Capricorn Energy narrows H1 losses, cuts FY production guidance

Capricorn Energy posted a narrowing of its operating losses for the first half on Tuesday, but cut its full-year production outlook after it drilled fewer wells in Egypt than expected.

In the six months to the end of June, operating losses narrowed to $37.3m from $47.4m in the same period a year earlier.

The oil and gas exploration and development company - which agreed in June to be bought by Tullow Oil in a £1.5bn deal - downgraded full-year production guidance to between 33,000 and 36,000 barrels of oil equivalent per day, from between 37,000 and 43,000.

Capricorn noted that its joint venture in Egypt secured additional rig capacity in the fourth quarter of 2021 to allow a ramp-up in investment following completion of the acquisition in September, in order to take the number of rigs active on the licences from two to five.

"The third rig began operations in Q1 2022, delivering three wells in the period. The fourth and fifth rigs were subject to logistics and commissioning delays," it said.

"One of them is now operating on its first well, and the final additional rig is undergoing commissioning activities and expected to begin operations before the end of Q3 2022. Consequently, the number of wells drilled in H1 2022 was lower than originally anticipated, and the full-year drilling and production outlook is therefore expected to be lower than planned."