Capricorn Energy Share Discussion Threads

[last of the mohicans] 06/11/2023 12:38

I spent some time over the weekend researching what sort of contingent consideration we might expect to receive in Q1 2024 from Waldorf for the old UK assets.

Its not as simple as it looks because the brent price used in the calculation for 2022 wasn't the actually average brent price for 2022 ! I'm guessing this is because Kraken is a heavier oil & thus trades at a lower price than normal brent.

So factoring that in (roughly $2 difference) gives me a current prediction that the payment due to us will be around $54M (unless the oil price moves a lot or there is a production outage at either of the 2 fields between now & the end of the year).

LOTM

[last of the mohicans] 06/11/2023 12:11

Really surprised to see that ADVFN only have 1 RNS for Capricorn today when in actual fact 3 were issued 1st thing this morning.

The one which is there showing the further increase in the Goldman Sachs holding to 17.728066 % from 16.535926 %

They've now increased there holding by over 6.5% since the 6th of October by the way.

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The next RNS showed that Newtyn Partners had increase there holding in Capricorn to 12.27 % from 9.29% on 20th October, again that's a significant increase & all in shares, no indirect holding at all.

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The 3rd was the buy back notice which was hardly worth issuing given they bought back all of 237 share on Friday !

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Clearly something big is going on & sadly from my point of view its looking very much like Capricorn is in play for a new take-over offer. I do hope I'm wrong unless its at a price around £4 per share.


LOTM

[last of the mohicans] 03/11/2023 05:47

Company Website has been updated to reflect the share ownership as at 20th October.

This is name, new position, old position, number of shares & percentage owned of the 94.692M in issue at that date, ( Although I'm not convinced its totally accurate)

Goldman Sachs collateral account 1 1 10,603,238 12.23 was (11.18%)
Newtyn Partners . . . . . . .. . 2 2 8,816,666 9.29 was ( 9.26%)
Palliser Capital . . . . . . ... 3 3 7,431,767 7.83 was ( 7.80%)
Kite Lake Capital Management . . 4 4 7,163,629 7.55 was ( 7.52%)
Irenic Capital Management . . .. 5 6 6,136,349 6.47 was ( 6.50%)
Bank of New York Stocklending . .6 = 5,991,078 6.31
Dimensional Fund Advisors . . .. 7 7 4,245,328 4.47 was ( 4.55%)
Vanguard Group . . . . . . . .. .8 9 4,245,328 4.47 was ( 4.19%)
Bank of America Merrill Lynch . .9 8 4,312,448 3.97 was ( 4.53%)

So we have a new name on the list Bank of New York Stocklending collateral account - No hiding what that account is all about going by its "STOCKLENDING" rather appropriate given how much stock is currently on loan to the 4 longs.

Madison Avenue Partners who were previously 5 6 6,233,034 6.55 have now left the building ( for now at least) - yet have not submitted any holding notice to say they are now below the 3% threshold.

Morgan Stanley don't show up on the list yet they only reached the initial threshold on 13th October 6,377,792 shares or 6.718569% & there has been no notice to say it's gone below 3% again.


-------------------------------- old stuff -------------------

Blackrock used to own 3.13% as of 8th Sept so they have clearly fallen below the 3% threshold since then, yet no notification of such has been issued to the company.

Centiva Capital who had acquired the voting rights to 3.01% of the company around the 22nd Sept don't show on the list & we know Bank of America have a far larger holding in the company's voting rights than is listed above, but the record seems to only show shares owned not actual voting rights.

LOTM

[last of the mohicans] 02/11/2023 10:06

I've had a fun morning so far !

I bought my 3,700 shares back that I sold for just under £1.6147 late last night (didn't appear on the LSE) for under that £1.613144 (yes it didn't show on the LSE).

I then sold 2,200 shares at £1.6221 which does show on the LSE.

To then buy back the 2,200 immediately for £1.610141 that again doesn't show on the LSE.

Yes they were way below the official price.

So I thought I'd move them around for virtually no cost to me to see if it would trigger some of the bots into action and it has :)

LOTM

[last of the mohicans] 02/11/2023 08:29

I forgot to post this yesterday .........

So Goldman Sach's acquired another 1.151602% of Capricorn (1,083,803 shares) between Thursday the 26th Oct & Friday 27th October, taking there holding to 14.18868% of the company.

Yet the total volume of shares traded on the LSE on those 2 days were just 114,924 shares on the 26th Oct & 247,323 shares on the 27th Oct. Which is all of 362,247 shares.

We know Capricorn acquired for the buy-back 22,762 on the 26th & 31,353 on the 27th Oct through the LSE. Which is a total of 54,115 shares.

So where did the other 775,671 shares come from ?

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

As no-doubt some of you noticed Goldman Sachs put out another holding notice yesterday afternoon, showing that on Monday 30th October they now held 15.359965% of the company which was an increase of 1.17181% from Friday.

There indirect interest decreased slightly from 10.97396% to 10.53099% which meant they acquired 1,524,832 shares in a day.

Now Monday's volume on the LSE was all of 123,611 shares and Capricorn accounted for 19,417 of that volume.

So there is a lot of buying going on out of sight by Goldman Sachs

LOTM

[hsfinch] 01/11/2023 22:13

Sorry folks. That was meant for the Chariot board. Finger trouble due to jet lag.

[hsfinch] 01/11/2023 22:11

Greetings punters. Just back from a work stint in Dubai. share price holding up nice coz insiders know whats coming. A partner. End of November latest or AP and Julie gonna get their collars felt.

[last of the mohicans] 31/10/2023 15:11

The 3,700 trade shown as a sell at £1.5488 @ 14.49 is actually a limit order buy of mine. I had sold a small parcel last week of 3,500 at £1.6198

I'm still waiting on my dividend arriving by the way !

Hopefully Merrill's are getting a decent amount of stock today at these low prices for the buy-back, which would be lovely jubbly.

LOTM

[last of the mohicans] 30/10/2023 01:43

aspect100,

It was a takeover target on 2022 & the 2 offers were rejected by the institutions who changed the board to the current one.

I'd say its highly unlikely to be a takeover target now that it's paid out $550M in cash. If someone wanted access to such a lot of cash that opportunity is now gone.

The company has down sized substantially since late 2020. There used to be 585M shares in issue its currently just 94.5M & will soon enough be under 91M, ie under 1/6th of the size it used to be.

Your seeing me talk of large dividends ( & they are on a per share basis) but in reality the actual cash amount is not that much.

With 91M shares a $0.10 a share dividend costs the company $9.1M (with 585M shares that would mean a cost of $58.5M).

With 75M shares ( that's me assuming the 2024 Waldorf payment is paid as a special dividend & another share consolidation along with it) it only costs Capricorn $7.5M for a $0.10 dividend per share.

And with the 55M number I talked of in 2025 in my last post the cost is just $5.5M
for every $0.10 dividend.

So I regard it as a cash cow going forward.

If I'm wrong & there is a takeover offer then what sort of price are they going to offer & the directors ( or more importantly the Insto's) going to accept ?

They wouldn't take £2.70 in 2022.

And on my calculations the 2 share consolidation & buy-back have only enhanced the remaining value on a per share basis ( not an overall valuation of the company) since then.

I currently have the figure at around £4.20 per share & growing with every share bought back below that price. However it will need adjusting depending on what's said on 30th November about Egypt & the company's oil & gas reserves. If they write down the value of the recoverable reserves then that figure will fall, conversely if they increase the recoverable reserve number it will rise.

Given Capricorn is now just a 1/6th the size it once was just a small revision up or down will make quite a difference to the asset value per share. 1M barrels of oil divided by 585M doesn't even give you 2 per barrel, yet with 91M shares its 11 barrels & the inground value of that.

LOTM

[aspect100] 29/10/2023 14:26

Could this be a takeover target?

[last of the mohicans] 28/10/2023 18:16

Year End Prediction

30th June net cash position was $176M less the Roughly $100M special dividend that has now been paid.

Net receivables were $148M with $113M of it overdue.

2nd half capex in Egypt for development & production was put at $40 - $50M
G&A for the 2nd half I'm estimating as $30M weighted to Q3.

Share buy-back program $14M in the 2nd half (although I don't think it will be finished by year end).

Net interest payable on Egypt Loan $5M after allowing for interest receivable on Capricorn cash balances.

There is around $20.3M in the accounts due to be paid within 12 month's I'm guessing its payable around the end of the year / early Jan & is effectively offset by a matching cash balance, so all we'll see is a reduction in outstanding debt & a lower overall cash balance.

There is also $25M payable to Shell in Jan 2024.

The only other cash cost will be OPEX - I've calculate that at $13 per net boe. So on 6,000 bopd & 7,000 boed nat gas & 184 days that works out at $31.1M (1st half cost was $27.5M for comparison in the accounts)

Only other thing on the subtraction side is depletion of reserves, but that's an accounting number affecting the assets of the company not a cash number. The 1st half was down as $55.1M so I'll be using $60M as my number for this.

So total 2nd half cash expenditure is expected to be between $120.1M & $130.1M depending on the actual D&P number.

On the income side, I've estimated Brent oil to average $88 per barrel for the half & the discount for Egypt to be $2 per barrel taking it down to $86.

Thus oil income will be $95M (86 x 6000 x 184).

Working out the nat gas number is sadly more complex. Capricorn use a number of 5.6 to convert there gas to boe rather than the standard figure of 6. Which means it has a higher BTU number than 1055 per MCF. After much debate I've decided to price it at 6x$2.95 rather than 5.6x$2.95 although it doesn't really matter that much as the difference over the 6 months is only $1.5M

So nat gas income will be @ $22.75M

This gives us a total income on paper of $117.75M

I say on paper because although its earned in the current half year, payments are always in arrears. So for Oil production in Oct the cash isn't actually due to be paid until 1st Dec & Gas not until the following month. So the easiest way to think about it is payment being a quarter behind actual production.

So the 2nd half would normal get the income earned in Q2 & Q3 which in this case means the lowest oil prices for the year so far in May & June being in the calculation from a cash received perspective.

Bearing this in mind I'm going to use an overall number of $100M from the cash side of things with regard to income.

The next important question that needs to be addressed regards the overdue amounts, has this got worse/better/or stayed the same from what happened in the 1st half of the year.

I don't think they will have improved yet, so I've gone with a similar deterioration to that of the 1st half, ie a $50M increase in both net receivables & overdue amounts. Offset by a $20M increase in payables (the figures were $51M, $47M & $21M in the half year accounts). So effectively a further $30M deterioration.

Now to put it all together............


Cash of $76M + income in cash of $70M ($100M - $30M) = $146M
Less expenditure of between $120.1M to $130.1M

Leaving us with a net cash balance of between $15.9M & $25.9M

Plus net receivables of $215.75M ($148M + $50M + $17.75M) with $163M of it overdue ($113M + $50M) & net payables of $56M ($36M + $20M)

Now there is a scenario on these numbers where the company doesn't have the physical cash to pay the $25M to Shell in Jan 2024 although there should be payments coming into us on 1st of Jan (or close to then) of over $20M which would alleviate the problem. However that scenario only exists if Capricorn hasn't taken mitigating action before then like reducing the D&P spend / suspending the rest of what's left of the buy-back for a few weeks etc, or borrowing $15M max for 3 month's.

I'm sure they will take the appropriate action as needs be because Cheiron & Capricorn will simply not let the outstanding balances continue to build up without reducing there D&P spend or pushed it back until cash is coming in to match it, as its not in there interests to do so especially with Cherion being the largest Independent O&G in Egypt with many more licences than ours to deal with (fund) as well.

Our G&A expenses will be down to just $2M a month max by then as well & there will be a large incoming payment from Waldorf before April to make the cash bank balances look very rosy again.

Having dealt with the potential downside lets look at the upside of where things are.

I've used the max expenditure numbers in these calculations but I've not done so on the revenue side, oil production by late December should be nearer 7,000 bopd rather than the 6,000 I've used for example.

So our net position at the end of June was $186M ($76M cash + $112M net receivables [$148M - $36M of payables] ) of near liquid assets.

At the end of December we're looking at near liquid assets of between $175.65M & $185.65M ( with a minimum of $15.9M to $25.9M of it in cash + $159.75M net receivables [$215.75M - $56M of payables] ) Now obviously it would be preferable for the cash figure to be higher & the net receivables number lower by the corresponding amount.

In other words we're literally back to where we were at the end of June, only having spent another $40 - 50M on D&P that has increased our production rates ahead of 2024, $14M on the share buy-back & a large chunk of the $30M on G&A right sizing the business for the future.

Which makes for a very bright outlook for 2024, even if we were to ignore the Waldorf payment completely.

We'll have higher production & lower G&A costs, & as some of those net receivables get paid to us, they'll be a lot of room for dividend payments.

In Q1 of 2024 Expense's for example will come to around $64.5M ($25M Shell, $15M D&P, $15.5M OPEX, $6M G&A, $3M Debt Int).

Yet using 7,000 bopd & 6,000 boe of nat gas, revenue will come to $65.5M ( $54.75M Oil, $9.75M gas) using the same average prices of $86 for Egypt oil & $2.95 for gas.

Now you're saying where's the spare cash for ordinary dividends on those numbers !

Well in Q2 Expense's will drop to $43.5M ($20M D&P, $15.5M OPEX, $5M G&A, $3M Debt Int) & that's with increasing D&P by another $5M for the quarter. While income should actually increase due to production increases from the cash invested in Q1, but even leaving it unchanged we'll be $22.5M better off, meaning that Capricorn should be able to pay an interim dividend in Sept/Oct of around $15M easily. Translating that into a per-share number depends on what happens to the Waldorf payment & whether that was used to give us another special dividend & share consolidation before then. If it was then we'd be looking at around $0.20 per share for the interim dividend rather than say $0.15

As for the final dividend for 2024, well that would all depend on what the oil price does during the year, but if it did average out at a price similar to this year's then I wouldn't be surprised to see $30M being paid out ie potentially $0.40 per share (in May 2025) & $0.60 in total in ordinary dividends for the year to 31st Dec 2024 & that's just the beginning of these significant payouts.

The potential 2025 payment's from Waldorf & Woodside ahead of that final dividend announcement could have a significant bearing on the per share amount's. It will depend on the share price at that time as to how many shares would be cancelled from another consolidation, but I can see the potential for Capricorn to have just 55M shares in issue by then(90.55M end of 2023 to 75M in 2024), thus the final dividend payout would be around $0.55 per share instead of $0.40 which is a massive difference.

LOTM

[last of the mohicans] 27/10/2023 14:01

Capricorn must have one of the most active major shareholder registers out there !

Morgan Stanley have now joined the party.

I wonder how they got 6.3M shares so fast, given how little volume is trading through the LSE.

LOTM

[finkie] 24/10/2023 22:28

Who cares let them do their shenanigans!

[last of the mohicans] 24/10/2023 21:21

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

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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

[last of the mohicans] 24/10/2023 16:58

I've just been having a rant with my broker about having not yet received the dividend. They say they are yet to receive it from the registrar's!!!

I could be waiting days on it arriving.

Really was wanting the price to stay low for a while longer, while the buy-back munched away on those super cheap shares. Sadly its not to be for now.

Silverstone1 - that 161,874 trade wasn't you by chance ?


LOTM

[aspect100] 24/10/2023 16:49

My dividend was received on the 20th.

It's gone back into the stock.

The best energy buy on the market - but just my opinion.

[last of the mohicans] 24/10/2023 08:44

Silverstone1

Lucky you !

I'm still waiting on mine :( & who knows when it will arrive.

Itching to it get it re-invested at these prices ........

That's some dividend by the way !

LOTM

[silverstone1] 24/10/2023 00:50

I RECEIVED MY £70,694.40 DIVIDEND ON THURSDAY EVENING BECAUSE I HOLD CNE IN CERTIFICATED FORM!

[last of the mohicans] 23/10/2023 16:20

Still waiting on my Dividend arriving in my ISA account so that I can get it re-invested at these prices !!!!

I'm busy doing some calculations as to my end of year numbers regarding cash /
net receivables due / over due amount etc.

Yes hopefully the 30th Nov update on Egypt will provide some of the actual figures to the end of Oct, so that we can see the trends.

I believe we are currently getting net revenue from oil & liquids of $362,000 per day ( after OPEX costs & putting G&A costs at $100K per day [$3M a month] ) using 6,000 bopd.

I estimate depletion costs to be around $126,000 per day but that's money already invested, so isn't a cash figure but still needs to used to reduce the outstanding value of the assets accordingly.

Now that $362,000 per day won't be coming to us anytime soon. Its not due for payment until 1st December & it won't fall into the overdue category until at least 1st Jan 2024. I'm guessing it will be after 1st April before Capricorn gets its hands on it.

Still its a significant sum of money & if oil prices average the same to the end of the year it equates to over $27M net in just 75 days.

LOTM

[aspect100] 23/10/2023 14:54

Very undervalued at this price.

I think there is an update on November 30.

[last of the mohicans] 23/10/2023 09:07

Hi hsfinch,

FAR have a completely different contingent payout mechanism to Capricorn, its linked to production & oil price out to around 2026 I think it is, there's was a far better (no pun intended) deal structure than Capricorn's. FAR are almost certain to get paid a large amount.

It will be touch & go, but I don't think Woodside are that type of company & $50M to them is a drop in the ocean.

LOTM

[hsfinch] 23/10/2023 08:09

And if they have to delay it by a few days to avoid paying out millions to Capricorn and FAR, they will.

[last of the mohicans] 19/10/2023 21:28

From Woodside today

""At Sangomar in Senegal, another two of the 23 planned wells were drilled, taking the total now completed to 14. Pre-commissioning work at the floating production storage and offloading vessel continued in Singapore. Overall, the Sangomar project is 90% complete and we remain on track for targeted first oil in mid-2024."

"Sangomar Field Development Phase 1

· FPSO topsides integration and pre-commissioning works continued in Singapore.

· The development drilling program continued with 14 of 23 wells completed.

· The subsea installation campaign was 80% complete, with the overall subsea work scope 96% complete at the end of the period.

· The project was 90% complete at the end of the period and first oil is targeted for mid-2024."

LOTM

[last of the mohicans] 19/10/2023 14:27

Market cap $185M (at £1.60 & exchange rate of $1.22 to £)

Net Cash in bank after special dividend & share buy-back to date $71.5M+ ($176 - $100 - $3.5M - $1M )

Net receivables due in Egypt $108M+ ($144 - $36)

There is still $9M to be spent on the buy-back so as the net cash amount declines by that amount so will the market cap value fall by the same amount.

Therefore Egypt is currently valued at under $10M.

That's if you disregard the contingent payments that are due in 2024-26 from Waldorf & the possible Senegal payment in 2025 provided production there starts by 30th June 2023.

If you give any value to the above (& there is definitely going to be a payment due for 2023 from Waldorf) then Egypt is literally given a negative value) or zero value.

LOTM

[last of the mohicans] 19/10/2023 13:34

Hi aspect100

Yes I'll be using my special dividend to buy another large block for trading as well.

Hopefully this sort of price is still available by the time my dividend arrives ( I'm guessing Monday at best knowing my broker, but they messed it up the last time & it took 2 weeks to get it)

Hopefully they shake out a lot of stock & get volume up so the company can munch away at these prices.

So far they've bought in just over 0.50% of the stock in 9 days (478,044 shares) & spent £834,105 doing so at an average price of £1.7488

That works out at just over 10% of the $10M having been spent thus far.

My model show's that at the current average price to date (£1.75) they will get to buy-in a further 4.11M shares. If it averages £1.70 from now on it will be another 4.23M instead.

The strength of the $ against the £ is also aiding the cause. I'm using $1.25 to be on the high side.

So the total buy-in is headed for around 5% of the company.

LOTM