Capricorn has been informed by the Egyptian General Petroleum Corporation (“EGPC”) that it has approved the consolidation of eight of the Company’s existing Egyptian concession agreements, in which it has a 50% participating interest held jointly with Cheiron Oil and Gas (Operator), into a new, single integrated concession agreement. The integrated concession agreement is subject to Egyptian Parliamentary ratification which is expected to take place in 2025.
The new concession agreement includes improved commercial terms (1) and a refreshed primary development term to support increased investment, for the benefit of all parties.
Key elements of the merged concession
“This agreement marks a key milestone in unlocking further value in our Egyptian Western Desert asset base. The three partners: EGPC, Cheiron and Capricorn have put in significant time and effort to construct a business case that allows all parties to benefit. With the improved terms and consolidation of the development leases, the joint venture partners will be able to justify increased investment to unlock significant contingent resources, leading to increased production and reserves for the benefit of all stakeholders. The development potential of these assets is fully capable of being funded by cashflows generated in Egypt.
With the successful outcome of this milestone in sight, we, along with our partners, will now begin the work to achieve a similar outcome for the Alam El Shawish West (AESW) joint venture.
We believe this agreement is a very important step in restoring Capricorn as a premier small-cap energy company. In addition to our achievements in Egypt, we continue to actively evaluate material opportunities in the UK North Sea. Combined, these initiatives will make Capricorn significantly more sustainable as a business and attractive as an energy investment,” Randy Neely, Chief Executive, Capricorn Energy PLC said.
(1) Compared to the terms disclosed in the 03 May 2024 analyst presentation on our website
(2) Based on $60-80/bbl Brent price range, WI liquids production <15,000 bopd, WI gas production <300mmscf/d
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