Capricorn Energy on track for $50m payment

4th Oct 2024 07:40

(Sharecast News) - Capricorn Energy confirmed on Friday it had hit a $50m payment milestone under a 2020 deal with Woodside Energy, with proceeds due to be returned to shareholders.

The London-listed energy developer sold its stake in the Sangomar oil field development, located offshore from Senegal, to Australia's Woodside in 2020.

Under the terms of the deal, Capricorn is entitled to an additional contingent payment of either $25m or $50m if the average Brent oil price during the first six months of production exceeds either the $55 per barrel or $60 per barrel thresholds.

Production got underway on 10 June, when Brent was trading at around $80 per barrel.

There needed to be 30 days of continuous production before the payment could be triggered, and on Friday Capricorn said Woodside had confirmed that the production condition had now been met.

The payment is expected to be made in early 2025. Capricorn said it remained committed to returning any available proceeds of the payment to shareholders, though added that the precise amount of distribution was subject to any tax obligations due in Senegal.

Earlier this year, Capricorn said that Senegal's tax authorities had raised concerns that could led to further tax charges. Both Capricorn and Woodside are contesting the charges.

As at 0845 BST, shares in Capricorn were up 2% at 212.9p.