Capricorn Energy PLC

Good morning, afternoon, and thank you all for attending or listening in remotely. I'm joined here today by Eddie Oak, our CFO, who will walk you through the operational financial highlights, and Jeff Probert, our COO, who will provide a review of ongoing operations and summarize our plan to improve our production sharing contracts in Egypt. And by the way, for those listening, it's Randy Neely speaking. Over the past year and a half, the new board, myself and the rest of the management team have made a major effort to transform the culture, priorities and focus of Capricorn. The company has now returned over $600 million to shareholders through dividends and share buybacks. Our intention is to continue to provide returns as appropriate, including returning amounts associated with the Senegal contingent receipt expected in early 2025. The board will also assess the company's ability to continue to buy back shares upon the completion of the current buyback program, which is about 80% complete. With respect to priorities, we have, since my arrival, been working hard to improve our knowledge of our producing assets and our working relationships with both our partner and the government of Egypt. As part of that effort to improve our understanding of our assets, we published a third-party CPR early this year, a summary of which is available to view on our website. The hard work being performed by our technical team and financial teams have already led to better predictability of operating results and cash collections, of which we collected over $90 million in the first half of the year and an additional $20 million subsequent to the end of the half year. During the first half of the year, we continued to exit our non-core activities, shutting down the Mexico office, although we still have some clean-up there to ensure a full and tidy exit. We have continued our efforts to refine our overhead, and we are on target to see an approximate 80% reduction in G&A costs from 2022 to 2025. All of these efforts are leading to a more predictable base of operations, better forecasting of both production and cash flows. The technical team is actively working with our partner to help prioritize operations specifically focused on liquids to improve profitability. And key to a significant value add in the future is an amended, extended, and improved set of production sharing contracts to promote the partnership's ability or incentive to invest and grow production in Egypt. As I mentioned, Jeff will review the process and progress the joint venture, that is Capricorn and our partner Chiron, are making on this a little later. Another area of focus for the team, a much leaner team, by the way, is to identify a suitable North Sea asset that Capricorn can leverage its position and capabilities to unlock value from its legacy operations in the UK. Beyond the North Sea, ultimately, we feel that in order to enhance our investment thesis, the company needs to show growth, certainly in terms of production and reserves, but most importantly, cash flow. Regardless of our size, the value proposition of our shares is compelling. Our Egyptian business alone supports the current price, but that excludes the near-term tangible receipts due and the mid-term value realizations that we are focused on as key strategic objectives. Our Egypt business, which is an improving proposition and probably been overly penalized for the situation that existed in Egypt during the past couple of years, on its own is worth more than the current market cap of the company. Closing the gap between the underlying asset value and market value continues to be a management priority. The market capitalization of Capricorn implies Egypt is heavily risked. However, Egypt has never defaulted on its oil and gas debts, and Capricorn's Egypt business is ring-fenced in that the PLC has not provided a single dollar of support to the production and development business in Egypt since July of last year. The significant and near-term potential realization of contingent and scheduled receipts on historical transactions also appears to be valued at near zero. The company currently anticipates that the contingent elements of the Sangamar $50 million payment, that is the rent price and the continuous production requirements, will be confirmed, and we will then be due that amount from Woodside in early 2025. As we have disclosed, there are tax challenges being advanced by the Senegalese government, which may result in reductions to the potential distributable amount, and we also hope to have that clarity before year-end. The company will be due a final amount on the restructuring of the contingent amounts due from Waldorf Energy, and we are reasonably confident the full amount will be received in early 2025 as well. Those two amounts together are potentially worth an additional 75p per share, and that's certainly not immaterial given our current stock price. In addition to those very tangible elements of value, the company is also pursuing the realization of value in both the UK and Egypt. We believe those independent strategic objectives could also create another one pound of value each for the shares. I'll now turn it over to Eddie. our CFO, to provide some first-half financial and operating highlights.

Thanks, Randy, and good afternoon, all. Encouraging financial performance through the first half of the year. We averaged 26,200 BOEs per day, with a higher liquids weighting of about 42%. Oil prices have hung in over the first half, where an average oil price is $78.60 a barrel and a contractual gas price of about $297 in MSCUF, supplied revenues of $80 million. OPEX of 470 at Bowie have been lower than forecast, but this was due to the material devaluation of the EGP in the period. We're not expecting to hang on to those cost savings as they'll be inflated away through increasing input costs, contract renewals, and negotiations. The company also allocated $53 million to shareholders in the period through dividends and share repurchases and ended the half with cash of $148 million. We expect to meet guidance given earlier in the year of between 20,000 to 24,000 BOEs per day and total capex of 50 to 60 million. We're going to continue to monitor receipts against our outstanding receivables balance and gauge against our commitments in Egypt. Taking into consideration 108 million in Egypt debt, the company exited June 30th with 40 million in net cash. Jeff's going to take over here for an operational update.

Thanks, Eddie. This operational update will be relatively brief, as the rigs remobilized in quarter two didn't get fully active until July, following the company's approval of a work program budget and a return to regular receipts from EGPC. As Eddie noted, when we weren't drilling in H1, production declines were in line with our expectations, and overall, working interest production today remains in line with our full-year guidance. Both drilling and workover activity have principally been focused on liquids in the bed area and a renewed effort to actively manage those reservoirs with water injection. This will continue into the first half of 2025. We also noted at the full year results that the time lag between drilling and bringing new wells into production this late in the year would not have a significant impact on the year-average 2024 production, and that continues to be the case. However, this year's drilling is expected to have a more significant 2025 production impact over no further activity. Capricorn continues to work independently to influence the development direction of the consortium, high grading the opportunity set, and we're pleased to see our technical insights being largely adopted by the operating company, Perpetco. Three rigs are currently active in the Western Desert, with two of those rigs expected to move to execute outstanding exploration drilling commitments in Q4. Finally, I'd like to update you on the significant progress made on getting better alignment between the company and EGPC with respect to improving the PSCs, the concession agreements. During the third quarter, we engaged directly with EGPC and the Ministry of Petroleum, resulting in Chiron delivering a proposal on our behalf to EGPC to amend and extend the eight concession agreements owned on a 50-50 basis with our partner. Following this significant step, EGPC has formally convened an investment committee to assess the proposal and negotiate with the consortium on the fiscal and investment terms of a new concession agreement over these areas. Engagement with that committee has already commenced. There's no set timeline for this negotiation, but it's clear that EGPC and the Ministry of Petroleum are as motivated as we are to create an investment environment in the Western Desert that incentivizes the company to go after additional production and reserves at pace. The resources in the ground are present. We just need the necessary improved agreements to invest and convert them into reserves and production and returns for EGPC and the company alike. I put an indicative timeline up there. based on our historical expectations, that we note the positive engagement we've had to date this time around. Needless to say, we'll not be providing a blow-by-blow account of these negotiations as they progress, but we'll disclose the material progress as appropriate. I'll now hand back to Randy to wrap up. Thanks, Jeff.