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(Alliance News) - Capricorn Energy PLC on Tuesday confirmed the arrival of the floating production storage and offloading facility for Woodside's Sangomar field development offshore Senegal
The Egypt-focused upstream energy company said it intends to continue to target first production for mid-2024.
As defined in the sale and purchase agreement, Capricorn said it may become entitled to a contingent payment of either USD25 million or USD50 million if the average Brent oil price during the first six months of production exceeds the USD55 per barrel or USD60 per barrel thresholds and first oil is achieved in the first half of 2024.
Brent oil was quoted at USD82.55 a barrel midday Tuesday, rising from USD81.69 late Monday.
If first oil is achieved prior to the end of June, Capricorn said the contingent payment is anticipated in early 2025, once the average oil price has been determined and there has been 30 days of continuous production.
In either case, Capricorn said no additional payment will be due from Woodside if the average Brent price is less than or equal to USD55 per barrel or if first oil is achieved later than the first half of 2024.
Capricorn also said the Senegalese tax authority has agreed that real estate capital gains tax is not payable if a taxable gain has not been made, as previously disclosed last month. However, it has not yet adjusted its claim to consider Capricorn's historic base costs, the company said, to recognise that Capricorn incurred a capital loss on its sale of its interests in the Sangomar field to Woodside.
Capricorn said its position remains that no Senegalese registration duty is payable.
"The Senegalese tax authorities had previously confirmed in writing to Capricorn that transactions prior to first oil would not be subject to registration duties. Accordingly, the Company will continue to vigorously defend its position on this matter," Capricorn said.
Capricorn remains committed to returning any proceeds of this contingent payment to its shareholders, the company said.
Shares in Capricorn were up 1.0% to 121.57 pence each in London on Tuesday afternoon.
By Greg Rosenvinge, Alliance News senior reporter
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