Capricorn Energy full-year production to miss current forecasts

Capricorn Energy said in a trading update on Friday that at the end of October, its working interest production across the four main concession areas in the Western Desert had averaged 30,600 barrels of oil equivalent per day (boepd), with oil accounting for 45% of total production for the year.

The London-listed firm explained that, due to several project delays beyond those initially outlined during the first-half results announcement in September and lower-than-expected contributions from new wells, it anticipated that full-year 2023 production would average around 30,000 barrels of oil equivalent per day.

That would be below the lower end of the original production guidance range of 32,000 to 36,000 equivalent daily barrels for the 2023 financial year.

The previously forecast exit rate for the year was also affected by project delivery timing in critical areas like Teen and the BED region, where activities, including the development of new wells and projects, could contribute to production before the end of the year.

Capricorn said it was actively collaborating with its operator to prioritise high-value new well opportunities, deploy an appropriate rig fleet to maximise asset exploitation and execute an efficient drilling campaign and reservoir management strategy.

Those efforts were closely aligned with the rate of collections, all aimed at delivering the best economic outcome for Capricorn and its investors within the Bapetco joint venture in Egypt.

Despite the operational challenges, Capricorn maintained its 2023 capital and operating expenditure guidance at $117m to $127m and $5 to $6 per barrel of oil equivalent, respectively.

At the end of October, the company had a cash position of $158m before accounting for Egypt reserve-based lending, totalling $113m.

“The company reiterates its position detailed in the first half results presentation that the Egypt asset must be self-funding and that the focus is on maximising the value of the Egyptian business,” the board said in its statement.

“During the period from 1 July to 31 October, Capricorn has collected $44m in accounts receivable and is scheduled to receive 50% of the proceeds of a cargo lifting in December.”

Capricorn said that as of 31 October, it had $170m in outstanding accounts receivable from the Egyptian General Petroleum Corporation (EGPC), of which $139m was overdue.

“Capricorn is actively working with EGPC to address the receivables position and remains confident in the full collection of the amount outstanding.”

Capricorn said it would announce its preliminary results for the 2023 financial year on 14 March.

At 0858 GMT, shares in Capricorn Energy were down 2.96% at 144p.

Reporting by Josh White for Sharecast.com.