Capricorn in $873m profit after India tax victory

Edinburgh-based Capricorn Energy — formerly called Cairn Energy — said on Tuesday it made a 2021 pretax profit of $873.7 million from continuing operations compared with a pretax loss of $157.2 million the previous year following the resolution of its tax dispute with the government of India.

Capricorn’s revenue rose to $57.1 million from just $400,000 the year before.

Resolution of the Indian tax dispute resulted in a refund of $1.06 billion.

The Edinburgh company has committed almost $1 billion to shareholder capital returns for 2021 and 2022.

That includes a $257 million special dividend in Q1 of 2021 following the sale of a Senegal asset.

Also, following the India tax refund, a $500 million tender offer will run through April 2022 and an ongoing share buyback programme will return up to $200 million to shareholders.

Capricorn currently estimates 2022 capital expenditure of $200 million.

Capricorn Energy CEO Simon Thomson said: “2021 was a transformational year for Capricorn; we continued to successfully reshape our portfolio and achieved a positive resolution of our Indian tax dispute.

From the proceeds of asset sales and the Indian tax refund we have committed to nearly US$1 billion of capital returns to shareholders in 2021 and 2022.

“We acquired an attractive portfolio of low breakeven oil and gas production in Egypt, where we are already delivering production growth and emission reductions, and which has significant further opportunities for value creation.

“We also retain the balance sheet capacity to further expand the production base through value-accretive acquisitions.

We look forward to continuing to deliver our strategic aims in 2022 with a strong commitment to safety, social responsibility and our pathway to net zero carbon emissions by 2040.”

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