Capricorn Energy on acquisition trail after India tax refund buoys balance sheet

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Edinburgh-headquartered Capricorn Energy is eyeing further acquisitions after a “transformational” 2021 in which it re-entered profitable waters, boosted by its billion-dollar India tax refund.

The firm, formerly known as Cairn Energy, has reported a pre-tax profit for last year of $895 million (£683m), compared to a $394m pre-tax loss in 2020. It had seen its long-running Indian tax dispute resolved, resulting in a tax refund of $1.06 billion.

The upstream energy company also flagged its acquisition of Shell’s Western Desert production and exploration portfolio in Egypt, saying the asset has major potential for production growth, operating efficiencies, exploration resources and decarbonisation, with 2021 revenues from production in the country totalling $56m. Overall net cash generated from oil and gas production was $185m.

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Capricorn's finance boss James Smith (left) with CEO Simon Thomson. Picture: contributed.Capricorn's finance boss James Smith (left) with CEO Simon Thomson. Picture: contributed.
Capricorn's finance boss James Smith (left) with CEO Simon Thomson. Picture: contributed.

Chief executive Simon Thomson said: “2021 was a transformational year for Capricorn; we continued to successfully reshape our portfolio and achieved a positive resolution of our Indian tax dispute.

“From the proceeds of asset sales and the Indian tax refund we have committed to nearly $1bn of capital returns to shareholders in 2021 and 2022."

The firm, which was founded by Sir Bill Gammell and will be an occupier of the £350 million Haymarket Edinburgh development, also reported year-end group cash of $314m, with net cash of $133m after debt drawn to fund the Egypt acquisition of $181m.

Mr Thomson added that the firm’s balance sheet provides enough resource to enable “value-accretive” acquisitions. “We look forward to continuing to deliver our strategic aims in 2022 with a strong commitment to safety, social responsibility and our pathway to net zero carbon emissions by 2040.” Shares in Capricorn closed down 6.45 per cent at 200.2p.

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