Capricorn Energy PLC on Thursday reported an annual revenue hike but a swing to loss, as the previous year’s bottom-line got a one-off boost from a tax refund in India.
Capricorn is an upstream energy company with assets in the UK North Sea, Mexico, Suriname, Mauritania and Egypt.
The company swung to a pretax loss of $128.3 million in 2022, from a pretax profit of $873.7 million the year prior. Profit in 2021 got a boost from a $1.07 billion tax refund in India.
Capricorn, formerly known as Cairn Energy, in 2021 said legislation in New Delhi cleared the way for the firm to receive the refund. A taxation amendment act nullified the tax assessment originally levied against the company by India in January 2016.
Meanwhile, revenue tripled to $229.6 million in 2022 from $57.1 million in 2021, driven by an average realised oil price of $98.8 per barrel, up from $77.8.
Capricorn set out plans to return $575 million in capital to shareholders over the next year. It will fork out $450 million for an immediate special dividend, before $100 million in a special payout in the fourth quarter, as well as a share buyback of at least $25 million.
Looking ahead, Capricorn said it remains ‘confident’ and aims to deliver ‘meaningful improvement and efficiencies’.
The company expects to produce an average of 32,000-36,000 barrels of oil equivalent per day and estimates a capital expenditure of $155 million to $175 million in 2023.
Capricorn also confirmed the appointment of Randy Neely as chief executive officer from June 1. Neely is the former president and CEO of TransGlobe Energy Corp.
Chair Craig Van der Laan said: ‘We are pleased to report our initial findings, which include five areas of decisive strategic action. These include a decision to make a material return of capital to shareholders; a significant cost reduction as part of a broader plan to preserve shareholder cash; the curtailment of expensive exploration activities outside of near field activity in Egypt; plans to improve the Egypt business; and a drive for a culture change across the company.
‘As we take the next actions in our review, I am pleased to announce that Capricorn will benefit from the leadership of Randy Neely, a highly accomplished industry figure with extensive experience of successful operations in Egypt,’ he added.
Shares in Capricorn were down 6.3% at 227.40 pence each in London on Thursday midday.
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