Capricorn Energy (CNE) H2 2023 earnings summary

Executive summary

• Returned $568m to shareholders in FY 2023; year-end net cash was $76m. Management prioritized shareholder distributions while aligning Egypt investment with available in-country funds.

• Egypt operations generated $200m revenue and $140m gross profit; drilling ceased in March 2024 pending an acceptable EGPC repayment programme.

• 2024 total production guidance is 20,400–24,400 boepd on a sales basis, with Egypt activity and output dependent on the timing and scale of drilling resumption.

Financial highlights

• FY 2023 working-interest production averaged 30,044 boepd, including 47% liquids; net entitlement sales were 12,161 boepd.

• Egypt production revenue was $200m; gross profit was $140m before tax gross-up, depletion and expected credit loss adjustments.

• Oil price averaged $81.2/bbl and gas price $2.9/mmscf; operating costs were $5.4/boe on a working-interest basis.

• Development and production capex was $91m; Egypt exploration capex was $15m and non-Egypt exploration capex was $34m.

• Egypt operating cash inflow was $32m; EGPC receivables were $169m at year-end, including $151m due for payment.

Outlook and guidance

• 2024 production guidance: Egypt 20,000–24,000 boepd, UK ~400 boepd and total 20,400–24,400 boepd; volumes are on a sales basis and UK guidance depends on deal completion.

• 2024 capex guidance is $15m–$20m, all allocated to Egypt; budget approval is contingent on confirmation of an acceptable repayment programme.

• Egypt operating cost guidance is $7–$9/boe; UK guidance is $23/boe, inclusive of tariffs and subject to UK deal completion.

• Without development drilling, average production is expected to decline 20%–30% over 2024; drilling can resume once an acceptable EGPC payment plan is secured.

• Gross G&A is expected to be c. $22m in FY 2024, moving to a run rate below $20m by year-end; 2024 well count is expected to fall YoY.