Capricorn sticks with payouts despite Egypt owing money

By Shadia Nasralla

LONDON (Reuters) -Capricorn Energy is sticking with plans to pay out a total of $575 million to shareholders this year including a $100 million special dividend in October, it said on Thursday, despite payment delays from key market Egypt.

After shareholder revolts derailed two mergers and prompted Capricorn to turn its back on all assets bar producing fields in Egypt, it is owed $144.2 million by the north African country in so-called “receivables”, $113.3 million of which are overdue, it said, calling this a “key concern”.

CEO Randy Neely was brought on board in June to renegotiate broader terms with Egypt, as he had done in his previous job at TransGlobe.

Capricorn had previously said the timing of a $100 million payout depended on how much revenue was generated in Egypt and the outcome of negotiations over its Egyptian licences, as well as oil and gas prices this year.

A shareholder meeting is planned for Oct. 5 to approve the $100 million special dividend ahead of a strategy update in November, Capricorn said.

Neely signalled the special dividend could be a one off, depending on the Egyptian negotiations.

“Just because you say you had a $100 million budget this year doesn’t mean you have a $100 million next year if you’re not getting paid,” he told Reuters.

“It’s an ongoing daily, weekly discussion (in Egypt),” he said, adding no “new roads” needed to be pursued with the authorities on concepts of production sharing contracts but that the process was still at an early stage.

Capricorn paid out a $450 million dividend in May and has already bought back $15 million worth of its own shares.

The company swung to a $62 million half-year loss from a $41 million post-tax profit a year earlier due to changing the way it accounts for non-Egyptian and exploration assets, with its net cash pile standing at $176 million at the end of June.

(Reporting by Shadia NasrallaEditing by David Goodman and Mark Potter)