment on revenue receivable (9.0) - - - (9.0)
Other operating income - - - 0.6 0.6
Depreciation - purchased assets - - - (0.2) (0.2)
Amortisation - right-of-use assets (0.3) - - (2.3) (2.6)
Amortisation of other intangible assets - (0.3) - (3.6) (3.9)
Other administrative expenses (1.9) (2.9) (0.1) (50.3) (55.2)
Operating profit/(loss) 5.4 (29.5) (8.2) (55.1) (87.4)
Fair value loss - deferred consideration (8.0) - - - (8.0)
Gain on financial assets at fair value through profit or loss - - - 0.8 0.8
Impairment of an asset held-for-sale - - - (4.0) (4.0)
Interest income 0.4 - 0.1 19.9 20.4
Interest expense (15.0) - - (0.5) (15.5)
Other net finance (expense)/income (2.7) 1.7 (0.5) (6.9) (8.4)
Loss before tax from continuing operations (19.9) (27.8) (8.6) (45.8) (102.1)
Tax charge (40.5) - - - (40.5)
Loss for the year from continuing operations (60.4) (27.8) (8.6) (45.8) (142.6)
Loss from discontinued operations - - - (1.4) (1.4)
Loss attributable to equity holders of the Parent (60.4) (27.8) (8.6) (47.2) (144.0)
115.2
Balances as at 31 December 2023: Capital expenditure
96.4 15.0 1.9 1.9
Total assets 426.8 8.6 29.8 202.4 667.6
Total liabilities 237.2 5.2 5.9 12.8 261.1
Non-current assets 232.0 0.2 27.6 13.2 273.0
Revenue in the Egypt segment contains revenue generated from eight concessions
in the Western Desert, onshore The Arab Republic of Egypt. 93.1% ($187.1m) of
revenue related to sales to a single customer.
All transactions between segments are carried out on an arm's length basis.
Section 4 - Income Statement analysis (continued)
4.2 Administrative and other expenses
Year ended Year ended
31 December 31 December
2024 2023
$m $m
Administrative expenses 23.9 55.0
Other expenses - corporate transactions - 6.9
23.9 61.9
In 2023, the corporate transactions are costs of $6.9m related to corporate
transactions subsequently terminated.
4.3 Finance income Year ended
31 December
2024 Year ended
$m 31 December
2023
$m
Bank and other interest receivable 8.5 21.8
Other finance income 0.6 -
Exchange gain recycled from Other Comprehensive Income 0.4 -
9.5 21.8
4.4 Finance costs Year ended
31 December
2024 Year ended
$m 31 December
2023
$m
Loan interest 12.8 15.0
Facility fees amortisation 0.9 0.9
Other interest and finance charges and unwind of discount 2.8 1.7
Exchange loss 3.9 7.7
20.4 25.3
Loan interest of $12.8m (2023: $15.0m) was charged on the Egypt Junior and Senior Debt Facilities.
4.5 Earnings per ordinary share
Basic and diluted earnings per share are calculated using the following
measures of (loss)/profit:
Year ended Year ended
31 December 31 December
2024 2023
$m $m
Loss and diluted loss after taxation from continuing operations (12.6) (142.6)
Profit/(Loss) and diluted profit/(loss) attributable to equity holders of the 10.6 (144.0)
Parent
The following reflects the share data used in the basic and diluted earnings
per share computations:
Number Number
of shares of shares
2024 2023
'000 '000
Weighted average number of shares 79,557 196,128
Less weighted average shares held by ESOP and SIP Trusts (1,310) (2,777)
Basic and diluted weighted average number of shares 78,247 193,351
Section 5 - Taxation
5.1 Tax charge on profit/(loss) for the year
Analysis of tax charge on profit/(loss) for the year
Year ended
Year ended 31 December 2023
31 December $m
2024
$m
Current tax charge:
Overseas corporation tax charge - Egypt 30.1 54.1
Overseas corporation tax credit - India (5.4) -
Total current tax charge on profit/(loss) from continuing operations 24.7 54.1
Deferred tax charge/(credit):
Deferred tax charge/(credit) on intangible/tangible assets - Egypt 1.8 (12.3)
Deferred tax credit on non-current assets - Egypt - adjustment - (1.4)
Deferred tax charge/(credit) from continuing operations 1.8 (13.7)
Total tax charge on loss from continuing operations 26.5 40.5
UK deferred tax credit - (4.1)
Total deferred tax credit on loss from discontinued operations - (4.1)
The current tax charge in Egypt of $30.1m (2023: $54.1m) is settled by EGPC on
the Group's behalf.
Factors affecting the tax charge for the year
A reconciliation of the income tax charge applicable to the profit/(loss)
before income tax to the UK statutory rate of income tax is as follows:
Year ended
Year ended 31 December 2023
31 December $m
2024
$m
Profit/(Loss) before tax from continuing operations 13.9 (102.1)
Profit/(Loss) before tax multiplied by the UK statutory rate of corporation 3.5 (20.7)
tax of 25% (2023: 23.52%)
Effect of: (2.1)
Special tax rates and reliefs applying to oil and gas activities in the UK (1.1)
Special tax rates and reliefs applying to oil and gas activities in Egypt 5.1 13.4
Temporary differences not recognised 7.1 23.5
Permanent items non-deductible 18.4 14.3
India tax refund not subject to tax (5.4) -
Group relief surrendered against profits/gains arising in discontinued - 11.1
operations
Total tax charge on profit/(loss) from continuing operations 26.5 40.5
The reconciliation shown above has been based on the average UK statutory rate of corporation tax for 2024 of 25% (2023: 23.52%). The Finance Act 2023 was enacted on 11 July 2023 and increased the UK main rate of corporation tax from 19% to 25% with effect from 1 April 2023.
The applicable UK statutory corporation tax rate applying to North Sea oil and gas activities is currently 40% (2023: 40%). The temporary Energy (Oil and Gas) Profits Levy was increased to 35% from 1 January 2023 (substantively enacted in November 2022) and further increased to 38% on profits arising after 1 November 2024 (substantively enacted November 2024).
Section 5 - Taxation (continued)
5.2 Deferred tax assets and liabilities
Reconciliation of movement in deferred tax assets/(liabilities):
Temporary difference in respect of non-current assets Other temporary differences
$m Losses $m Total
(restated) $m
$m
Deferred tax assets
At 1 January 2023 8.7 - - 8.7
Deferred tax credit through the Income Statement - continuing operations (4.4) 3.3 - (1.1)
At 31 December 2023 4.3 3.3 - 7.6
Deferred tax charge through the Income Statement - continuing operations 13.2 (2.5) - 10.7
At 31 December 2024 17.5 0.8 - 18.3
Deferred tax liabilities
At 1 January 2023 (24.3) 9.1 (13.2) (28.4)
Deferred tax (charge)/credit through the Income Statement - continuing 14.8 - - 14.8
operations
Deferred tax (charge)/credit through the Income Statement - discontinued - (9.1) 13.2 4.1
operations
At 31 December 2023 (9.6) - - (9.6)
Deferred tax credit through the Income Statement - continuing operations (12.5) - - (12.5)
At 31 December 2024 (22.1) - - (22.1)
Prior year comparatives have been restated to correctly disclose the deferred
tax impact of temporary differences in respect of noncurrent assets from the
deferred tax impact of tax losses. There is no change to the net deferred tax
asset or liability recognised at 31 December 2023.
Deferred tax assets/(liabilities) in Egypt:
As at As at
31 December 31 December
2024 2023
$m $m
Assets 18.3 7.6
Liabilities (22.1) (9.6)
(3.8) (2.0)
Recognised deferred tax assets Egypt
Deferred tax assets of $28.3m (2023: $7.6m) are recognised in respect of Egypt
oil and gas non-current assets temporary differences of
$32.6m (2023 restated: $10.6m) offset by Egypt tax losses of $2.0m (2023
restated: $8.1m) on four concessions where future profits are
expected to be available to recover the value of the assets.
At the balance sheet date the Group has $69.5m (2023: $33.0m) of temporary
differences in respect of Egypt non-current assets and
$38.9m (2023: $38.6m) of Egypt tax losses, which can be offset against future
oil and gas profits in Egypt. No deferred tax asset is
recognised in respect of these temporary differences as it is not considered
probable that these amounts will be utilised in future periods.
Deferred tax liabilities Egypt
Deferred tax liabilities of $12.9m (2023: $9.6m) are recognised across five
concessions in respect of taxable temporary differences of $54.5m (2023:
$39.7m) related to Egypt oil and gas non-current assets. No tax losses are
available to offset these taxable temporary differences.
Section 5 - Taxation (continued)
5.2 Deferred tax assets and liabilities (continued)
UK
Previously a deferred tax liability of $4.1m was recognised in respect of
earnout consideration due in relation to the disposal of UK oil and gas
producing assets. Following settlement of the earnout in 2023 (see note 6.1)
the chargeable gain arising was fully sheltered by available tax losses and no
tax charge arose. The deferred tax liability therefore reversed in full.
Unrecognised deferred tax assets
No deferred tax asset has been recognised on the following as it is not
considered probable that it will be utilised in future periods:
At 31 December At
2024 31 December
$m 2023
$m
UK RFCT trading losses 254.7 244.6
UK SCT loss 250.8 253.1
UK other ring fence temporary differences 629.3 626.4
UK excess management expenses 450.9 414.6
UK non-trade deficits 93.2 79.6
UK temporary differences on share-based payments 34.0 34.0
UK disallowed tax interest expenses - 11.3
Egypt fixed asset temporary differences 11.8 20.9
Egypt ring fence corporation tax trading losses 35.6 29.7
Section 6 - Discontinued operations
6.1 Profit/(Loss) from discontinued operations
Settlement of earnout consideration due
On 2 November 2021, Capricorn completed the sale of its interests in the UK
Catcher and Kraken producing assets to Waldorf Production Limited ("Waldorf").
Consideration under the agreement included contingent consideration ('earnout
consideration') dependent on oil prices from 2021 to the end of 2025 and
minimum production levels being achieved. The first annual payment of earnout
consideration of $75.8m due on 2021 production was received in 2022. The
second annual payment of $134.4m due on 2022 production was settled in March
2023.
On 18 December 2023, Capricorn entered into a settlement agreement with
Waldorf for the full and final settlement of the remaining earnout
consideration due. Under the agreement, Capricorn received an initial payment
of $48.0m in December 2023, with a further $2.0m received at the end of Q1
2024. An additional payment of $22.5m was due in early January 2025 and
Capricorn were also due to receive Waldorf's 25% non-operated WI in the
Columbus gas field, subject to the necessary approvals. However, due to
financial difficulties impacting Waldorf, the $22.5m has not been received and
instead written down to an estimated recoverable value of only $1.5m. The
transfer of the Columbus asset is also not expected to complete and the
related long-term receivable fully impaired.
At the date of the settlement agreement, the fair value of the earnout was
$79.3m, a fall of $10.4m across the year, reflecting oil price movements. With
combined proceeds from the settlement agreement of $77.6m, after adjusting for
expected credit losses of $1.9m, the Group recorded a loss on the settlement
of the earnout of $1.7m 2023 and $26.1m in 2024.
Year ended 31 December Year ended 31 December
A breakdown of the total profit from discontinued operations is as follows:
2024 2023
$m $m
Cost of sales
Cost of sales - recovery of production costs - 4.3
Operating profit - 4.3
Gain on disposal of oil and gas assets 50.0 -
Loss on disposal of a subsidiary (0.7) -
Loss on financial asset at fair value through profit or loss - earnout - (10.4)
consideration
Loss on disposal of a financial asset (26.1) (1.7)
Finance income - 2.3
23.2 (5.5)
Profit/(loss) before tax from discontinued operations
Tax credit - 4.1
Profit/(loss) after tax from discontinued operations 23.2 (1.4)
Earnings per share for profit/(loss) from discontinued operations 2024 2023
$ $
Profit/(Loss) per ordinary share - basic and diluted ($) 0.30 (0.01)
In January 2025, Capricorn received a further $50.0m consideration relating to
the disposal of oil and gas assets in Senegal in 2021. This consideration was
dependant on several conditions being met, including the date of first oil and
an average oil price above set levels, and these were all achieved by the end
2024.
An audit of the Kraken and Catcher joint operations for the period from
January 2019 to December 2020 resulted in a refund of production costs from
the operator of $4.3m, which was credited to discontinued operations in 2023.
The fair value loss in 2023 was recognised on changes in the valuation of
earnout consideration receivable prior to the December 2023 settlement
agreement.
Section 6 - Discontinued operations (continued)
6.2 Cash flow information for discontinued operations
Year ended Year ended
31 December 31 December
2024 2023
$m $m
Net cash flows from operating activities - 4.3
Net cash flows from investing activities 2.0 184.7
Net increase in cash and cash equivalents 2.0 189.0
The 2022 earnout of $134.4m and related interest payment of $2.3m were
received in March 2023. In December 2023, a further settlement of $48.0m was
received following the settlement with Waldorf. In 2024, a further $2.0m was
received under the terms of the settlement agreement.
6.4 Discontinued operations - Senegal contingent liability
On 14 November 2024, Capricorn received notification that Woodside Energy
("Woodside") had received a notice from the Senegalese Tax Authority. The
notice from the Senegalese Tax Authority states that:
‒ Senegalese registration duty ($29.0m including interest and penalties)
should have been paid on the transfer (in December 2020) by Capricorn to
Woodside of its PSC interests offshore Senegal; and
‒ Senegalese real estate capital gains tax ($14.5m including interest and
penalties) should have been withheld by Woodside from the price paid to
Capricorn in respect of the sale of those PSC interests.
Under the terms of the sale agreement between Capricorn and Woodside,
Capricorn is responsible for any registration duty and for any capital gains
tax arising in connection with the sale of the PSC interests.
Capricorn's analysis remains that no Senegalese registration duty or capital
gains tax is payable, based on analysis at the time of the transaction.
Capricorn will continue to vigorously defend its position on this matter,
including exercising rights under the sale agreement to participate in the
defence of any such claim.
Glossary
bbl barrels of oil
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
mmbo million barrels of oil
mmboe million barrels of oil equivalent
mscf thousand standard cubic feet
WI working interest
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.
For further information, visit www.capricornenergy.com
(https://www.capricornenergy.com/) .
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