Capricorn Energy Receives $30 Million in Payments from Egypt

Capricorn Energy Receives $30 Million in Payments from Egypt
Capricorn says $104m of Egypt receivables 'overdue' – Scottish Financial

Capricorn Energy Receives $30 Million in Payments from Egypt

On March 28, oil producer Capricorn Energy announced that it had received a payment of $30 million from the Egyptian government this week, following an increase in the government’s debt to the company to $169 million last year. Chief Executive Randy Neely stated, “Throughout my twelve years working in Egypt, and looking further back, the Government of Egypt has always honoured its financial obligations to international investors.”

Capricorn Energy, which is refocusing its strategy to concentrate on its Egyptian assets after facing two shareholder revolts over merger plans, has temporarily halted new drilling and investment in the country until it reaches an agreement with the state-owned Egyptian General Petroleum Corporation (EGPC) on a payment plan.

The company reported a 2023 loss after tax of $144 million, wider than its loss of $67.1 million the previous year. By the end of 2023, receivables due from Egypt totaled $168.7 million, marking an increase of $71.9 million over the year, with $143.1 million of that amount overdue.

Capricorn, in collaboration with its Egyptian partner Cheiron, stated that they were “seeking waivers from lenders for several potential events of default under the facilities, all related to a lack of a payment plan from EGPC to resolve the receivables position.” The company declined to provide further comments on the waivers.

Capricorn Energy’s financial statements revealed that they, along with their Egyptian partner Cheiron, are actively seeking waivers from lenders due to several potential events of default under the facilities, all linked to the absence of a payment plan from EGPC to address the outstanding receivables. However, the company refrained from offering additional details regarding the waivers.

The situation underscores the challenges faced by international investors operating in Egypt’s energy sector, particularly concerning payment delays and uncertainties in receivables management. Despite these difficulties, Capricorn Energy remains committed to its operations in Egypt and continues to work towards resolving outstanding financial issues with the Egyptian government and EGPC.

 

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