Capricorn Energy evaluates UK North Sea M&A

Edinburgh-based oil and gas firm Capricorn Energy said in an operational and trading update it is currently evaluating mergers and acquisition opportunities in the UK North Sea and in the Middle East and North Africa (MENA) region.

Capricorn outlined its financial performance for the year ended December 31, 2024, saying: “Revenues of $143m; provisional entitlement sales volumes of 3.5mmboe (39% liquids), production costs of $41m ($4.6/boe) with average oil price of $79.3boe and gas price of $2.94/mmscf …

“Capex of ~$60m … Group net cash of $23m; comprising $123m cash and $100m debt following receipt of payments in Egypt of $135m …

“Net cash inflows of $72m from Egypt operations, post capex … Receivables of ~$180m before expected credit loss adjustments … Gross G&A of ~$25m, inclusive of ~$3m in legacy restructuring costs but excluding share-based payments …

$25m share buyback completed in November 2024 … Senegal contingent payment of $50m from Woodside received on 22 January 2025. The precise amount and timing of distribution remains subject to any disputed tax obligations in Senegal.”

Capricorn CEO Randy Neely said: “I am delighted to report that our continued focus on financial and operational discipline in 2024 resulted in Capricorn achieving the top end of production guidance and a return to profitability.

“Throughout the year, we kept the market abreast of Woodside’s progress with the Sangomar asset and were very pleased to confirm the receipt of $50m on 22 January.

“As previously guided, the company remains committed to returning any available proceeds of this contingent payment to our shareholders, the precise amount and timing of which remains subject to any disputed tax obligations.

In 2025, we will continue to focus on maximising the value from our self-funding Egyptian business unit, ensuring revenues from the assets provide the cash flow to sustain and eventually grow investment in country.

“Our ongoing negotiations to amend, extend and consolidate the terms of our production sharing contracts (PSCs) to support increased investment and strengthened returns continue to progress well and we expect this process to complete within the timeline guided in September 2024.

Outside of Egypt, our priority is to develop the scale and longevity of the business to increase cash flows and deliver consistent shareholder returns.

“Our objective is to diversify and expand operations by leveraging our core corporate capabilities to identify, acquire and exploit the right assets in the right locations.

“We are currently evaluating M&A opportunities in the UK North Sea and in the MENA region against a strict set of strategic, financial and returns criteria, and look forward to updating the market on our efforts when appropriate.”