Capricorn, Pharos to resume oil drilling in Egypt after some dues paid
May 23 (Reuters) -Oil producers Capricorn Energy CNE.L and Pharos Energy PHARP.L said on Thursday their cash positions have improved after they received payments from the Egyptian government, allowing them to resume drilling in the country.
Capricorn said it received a total of $71 million from Egypt in the first four months of 2024, while Pharos said it received $12.4 million.
"The ultimate goal in Egypt, and a potential major catalyst for both companies if it occurs, is if they are able to amend and consolidate license terms to unlock value and accelerate investment further," Jefferies analysts said.
Pharos is preparing to drill at its El Fayum and North Beni Suef oilfields later this year, and is also seeking to consolidate the two government-licensed fields into one, said CEO Jann Brown.
Meanwhile, Capricorn is in talks with state-owned Egyptian General Petroleum Corporation (EGPC) to amend the terms of their production sharing contracts.
The company approved a capital budget of $57 million for 2024 which includes drilling 15 new wells, said CEO Randy Neely, adding that "investment in Egypt will continue to be aligned with funds available to Capricorn in-country."
It had previously halted new drilling and investment in the country until it agreed with EGPC on a payment plan.
"Egypt has never defaulted on oil and gas debts, and we remain confident that Egypt has the capacity to address our overdue receivables," Neely said, noting how ratings agency Fitch revised the country's outlook to positive from stable earlier this month.
Reporting by Deep Vakil in Bengaluru; Editing by Varun H K
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