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| Share Name | Share Symbol | Market | Stock Type |
|---|---|---|---|
| Capricorn Energy Plc | CNE | London | Ordinary Share |
| Price Change | Price Change % | Share Price | Last Trade
|
|
|---|---|---|---|---|
| 2.20 | 1.31% | 170.60 | 16:35:19 |
| Open Price | Low Price | High Price | Close Price | Previous Close |
|---|---|---|---|---|
| 166.80 | 166.80 | 170.80 | 170.60 | 168.40 |
| Industry Sector |
|---|
| OIL & GAS PRODUCERS |
| Top Posts |
|---|
Posted at 26/1/2024 08:36 by last of the mohicans After reflecting overnight on the update, the biggest thing that is missing is an actual update on what was achieved in Egypt in 2023.The postponement of the Egypt presentation at the end of November is in reality a major blow to investors, because we have no idea of what was achieved for the roughly $93M of Capex spent in Egypt in 2023. There has been no drilling updates or detailed reports giving the licence name, the well, what was found, if so the flow test results & if its on production yet or not & one of the most important parts new reserve numbers Yes there has been some snippets given to us, but not a real in depth insight into it all. Without that investors have no real idea if the money has been well spent or not. From what I've read, it doesn't look like we've found that much in the way of new reserves. The more wildcat drilling side of things seems to have just turned up dry holes even with 3D seismic. The only successes seem to have been step out wells from existing producing wells. The long & short of it is this, if we don't have a baseline telling us what we have then its impossible to tell if we're actually making progress or not. Or if we are simply sending good money after bad & would be better off just producing what we've got (other than in-fill locations) & taking the money & running rather than spending it on Capex where we're losing it & getting no real return on it. LOTM |
Posted at 03/12/2023 01:05 by last of the mohicans I made my year end prediction's in post 119 on 28th October.Sadly since then Capricorn have released several negative pieces of news, including yesterday's operations update. They are meant to be open & transparent with there communications now, but sadly they are not as detailed as they should be in spelling things out for investors. It has taken me several of there announcement to get a better understanding of what's being said between lines, or has been left out for a reason! Sadly this is not going to be pleasant reading for many ........ The production miss is much great than you might initially think, originally production for the year was forecast to be 32,000 boepd with an exit rate of 34,000 boepd & increasing into early 2024. Instead production is now forecast to fall from just 30,600 boepd at the end of October to @ 30,000 boepd for the year as a whole. That means production for November & December combined is going to AVERAGE just 27,010 boepd. Yes that's right 27,000 boepd ((30,000*365 - (30600*304)) / 61). So this Miss isn't just the 2,000 boepd it appears to be on the surface ie 30,000 instead of 32,000. No the miss come the end of December is in actual fact 7,000 boepd. In other words Capricorn will enter 2024 with production over 20% below where it should have been. ---------- The announcement talks about more project delays & lower than expected new well contributions which is not a good sign. It then goes on to add this very interesting bit "Capricorn is working closely with the Operator to assist it to focus on high-grading new well opportunities, deploying the appropriate scale of rig fleet to ensure effective exploitation of the asset base, and delivering the most efficient drilling campaign and optimised reservoir management. They've talked about "high-grading" before but the new bit should be causing alarm on a number of fronts. Its basically saying the operator is using the wrong rigs ! Now this could be one of 2 things, the operator is using cheaper lower powered rigs in the hope of saving money, which usually ends up doing the exact opposite, with breakdowns, controlling the wells while drilling higher pressure sections, damaging the productive formations etc. Or it could be them using far more powerful rigs than are actually needed & thus these are likely to be far more expensive to hire & them hiring more rigs than they need! It all points to disagreements/fricti Which is alarming considering Capricorn has just passed operatorship of all the licences it operated over to Cheiron ! The fact the D&P budget is unchanged from previous guidance, re-enforces my alarm at what's happened, it doesn't make sense at all. If you've had to push back all these well's then a large chunk of the D&P money should have been pushed back into 2024 as well until the work takes place. So something is definitely not right there. I'd go so far as to say CEO Mr Neely will be taking the same approach to Egypt as he has to the UK, I doubt the head of Egypt is still in a job along with several others in senior positions, if she is I'd say its highly unlikely that she's there much longer. Those at the top there clearly have no idea of what there doing recruitment wise. Which leaves you wondering how Capricorn functioned at all previously! when they were meant to be an operator & the staff capable of doing so. ---------------- As to the financial numbers. Well the first key observation is this, why didn't they wait until Monday/Tuesday to put out this update ? Because if they did they could have incorporate the end of November numbers instead, but there's a good reason they didn't want to do that ! There well below the $70M I was expecting for cash receipts in the 2nd half of 2023, now in part a little of that will go down to the lower production numbers but still $44M seems on the low side. Receivables & Overdue payments both increased by @ $26M up to the end of October ( I had allowed for $50M for each to end of December). So no real progress so far in quickening up payments to us & they conveniently didn't give an updated payables number, so NO way of knowing the true net position! Debt was reduced by $13M which will help to lower Capricorn's interest payments. Now to the net cash balance of $45M down from $174.6M at the end of June (need to deduct @ $97M for the special dividend & @ $4.5M for the share buy-back (£13.255M-£9.7M to 31st Oct). So that leaves $73.1M less the $45M cash balance which means $28.1M of existing cash was used up in the 4 months, plus the $44M of new cash receipts, ie total spend of $72.1M over 4 months. I had 2nd half expenditure previously pencilled in for $120.1 - $130.1M, that figure will be wrong now because of lower opex costs etc. There still saying $40-50M D&P, lets stick to $30M for G&A, Egypt loan interest $5M, lets cut Opex to $23M & $8.4M for the rest of the share buy-back (but I'm going to exclude $6M of that for now), gives us a new total of $102.4 -$112.4M. So if we deduct total estimated spend for the 2nd half of this year ($102.4 -$112.4M) from that already spent $72.1M it leaves Capricorn with @ $30-40M to pay against a current cash balance of $45M. Therefore they have enough cash to last them through the end of December. Then it becomes very tricky indeed & they are at the mercy of EGPC & the payment that is due in January & whether it arrives on time or not because if it doesn't then how are they going to pay the $25M that is due to Shell ? Even if it does arrive on time its going to be a lot smaller than I had previous forecast due to the considerable drop in production that's occurred. Let's say the payment is enough to cover that $25M, they still need to have enough cash to get hem through to there next payment. Now Waldorf are going to be due them a payment of @ $50M currently, but given the current situation at Waldorf I doubt they'll be paying that until the very last minute possible (if not beyond) so in my opinion that cash won't be going into the bank account until at least 31st March 2024. Given the G&A spend of $6M for the 1st Qtr of 2024 not to mention Opex costs for the same period they will now simply run out of money. I talked about borrowing some in my forecast, that is still possible, but the cost of doing so will be much higher, given the falling production profile (instead of a rising one) the Senegal legal position that arisen etc. ------------- In summary the next 5 to 6 month's are now going to be extremely difficult for Capricorn, because of falling production, there failure to deffer D&P expenditure into 2024 & much lower cash receipts because of the EGPC than expected (that $26M lower than my forecast is hurting big time now) If the company could turn back the clock 3 months knowing what they know now they wouldn't have gone ahead with the $97M special dividend payment. They might have paid out 50% of it instead or delayed it into 2024, citing EGPC for the delay due to the failure to pay on time & having to constantly increase the amount of working capital currently require in the meantime until its resolved. I'm not sure how much longer they will keep going with the buy-back there is still @ $7.5M to be spent on it to reach the minimum $25M they promised shareholders. I suspect there will come a time when it is halted temporarily (until the Waldorf payment is received for example or EGPC makes a back payment covering some of the overdue amounts). There won't be room for any new D&P expenditure until that Waldorf payment is received & its just as well they've cut G&A by $50M from now on otherwise they'd be having to find another $4M a month from January just to keep going! ------------ I still see potential here, but the company has a lot of explaining to do to its shareholders & it really needs to do so soon, but it may not have all the facts itself yet to pass on ! I'm not sure what the big American banks / brokers see that we don't that keeps drawing more of them in to buying a stake in Capricorn. If you offered me as many shares as I wanted to buy at £1.30 right now, I'd say thanks but no thanks. The answer would probably be the same at £1.20 until I know more facts. Yes that is a big difference from the current share price but in terms of market value it's only around $25M ( or the cash I was expecting them to have received but haven't & no its not in the receivables number instead, as that's kind of where I was expecting it to be end of October) . Good luck all - post now complete & ready for comment LOTM |
Posted at 02/12/2023 02:23 by last of the mohicans post removed & re-done on next post due to being logged out & having to log back in & not wanting to lose all the added sections.LOTM |
Posted at 24/10/2023 21:21 by last of the mohicans I'm not entirely sure how they are doing it but Goldman Sach's continues to increase its voting interest in Capricorn week by week.There overall ownership of shares has decreased yet again, but at the same time they've increased the indirect voting rights by an even bigger number. Split has gone from 2.343998% of shares owned down to 2.067665% & indirect interest up from 10.437694% to 10.940662% Which is an overall rise from 12.781692% to 13.008327%. So that is an overall increase of 1% since the share consolidation on 6th October -------------------- So the current know longs are Goldman Sach's 10.94662% (24th Oct) Bank of America Merrill Lynch 10.187023% (5th Sept) Centiva Capital, LP - 3.05% (22nd Sept) Palliser Capital (UK) Ltd 2.35% (10th Oct) Which is a total of over 26.5% The other 6 major institutional investors only own 38.57% of the company's shares ! Therefore on the face of it at least 4 of them have "lent out" there Capricorn voting rights. I don't think there can be many similar situations out there if at all. Which is why they can move the share price around to there hearts content to flush out weak holders & get stock on the cheap, even with the buy-back acting in competition to them. LOTM |
Posted at 12/9/2023 14:17 by last of the mohicans churchill2I'm not expecting great numbers, because its nearly impossible to have them given what we already know. Expenditure in the 1st half of this year was extremely high (excluding the $449M special dividend). Production was in gradual decline & that would have continued until probably late March before the 1st of the new wells came on stream. The 1st half loss will be substantial. Capricorn won't even break even for the year, even with these rising oil prices & increasing production. 2024 is a completely different story, Goldman Sach's & Bank of America see what's coming & are accumulating voting rights, right left & centre shaking out the weak holders. Private Investors are going to wake up to this to late ...... Capricorn is going to be a cash-cow, because of all the money that's been invested in the ground. LOTM |
Posted at 31/8/2023 14:08 by last of the mohicans taxi1Personally I'm not expecting too much with the half year report, given the oil price in the 1st half of the year. Some more substantially above expectation (pre drill) new development wells would be nice. Probably the most important bit will be how they are getting on with reducing the outstanding payments due to them in Egypt ( or at least holding them steady for now) Then how they are going to distribute that $100M. Hopefully they do another share consolidation with it, along the lines of 3 new shares for every 4 held. I know you'll think that's not going to do anything, well it won't immediately but come the middle of next year, you'll probably have changed your mind when you start to see how much the dividend yield is. That will then push up the share price as other investors see the value here of a significant cash-cow. I'm also hoping they increase the size of the share buyback and actually use that cash to do it. The current one should be mopping up stock nice and cheaply right now & for some unexplained reason its not & yes it will make a big difference further down the line, getting those other 4M+ shares bought it, because that will be 4% less shares for the dividend to be shared amongst. If you go back to the offers around the £2.70 mark, then each share bought back for under that price, increases the value of those left in issue. Yes its a kind of hidden value but its still there & growing ( the $450M payment effectively bought in 166.5M shares at £2.11 & the buyback has bought in 5.7M at roughly £2.09 on average). So that increases the hidden value from £2.70 to over £3.30 a share on the shares currently in issue. With around 100M shares in issue following all of the above, & next years operating costs reducing by $35M. (yes that's $0.35 per share drop in annual costs). LOTM |
Posted at 20/7/2023 15:47 by anley Perhaps investors do not like EGYPT and here in the UK that seems to be the case as well..........politiIn any case there does seem to be dogs left to die in back offices so a clean up is still needed. |
Posted at 19/7/2023 09:02 by dunderheed HSF - you've always intrigued me on this as you seemed to have a dislike for CNE management previously - I've got to admit I always thought CNE was a "reasonable" company.I really liked their "balls" as they simply did exactly what they said they'd do - in quite a risky way IMHO - and always seemed to come out "okay" in the end? But - they took some pretty big gambles and appeared to overpay for any of their respective BD work? My only criticism was the C suite did seem to be pretty highly paid - but equally they seemed to get above average returns for their investors? Two caveats - 1. I can remember speaking to a lot of other highly experienced and top directors of other larger E&P / fully integrated firms who often referred to CNE's "suicidal" approach to business strategy and 2. Wtfdik?! As ever all IMHO and DYOR. EDIT btw is the new CNE CEO the chap from Transglobe because he's bloody excellent IMHO. |
Posted at 19/7/2023 08:32 by hsfinch Rage at activists investors and their mates. They've destroyed a decent Scottish company. What's left ain't got a chance of doing anything good. The new CEO is a bean counter under orders. Expect more job cuts, another divi from cash in the bank and sale of Egypt rump for peanuts if you're lucky. By the way, dinnae expect another penny from Sangomar. OAO. |
Posted at 18/7/2023 12:07 by finkie Feels like a slight overreaction to a scenario which might not be as bad as rns.The 20-25% fall feels slightly overdone to me. But I can fully understand investors throwing in the towel as well the board are poor. |
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