Capricorn Energy PLC

Good morning and welcome to Capricorn's Energy's full year 2024 results presentation. We are joined by Capricorn's senior management team who will first present the results and then will be available for Q&A afterwards. I will now hand over to CEO Randy Neely to begin. Please go ahead.

Good morning. And thank you all for attending or listening in remotely. I'm joined today by Eddie Oak, our CFO, who will walk through the operational and financial highlights, as well as Jeff Probert, our COO, who will provide a review of ongoing operations and provide more detail on the progress made to improve our production sharing contracts in Egypt. Over the past two years, 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. This wheel is meant to capture very simply how we are approaching our business. We like to describe ourselves as a blue collar oil and gas company. We focus on the small details. We finance the business conservatively. We approach every project with technical rigor and apply strict capital discipline. We demand operational excellence from ourselves and our partners. In Egypt specifically, we administer the business strictly through a self-funding business model. And for new ventures, we will require the application of prudent approach to risk management. We cannot be completely risk averse. No risk will result in no return. The priority set out almost two years ago, including right-sizing the organization, exiting non-core, non-revenue activities and ventures, returning excess capital to shareholders, and refocusing the company on the assets at hand. These have all chiefly been achieved. The company returned over $600 million to shareholders through dividends and share buybacks. Our goal is to continue to provide returns to shareholders, and we are very disappointed that we can't confirm a dividend to shareholders on the back of the receipt of the $50 million contingent payment received earlier this year from Woodside. Our financial planning had included a couple of things occurring, which have not come to pass since our last financial reporting period. First, we had expected that we would receive $22.5 million from Waldorf, who have now entered administration and have proposed a plan to avoid making any material settlement of that debt due to us. Second, we were optimistic that the Senegalese government would agree a reasonable settlement of the taxes being claimed on the proceeds paid by Woodside to Capricorn on the original transaction. This, of course, has not occurred and the prospect of an early settlement has deteriorated. At this time, we expect a lengthy period of arbitration will be ahead of us to determine an outcome. As we have previously stated, we do not believe any amounts are due on that claim. We do not provide for this claim in our financial statements, and we, along with Woodside, intend to defend that position vigorously. However, with all arbitrations, there is a chance the outcome will not be as expected, and as such, it is only prudent for the company to act conservatively regarding distributions until we have certainty on any settlements. In Egypt, the entire team has been working very hard to improve our business, both operationally and financially. Over the past year, we made very good progress operationally, but financially, the macro environment continued to dominate, which has resulted in our trade receivables increasing year over year by about 5%. We remain optimistic that along with a renewed PSC for our 50-50 concessions held with Cairo, we will see increased receipts that will enable all parties, the government and the contractors, to realize on the improved opportunity set created through the improved fiscal terms. As promised, we have delivered on an 80% reduction in headcount and gross G&A from 2022 to our expected expenditures in 2025. With those initial goals principally achieved, we are now turning our attention to increasing value for our shareholders. Our intent is to do that through three principal activities. First, the improvement of the base business in Egypt. Improvements to fiscal terms and lengthening the contract life will open up significant new resources for the joint venture to exploit. Effectively, the amended contractual terms will allow the joint venture to pursue a very large existing resource base, dramatically larger than available under the current contract life and fiscal terms. Jeff will provide more detail momentarily. Second, we, led by Nathan Piper, Director of Commercial, will continue to search for a material deal in the UK North Sea to realize on our advantage position there. We have a strict set of criteria we measure every North Sea opportunity against. We have been deep into several processes, but have been unable to successfully conclude any of them, either due to being outbid or the seller electing to retain the asset. A challenge for us in this initiative is that we remain resolute, that we will not take on any material near-term decommissioning liabilities as part of the transaction. And the third activity, we will look for another material asset to add to the business portfolio. This third activity will likely garner the most interest and possibly concern from shareholders. But let me assure you, we will approach any new venture in the same way we approach our existing business. The venture will need to be financeable with conservative leverage. It will need to be quickly self-sustaining from our funds generated internally. We will also need to enhance the company's ability to return value to shareholders and be such that the skills and reputation that Capricorn possesses are complementary to the opportunity. Ultimately, in our review, we will be driven by value, more so than geography. I'll now turn the presentation over to Eddie Oak, our CFO, to provide a review of financial and operating highlights for the year.

Thanks, Randy. If we can go to slide seven. Capricorn exited 2024 with strong performance from operations in Egypt with earnings of $105 million, but balanced against a backdrop of a challenging receivable situation. where AR increased 184 million by year end. We continue to engage with EGPC and multiple levels of government to underscore the fiscal position of Capricorn in Egypt and the need for reliable and material payments given the significant investment made by the company against this building receivables balance. Our year-end net cash saw a small improvement from the beginning of the year to 23 million, largely driven by non-recurring items from discontinued operations. OPEX for the year was at an all-time low at $4.80 per BOE. This performance is not likely to be repeated as inflationary impacts from the material devaluation of the Egyptian pound last year work their way through our contracting process. Next slide, please. The business followed through on its commitment to shareholders, distributing available funds through its capital allocation policy and slightly improving our year-end net cash position from an adjusted balance at the start of the year. Though again, this was primarily driven by one-off collections from discontinued operations. Next slide, please. Our preliminary guidance for 2025 is a reduction over the prior year and reflects an underlying base annual decline of around 40%. Our capital investments for 2025 and minimal impact on full-year production is reflective of exploration commitments that must be drilled in the current year, balanced against the creative development drilling opportunities all funded from operational cash flow. We expect that the new concession agreement will be ratified in the current year, which should give us a material runaway to a rarest decline and work towards recovering production under improved commercial terms. We also want to alert the market that production will be impacted by a three-week turnaround for required maintenance in Q4 that will impact 60% of our production base. I'll hand off to Jeff here for an operational review of the business.