Capricorn Energy lowers output guidance as restructuring continues

(Sharecast News) - Capricorn Energy, the Egypt-focused oil and gas group, has said that full-year production will be at the low end of previous guidance as the slimmed-down business swung to a loss in the first half of 2023. The Edinburgh-based company expects average output to be at the low end of 32,000 to 36,000 barrels of oil equivalents per day (boepd), as it continues to exit high-risk exploration projects which its new board deems as non-core.

Capricorn has had a tumultuous 2023 so far, which saw the collapse of a proposed reverse takeover of NewMed Energy in the first quarter - following strong shareholder opposition - which resulted in all but two members of the board resigning.

The company, with a new board, then underwent a strategic review and decided to focus on returning excess cash to shareholders, cutting costs and staff, and stopping high-risk exploration activities outside of Egypt.

Capricorn has now fully exited the Mauritanian market, and continues to pursue exits from activities in the UK, Mexico and Suriname.

The UK headcount is expected to be cut by around 80% to less than 30 people, bringing the total staff level to just 50.

Meanwhile, $450m was returned to shareholders in May and a further special dividend of $100m, payable in October, has now been proposed.

Production in the first half was just 31,496 boepd, down from 35,500 boepd in the first half of 2022. And, as a result of the average oil price sinking from $110.9 to $78.6 a barrel, revenues from production totalled just $98.3m, from $137.4m the year before.

The company reported a loss before taxation of $62.2m for the period, compared with a profit of $40.8m in the first half o2022.