Capricorn reiterates production outlook, shares spark

(Sharecast News) - Shares in Capricorn Energy rallied in early trading on Thursday, despite widening interim losses, after the oil firm reiterated its full-year production outlook. Losses from continuing operations came in at $7.5m in the six months to 30 June, compared to profits of $16.4m a year previously.

Revenues were also lower, falling to $59.7m to $80.8m. In recent years Capricorn - formerly Cairn Energy - has overhauled its business to refocuses solely on its Egyptian assets.

During the first half, Capricorn said it had achieved a number of key milestones for increased investment in the country.

In particular, it said "crucial groundwork" had been laid by state-owned oil company Egyptian General Petroleum Corporation approving the consolidation of eight of the company's 50%-owned concession agreements into one new, single integrated concession.

Parliamentary ratification is expected later in the year.

Randy Neely, chief executive, said Capricorn had delivered a "solid" operational performance during the first half, putting it on track to achieve the mid-point of its annual production guidance.

"This performance reflects our ongoing commitment to operational and financial discipline as we pursue long-term value creation for shareholders," he added. "Significant progress has been made towards unlocking value from our Egypt portfolio, having achieved a number of key milestones for increased investment in the country.

"We are well-positioned for growth."

Capricorn's full-year production guidance is for between 17,000 and 21,000 barrels of oil equivalent per day (boepd).

As at 31 August, year-to-date production averaged 19,994 boepd.

Operating costs of between $5 and $7 boe were also left unchanged.

Shore Capital, which has a 'buy' rating on the stock, said: "The first half was a positive period for the company, with production tracking above expectations and the recent concession agreement smoothing the way for increased activity levels in Egypt.

"The second half should see the drilling of up to 10 development wells, all focused on the Badr El Din area."

As at 0815 BST, shares in Capricorn were nearly 10% higher at 220.65p.