Capricorn Energy has confirmed its proposed return of $500m worth of proceeds received from the resolution of its tax dispute with the Government of India, following approval by the Financial Conduct Authority.
From today, a tender offer will be open to all eligible Capricorn shareholders, who will be able to select the price at which they wish to tender their shares for purchase, or select to tender their shares at the clearing strike price.
If the company does not receive sufficient take-up to allow it to fully deploy the money, it plans to consider the return of the remainder in the form of a special dividend.
Meanwhile, the Edinburgh-headquartered group's full-year results revealed that almost $1bn has been committed to shareholder capital returns, including the $257m special dividend this time last year, following the sale of assets in Senegal and the ongoing share buyback programme of up to $200m.
Up to a further $100m is receivable in 2023 or 2024 for the Senegal sale, dependent on oil price and first production timing.
Capricorn reported a profit after tax of $895m, compared to a $394m loss during 2020, including the India tax refund.
Year-end group cash stood at $314m, although this actually came in at net cash of $133m, after debt was drawn to fund the Egypt acquisition of $181m.
Buying Shell’s Western Desert production and exploration portfolio gives "significant potential for production growth", along with operating efficiencies and exploration resources.
Revenues from Egypt production were $56m, with an average realised oil price of $77.8 per barrel and a gas price of $2.9 per thousand cubic feet.
Net cash generated from oil and gas production for the year was $185m, while net capital expenditure stood at $66m.
Current estimates of 2022 capital expenditure total approximately $200m, including Egypt production and development expenditure of $90 to $110m, targeted at delivering substantial production growth during 2022
Egypt exploration expenditure of around $35m is required to sustain the resource base, while UK infrastructure-led exploration expenditure will come in at around $40m, predominantly on the Jaws and Diadem wells, with no further well commitments beyond 2022.
There is other international exploration of up to $35m, principally in Mexico, but no further commitments beyond 2022 and any further investment is contingent on farm-downs.
Simon Thomson, chief executive at Capricorn Energy, said: “2021 was a transformational year for Capricorn; we continued to successfully reshape our portfolio and achieved a positive resolution of our Indian tax dispute.
“From the proceeds of asset sales and the Indian tax refund we have committed to nearly $1bn of capital returns to shareholders in 2021 and 2022.
“We acquired an attractive portfolio of low breakeven oil and gas production in Egypt, where we are already delivering production growth and emission reductions, and which has significant further opportunities for value creation.
“We also retain the balance sheet capacity to further expand the production base through value-accretive acquisitions.”
Don't miss the latest headlines with our twice-daily newsletter - sign up here for free.
