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(Sharecast News) - Capricorn Energy said in an update on Tuesday that, in response to Woodside Energy's recent announcement, it was awaiting the arrival of the floating production, storage and offloading (FPSO) facility for the Sangomar Field development off the coast of Senegal.
The AIM-traded firm said Woodside had affirmed its aim to achieve first production by the middle of the year.
Under the terms of the sale and purchase agreement, Capricorn said it stood to gain a contingent payment ranging from $25m to $50m.
The payment hinged on the average Brent oil price surpassing predetermined thresholds of $55 or $60 per barrel during the initial six months of production, coupled with the achievement of first oil in the first half of 2024.
If the conditions were met before 30 June, Capricorn said it expected receiving the contingent payment in early 2025, subject to the determination of the average oil price and 30 days of continuous production.
First oil was defined as a continuous 72-hour period during which at least 30,000 barrels were produced for sale.
However, no additional payment would be due if the average Brent price remained at or below $55 per barrel, or if first oil was achieved after the first half of 2024.
Capricorn added that it was in ongoing negotiations with the Senegalese Tax Authority.
The board said that while it had been agreed that real estate capital gains tax would not apply if no taxable gain was made, there was a discrepancy concerning Capricorn's historic base costs, which resulted in a capital loss on the sale of its Sangomar field interests to Woodside.
Additionally, discussions regarding Senegalese registration duty were continuing, with Capricorn maintaining its stance that no such duty was owed.
The company asserted that prior assurances from the Senegalese tax authorities exempted transactions before first oil from registration duties, adding that it vowed to defend its position on the matter.
At 1535 GMT, shares in Capricorn Energy were up 1.16% at 121.8p.
Reporting by Josh White for Sharecast.com.
