Edinburgh-based oil and gas firm Capricorn Energy, where shareholders recently ousted the executive leadership and terminated a planned merger, on Monday published an update on its operations and trading performance ahead of full-year 2022 results.
The firm said Clare Mawdsley, previously director of finance, has been appointed as acting chief financial officer.
Capricorn, formerly known as Cairn Energy, said net cash at December 31 was $597 million, comprising $757 million cash and $160 million of debt.
Capricorn said a $1.06 billion tax refund was received following the resolution of its Indian tax dispute, and $529 million was returned to shareholders during 2022, via a tender offer and share repurchase.
“2022 overall production averaged ~34,200 boepd, within revised full year guidance of 33,000-36,000 boepd,” said the firm.
“This was lower than original full year guidance principally due to the joint venture drilling fewer development wells than originally planned and targeting oil versus higher rate, lower value gas; the Teen gas condensate project start-up date being delayed from 2022 to 2023; and, certain gas wells performing below year-end 2021 expectations …”
On its strategic review, Capricorn said: “As announced on 1st February the new board has now commenced its strategic review of Capricorn’s business including, as an immediate priority, an assessment of the future cash needs of the business.
“At our full year results in April, the board will provide an update on the strategic review of our assets, cost base and future strategy of the business.
“We continue to focus on optimising our operations to identify a path forward in the interest of enhancing shareholder value and returns.”
Capricorn Energy terminated its planned merger with Israeli gas group NewMed Energy on February 15 after months of shareholder pressure that also toppled Capricorn’s executive leadership.
Activist shareholder Palliser Capital and some of Capricorn’s biggest shareholders had publicly opposed the merger, arguing that it undervalued Capricorn.
Proxy advisers also recommended rejecting the plan.
In early February, almost the entire Capricorn board including its chief executive were replaced by new directors proposed by Palliser.
confirmed six new board members, with Craig van der Laan appointed the firm’s new chair and Chris Cox appointed interim chief executive officer.
The new directors announced a strategic review of the company.
On Monday, Capricorn added: “US$77m received in H1 2022 as contingent earn-out consideration in respect of the divested North Sea production assets based on 2021 production levels and average oil prices …
“Net cash inflow from Egypt producing assets of US$104m, comprising US$128m net cashflow generated during the year and deferred consideration and settlements paid of US$24m …
“Oil and gas revenue in Egypt was US$229m, from net entitlement sales volumes of 4.7 mmboe. Oil sales averaged US$98.8/boe and gas sales averaged US$2.9/mcf. Production costs over the period were ~US$71m, or ~US$5.5/boe (on a WI basis) …
“Cash outflows in respect of capital activity totalled US$156m (development and producing assets US$70m including US$8m of near-field exploration in Egypt, exploration and appraisal activities US$86m including the Jaws and Diadem wells in the UK) …
“Earn-out consideration on the disposal of the UK Catcher and Kraken interests in relation to 2022 production and oil prices is expected to be ~US130m, payable by the end of Q1 2023, inclusive of interest …
“Earn-out consideration in respect of the Catcher and Kraken interests will also be due to Capricorn in relation to production and oil prices in calendar years 2023 to 2025, subject to minimum production and oil price thresholds being met …”