Capricorn Energy Share Discussion Threads

[controlledmadness] 18/9/2023 14:22

So is I understand the logic from LOTM then the reason no buy backs since the beginning of August is that BofA knew there was going to be a consolidation and Goldman Sachs also knew which explains their playing around everyday.
This sounds like insider trading.

[last of the mohicans] 18/9/2023 07:39

So not long after my last post the circular was released & the consolidation ratio is 2 new for every 3 held.

Not the ratio I was looking for, but can't have everything. So they'll be roughly 95.224M shares in issue once the consolidation is complete & the outstanding share buy-back amount of roughly $10M will reduce that number by close to 4M shares thus leaving us with around 91M in issue come the 1st of Jan.

I sold one lot of 9,500 shares on Friday afternoon at just over 175p

It's good to see that they've leant from the last buy-back situation & are waiting until after the consolidation is completed before the program re-starts.

LOTM

[1doodlebug] 15/9/2023 17:25

Another share consolidation !

[last of the mohicans] 15/9/2023 14:54

I see the trader's have tried to flush out the weak stop-losses on Brent / WTI ahead of the weekend, doesn't look to have succeeded with the price bouncing back up yet again.

The afternoon bots are not working like they usually do so far this afternoon with CNE, perhaps its to do with this large O trades that have gone through.

This has a different feel to it somehow.

I was hoping to see the circular has been issue notice at lunch time today, but sadly that hasn't occurred.

LOTM

[last of the mohicans] 15/9/2023 12:04

churchill2,

Yes I saw the mistake straight away yesterday morning (someone obviously didn't change the date when editing the previous one).

-----------------------

I'm not sure its a bag of worms (Egypt portfolio).

So net cash was $176M at the end of June let's now call that $76M after the $100M distribution to shareholders.

There is $144M of receivables still to come & $85M of payables to deduct (although I'm not sure its actually that high, its not been well presented this time round).

Capex is down as $40 - 50M in the 2nd half.

Your also failing to see how that $50M annual saving in G&A costs gets used.

I did a rough calculation on the Waldorf consideration due for 2023. Yes they have the figure lower than I'm getting but the average price of oil in the 1st half of the year was $79.75, which is where they would base there's on. If it stays roughly where it is now the average for the year rises to over $84 per barrel. Which increases the payment by around $7.5M

There was also the production issue with Kraken in May/June. So they may have a lower total production number than is the case.

I'm currently penciling in $57.6M as the sum due in March 2024.

LOTM

[churchill2] 15/9/2023 10:43

While I am on the subject did anybody actually read the RNS from our Chief Executive Randy Neely.
In his H1 Operational and Strategic Highlights covering the Net Cash position for the six months from January 1st 2023 to the 30th June 2023 the 31st December 2022 is inserted instead of 30th June 2023. It begs the question how many highly paid professional staff and Auditors have read this statement and allowed it to go to shareholders.

[churchill2] 15/9/2023 10:20

Hi LOTH
I do admire your optimism but notwithstanding the rise in the oil price Egypt is a bag of worms. So where do we go from here Capricorn as at the end of Jane 2023 has $174 thousand less the $100 thousand being returned to shareholders. I do not believe we can sell Egypt for any realistic value so we will have to soldier on hoping they pay what is owed to us.
Senegal is gone which leaves $50 thousand approximately from our ex North Sea Assets.
So I am concerned that the future prospects for Capricorn look far from healthy.

[silverstone1] 15/9/2023 08:51

ANOTHER 56P SPECIAL DIVIDEND NEXT MONTH!

[last of the mohicans] 14/9/2023 16:57

taxi1,

I listened to it this morning.

Give the guy some time, he's got a good history by all accounts & knows Egypt well, from a how to do business point of view.

I think we'll learn a lot more at the end of November when they are discussing the assets in detail.

I think there is a lot of hope, I came across something about a week ago, that could be really exciting indeed, but first I need to let it play out & see what the result is before I want to say any more. If it turns out positive then it will be big news, but unfortunately its going to be a few weeks yet before I really know any more.

If it wasn't for technical issues our production profile would be even better than it is now & they have a number of additional wells that will come on stream near the end of the year which will mean good production at the start of 2024.

Just relax & let it all happen the money will be rolling into there bank accounts & then into ours.

LOTM

[taxi1] 14/9/2023 16:42

LOTM
I’ve just listened to the webcast
It’s on the company’s web page
Good to put a voice to a name
But dosent fill me with any great hope
Listen to it yourself let me know what you think

[last of the mohicans] 14/9/2023 15:34

As I said I think there are under instructions to get this to a close of £1.68 (3x£0.56)

Oil price is up nearly $2 currently so that's another $12,000 more to bank today than they banked yesterday for the same amount of production !

$$$$ everywhere

LOTM

[last of the mohicans] 14/9/2023 14:28

hmm Rolls Royce aren't going to be paying that out annually.

DEC do roughly 16%

GKP were doing 41% before they had the pipeline issue with Iraq/Turkey.

And I think my 25% is being conservative ! but we'll see.

Its not going to be helped if those insto's are deliberately pushing the price up to close at £1.68 so that the ratio is 2 new for every 3 :( :( :(

LOTM

[taxi1] 14/9/2023 14:06

Where else are you going to get such a fab return on your money

Rolls Royce

[last of the mohicans] 14/9/2023 13:41

taxi1,

I wasn't here when the share price was £2.50 or the 2 bids of around £2.70 a share were rejected.

I only got interested just before the £1.15 payout, so roughly the beginning of May this year.

I really like the story & what the new board are trying to achieve.

People have totally lost sight of the value here.

There were 315M shares in issue back then when they rejected £2.70 or £850M valuation for the company.

They paid out £362M (£1.15 per share) & reduced the shares in issue to 148.5M when the share price was like £2.18 a share. Which meant they effectively added £0.56 to the value of the shares that were left in issue to that previous £2.70 people had been willing to pay to buy/merge with the company.

The buyback has only enhanced that value further with 6M shares bought so far.

Now they are going to payout another £80M or £0.56 per share to reduce the number of shares in issue even further & they are doing it at an even cheaper price than before !

If you add the numbers up we will end up having 95M shares max in issue having paid out a total of £452M (362 + 80 + 10).

So if you think about it that means £400M (that someone was willing to pay previously at similar or lower oil & gas prices) is in those 95M shares ie the offer would be over £4 per share now.

The cost savings the new board are doing shows just how staggeringly badly the company was run previously. They are going to be saving roughly $50M a year in admin costs. That's a saving of $0.50 per share (post consolidation) saved going forward each year for many years to come.

Think about it, over 4 years that the current value of the company post consolidation retained for the benefit of shareholders & not needlessly waisted.

--------------------

Yes its being played by the institutions while they try to hoover up as much stock as they can. Goldman Sach's, Bank of America & possibly others have seen the potential value here & are getting as big a slice of the pie as they can.

I expect this to become a dividend stock next year (although the company's not saying that yet). In 2 years time CNE most likely will be yielding 25%+ annually on the money invested today.

Where else are you going to get such a fab return on your money .......

LOTM

[taxi1] 14/9/2023 12:05

LOTM
I wish you all the best
But when this was £2.50 they all knew the divi was comming look were we are now.
All this share is now is s hedge fund plaything do what they want with it.
So now we wait on their next plan to maximise shareholder value I don’t think anyone in that office has looked up the definition of the word.
But on a lighter note hope I’m talking rubbish

[last of the mohicans] 14/9/2023 11:21

taxi1

Everyone knew the $100M payment was coming, they just didn't know when.

I've actually bought 2 more small parcels of shares today, which I'm now realising I shouldn't have done. As doing so most likely doesn't help with the outcome I'm currently looking for.

I won't be buying any more until after the circular is published ( probably tomorrow or Monday) as that will contain the share consolidation ratio.

Now they may have already agreed on the ratio based on yesterday's or tuesday's share price & I hope that's the case, otherwise it will be on today's closing price or friday's one.

And I would like that to be as low as possible even although it will increase my on paper losses in the meantime.

I'm looking at the longer term outcome once the special dividend is paid & the share buy-back complete's & yes I want as few shares in issue going forward as possible because that means fewer shares for future revenue to be distributed between, thus higher dividends & earning per share.

I'll reluctantly take 2 new shares for every 3 currently ratio which would take us to roughly 95M shares & the buy-back might take another 4M off that number eventually.

I'd be even happier if the ratio is 19 for every 30 currently held as that takes the number down to roughly 90.5M shares. Or 37 for every 60 as that makes it just over 88M shares.

LOTM

[taxi1] 14/9/2023 09:59

The div payments already factored in to the price already
This will drop like a stone when div payment comes
Then they buy the rest of the buyback at the low price
Been here before we always get shafted
Hope I’m wrong

[last of the mohicans] 14/9/2023 07:58

Wow I wasn't expecting the $100M dividend (56p per share) to be paid out as quickly as 20th October with an Ex-Div date of 5th October.

The rest of the share buy-back is to be completed by the end of December, so they'll have to get a move on with that now.

Happy as Larry with both of the above especially the share consolidation being confirmed. Just wish it was happening at the close of business yesterday, because that would reduce the number of shares in issue by 1/3 so we'd be looking at under 100M shares in issue with the buy-back to reduce it even more !

Now with this dividend on offer there will be a move to push the share price higher thus reducing the consolidation ratio :(

LOTM

[last of the mohicans] 13/9/2023 23:08

churchill2,

hmm I'd say worrying is more like it, been here to often in the past.

Hopefully things will turn out alright this time round !

fingers crossed etc

But seriously Capricorn is currently valued at under $280M. Net Cash alone was $191M at the end of May. Then you have receivables due of $145M less payables of $65M to add on, on top of that.

So basically the business is currently being given a negative value !

Because those numbers don't include the future contingent consideration due from Waldorf of over $100M (from there calculations not mine) less another $25M due to Shell in 2024.

LOTM

[churchill2] 13/9/2023 18:05

Hi LOTM
Should be an interesting day tomorrow. Trying to make sense of the numbers that can be so variable is the proverbial minefield. It could go 20p either way.

[last of the mohicans] 13/9/2023 14:01

I topped up yet another 5,250 at 155.17p but its not showing up on the LSE yet so either there delaying it or it was done on another platform.

LOTM

[last of the mohicans] 13/9/2023 13:15

Not entirely sure how I missed these, but these were updates from the AGM statements

· Identifying and actioning a significant reduction in G&A to right-size the overhead to the continuing business. We have achieved an initial gross G&A reduction of at least US$35m on a run rate basis with opportunities for further meaningful cost savings being pursued. We will update shareholders on the scale of further cost reductions at our half year results in September, but we believe it will be possible to reduce annual gross G&A to US$1.50/boe or less;


Year to date production to the end of May has averaged 31,500 boepd (split 14,000 bopd and 98 mmcfpd). Our full year working interest production guidance remains 32,000-36,000 boepd and we expect an uplift in production in the second half of the year to achieve this. At the end of May we had US$317m cash (net cash US$191m after debt of US$126m), US$145m trade receivables in Egypt (US$104m is overdue) and US$65m of trade payables and accruals. *


Since the results announcement, Capricorn, with its partner, has sustained a five-rig development drilling program in Egypt, focused on the oil-rich BED area. Eight producer and water injector wells have been drilled this year in the BED 15/16 area, following seven successful wells drilled in the area in 2022, extending field limits and reserves. A well in the Karam Field in the AESW concession tested in May at rates of up to 4,600 bopd, the highest flowrates encountered in a Capricorn well to date. Production is on track to grow in the second half of the year.


So lets go through them .........

To get to a G&A cost of $1.50 boe would be some achievement, even if they were referring to that as a WI number ( @$3.40 net to our share) it would still be a remarkable achievement compared to the figures I posted earlier.

[last of the mohicans] 13/9/2023 11:58

Even with the health profit margin we're currently enjoying of rough $40 a barrel ($89+ for Egypt oil - $49.83 of OPEX, deferred payment & G&A) & gradually increasing production, that level of income will no-where near cover the amount of money being invested in the ground this year in Egypt ($120M).

2024 will be the inflection point.

If production starts the year at roughly 7,000 bopd & the oil price maintains its current level. Then we should be seeing a healthy margin of over $50 a barrel ( $88 - $36.05 ($13.00 + $9.60 +$13.45) )

That equates to over $350,000 net per day.

If development capital is set around $80M for 2024, that equates to $6.66M a month or roughly $220,000 per day. Even if they went as high as $120M again that still comes in at roughly $330,000 per day.

So we would be doing better than break-even from day 1 & as production continues to increase gradually during the rest of the year, we would be able to bank more & more cash daily (assuming the oil price was constant which it won't be).

Even taking the daily margin at $20,000 that works out at $7.3M for the year, then add in the nat gas for another $3.5M & you're looking at over $10M that can be distributed in dividends. By then we should be down to under 110M shares in issue so close to a dividend of $0.10 per share, plus the distribution from the Waldorf assets in late March which is likely to be in the region of $50M. Lets say they use $20M for additional share buy-backs & pay out the other $30M. That would mean a total dividend for 2024 of close to $0.40 a share !!!

LOTM

[last of the mohicans] 13/9/2023 10:42

So where is the current break-even point for Capricorn if we leave nat gas production to make that tiny profit per day ?

OPEX is $13.00 per barrel.

The extra deferred consideration payment to Shell of $25M that will need to be paid in Q1 2024 for the Egypt assets.

So you can say its just over $2M per month, or on a per barrel basis its $11.41 ($25M / 2.19M) assuming production for the year averages the 6,000 bopd they projected.

Please note production is very much biased to the 2nd half of the year so if you split the $25M in 2 & assign $12.5M to each half of the year & then divide that by the production for that half year my estimate is that the cost was around $13.80 in the 1st half.

G&A cost next

Total is expected to be around $70M for 2023 falling to just $35M next year (which is something people really need to grasp going forward).

Again you can either assign it per month $5.83M or by a barrel $31.96 (ouch) & again if you want to weight it to the production profile it was probably around $38.80 in the 1st half of the year.

Just as an aside looking ahead if we were to say production was 6,000 bopd in Jan 2024 (the average expected for 2023) then the G&A cost for that month works out at just $15.68 per barrel & if its 7,000 which is where I expect it to be if not higher then the figure falls to $13.45 per barrel.

So for the 1st half of 2023 we're looking at costs of $13.00 + $13.80 + $38.80 = $65.60 per barrel.

For the year as a whole $13.00 + $11.41 + $31.96 = $56.37 per barrel
For the 2nd half of 2023 approximately $13.00 + $9.70 + $27.13 = $49.83 per barrel

As you can clearly see there isn't a lot of profit margin between $77.75 (the average price of our Egypt oil in the 1st half of 2023) & our costs of $65.60 per barrel.

And that's before you write of the cost of the Mexico well $30M (which wipes out another $13.50+) or take account of the $120M of drilling in Egypt for 2023.

LOTM

Sorry I've made an error in the above I need to re-do the calculation later as I've assigned all costs to oil & some need to go to the nat gas side of things

[last of the mohicans] 12/9/2023 21:09

controlledmadness,

Yes Bank of America Securities were carrying out the buy-back with the last announcement regarding it issued on 4th August, with something like $12M+ left to be spent of the $25M minimum buy-back amount.

Bank of America (& Merrill Lynch which is part of the company) made there 1st official major share holding declaration to the market on 15th August.

They passed a notifiable threshold on 14th August.

They owned 1.949898% of the shares directly & had voting rights over an additional
7.539843% of the company, for a total of 9.489741% as of that date (or 13,554,847 shares).

Previous to that date they had no notifiable interest in the company's shares (so less than 3% in total for sure, but the document kind of indicates they didn't have any shareholding at all).

Since then they have gone on to increase there actual holding of shares owned (it had risen to 3.58% by 25th August see company website & major shareholders list) only for it to then drop to just 0.333209% on 4th Sept (see 5th Sept announcement).

However the general trend that is clear through all these Bank of America & Goldman Sach's announcements is that they are building up significant voting rights in the company through various means.

Goldman Sach's currently have voting rights to 17,522,049 shares or 12.267% of the company & Bank of America 15,026,769 shares or 10.52% of the company.

----------------------------

And yes the reason the buy-back is not currently active (when it should be filling its boots with cheap stock) could well be a conflict of interest for Bank of America.

I hope we get to the bottom of it on Thursday during the Webcast & the company comes up with another broker who can do the buy-back instead because the current situation is not in existing shareholders best interest's.

LOTM