Pre-Annual General Meeting Information • Jan 9, 2023
Pre-Annual General Meeting Information
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THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. IT CONTAINS RESOLUTIONS TO BE VOTED ON AT THE GENERAL MEETING OF THE COMPANY TO BE HELD AT 2.00 p.m. (LONDON TIME) ON 1 FEBRUARY 2023 AT THE SHERATON GRAND HOTEL, 1 FESTIVAL SQUARE, EDINBURGH EH3 9SR.
If you are in any doubt as to the action you should take, you are recommended to seek your own financial advice immediately from your stockbroker, bank manager, solicitor, accountant, fund manager or other appropriate independent financial adviser, who is authorised under the Financial Services and Markets Act 2000, as amended ("FSMA") if you are resident in the United Kingdom or, if not, from another appropriately authorised independent financial adviser.
If you sell or otherwise transfer or have sold or otherwise transferred all of your holding of Ordinary Shares, please forward this document, together with the accompanying BLUE Form of Proxy, as soon as possible, to the purchaser or transferee, or to the bank, stockbroker or other agent through whom the sale or transfer was effected, for transmission to the purchaser or transferee. If you sell or otherwise transfer or have sold or otherwise transferred only part of your holding of Ordinary Shares, you should retain these documents and consult the bank, stockbroker or other agent through whom the sale or transfer was effected. However, the distribution of this document and the accompanying BLUE Form of Proxy into jurisdictions other than the United Kingdom may be restricted by law. Therefore, persons outside the United Kingdom into whose possession this document comes should inform themselves about, and observe, any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.
(incorporated and registered in Scotland with registered number SC226712)
Your vote is important – please use it and please read the Letter from the Board in Part I. Shareholders will find enclosed a BLUE Form of Proxy for use in connection with the resolutions to be proposed at the General Meeting. Whether or not you propose to attend the General Meeting, please complete and return the BLUE Form of Proxy in accordance with the instructions printed on it as soon as possible, and in any event, so as to be received by Equiniti Limited, Aspect House, Spencer Road, Lancing, West Sussex, BN99 6DA , no later than 2.00 p.m. (London time) on 30 January 2023.
CREST Members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do so for the General Meeting to be held on 1 February 2023 and any adjournment(s) thereof by using the procedures described in the CREST Manual. CREST personal members or other CREST sponsored members, and those CREST Members who have appointed a voting service provider(s), should refer to their CREST sponsor or voting service provider(s), who will be able to take the appropriate action on their behalf.
Nicoletta Giadrossi (Non-Executive Chair) Simon Thomson (Chief Executive) James Smith (Chief Financial Officer) Keith Lough (Non-Executive Director) Peter Kallos (Non-Executive Director) Alison Wood (Non-Executive Director) Catherine Krajicek (Non-Executive Director) Erik Daugbjerg (Non-Executive Director) Luis Araujo (Non-Executive Director)
(each a "Director" and together the "Directors")
Registered office: 50 Lothian Road Edinburgh EH3 9BY
9 January 2023
On 19 December 2022, the board of directors of the Company (the "Board") received a request from Palliser Capital Master Fund Ltd ("Palliser") to call a general meeting of the Company (the "Requested GM") to consider resolutions to remove seven of the current Directors from the Board and to appoint six new directors, selected by Palliser, to the Board (the "Proposed Resolutions").
The Board is required by statute and the Company's articles of association to call the Requested GM to be held at 2.00 p.m. (London time) on 1 February 2023 at The Sheraton Grand Hotel, 1 Festival Square, Edinburgh EH3 9SR to allow shareholders to consider and vote on the Proposed Resolutions. Notice of the Requested GM is set out in Part II.
The Board does not believe that the Proposed Resolutions are in the best interests of shareholders and unanimously reaffirms its support for each of its Directors identified in Proposed Resolutions 1 - 7.
The Board encourages shareholders to read carefully the 'Observations Regarding Palliser's Perspectives on Capricorn Energy' presentation which was published by the Company on 5 January 2023 and is appended to this document (the "Presentation").
In summary, the Board believes that:
The Board believes that the proposed combination with NewMed Energy Limited Partnership ("NewMed") (the "Combination"), which we announced on 29 September 2022, represents the best opportunity to maximise the value of your shares. Specifically, the Combination with NewMed will:
2 Board estimate based on an ongoing independent 3rd party working capital exercise considering the capital requirements of the business, its ongoing financial guarantee obligations and assessing reasonable downside scenarios over an 18-month projection period
4 Includes return of US\$620m associated with the Combination
3 H1 2022A
The Board believes that, as a result of the Combination, the combined entity (the "Combined Group") will have a very high-quality asset portfolio and a resilient revenue base generating regular returns to Capricorn shareholders. This includes the largest interest in the world-class Leviathan Field, enabling the Combined Group to provide gas to growing regional energy markets and potentially LNG to European and international markets. The Combined Group will be competitively positioned to facilitate and further accelerate gas trade and decarbonisation in the MENA region and will invest in the transition to a low carbon energy system in line with its commitment to achieve net zero Scope 1 and Scope 2 carbon emissions by 2040.
The Combination Is The Result Of A Comprehensive Review Of Alternatives: The Board, together with its independent financial and legal advisers, has had more than 20 meetings over the last 12 months to review a broad range of strategic alternatives, including a sale, liquidation, business combinations, asset acquisitions and other transactions, as well continuing as a standalone business. The Board recommended the Combination after a robust and thorough process, having engaged in discussions with multiple counterparties regarding potential transactions and thoroughly reviewing all proposals received.
The Board Is Well-Qualified To Evaluate Alternatives And Has A Strong Track Record Of Delivering for Shareholders: The Board is deeply familiar with Capricorn's business, as well as its challenges and opportunities and is well-positioned to oversee the strategic direction of the Company. The Board, as executives and directors, collectively has 200+ years of oil & gas experience and has executed and overseen more than US\$100 billion in M&A transaction volume. The Board has returned >US\$780 million8 over the past two years and US\$5.5 billion9,10 to shareholders over the last 15 years and proactively repositioned the Company and secured proceeds from the Indian arbitration process.
The Combination Will Deliver More Value Than Palliser's Plan: Palliser's stated purpose in replacing a majority of the Board is to assess "all go-forward strategic options" for Capricorn, including implementing Palliser's Value Optimisation Plan (the "Plan") and terminating the Combination. The Board has reviewed this Plan in detail, along with our independent financial advisors. The Board believes that implementing the Plan and terminating the Combination are not in the interests of Capricorn shareholders. As noted in our recent Presentation, Palliser's Plan is based on an overinflated value of Capricorn which is driven by outdated facts and assumptions (including regarding available cash, the value of potential contingent value rights and the time, costs and challenges associated with executing their Plan). The Plan also underestimates the value creation potential of the Combination and additionally makes a number of incorrect assertions about Capricorn's historical performance and misleading characterisations of the Company's track record in an attempt to gain support for their effort.
6 Premium based on £0.99 exchange value per share and theoretical Capricorn GBP share price ex-dividend of £0.68, announcement date (28 September 2022)
7 Unlevered free cash flow for existing producing assets, according to Leviathan NSAI report as of December 2021 and Capricorn estimate
8 H1 2022A
9 Includes return of US\$620m associated with the Combination
10 Proposed pre-completion special dividend of US\$620m paid to Capricorn's existing shareholders which includes ~US\$15m, which is subject to finalisation of an independent 3rd party report into the fair valuation, which is to be payable to more than 200 participants under the Capricorn share plans, comprising current employees (including the executive directors) and a number of former employees
Additional detail regarding the Board's analysis of the Plan is included in the Presentation appended to this document. We urge Capricorn shareholders to carefully review these materials to ensure they fully understand the risk of potential value destruction. We have real concerns that shareholders who rely on the Plan will likely be voting for value destruction.
Palliser has made its Board nominations in connection with its public opposition to the Combination and after consistent and constructive engagement by management and the Board to address concerns and questions on the Combination and alternative options. Accordingly, in the event that the Proposed Resolutions are passed, the current Board believes there is a material risk that the proposed reconstituted Board may seek to terminate the Combination or otherwise take actions that materially reduce the chances of the Combination successfully completing, which the Board believes would not be in the best interests of all shareholders and could result in value destruction.
Whilst the Board believes the timing of Palliser's requisition notice and nature of the resolutions of the Requested GM are not in the interests of shareholders, the Board is committed to transparency and the highest corporate governance standards, including Board composition. The Board has notified Palliser that, mindful of its fiduciary duties and consistent with UK corporate governance requirements, it requests the opportunity to meet with its nominees in order to share information about the Company's ongoing operations and also wishes to assess the basis on which their experience and skill sets might be complementary and additive to the Board. The Board has also invited each of Palliser's nominees to sign non-disclosure agreements to give them the opportunity to review Capricorn's business plan and additional details about the Combination and the Board's process. This will enable them to better assess for themselves the strategic alternatives that have previously been explored by the Board and to evaluate the body of information underpinning the Board's recommendation of the Combination.
The Board is aiming to publish a combined prospectus and circular, which will contain more information about the Combination with NewMed and convene a general meeting at which shareholders will consider whether to approve the Combination (the "Combination GM"), as soon as possible. The Board is seeking to hold the Combination GM on or around the same date as the Requested GM, so that shareholders can make a fully informed decision about how to vote on the Proposed Resolutions and the Combination resolutions.
The Board urges you not to cast a vote in respect of the Proposed Resolutions in this document until you have received all the documentation for the Combination GM and made up your mind about whether to support the Combination.
The Board is focused on delivering the maximum value to Capricorn shareholders. It believes that the Combination with NewMed will deliver significantly more value than Palliser's Plan and urges Capricorn shareholders to VOTE AGAINST all of the Proposed Resolutions at the Requested GM.
If you vote in favour of one or more of the Proposed Resolutions, this may result in the Combination either being materially delayed or not occurring at all.
On behalf of the Board, thank you for your continued dialogue and investment. We look forward to providing more information on the Combination through the prospectus and circular to be published as soon as possible and to engaging with you further over the coming days and weeks.
Yours faithfully,
Nicoletta Giadrossi Chair
(incorporated and registered in Scotland with registered number SC226712)
NOTICE IS HEREBY GIVEN that a general meeting of Capricorn Energy PLC (the "Company") will be held at 2.00 p.m. (London time) on 1 February 2023 at The Sheraton Grand Hotel, 1 Festival Square, Edinburgh EH3 9SR (the "General Meeting") for the purposes of considering and, if thought fit, passing the following resolutions, which will be proposed as ordinary resolutions, of the Company at the General Meeting or any adjournment thereof:
By order of the Board
Anne McSherry Company Secretary Date: 9 January 2023
Registered Office: 50 Lothian Road Edinburgh EH3 9BY United Kingdom
In order for a proxy appointment or instruction made using the CREST service to be valid, the appropriate CREST Proxy Instruction must be properly authenticated in accordance with Euroclear's specifications and must contain the information required for such instructions, as described in the CREST Manual. The message, regardless of whether it constitutes the appointment of a proxy or an amendment to the instruction given to a previously appointed proxy must, in order to be valid, be transmitted so as to be received by the Registrars (ID RA19) by no later than 2.00 p.m. (London time) on 30 January 2023, or, in the event that the General Meeting is adjourned, not less than 48 hours before the time appointed for the adjourned General Meeting (excluding any part of any day that is not a working day). No such message received through the CREST network after this time will be accepted. For this purpose, the time of receipt will be taken to be the time (as determined by the timestamp applied to the message by the CREST core processor) from which the issuer's agent is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST. After this time, any change of instructions to proxies appointed through CREST should be communicated to the appointee through other means.
CREST Members and, where applicable, their CREST sponsors or voting service provider(s) should note that Euroclear does not make available special procedures in CREST for any particular messages. Normal system timings and limitations will therefore apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST Member concerned to take (or, if the CREST Member is a CREST personal member or sponsored member or has appointed a voting service provider(s), to procure that his or her CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted by means of the CREST system by any particular time. In this connection, CREST Members and, where applicable, their CREST sponsors or voting service provider(s) are referred, in particular, to those sections of the CREST Manual concerning practical limitations of the CREST system and timings, which can be viewed at www.euroclear.com. The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in regulation 35(5)(a) of the Uncertificated Securities Regulations 2001. You may appoint more than one proxy provided that each proxy is appointed to exercise rights attached to different Ordinary Shares. You may not appoint more than one proxy to exercise rights attached to any one Ordinary Share. To appoint more than one proxy, please contact the Registrars on +44 (0)371 384 2660 between 8.30 a.m. and 5.30 p.m. (London time) Monday to Friday (excluding public holidays in England and Wales). Please note that calls to these numbers may be monitored and recorded for security and training purposes.
The right to appoint a proxy does not apply to persons whose shares are held on their behalf by another person and who have been nominated to receive communications from the Company in accordance with section 146 of the Companies Act 2006 ("Nominated Persons"). Nominated Persons may have a right under an agreement with the registered shareholder who holds the shares on their behalf to be appointed (or to have someone else appointed) as a proxy. Alternatively, if Nominated Persons do not have such a right, or do not wish to exercise it, they may have a right under such an agreement to give instructions to the person holding the shares as to the exercise of voting rights.
| "CREST" | the relevant system (as defined in the CREST Regulations) in respect of which Euroclear is the operator (as defined in the CREST Regulations) |
|---|---|
| "CREST Manual" | the rules governing the operation of CREST as published by Euroclear |
| "CREST Member" | a person who has been admitted by Euroclear as a system member (as defined in the CREST Regulations) |
| "CREST Proxy Instruction" | a CREST message properly authenticated in accordance with Euroclear's specifications and containing the information required for such instructions, as described in the CREST Manual |
| "CREST Regulations" | the Uncertificated Securities Regulations 2001 (S.I. 2001 No. 3755), as amended |
| "Euroclear" | Euroclear UK & International Limited |
| "Ordinary Shares" | ordinary shares of 21/13 pence each in the capital of the Company |
| "Registrars" | Equiniti Limited |
In accordance with section 314 of the Companies Act 2006, the below statement is being circulated to shareholders on behalf of Palliser Capital Master Fund Ltd.
A copy of that statement is attached below.
Corporate Affairs Capricorn Energy PLC 50 Lothian Road Edinburgh EH3 9BY United Kingdom
Tel: + 441314753000
Palliser is a global investment fund and one of Capricorn's largest shareholders, holding 6.96% of the company's issued share capital. Our investment team has closely monitored Capricorn for over a decade.
We seek to safeguard shareholder value by giving shareholders an opportunity to vote on resolutions (the "Resolutions") which, if passed in their entirety, will immediately:
Two of the existing independent non-executive directors, Catherine Krajicek and Erik Daugbjerg, are more appropriately positioned to remain on the Board to ensure a degree of continuity.
The Resolutions reflect our loss of confidence in the judgment and priorities of the current Board and its sustained inability to execute a value accretive corporate strategy for shareholders. In particular, the Board:
We shared our concerns with the broader market on 9 August and 27 October, together with our Value Optimisation Plan underpinned by detailed analysis from market-leading independent advisers and industry experts. Regrettably, the Board has refused either to engage in meaningful dialogue with us on the Value Optimisation Plan or to provide any clarity as to strategic alternatives if the NewMed deal is not approved.
Following a rigorous search process, we have identified six outstanding Director Candidates who are independent of Palliser and possess the necessary mix and depth of skills and experience, including extensive Egypt-focused oil & gas expertise, that Capricorn urgently needs. These appointments would bring fresh perspectives to the Board to facilitate a comprehensive re-evaluation of the optimal corporate strategy and the executive leadership required to ensure that Capricorn's full value potential is realised.
We are pleased to introduce the Director Candidates to you:
Hesham has over 32 years' experience in senior management roles in the global energy industry, including most recently as BP's Regional President for North Africa. He transformed BP's Egypt business by identifying and translating complex growth opportunities into tangible outcomes, including successfully leading negotiations for the modernization of the fiscal and commercial terms of BP's Egyptian concessions. Given his wealth of industry knowledge and unique region-specific experience, Hesham is an ideal candidate to ensure Capricorn maximises the potential of its Egyptian assets.
Chris has over 40 years' experience in the global oil & gas sector; most recently as CEO of Spirit Energy and MD of Centric a's E&P business after senior roles at BG Group, Amerada Hess, and Chevron. He has extensive experience navigating complex M&A transactions worldwide. Chris possesses deep knowledge of a broad range of disciplines relevant to Capricorn's portfolio including subsurface, drilling, projects, operations, M&A and N management.
Maria is a seasoned independent non -executive director with over 20 years' experience, including as chair, senior director, and committee member of various public companies. She also has decades of direct investment experience in senior roles at premier international asset management firms, including as Head of Emerging Markets Equity Strategy at Goldman Sachs and PIMCO.
Craig has nearly three decades of senior international executive experience across a wide range of industries in operational and strategic, legal/M&A and project leadership roles in over 50 countries. His executive career spans senior levels of private and public companies (including FTSE 100 and ASX 20), such as Brambles, Transurban, CIMIC, Lend Lease and Fosters. Most recently, Craig was CEO and director of an Australian Government Authority where he led multibillion dollar urban development projects.
Richard is a veteran in the oil & gas sector with over 40 years' experience across the world's major petroleum provinces, including as CEO and director of Frontera Energy Corporation, COO of Exploration at BP (where he had operational responsibility for hydrocarbon discoveries in multiple countries, including Egypt), and Executive VP of Talisman Energy Inc.
Tom has over 25 years' global investment banking and private equity experience, serving in senior leadership positions at Credit Suisse, Morgan Stanley and D.E. Shaw. He is currently a partner at LionRock Capital, a private equity firm investing primarily in Europe and Asia. Tom also has extensive emerging markets and capital markets experience, having covered equity, credit and derivative investments whilst managing relationships with an array of institutional and retail investors.
We strongly believe that the proposed change in board composition and appointment of the Director Candidates is firmly in the best interests of all Capricorn shareholders. We are confident that, if appointed, the Director Candidates would carefully and transparently, assess all strategic options available to Capricorn, including the Value Optimisation Plan.
We look forward to sharing more information about the Director Candidates over the coming weeks prior to the General Meeting.
Please refer to www.ReformCapricorn.com for further information on the Value Optimisation Plan and to keep up to date with Palliser's ongoing engagement with Capricorn.
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| NEWMEDENERGY | |
Palliser's "Value Optimisation Plan" purports to deliver more value than the proposed Capricorn/NewMed Combination. Their Plan relies on several outdated and incorrect facts and assumptions – we are providing additional information to allow shareholders to assess the key issues
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Source: Company information
(including the executive constant of US\$220m pad to Capricom's existing, shashing heads to be a finite particle including the finite of particle including which is to be payable on more than 201
| NEWMEDENERGY |
|---|
| Net Cash | Of this, US\$9m is restricted cash and US\$44m is in Egypt to support near term capital commitments, debt liquidity tests and also pay Shell is US\$597m, US\$34m -1 lower than Palliser's assumption due to ongoing investment in Egypt US\$25m due in January (amounts not available for capital return) Capricorn's current cash balance |
|---|---|
| Egyptian Assets |
Exploration Value: Palliser has ascribed US\$47m of value to exploration, which should not be included in core NAV or Fair Market JS\$335m requires multi-year capital investment. Capricom has guided the market to capex of ~US\$75m per year from 2023 to 2026 Capex Requirement: Palliser's assumed value with no further investment is just US\$71m. They fail to state that their full 2P value of 2C Valuation: Palliser's valuation of 2C resources is based on a 2P NPV/boe multiple – this approach fails to incorporate the additional capital required to deliver 2C resources. Many of these resources have not been defined as economically viable or price deck materially exceeds lending bank, peer assumptions and futures curve 2 recoverable within current lease periods Oil Price Assumption: Palliser's Value |
| UK Contingent Proceeds |
The fair value of the UK receivable has reduced from US\$241m at 30 June 2022, to US\$205m 2,3 as a result of falling oil prices (for ~US\$120m of the expected receivable is already factored into Capricom's working capital projections (and could not be distributed) The fair value of the UK receivable is a future estimate, subject to external factors further details see Supporting Materials) |
| Contingent Proceeds Senegal |
Palliser values the Senegal contingent payment at US\$73m, its risked value is US\$57m as a result of an increased risk of delay linked to Woodside's revised start-up guidance to "late 2023" and no contribution to its 2023 production guidance from Sangomar |
| Source: Company Disclosure: ERCE Eair Market Valuation Report: Bloomberg as of 25 October 2022 |
Source: Company Disclosure, ERCE Far Market Valuation Report, Bioomberg as or 25 October 2022
The Company of the Company of the Company of the Company of the Company of the Company of C.315 million shares as per latest RNS
$\overline{5}$
After correcting the facts and assumptions, the Plan would deliver significantly less value than the Combination
After correcting Palliser's Plan, the NewMed Combination delivers more value than the Palliser Plan. The value of Palliser's Plan looks even worse when adjusted for an average market P/NAV discount
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| NEWMEDENERGY É |
(1) Palliser's Plan Also Relies on A Number of Undeliverable Assumptions (Cont'd) | Capricorn |
|---|---|---|
| incorrect facts and assumptions, fails to reflect key discounts and costs The Plan relies on several outdated and |
||
| Distributions Shareholder |
distribute ~US\$500m on a standalone basis in the near-term, based on an ongoing working capital The Combination allows Capricorn to pay a pre-completion cash dividend of US\$620m, of which ~US\$605m will be returned to 5m required to satisfy dividend equivalent rights in existing Company share plans1 existing shareholders with ~US\$1 Capricorn expects to be able to П П |
|
| Palliser's analysis fails to take account of exploration commitments, financial guarantees and working capital requirements idated for the prospectus (see Supporting Materials) exercise 2 being independently val $\overline{\phantom{a}}$ |
||
| ~US\$120m of this is included in the working capital requirements of the business and the company would need to retain a material stake in contingent payment are now worth ~US\$260m3.4 Palliser's estimated US\$314m of ▅ ▅ |
||
| Contingent Proceeds 3 |
As a result, ~US\$140m is the maximum that could hypothetically be distributed any instrument distributed to be aligned with holders ■ |
|
| Further, a CVR instrument has several challenges, could not be held by many investors and would likely trade at a discount $\mathcal{L}_{\mathcal{A}}$ |
||
| Cost Cutting | G&A to market cap ratios of its London-listed peer group Capricorn has one of the lowest П |
|
| Capricom has already implemented G&A reductions , reducing headcount by one-third in 2022 which is expected to deliver an annual G&A saving of ~US\$7.5m per year from 2024, while other cost-saving measures are ongoing |
||
| Source: ERCE Fair Market Valuation as of 1.ully 2022; 12% discount rate applied; GBPUSD FX rate: 1.14; Capricon share count of c.315 million shares as per lates (Regioner Proposed pre-completion special dividend to Caprico |
Source: ERCE Fair Marker Valuation Report, Molecond Resound Total CORPUSD FX rate: 114: Capricon share count of 315 million shares as per latest RNS disclosure; Proposed pe-completion special dividend to Capricon's existin
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| Without the Co Palliser's state |
ment that Capricorn's Board is | mbination is false m on a standalone basis withholding capital returns to pressure shareholders to vote on the Co m in the near-ter US\$500 mbination, Capricorn could pay out only ~ |
|---|---|---|
| " | review the capital requirements of the business for the prospectus, including its financial guarantee obligations and assessing ~US\$120m higher than could be paid out on a standalone basis, verified by an independent working capital exercise to distribution to shareholders in Q1 2023 associated with the NewMed Combination is reasonable downside scenarios over an 18 month projection period2 (see Supporting Materials) The proposed US\$620m1 |
|
| 3DOOLVHU)DLOVWR7DNH | " | Of the US\$620m distribution, ~US\$605m will be returned to existing shareholders with ~US\$15m required to satisfy dividend equivalent rights in existing Company share plans3 |
| \$FFRXQWWKH :RUNLQJ&DSLWDO ,QWR |
" | The working capital report (which is being prepared as part of the Combination Circular) has tested for downside scenarios both operational (production, capex and opex) as well as oil price |
| 6WDQGDORQH&DSULFRUQ PHQWVRID 3ODQ´ LQLWV³ 5HTXLUH |
" | mitments across Egypt and the rest of the portfolio, in addition to the continuous production and development drilling campaign in Egypt mitments include approximately US\$47m of exploration com The Company's capital com |
| " | mitments include US\$69m of bank guarantees to the government of Mexico in relation to exploration licence commitments as well as operations in Egypt and Mauritania The Company's financial guarantee com |
|
| scenarios " |
shareholders in the short- to medium-term and further returns may not be possible at all under certain downside On a standalone basis, the Company is unlikely to be in a position to return material additional retained cash to |
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Source: Company information, Israeli Electricity Authority report
1 Production on WI Basis. 2 Leviathan Phase 1B and Aphrodite have not been approved yet.
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Source: Company disclesure, Factest as at 30-Dec2022 fc FX Rate
https://www.php?company.com/interview/the free are immedial. iPH 2022A as cut off alse given inconsistency in reportions of peers. 3 Includes relum of US\$520m
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6RXUFH&RPSDQ\LQIRUPDWLRQ)DFWVHWDVDW'HFEquity research reports. (Permission to quote neither sought or provided) ï3URSRVHGSUHFRPSOHWLRQVSHFLDOGLYLGHQGRI86PSDLGWR&DSULFRUQ¶VH[LVWLQJVKDUHKROGHUVZKLFKLQFOXGHVSD\RXWRIFDVKVXPVWRSDUWLFLSDQWVLQFHUWDLQRI&DSULFRUQ¶VVKDUHSODQVZKLFKDUHUHIHUDEOHWRWKHHIIHFWRIWKHSURSRVHGWUDQVDFWLRQ %DVHGRQH[FKDQJHYDOXHSHUVKDUHDQGWKHRUHWLFDO&DSULFRUQ*%3VKDUH SULFHH[GLYLGHQGRIDQQRXQFHPHQWGDWHWK 6HSWHPEHU
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Source: Company information
I Based on £0.99 exchange value per share and theoretical Capricorn GBP share price ex-dividend of £0.68, announcement date (28º September 2022).
| FDVKUHWXUQ Transaction enables Capricorn to maximise the cash return to shareholders, with the total dividend an estimated ~US\$120m higher than the P 6 &DSULFRUQVKDUHKROGHUVWKURXJKD8 Company could return on a standalone basis over the near-term due to working capital requirements2 PHGLDWHFDVKYDOXHXSIURQWIRU P 6XEVWDQWLDOL x |
|---|
&DSULFRUQVKDUHKROGHUV PWR PLX A ~46% premium to Capricorn share price at time of announcement3 PELQDWLRQSURYLGHVDVLJQLILFDQWSUH &R 3URSRVHG x |
&DSULFRUQVKDUHKROGHUV 33% accretive to Capricorn shareholders' 2P + 2C reserves and resources per share PELQDWLRQLVVLJQLILFDQWO\YDOXHDFFUHWLYHWR &R 3URSRVHG x |
2bn boe of net 2P & 2C reserves and resources, c.US\$3bn UFCF cumulative expected in 2023-27E4, policy to distribute a minimum 30% of ZLWKVXEVWDQWLDOUHWXUQVSRWHQWLDO PSDQ\RIVFDOH PJDVIRFXVHGHQHUJ\FR FCF pre growth capex after financing costs ZWKIUR )XWXUHYDOXHJUR x |
Leviathan emissions intensity amongst the lowest in the world, deal creates the largest gas-focused energy company in LSE premium segment PLFV ZWKDQGHQHUJ\WUDQVLWLRQG\QD PLFJUR 3RVLWLRQHGWREHDEHQHILFLDU\RIHQHUJ\VHFXULW\HFRQR by 2P Reserves x |
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Working Capital Requirements (Being Independently Verified for Prospectus)
Capricorn
Under the Reasonable Worst Case (RWC) paying a US\$500m dividend is challenging whilst paying a US\$620m dividend is unrealistic
Source: Independent Working Capital Report Currently in Progress
Proposed provided to the Control of Decembent Provident Provident Provident Provident Provident Provident Provident
≀ Proposed pre-completion special divide
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Several inaccuracies require correction for shareholders to evaluate the Value Optimisation Plan outlined. We note that ERCE is an oil and gas reserves auditor and comment in their report that they are not regulated to provide investment advice
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Capricorn's Board and Advisers have considered whether distribution of contingent value rights to shareholders would allow greater direct return of value to shareholders, but concluded that the option would materially erode shareholder value
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Source: https://www.woodside.com/docs/default-sourcelesx-announcements/2022/investor-briefing-day-2022_pdf?sfvrsr=bb5fa28d_S
↑ https://www.woodside.com/docs/default-sourcelasx-announcements/2022/2023-full-year-guidance.p
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The new Capricorn shares have not been, and will not be, registered under the U.S. Securities Act 1033, as amended (the "U.S. Securities Act") or under the securities laws of any state or other jurisdiction of the United S shares may not be offered, sold or delivered, directly or indirectly, in or into or form the United States absent registration under the U.S. Securities Act or an exemption therefrom. The new Capricorn shares are expected from the registration requirements of the U.S. Securities Act provided by Section 3(a)(10) thereof. Under applicable U.S. securities laws, persons (whether or not U.S. persons) who are or will be "affiliates" (within the m or NewMed prior to, or of Capricorn after, the consummation of the Recommended Combination will be subject to certain U.S. transfer restrictions relating to the Napricorn shares received pursuant to the Scheme.
The Recommended Combination will be subject to UK and Israeli procedural and disclosure requirements and practices, which differ from those of the United States.
The Recommended Combination relates to the acquisition of an Israeli limited partnership and is proposed to be effected by means of a scheme field by means of a scheme of arrangement is not subject to proxy solicitation or tender offer rules under the U.S. Exchange Act. Accordingly, the Scheme is subject to the disclosure requirements, rules and practices applicable in Israel to schemes of arrangement, which differ from or tender offer rules.
The financial information herein has been prepared in accordance with IFRS and may not be comparable to financial information of comparies whose financial statements are prepared in accordance with U.S. GAAP.
It may be difficult for U.S. holders to enforce their rights and claims antism gainting out of the U.S. federal securities laws, since Capricorn and NewMed are located in countries other than the United States, and some or countries other than the United States. U.S. holders may not be able to able to sue a non-U.S. company or its officers or directions in a non-U.S. count for violations of the U.S. securities laws. Further, it may be diffic subject themselves to a U.S. court's judgment. This presentation is not intended to and shall not constitute an offer to buy or sell or the solicitation of an offer to buy or sell any securities, or a solicitation of any vote or approval, nor shall there be any offer, such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. This presentation should be read in conjunction with the announcement made or to be made by MewMed and Capticom, the prospectus and shareholder circular to be published by Capricom and any other relevant documents relating Combination published by NewMed and/or Capricorn, which are available or will be made available in due course at www.capricornenergy.com or via other means as required or appropriate. Any decision taken in relation to the only be taken by reference to the information set out in (or otherwise incorporated by reference into) such documents.
Donnelley Financial Solutions 439400
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