Capricorn Energy (CNE) H1 2024 earnings summary

Executive summary

• Management has focused on transforming company culture, operational alignment, and asset optimization, returning over $600 million to shareholders since Q1 2023 through dividends and buybacks.

• The company is prioritizing improved knowledge and management of Egyptian assets, with a third-party CPR published and enhanced predictability in operations and cash collections.

• Non-core activities have been exited, including the closure of the Mexico office, achieving an ~80% reduction in G&A costs from 2022 to 2025.

• Strategic objectives include maximizing value from Egyptian assets and seeking selective North Sea acquisitions to leverage legacy positions.

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

Financial highlights

• H1 2024 average production was 26,200 boepd, with 42% liquids weighting; Egypt revenue was $80.3m at an average oil price of $78.60/bbl and gas price of $2.97/mscf.

• Operating costs were $4.7/boe, with development and production capex totaling $32m and exploration costs $3m.

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

• Operating profit was $26.9m, a turnaround from a $35m loss in H1 2023; EPS for H1 2024 was $0.02.

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

Outlook and guidance

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

• Drilling and workover activity focused on liquids in Egypt will continue into H1 2025, with 2024 drilling expected to impact 2025 production more significantly.

• Management expects to realize contingent receipts from historical transactions in early 2025, including a $50m Senegal payment, subject to tax assessment resolution.

• Ongoing negotiations to amend and extend Egyptian PSCs are expected to incentivize further investment and production.

• The company is prioritizing further shareholder returns and value creation in the UK North Sea.