KEY POINTS
- Capricorn Energy now expects full-year output above the mid-point of its 18,000-22,000 boepd guidance, citing strong new-well contributions from its expanded Egyptian operations.
- First-half Egyptian revenue hit $100 million on a realised oil price of $89.5 a barrel, driving a swing to a $56.3 million operating profit from a $2 million loss.
- The results come mid-takeover: Capricorn accepted a higher $396 million DNO offer over Genel Energy, but says both bids remain in play.
Capricorn Energy has raised its full-year production outlook, pointing to stronger output from its expanded Egyptian operations, even as a months-long bidding war for the company grinds on.
The Egypt-focused producer said on Thursday it now expects annual output above the mid-point of its 18,000 to 22,000 barrels of oil equivalent per day guidance range. Specifically, it credited excellent contributions from new wells, adding that production stayed strong through July and August. Moreover, working interest production averaged 19,337 boepd in the first half.
A sharp financial turnaround
The stronger output flowed through to earnings. According to Capricorn, Egyptian revenue reached $100 million in the six months to June 30, lifted by an average realised oil price of $89.5 a barrel, up from $73.6 a year earlier. Consequently, the company swung to a first-half operating profit of $56.3 million, reversing a $2 million loss in the same period last year.
The rebound underscores how firmer oil prices have reshaped the producer’s finances. Furthermore, higher realisations magnified the benefit of the extra barrels from Egypt, turning a modest loss into solid profitability within a year.
Bidding war rumbles on
The results land in the middle of a takeover contest. Notably, Capricorn agreed earlier this month to a higher $396 million offer from Norwegian oil firm DNO, chosen over a rival bid from Genel Energy. However, the company said both offers remain in play, leaving the outcome unsettled.
The tussle reflects a broader wave of dealmaking. Additionally, Capricorn’s shares have climbed this year as the oil price surge that followed the Iran war spurred consolidation among energy firms operating in the Middle East. Ultimately, the upgraded outlook strengthens Capricorn’s hand, giving suitors a more valuable target and shareholders fresh grounds to weigh the competing bids.
