Capricorn Energy PLC

Annual Report

and Accounts 2024

Capricorn Energy PLC Annual Report and Accounts 2024

2024 Highlights

At a glance

Our strategy

Capricorn is a cash flow-focused energy producer, with

a portfolio of onshore development and production assets

in the Egyptian Western Desert. Our objective is to create

value for our stakeholders through the development

and production of oil and gas and ultimately, the delivery

of consistent shareholder returns.

Capricorn’s strategy is focused on developing the scale

and longevity of the business to maintain strong cash

flows and deliver consistent shareholder returns.

Net working interest (WI) oil and gas production

averaged

23,763

boepd

Egypt oil and gas sales revenue

$147m

Year-end net Group cash

$23m

Cash and cash equivalents of $123m

less debt drawn of $100m

Shareholder returns

$57m

 Read more on Environmental, social and governance on pg 10

 See our KPIs on pg 9

Capricorn Energy PLC

Annual Report and Accounts 2024

Strategic Report Corporate Governance Financial Statements Additional Information

Contents

Strategic report

Chair’s statement 2

CEO’s review 3

Strategy and business model 5

Market overview 6

Stakeholders and s172 statement 7

Measuring our performance 9

Environmental, social and governance 10

Risk management 15

Viability statement 16

Principal risks 17

TCFD reporting 23

Financial & operational review 31

Corporate governance

Board of Directors 36

Corporate governance statement 38

Audit committee report 44

Sustainability committee report 49

Nomination and governance committee report 50

Directors’ remuneration report 53

Directors’ report 67

Financial statements

Independent auditors’ report to the members

of Capricorn Energy PLC 71

Group income statement 77

Group balance sheet 78

Group statement of cash flows 79

Group statement of changes in equity 80

Section 1 – Basis of preparation 81

Section 2 – Oil and gas assets, operations and

other non-current assets 83

Section 3 – Working capital, financial instruments

and long-term liabilities 90

Section 4 – Income statement analysis 99

Section 5 – Taxation 106

Section 6 – Discontinued operations 110

Section 7 – Capital structure and other disclosures 112

Company balance sheet 115

Company statement of cash flows 116

Company statement of changes in equity 117

Section 8 – Notes to the Company financial statements 118

Additional information

Licence list 124

Group reserves and resources 125

Glossary 126

Company information 127

www.capricornenergy.com

Chair’s statement

Strategy and

business model

Market overview

Environmental, social

and governance

pg 2

pg 5

pg 6

pg 10

Capricorn Energy PLC

Annual Report and Accounts 2024

CHAIR’S STATEMENT

I am honoured to present my first annual

report as Chair of Capricorn Energy,

having been appointed at the 2024 AGM

in May following the departure of Craig

van der Laan. I would like to thank Craig

for his dedication to transforming the

business; he brought invaluable insight

and expertise to the role and it was a

pleasure to serve on his Board. I would also

like to thank Hesham Mekawi following

his resignation from the Board in June;

his deep experience in the industry and

region was vital to Capricorn during its

transition period. Finally, we welcomed

Sachin Mistry as a Non-Executive Director

at the May AGM as a representative of

one of Capricorn’s largest investors,

Palliser Capital.

Consistent delivery and

clear strategic direction

Today’s Capricorn is a fundamentally

different company to that of two years

ago. This is undoubtedly due to the team’s

efforts in delivering the strategic priorities

communicated by the Company over the

past two years. Capricorn’s culture reset

was led with a focus on capital returns,

resulting in more than $600m returned

to shareholders over the period.

We exited almost all non-core activities in

2024, resulting in minimal spend outside

Egypt in the year, and we are on target

to achieve an approximate 80% reduction

in general and administrative (G&A)

costs from 2022 to 2025. We are now

in a position to draw a line in the sand

and focus on unlocking the highest

possible value from our assets in

Egypt. Capricorn has a clear strategy

and direction for the new business,

demonstrated by improved operational

and market performance, reflecting

our commitment to our shareholders

and to Egypt.

Capital discipline

and financial stability

Continued capital discipline and cost

control now form the foundation of our

Company culture and we have made

substantial progress in strengthening our

balance sheet, providing greater stability

for the business. This financial strength

underpins our ability to unlock the clear

value opportunities in the Company and

pursue strategic goals to deliver long-term

value to our shareholders.

In H1 2024, the stabilisation of the

Egyptian economy improved the

regularity of payments on our outstanding

receivables position, supporting our

strategy to develop a self-sufficient

business in Egypt that only invests what

it will return. We will continue to monitor

future capital expenditure commitments

against collection of receivables. Since

my appointment, management has

dedicated a significant amount of time

to improving our knowledge of the

producing assets, as well as the working

relationships with our partner, Cheiron,

and the Egyptian Government and we

are already benefiting from improved

predictability of operating results.

In the year to 31 December 2024,

Capricorn has collected $135m in

receivables, providing us with greater

confidence that we will continue to

receive payments at regular intervals.

Maximising asset potential through

strengthened relationships

Our strategic focus remains on maximising

the potential of our assets and deepening

our relationships with our partners in

Egypt. Through production optimisation

and improved concession agreement

terms, we aim to enhance the value of

our operations.

We also resumed development activity

in the region following constructive

discussions with the Egyptian General

Petroleum Corporation (EGPC)

on payments.

CEO Randy Neely, together with

Eddie Ok, CFO and Geoff Probert, COO,

have brought extensive experience of

operating in Egypt, demonstrated by their

achievements at TransGlobe Energy, and

we are confident in our ability to achieve

a successful outcome to our concession

agreement negotiations to better reflect

current market conditions. We believe this

collaborative approach will help increase

production and tax receipts for the

country and enhance our ability to deliver

sustainable value to our shareholders.

Outside Egypt, our objective is to diversify

and expand operations while continuing

to evaluate M&A prospects in the UK

North Sea and MENA region, and exploring

new opportunities to enhance shareholder

value through strategic investments

and partnerships.

Looking ahead

As we move forward, Capricorn remains

dedicated to maximising value and to

delivering sustainable growth for our

shareholders. With a clear strategy

spearheaded by improved concession

agreement terms, disciplined fiscal

approach and strong relationships,

alongside a commitment to responsible

business practices, we are ensuring that

Capricorn is the partner of choice for all

stakeholders and is well-positioned for

continued success.

Maria Gordon

Chair

27 March 2025

“Capricorn remains dedicated

to maximising value and to

delivering sustainable growth

for our shareholders.”

Capricorn Energy PLC

Annual Report and Accounts 2024

Strategic Report Corporate Governance Financial Statements Additional Information

CEO’S REVIEW

Building momentum

as we unlock value

2024 was a pivotal year for Capricorn

during which we continued to improve

the operational performance of the

Egyptian business and continued our

culture of financial discipline, which helped

the Company achieve the upper end

of production guidance. Following the

strategic reset of the business in 2023 to

become the cash flow–focused energy

producer that we are today, we have made

significant progress on delivering our

business plan to unlock further value

from our assets.

Key highlights

Highlights for the year include a more

favourable fiscal environment in Egypt

and improved operational alignment with

our JV partner, prompting us to resume

investment in May 2024 with a full year

total net capital expenditure of $63m. This

included various infrastructure projects

and the drilling of 11 development and

two committed exploration wells, fulfilling

our outstanding work commitments

across our three licences.

Full year WI Egypt oil and gas production

was 23,763 boepd, comprising 44%

liquids, generating revenues of $147m at

an average realised oil price of $79.3/boe

and a fixed gas price of $2.9/mscf. Our total

production costs were $42m ($4.8/boe).

Net cash generated from Egypt oil and gas

production was $106m, with overall Group

net cash of $23m, comprising $123m cash

and $100m debt.

Our stronger balance sheet allowed us to

continue to deliver on our commitment

to shareholder returns with around $57m

returned in 2024. This was a combination

of a $50m special dividend paid in the

first half of the year and the resumption

in June 2024 of the $25m share buyback

programme initially announced in May

2023, which completed in November

2024. This takes the total capital returned

to shareholders to approximately $620m

since Q1 2023 and returning excess

capital to shareholders remains a core

focus going forward.

In December 2024, the Company was

notified by Woodside Energy (“Woodside”)

that all terms and conditions had been

satisfied under the sale and purchase

agreement relating to the disposal of our

production sharing contract (PSC) interests

in Senegal, following which a receipt of

$50m was collected in January 2025.

We withdrew from our last remaining

non-core interest in Mexico at the end

of Q2 2024. We also continued our efforts

to refine our overheads and are on track

to achieve our target of approximately

80% reduction in G&A costs from 2022

to 2025.

Cash flow focus

At the beginning of the year the leadership

team was strengthened with Eddie Ok

joining as CFO, and Geoff Probert as

COO, adding significant financial and

operational expertise, particularly in Egypt.

Their addition perfectly complements the

capabilities and dynamism of Capricorn’s

existing team of experts who have been

undertaking day-to-day responsibilities

and dealing with legacy issues, as well as

actively exploring business development

and M&A opportunities.

Over the year the team has been working

hard to improve our knowledge of and

optimise our producing assets in Egypt

with the goal of establishing a more

predictable operations base. Working

with our operating partner Cheiron, we

prioritised liquids-focused operations in

the Badr El Din (BED) area and renewed

our efforts to actively manage those

reservoirs with water injection to improve

profitability. This has increased our

understanding of the portfolio and led

to better forecasting of both operating

results and cash collections, with cash

receipts totalling $135m during the year.

Key to delivering our goal of improved

cash flows in Egypt is strengthened

alignment with EGPC through the

negotiation of improvements to our

concession agreements, incentivising

the partnership to invest and grow

reserves and production in Egypt,

satisfying domestic oil and gas demand

and reducing the country’s reliance on

imports. The Government recognises

the industry’s need to encourage

more investment and Egypt’s Minister

of Petroleum and Mineral Resources

has outlined his intent to improve the

investment environment to boost oil

and gas production in country.

In Q3 2024, together with our operating

partner Cheiron, Capricorn proposed

an amendment to consolidate the

eight jointly owned existing Egyptian

development concession agreements

into a single, integrated concession

agreement. EGPC formally convened an

investment committee in September

2024 to assess the proposal, with the

process expected to complete in 2025.

The process is well established in Egypt, as

Eddie, Geoff and I successfully initiated it

in while at TransGlobe Energy, so we have

a track record of securing improved fiscal

terms, acting as a stimulus to production

and generating investment.

M&A

Outside of Egypt, our priority is to develop

the scale and longevity of the business to

increase cash flows and deliver consistent

shareholder returns. Our objective is

to diversify and expand operations by

leveraging our core corporate capabilities

to identify, acquire and exploit the right

assets in the right locations. We are

currently evaluating M&A opportunities in

the UK North Sea and in the MENA region

against a strict set of strategic, financial

and returns criteria, and look forward

to updating the market on our efforts

when appropriate.

“Following the strategic reset of

the business in 2023 to become

the cash flow-focused energy

producer that we are today, we

have made significant progress

on delivering our business plan to

unlock further value from our assets.”

Capricorn Energy PLC

Annual Report and Accounts 2024

2025 Outlook

Following a transformational two years,

Capricorn now has the operational and

capital discipline, conservative balance

sheet, assets, expertise and Egypt’s

improved fiscal environment to realise the

embedded value within the Company.

Most importantly, a key milestone in

unlocking further value in our asset base

will be achieved through the amendment

to the terms of our concession agreements

to support increased investment and

strengthened returns, and we expect

this process to complete in H1 2025. It is

clear that EGPC and the Ministry are as

motivated as we are to create the right

investment environment to incentivise the

industry to go after additional production

and reserves. Our self-funding Egyptian

asset base provides a solid foundation from

which to grow, and we remain committed

to aligning our Egyptian investment with

funds available and generated in country.

The Egyptian business environment

continues to improve, providing us with

assurances that overdue receivables will

continue to be repaid.

We were pleased to report the receipt of

$50m in January after satisfying all terms

and conditions related to our disposal of

the Sangomar asset to Woodside Energy.

The Company’s stated desire to return

the $50m payment from Woodside has

been impacted by the requirement to

retain cash for any future tax obligations in

Senegal related to the divestment, along

with Waldorf Production UK’s (“Waldorf’s”)

failure to pay Capricorn $22.5m when

due in January 2025.

Capricorn’s investment proposition

remains compelling as we enter H1

2025 with significant momentum and

a sharp focus on developing the scale

and longevity of the business to build

cash flows that will ultimately grow our

production base.

I would like to thank my colleagues and

shareholders for their continued support

and look forward to another year of

delivery in 2025.

Randy Neely

CEO

27 March 2025

CEO’S REVIEW CONTINUED

“Capricorn now has the operational

and capital discipline, strengthened

balance sheet, assets, expertise

and improved fiscal environment

to realise the embedded value

within the Company.”

Capricorn Energy PLC

Annual Report and Accounts 2024

Strategic Report Corporate Governance Financial Statements Additional Information

Build scale

and longevity to

deliver consistent

shareholder

returns

STRATEGY AND BUSINESS MODEL

Capricorn is a cash flow–focused energy producer with a portfolio of onshore development

and production assets in the Egyptian Western Desert. Our objective is to create value for

our stakeholders through the development and production of oil and gas and ultimately the

delivery of consistent shareholder returns.

Capricorn’s strategy is focused on developing the scale and longevity of the business to maintain

strong cash flows that deliver consistent shareholder returns.

Near term

(< 1 year)

Legacy receipts

UK North Sea deal

Diversify and expand operations

Medium term

(< 3 years)

Long term

(3–10+ years)

Strategic priorities

Operational

excellence

Our objective is to diversify

and expand operations

by leveraging our core

corporate capabilities to

identify, acquire and exploit

the right assets in the

right locations.

Prudent

approach to risk

management

We seek to identify and

effectively manage the

existing and emerging risks

and opportunities which

are key to our long-term

success and sustainability.

Capital

discipline

We apply rigorous capital

discipline to investment

decisions and portfolio

management to optimise

capital allocations and take

a balanced approach to

business reinvestment.

Conservative

balance sheet

Our capital structure

mitigates our exposure

to price shocks, building

agility into our balance

sheet and greater control

and flexibility of our

capital programme.

Self-funding

business model

We maximise the value of

the Egyptian asset within a

self-funding business model

with production assets

providing the cash flow

to sustain activities.

Egypt concession agreement modernisation

Capricorn Energy PLC

Annual Report and Accounts 2024

MARKET OVERVIEW

Egypt outlook – stable political

environment bolstered by significant

external cash injection

Stable oil prices continue

The political environment in Egypt remains stable where

President Abdul Fattah al-Sisi won a third six-year term in

December 2023 leading to the appointment of a new cabinet

mid-2024. This included the introduction of Karim Badawi

as the new Minister of Petroleum and Mineral Resources.

Through 2024, foreign exchange reserves started to recover

following significant outflows in 2022. In the early part of the year

over $50bn of foreign currency was injected into Egypt through

a number of sources including a large scale $35bn deal with the

UAE to invest in Ras El Hekma. The deal was followed by loans

from several development partners including an $8bn loan from

the IMF, $8bn from the EU and $7bn from the World Bank. This

was in return for structural reforms that included the Egyptian

Central Bank floating the Egyptian Pound and a significant

interest rate hike. This boosted key Egyptian foreign exchange

reserves to $34bn at the end of 2024, easing the recent foreign

currency crisis. Following the material funding injection Egypt

is anticipated by the World Bank to start a gradual recovery in

growth from an estimated 2.5% in FY24 toward 4.2% by FY26.

This relatively constructive picture was set against ongoing

macroeconomic challenges including the escalation of the Middle

East conflict impacting foreign income sources, most notably

the Suez Canal revenues. The situation was also compounded

by geopolitical events, including the conflict in Ukraine and Gaza

and historic inflation. Higher international oil and gas prices also

put pressure on Egypt as the country increased LNG imports

to supplement domestic gas production in meeting growing

gas demand.

Significantly, in order to incentivise investment, Egypt remains

open to discussing amendments to fiscal terms.

Benchmark Brent crude oil prices averaged $81/bbl, broadly

similar to the 2023 average of $80/bbl as markets remained

relatively balanced, global inventories drawing only slightly year-

on-year. Although stable year-on-year, there was volatility within a

range of $70/bbl and $90/bbl with a peak of $93/bbl in mid-April

on rising tension between Iran (sixth largest oil producer) and

Israel and the risk that conflict could disrupt global oil supplies.

Slow oil demand growth due to weakening global economic

growth was compounded by relatively high supply outside of

the OPEC+ countries cushioning the impact of rising geopolitical

tensions in the Middle East and shipping disruptions in the Red

Sea. U.S. oil production reached a record high of 13.2m bopd in

late 2024, while production in Guyana and Canada also increased

through the year.

To guard against price weakness OPEC+ announced delays to

production increases on multiple occasions, albeit the oil price

in Q4 2024 eased to $75/bbl as risk of supply disruptions eased

with Israel electing not to attack Iranian oil infrastructure.

What does this mean for our industry?

Greater payments but energy deficit.

Compared to 2023, the improved National Balance Sheet has

seen more payments to international oil companies operating

in Egypt. Capricorn received $135m in 2024 compared to

$109m in 2023. However, the country is in a growing energy

deficit on both oil and gas, underlining the need to incentivise

and support ongoing investment and application of technology

by international upstream companies to develop domestic

hydrocarbons. This is set against delivering reliable energy

for a growing population of over 110m.

What does this mean for our industry?

Positive backdrop for oil focused investment.

As oil prices remain above the 10-year average this provides

a positive backdrop for continued investment in the sector with

Capricorn maintaining a focus on drilling oil development wells.

We anticipate continuing this strategic position particularly set

against Egyptian gas prices at ~$16/boe.

How are we responding?

The improved payment environment, particularly through H1 2024,

meant that our 50:50 JV with Cheiron was able to build the rig

count to three rigs. This has contributed to production reaching

the top end of guidance.

How are we responding?

Capricorn continued to produce relatively equal amounts of oil

and gas, however given the significantly better economic rate

of return relative to gas, we focused development drilling on oil

through 2024.

Capricorn Energy continues to focus on upstream oil and gas activities to

maximise shareholder value and returns. This is concentrated on our existing

operations in Egypt with developments in country and the wider oil price

environment key to business performance.

Capricorn Energy PLC

Annual Report and Accounts 2024

Strategic Report Corporate Governance Financial Statements Additional Information

STAKEHOLDERS AND S172 STATEMENT

The Board fully recognises the need

to balance the contrasting and, at

times, conflicting interests of various

stakeholder groups, whilst focusing on the

Company’s purpose, values and strategic

priorities. Such engagement underpins

the governance framework embedded

throughout our business and helps to

ensure we maintain the highest standards

of business conduct.

Throughout the past year, there has

been substantial engagement regarding

a number of significant matters which

has helped shape the Company’s

actions. These include the return of cash

to shareholders, ongoing operational

arrangements and the energy transition.

All key business decisions considered

included an analysis of stakeholder

considerations, anticipated impact

and any mitigating factors.

Supporting Section 172

Section 172 of the Companies Act 2006

sets out that a Director should have regard

to stakeholder interests when discharging

their duty to promote the success of the

Company. The Directors of Capricorn

Energy PLC consider, both individually

and together, that they have acted in

accordance with their duties codified

in law, which include their duty to act in

the way in which they consider, in good

faith, would be most likely to promote the

success of the Company for the benefit

of its members as a whole, having regard

to the stakeholders and matters set out

in Section 172(1) of the Companies

Act 2006.

Details of how the Board and senior

management engage and foster strong

relationships with some of our key

stakeholders, and examples of the impact

of this engagement, are set out below.

Further information can also be found

throughout the Strategic Report and in our

exploration of key strategic decisions made

in the Corporate Governance Report.

The Directors of Capricorn Energy PLC, and those of all UK companies, are

bound by their duties under the Companies Act 2006 to promote the success

of the Company for the benefit of its members and in doing so, having regard

to the interests and views of all relevant stakeholders. Continuous engagement

is integral to our day-to-day operations and working together towards shared

goals is a key factor in facilitating the long-term success of the business.

Why is it important

to engage?

How the Board and/or

management engaged Key topics of engagement

Examples of the impact of such

engagement and actions taken

Investors

‒ The views of our

investors influence our

strategic and operational

decision-making

‒ We are dependent on

shareholders for access

to funding

‒ We are accountable

to our shareholders

‒ Holding approximately

70 investor meetings,

including one-to-ones and

attending conferences

‒ Conducting regular

financial reporting

‒ Responding in a timely

manner to investor

and analyst enquiries

‒ Offering shareholders

the opportunity to submit

questions by email in

advance of general

meetings (as well as being

able to raise questions at

the meetings themselves)

‒ Post–general meeting

correspondence to discuss

vote outcomes

‒ Strategy and performance

‒ Return of cash to

shareholders

‒ Corporate governance

‒ Environmental, social and

governance (ESG) matters

including energy transition

‒ Regular reviews of

corporate objectives

‒ Return of cash being

conducted by way of

special dividend as

opposed to tender offer

Capricorn Energy PLC

Annual Report and Accounts 2024

Why is it important

to engage?

How the Board and/or

management engaged Key topics of engagement

Examples of the impact of such

engagement and actions taken

Governments

‒ We are responsible to them

for compliance with local

and/or international laws

‒ Their permissions

are required for us

to access acreage and

obtain payments

‒ Meetings with heads of

state, UK and country

ambassadors, ministers

and civil servants

‒ Legal compliance

‒ Major accident prevention

‒ Investment and

economic growth

‒ ESG matters

‒ Continued monitoring of

responsible performance

at Board meetings and

annual review of key Group

policies and objective key

performance indicator

(KPI) setting

‒ Implementation of

enhanced incident

reporting system

‒ Reviewing feedback

and commentary

from government and

regulatory bodies regarding

performance expectation

‒ KPIs include performance

against leading and lagging

indicators for health, safety,

security and environmental

(HSSE) protection

Business partners,

peers and contractors

‒ We are reliant on

our partners in joint

ventures (JVs)

‒ We are commercially

responsible to contractors,

suppliers and partners

‒ Their performance directly

impacts our financial,

operational and responsible

performance

‒ Meetings with partners,

peers and contractors in

addition to regular joint

venture (JV) and operations

planning meetings

‒ Maintaining membership

of industry bodies

‒ Active management of

key projects and assets

(including alignment

of project deliverables)

‒ Policies and standards

‒ Industry reputation

‒ Investment opportunities

for growth

‒ Long-term relationships

‒ ESG matters

‒ Careful selection

of contractors

‒ Continued membership of

the International Association

of Oil & Gas Producers

(IOGP)

‒ Actively engage with JV

partners and governments

to ensure good working

relationships

Local communities

and interest groups

‒ We have an ethical

responsibility to maximise

social and economic benefit

and to minimise impact

on livelihoods and the

environments in which

we operate

‒ They provide an alternative

perspective, strengthening

our knowledge of local

situations and/or specific

demands

‒ Community meetings

‒ Reviews of social investment

strategies aligned with

United Nations Sustainable

Development Goals

(UN SDGs)

‒ Senior management visits

‒ Media monitoring

‒ Transparency of payments

to governments

‒ Protection of resources

and livelihoods

‒ Community development

and social investment

‒ Access to employment and

business opportunities

‒ Education assistance

‒ Community investment

focused on maintaining

strong stakeholder

relationships in areas

where we have assets

or an office base

‒ Continued membership

of the Extractive Industries

Transparency Initiative

Employees

‒ We are dependent on

employees’ performance

and that of the wider

workforce

‒ We have a legal and ethical

responsibility for their

well-being

‒ They bring a diverse

perspective to the

identification of

opportunities and

ways of working

‒ Regular staff meetings

‒ Employee Voice Forum

(EVF) meetings

‒ Exit interviews

‒ Benefits

‒ Internal mobility

‒ Cost-of-living increases and

inflationary pressures in the

economy

‒ Collaboration across teams

‒ Review of employee

benefits

‒ Well-being strategy

development

STAKEHOLDERS AND S172 STATEMENT CONTINUED

Capricorn Energy PLC

Annual Report and Accounts 2024

Strategic Report Corporate Governance Financial Statements Additional Information

MEASURING OUR PERFORMANCE

F: Health and safety

(LTIF rate)

2022

2023

2024

0.16

2024 performance decreased versus

2023 with respect to long-term injury

frequency (LTIF).

Capricorn included data on non-operated

incidents in 2024 versus only operated

incidents in 2022 and 2023. Our operating

partner in Egypt performed strongly in

health and safety and achieved health and

safety benchmarks better than IOGP.

B: Net production

(boepd)

2022

2023

2024

34,200

30,044

23,763

Net production was 21% lower

in comparison to 2023.

WI production in 2024 across the

four main concession areas was at the

upper end of the guidance range for WI

production of 20,000 – 24,000 boepd.

Capricorn focused on improving

knowledge of and optimising the

producing assets in Egypt with the

goal of establishing a more predictable

operations base. The partnership

prioritised liquid-focused operations in the

BED area and efforts continue to actively

manage reservoirs with water injection,

to add production and reserves.

E: Receivables position

($ million)

2022

2023

2024

$97m

$169m

$18 4m

The receivables balance increased by 9%

in comparison to 2023.

There was a material improvement of

collections against Capricorn’s Egypt

accounts receivable since year-end 2024

with cash receipts of $135m in 2024

compared to $109m in 2023. Collections

in the first half of the year were strong,

but there was a significant deterioration in

the second half of the year. The Egyptian

business environment did improve in

2024 and we will continue to monitor

future capital expenditure commitments

against collection of receivables.

G: Scope 1 and 2 equity emissions

(tCO

2022

2023

2024

269,635

226,900

143,460

Scope 1 and 2 emissions reduced by 37%

in comparison to 2023.

Scope 1 and 2 emissions reduced

significantly in 2024 due to a number of

factors including the implementation of

decarbonisation initiatives in the assets.

Scope 1 greenhouse gas (GHG) emissions

reduced by 20%, routine flaring by 52%,

methane emissions by 2% and diesel

consumption by 13%.

C: Opex costs

($/boe)

2022

2023

2024

$5.7boe

$5.4boe

$4.6boe

Opex costs were 15% lower in comparison

to 2023.

Operating costs benefited from the

devaluation of the Egyptian currency.

D: Net 2P entitlement reserves

(mmboe)

2022

2023

2024

27.2

20.8

15.6

The Group 2P reserves decreased by 25%

in comparison to year-end 2023.

Reserves decreased by 5.2 mmboe during

the year from 20.8 mmboe at year-end

2023 to 15.6 mmboe at year-end 2024

on an entitlement interest basis. This was

principally due to Egyptian production

of 3.6 mmboe and downward revisions

in undeveloped reserves due to lower

planned drilling activity in expiring

licenses, and upward revisions to include

net entitlement on a before tax basis.

A: Cash receipts from operations

($m)

2022

2023

2024

$104m

$109m

$135 m

Cash collections in Egypt have continued

to grow year-on-year as Capricorn work

closely with our partner and EGPC to

address the ongoing receivables position.

We use both financial and non-

financial metrics to manage long-term

performance and monitor progress

against pre-defined strategic objectives.

Capricorn Energy PLC

Annual Report and Accounts 2024

ENVIRONMENTAL, SOCIAL AND GOVERNANCE

Over the past two years, Capricorn has transitioned from a larger exploration company

managing multiple assets to a more streamlined organisation with a non-operated stake in

onshore Egyptian assets. As a result of reducing our operations and size, the Company chose

to undertake a double materiality assessment (DMA) to reassess our material topics in light

of these changes to the Company’s scope of operations. This has enabled us to refocus our

ESG and sustainability efforts to be more representative of Capricorn today.

Double material topics

GHG emissions (GRI 11.1)

As an oil and gas company Capricorn

contributes to global GHG emissions

through its operations. We are working

to reduce our emissions and mitigate our

impacts through various projects. This

topic also brings financial risk, as future

carbon taxes, carbon border adjustment

mechanisms and methane regulations

could lead to increased costs associated

with Capricorn’s business.

Climate adaptation, resilience

and transition (GRI 11.2)

There are negative climatic impacts

from the burning of oil and gas, however

if Capricorn’s domestic supply to the

Egyptian market is replacing more

emission-intensive imports or the use of

more emission intensive fuels such as coal,

then this could have a net positive impact

on the country’s emissions. It is likely that

there will be financial risks associated with

climate change, through more frequent

extreme weather events (e.g. droughts,

heat stress, windstorms, etc.) that could

lead to both increased operating and

capital expenditures.

Occupational health and safety

(GRI 11.9)

Occupational health and safety is a key

topic for Capricorn as the negative impact

of an accident involving our workers or the

local environment could be significant,

hence we place large amounts of resource

into ensuring this does not occur.

Impact material topics

Water and effluents (GRI 11.6)

Capricorn’s assets in the Egyptian Western

Desert are located in an area of high water-

stress as per the Aqueduct Water Risk

Atlas. As a result, we are working together

with our JV partner to reduce any potential

negative impacts.

Employment practices (GRI 11.10)

Capricorn has a direct impact on the

people that we employ in our offices as

well as those employed in our operations.

Non-discrimination and equal

opportunity (GRI 11.11)

Capricorn has a direct impact on the

people that we directly employ in our

offices but a more limited influence on

those who are employed at our assets.

A breach of this topic would be a breach

of human rights and so it is considered

material to Capricorn.

Financial material topics

Conflict and security (GRI 11.18)

Escalation and widening of the conflict

between Israel and Gaza could lead to

financial risks for Capricorn’s business in

Egypt. While Capricorn’s direct operations

are unlikely to be affected, there could be

knock-on financial risks from supply issues

in the region due to the ongoing conflict

and any spill over tension.

Anti-corruption (GRI 11.20)

Capricorn has assets in a country deemed

high risk for bribery and corruption.

Egypt is ranked as ‘high risk’ for bribery in

Transparency International’s Corruption

Perceptions Index. The Company ensures

that it complies fully with the UK Bribery

Act in all jurisdictions in which we operate

to mitigate against this risk.

It was decided that the remaining 14

GRI 11 topics were non-material, based

on Capricorn’s non-operator status and

the regulatory environment in which

we operate and that our operators

are required to be compliant with.

While these topics do not meet the

threshold of materiality with regards to

ESG, they remain important to us. We

are committed to the ongoing review

of these topics and to updating their

materiality as required.

This process was conducted in consultation

with key internal staff and used topics from

the Global Reporting Initiative (GRI) oil

and gas sector 11 guidance. The impact

materiality (Capricorn’s outward impact on

stakeholders and the environment) and

financial materiality (impact on Capricorn)

was assessed for 22 topics.

This resulted in the designation of each

topic as either non-material, impact

material, financially material or double

material. It is important to note that

within these designations the topics

are not ranked against each other.

The matrix shows the topics material to

the business at the time it was completed.

We are committed to reviewing this as

the Company evolves or if external factors

change, to ensure it remains an accurate

reflection of Capricorn’s operations.

Capricorn Energy PLC

Annual Report and Accounts 2024

Strategic Report Corporate Governance Financial Statements Additional Information

Impact materiality

6 10 11

Double materiality

1 2 9

Non-material

Financial materiality

18 20

Materiality matrix

The outcome of Capricorn’s DMA is represented in the materiality matrix below:

Capricorn’s DMA results displayed in a matrix highlighting the materiality of the GRI 11 topics.

GHG emissions

Climate adaptation, resilience

and transition

Air emissions

Biodiversity

Waste

Water and effluents

Closure and rehabilitation

Asset integrity and critical incident

management

Occupational health and safety

Employment practices

Non-discrimination and

equal opportunity

Forced labour and modern slavery

Freedom of association and

collective bargaining

Economic impacts

Local communities

Land and resource rights

Rights of indigenous peoples

Conflict and security

Anti-competitive behaviour

Anti-corruption

Payments to governments

Public policy

Materiality topics

Working responsibly

We are committed to working responsibly as part of our strategy to deliver value in a safe, secure

and environmentally responsible manner for our stakeholders. Our responsible business principles

are integrated into our systems and processes and determine how we work, helping us to behave

responsibly for our people, the environment and society.

The UN SDGs provide a framework from which to assess the impact and increase the value of Capricorn’s activities, and we look

to contribute positively towards them.

Our reporting covers those assets and activities of which we have operational control. It does not include the performance of

non-operated joint venture activities; however, we do consider the risks associated with our partners’ positions and their control

of such activities.

Capricorn Energy PLC

Annual Report and Accounts 2024

Governance Environment People Society

Material topics

For more on our business principles visit: www.capricornenergy.com/working-responsibly/

‒ Anti-corruption ‒ GHG emissions

‒ Climate adaptation,

resilience and transition

‒ Water and effluents

‒ Occupational health

and safety

‒ Employment practices

‒ Non-discrimination and

equal opportunity

‒ Conflict and security

Highlights

‒ Sustainability Committee

met twice in 2024 to

discuss ESG issues.

‒ Anti-bribery and corruption

and tax evasion compliance

training programme

completed across the

Group.

‒ Worked with our partners

to deliver anti-bribery and

corruption training to higher

risk roles.

‒ Risk assessments for

bribery and corruption and

tax evasion updated.

‒ Business and operational

management systems

refreshed to ensure they

were suitable for the Group.

‒ Frequent risk review

meetings completed with

all departments to review

and discuss ESG risks and

opportunities.

‒ Successfully executed

decarbonisation projects in

Egypt which, compared to

2023, resulted in a:

• 20% reduction in GHG

emissions;

• 52% reduction in routine

flaring;

• 26% reduction in

methane emissions;

• 13% reduction in diesel

consumption.

‒ The JV received an

Operational Energy

Efficiency award, presented

by the Minister of Petroleum

and Mineral Resources, for

achievements in enhancing

efficiency and reducing

emissions and flaring the

Obaiyed concession.

‒ The Group remains on

target to meet our short-,

medium- and long-term

emission reduction targets.

‒ Invested in improving

drought resilience in the

local community through a

social investment project.

‒ Operating partner

performed strongly in

health and safety, with

rates lower than IOGP

benchmarks.

‒ Completed a test

exercise of the Group’s

business resilience plan,

IT disaster recovery plan

and emergency response

capability.

‒ 100% completion rate for

all mandatory training.

‒ Zero reported breaches of

the Group Code of Ethics.

‒ Zero reported grievances.

‒ Implemented new software

to simplify HR processes

and improve employee

experience.

‒ Group travel risk

assessments completed

for all staff travelling to

areas with increased above

ground risks.

‒ Delivered a community

investment partnership

project improving housing

and drinking water access

infrastructure, income

generation initiatives

and veterinary clinics

for livestock.

‒ Supported new graduates

through continued

sponsorship of the Al Amal

Programme and two,

six-month internships at

Capricorn Egypt.

‒ The Group’s COO and our

Managing Director Egypt

completed a safety visit

to the NEAG-1 Production

station in the Western

Desert and the Egyptian

Petrochemicals Company

(EPC) gas monitoring and

measurement facilities

in Alexandria.

Priorities

‒ Continued commitment

to ethical operations and

ESG matters.

‒ Implementation of controls

to ensure Economic Crime

and Corporate Transparency

Act 2023 compliance.

‒ Continued delivery of

decarbonisation initiatives

in the assets to support

short-, medium- and long-

term emission reduction

targets.

‒ Employee engagement

via feedback and project-

related work.

‒ Review and implementation

of new well-being strategy.

‒ Review and implementation

of new learning portal.

‒ Commitment to maintain

and build trust with local

communities via social

investment partnership

supporting development

projects, job creation and

educational initiatives.

‒ Completion of safety

leadership visits to

Egyptian assets.

UN SDG alignment

Overarching goal, applicable to all material topics

ENVIRONMENTAL, SOCIAL AND GOVERNANCE CONTINUED

Capricorn Energy PLC

Annual Report and Accounts 2024

Strategic Report Corporate Governance Financial Statements Additional Information

Governance

Capricorn is committed to delivering

value in a safe, secure, environmentally

and socially responsible manner for our

stakeholders. Delivering our strategy,

achieving our objectives and creating

long-term value for our shareholders

requires robust, transparent corporate

governance. Good governance, combined

with our responsible culture, helps to

ensure that the Company continually

works to benefit our stakeholders.

Anti-corruption

Capricorn has a zero-tolerance position

on bribery, fraud and corruption. We have

developed mitigation measures and

undertake anti-bribery and corruption

assessments whenever we enter a new

territory or seek new business partners.

We also maintain due diligence in all of

our operating locations even when our

presence is established. Our business

partners, service providers and staff

are expected to act with honesty and

integrity, and all employees are trained

in anti-bribery and corruption policies

and procedures. We track and act on any

incidents of corruption, provide training

on anti-corruption policies and track

employee compliance and adherence

rates annually. A whistleblowing

mechanism is also in place to allow

employees to raise any concerns

about corruption.

In 2024, anti-corruption training was

provided to all employees across the

Group. Capricorn also worked with our

operating partners to deliver training to

staff in higher risk roles. We refreshed

the Group and country anti-corruption

risk assessments and continued to

perform due diligence on prospective

contractors and business partners

using a risk-based approach.

Environment

We are committed to being a responsible

energy producer and strive to prevent

and minimise our overall impact on the

environment.

GHG emissions

Our operations have an impact on the

environment through the emissions

generated by our activities. We remain on

track to meet our short-, medium- and

long-term emissions reduction targets

related to the Paris Agreement, as set out in

our emissions reduction pathway (see p28).

The majority of our GHG emissions relate to

our non-operated activities, so we use an

equity approach. Emissions include Scope

1 and 2 emissions and Scope 3 emissions

including business travel and commuting.

We explore ways to reduce these emissions

by collaborating with the operator in Egypt

and implementing an active GHG reduction

programme. In 2024, in comparison to

2023, the joint venture has successfully

cut GHG emissions by 20%, reduced

routine flaring by 52% and reduced diesel

consumption by 13%. Ongoing initiatives

executed include electrification of the BED,

NEAG and AESW concessions and replacing

diesel with gas turbines. In comparison to

2023, Capricorn’s total Scope 1 and 2 equity

emissions reduced by 37%.

Climate adaptation,

resilience and transition

Part of our efforts to manage the energy

transition is recognising our role in

supporting Egypt as a developing economy.

Egypt is a net importer of oil and gas, and

with 100% of Capricorn’s product used

within the domestic market, the Company

will continue to provide a high-quality

product to Egypt while implementing

increasingly efficient production initiatives.

We are aware that future risks, including the

energy transition, may impact our employees

with regard to job security. While we support

the decarbonisation of our asset base in

Egypt, the oil and gas industry underpins the

country’s economy and is one of its priority

industries, meaning there is no short- to

medium-term risk, and we expect our

employees to be able to enjoy a full career.

As part of Capricorn’s energy transition

planning, our emissions reduction

targets and ESG risks are included in

the Company’s risk register. We plan to

mitigate or manage climate-related risks

through avoidance, reduction, substitution,

sequestration and carbon offsets and

we do not expect any of our assets to be

closed early due to climate-related risks.

GHG emissions from operated activities (SECR)

Unit 2024 2023

Scope 1 (direct) emissions from fuel combustion, flaring and waste incineration tCO

UK 16.14 113.64

Capricorn Total 59.05 1,392.76

Scope 2 (indirect) emissions (location-based) from electricity consumption tCO

UK 44.71 149.26

Capricorn Total 74.73 181.84

Total gross Scope 1 and Scope 2 emissions tCO

UK 60.85 262.90

Capricorn Total 133.78 1,574.60

Total energy consumption kWh tCO

UK 315,541 1,340,000

Capricorn Total 589,798 1,419,444

GHG intensity ratio of Scope 1 and Scope 2 emissions to 1,000 hours worked tCO

e/1,000 wh tCO

UK 1.06 1.2

Capricorn Total 1.41 4.2

Scope 3 tCO

Business travel – UK 386.45 576.20

Business travel – Capricorn Total 386.45 576.20

Commuting emissions – UK 22.8 66.90

Commuting emissions – Capricorn Total 107.24 200.57

Capricorn Energy PLC

Annual Report and Accounts 2024

ENVIRONMENTAL, SOCIAL AND GOVERNANCE CONTINUED

Where possible, we make positive

contributions to climate change

adaptation, such as through our social

investment programme in Egypt.

Activities include the construction of

rain harvesting wells to improve drought

and famine resilience in communities

neighbouring our assets.

We exercise transparency with our lenders

by demonstrating how we will reduce

our emissions, and our current debt

agreement is subject to an Environmental

and Social Action Plan with requirements

related to a GHG emissions reduction

plan and the elimination of routine

flaring by 2030. Our Group Contracting

Procurement Procedure also requires

emissions data to be provided from

potential suppliers where appropriate.

Water and effluents

Access to clean, safe water for local

communities is a fundamental human

right that is enshrined in the UN SDGs and

we take our responsibility for protecting

and maintaining these resources seriously.

Our Corporate Environmental and

Climate Change Policy (CECP) outlines

our commitment to efficient operations

regarding water usage. It aims to protect

water sources and water quality where

we operate, promotes the efficient

usage of water, and includes the need to

engage with local communities to ensure

environmental resources are conserved.

Our social investment programme in

2024 included the construction of 80

rain harvesting wells in communities to

improve drought and famine resilience.

People

Our people are the key to our success

and their well-being, safety and security

are core values underpinning how we

do business. We have an excellent safety

record that we are determined to maintain

as we continue to develop the business,

prioritising health and safety, fairness,

inclusion and opportunity to help create

a professional, talented, diverse and

engaged workforce.

Occupational health and safety

We have HSSE policies and procedures

in place extending to our contractors,

subcontractors, suppliers and visitors to

mitigate workplace hazards and risks. As a

non-operator, all Capricorn employees are

office-based and unlikely to be exposed

to potential hazards associated with field

operations, however appropriate risk

assessment procedures such as journey

management plans and safety inductions

for visitors to our offices are in place to

ensure suitable protections.

We have a dedicated budget for

developmental and work-related training,

providing employees with access to external

training in addition to in-house workshops to

ensure compliance with legislative updates,

industry standards and objective-related

requirements. Roles and responsibilities

are reviewed regularly to aid succession

planning and the developmental and

personal ambitions of our employees.

The reporting of any HSSE-related issues

is encouraged and we actively raise

awareness among the wider workforce

and provide support. We also have a

whistleblowing mechanism in place to

ensure that anyone who raises a concern

or highlights potential or actual breaches

receives support and respect.

Employment practices

We support the work-life balance of our

employees by offering flexible start and

finish times, enhanced leave benefits,

the opportunity to work from home,

and access to a variety of well-being

programmes and initiatives aimed at

addressing social, financial, physical or

mental health issues they may be facing.

We also offer regular opportunities to

provide feedback to the leadership team

on any adjustments required.

Staff are offered a range of health and

well-being support, including access to an

employee assistance programme (EAP)

and private medical and dental insurance. A

healthcare allowance is in place to encourage

staff to maintain an active lifestyle, and our

EAP and BUPA memberships provide access

to a range of online resources to help improve

physical and mental health. As part of our

well-being strategy, we will also provide

employees with a variety of community

volunteering opportunities throughout 2025.

We promote a positive workplace culture

through regular employee engagement,

such as our EVF and regular one-to-one

management meetings used to gather

feedback from employees and discuss

appropriate actions. In 2025 our annual

employee survey will also be reintroduced

following a pause during the Company’s

restructure in 2023 and 2024.

Non-discrimination and

equal opportunity

Capricorn is committed to creating a

diverse and welcoming workplace where

we consider how specific groups may

be subject to discrimination and seek to

address these issues. We continuously

review the recruitment and equality,

diversity and inclusion policies we have

in place to ensure that all employees are

treated fairly and in a consistent manner.

A Company-wide annual salary process

is conducted to ensure equal pay and

consistency across the organisation, using

third-party and market benchmarking data

to inform our decisions and ensure that our

pay is competitive, fair and bias-free.

The Company also has policies

and procedures in place to prevent

discrimination, including annual

mandatory training, and in 2025

we will conduct in-house training

specifically covering the subject of

sexual discrimination. We have robust

processes in place to monitor, record

and report grievances, and any cases

of discrimination are dealt with under

our internal procedures, ensuring a full

investigation takes place and appropriate

actions are taken.

We work closely with our recruitment

partners to ensure that the people we

choose have the right skills and experience

required for the role. When advertising

directly, we use a platform that ensures

a wide range of candidates have visibility

of our opportunities.

Society

We seek to make a positive difference by

investing in efforts to support economic

and community development. We

consider it a privilege to work in any host

country and recognise that we must

manage and mitigate any potential risks

and impacts associated with our activities

to support communities that may be

affected by our operations.

Conflict and security

Our JV partner implements high HSSE

standards to protect the safety of the local

community and the environment. The

Crisis Emergency Management Procedure

is designed to mitigate and minimise the

occurrence of any potential incidents,

consisting of training in how to respond in

the event of an emergency, the provision

of equipment and resources and robust

protocols to ensure clear communication

between Capricorn and our JV partner

with neighbouring operators.

Capricorn indirectly employs field workers

from the local community through our JV

partner and we have formal agreements

in place to ensure the implementation

of consistent, safe and fair working

practices. We also perform periodical

checks of working conditions and provide

feedback to our JV partner to ensure

that contractors are treated fairly and

consistently.

As part of our commitment to health

and safety, the Group’s COO and our

Managing Director Egypt completed two

safety leadership site visits to the NEAG-1

Production station in the Western Desert

and to the EPC gas monitoring and

measurement facilities in Alexandria.

The objective was to meet with the local

leadership teams to get an overview of the

operations and to reinforce Capricorn’s

commitment to high standards of health

and safety.

Capricorn Energy PLC

Annual Report and Accounts 2024

Strategic Report Corporate Governance Financial Statements Additional Information

RISK MANAGEMENT

Successful and sustainable implementation of our strategy requires strong corporate governance and

effective risk management. We deliver this through a comprehensive framework of business policies,

systems and procedures that enable us to assess and manage risk effectively.

Managing business risks

Managing existing and emerging risks and

opportunities is essential to Capricorn’s

long-term success and sustainability.

All investment opportunities expose

the Group to political, commercial and

technical risk and Capricorn maintains

exposure to these risks at an acceptable

level in accordance with its appetite

for risk.

As in previous years, Capricorn’s risk

management process is based on

a holistic approach and provides a

systematic process for the identification

and management of the key risks and

opportunities which may impact the

delivery of the Group’s strategic objectives.

KPIs are set annually and determining the

level of risk the Group is willing to accept

in the pursuit of these objectives is a

fundamental component of Capricorn’s

risk management framework. As outlined

below, this integrated approach to the

management of risk and opportunity

plays a key role in the successful delivery

of the Group’s strategy. Capricorn’s system

for identifying and managing risks is

embedded from the top down in its

organisational structure, operations and

management systems, and accords

with the risk management guidelines

and principles set out in ISO 31000.

The Group’s risk management structure

is set out below. This framework for

risk assessment applies to all risk types

including operational, health and safety,

environmental, financial, strategic

and reputational.

In 2024, the Board completed a robust

assessment of the Company’s emerging

and principal risks.

Risk governance

Overall responsibility for the system of

risk management and internal control

rests with the Board. Principal risks and

opportunities, as well as progress against

key projects, are presented at each

Board meeting.

The Group’s framework for risk

management promotes a bottom-up

approach to risk management with

top-down support and challenge. The

risks associated with the delivery of the

strategy and work programmes, and

the associated mitigation measures

and action plans are maintained in a

series of risk registers at Group, country,

department and project level. Reporting

of these risks within the organisation

is structured so that risks are escalated

through various internal management

and Board committees, and to the

Board itself.

At the third line of defence is the co-

sourced internal audit function which

provides assurance on the effectiveness

of our risk management process and

other key controls to the Board and

its committees.

Group’s risk management framework

Risk governance framework

Outline the

strategy

Set a sustainable

strategy to achieve

Capricorn’s near- and

longer-term goals.

Define strategic

objectives

Set clear strategic

objectives.

Define risk

appetite

Determine the level of

risk the Group is willing

to accept in the pursuit

of its strategic objectives

and document this

in the Group Risk

Appetite Statement.

Identify

key risks

Identify key risks to

the achievement of

strategic objectives and

associated opportunities,

through discussions at

Board, management

team, country and

functional levels.

Apply risk

assessment

process

Apply the Group risk

assessment process to

ensure the ongoing

management of key risks

to our objectives.

Deliver strategic

objectives

Delivery of strategic

objectives through

informed risk-based

decision making and

target progress

through KPIs.

The Board

Holds overall responsibility

for the Group’s risk management

and internal control systems.

Sets strategic objectives

and defines risk appetite.

Sets the tone and influences

the culture of risk management.

Completes robust assessment

of principal risks.

Audit Committee

Chaired by Non-Executive Director in 2024.

Monitors and reviews the scope and effectiveness

of the Company’s systems of risk and internal control.

Reviews principal risks.

Department managers

Perform quarterly deep-dive reviews of the Group risk register and

assess risk actions, control effectiveness and risk ownership.

Asset/project/function level

Risk identification, assessment and

mitigation completed at country,

department and project level.

Risk management system embedded

and integrated throughout the Group.

Risk culture influencing all business activities.

Top-down: Oversight, accountability, monitoring and assurance

Bottom-up: Identification of risks and mitigating actions for assets, projects and functions

Capricorn Energy PLC

Annual Report and Accounts 2024

VIABILITY STATEMENT

In accordance with the provisions of the UK Corporate Governance Code,

the Board has assessed the viability of the Group over a period longer than

the 12-month period required for its going concern assessment.

Period of assessment

The Directors have assessed the viability

of the Group over a three-year period to

March 2028. In selecting the length of

period over which to assess viability,

the Board has considered the following:

‒ The Group’s financial outlook is

assessed primarily through its business

planning process. At least annually the

Board considers the Group’s business

plan and cash flow projections over

a three-year period.

‒ Key assumptions which underpin

the Group’s internal forecasts include

forecast oil prices, production profiles,

forecast cost levels for drilling and

operations, the level of future capital

investment and availability of debt

under the Group’s borrowing facilities.

The Board considers that most

significant risks to the business are

shorter term in nature, in particular

those associated with asset

performance, volatility of commodity

prices and availability and repayment

of debt under the current facilities.

‒ The Group’s longer-term work

programme in Egypt is dependent

upon collection of the Group’s

receivables, and, while the operator

routinely produces a five-year business

plan, the Directors will only commit

to expenditures on a far shorter time-

frame to match against payments

received in-country.

Consequently, the Board has determined

that three years is the appropriate period

over which to assess the Group’s viability.

Principal risks

The Directors have considered the impact

of the principal risks of the business

on the Group’s financial viability over

the assessment period as well as the

mitigation strategy in respect of those

risks. While all of the risks could potentially

impact performance, the principal risks

and uncertainties that are considered

to affect the Board’s assessment of the

Group’s financial viability in this period are:

‒ operational performance of its

producing assets;

‒ the effect of volatile oil and gas prices

on the business, on our partners, and

other stakeholders’ financial positions;

‒ volatility of cash revenue receipts in

Egypt due to irregular settlements of

trade receivables due from

EGPC and the impact on future

capital investment;

‒ the inability to secure new

opportunities to grow the business

outside of Egypt;

‒ a lack of availability and/or increased

cost of debt facilities to fund our

capital programme and execute

our strategy; and

‒ the inability to make further cash

returns to shareholders.

Financial forecasts

The Group’s base case financial

forecasts are based on the following key

assumptions that reflect the principal risks

as follows and are consistent with those

assumptions used in the going concern

assessment performed by the Board:

‒ production profiles and expenditure

forecasts on an asset-by-asset basis

based on the Group’s business plan

based on the revised field life and

economic terms across concessions

expected to be ratified in the

summer of 2025;

‒ forecast oil prices in line with

the two-year forward curve and

$65/bbl thereafter;

‒ Egypt trade receivables settlement

forecasts based on monthly invoices

and additional six-monthly bullet

payments to reduce the historic

receivables position;

‒ Forecast availability and repayments

of debt based on year-end

redetermination model in respect

of the RBL facility.

Downside sensitivity analysis was

undertaken on the base case scenario,

reflecting a more severe impact of the

principal risks, both individually and in

aggregate as follows:

‒ Lower crude oil prices, with a fall to $65/

bbl over the period;

‒ A 20% reduction in forecast production

volumes through 2026 and 2027 and

a 30% reduction in 2028;

‒ Increased delays in recovering Egypt

receivables with a reduction to monthly

receivables and no additional bullet

payments;

‒ Increased administration costs

of 10% and,

‒ An additional cash outflow in respect

of Senegal contingent tax liability.

In addition, Group has considered a more

severe oil price crash scenario assumed

to occur in the current year, with prices

dropping to $40/bbl and recovering by

the end of 2026.

Taking this into account, in both downside

scenarios the Group is forecasting

sufficient financial headroom throughout

the assessment period.

Conclusion

The Directors’ assessment of viability is

based on the Group’s current position,

prospects, and the principal risks and

uncertainties affecting the business.

As part of this analysis the Directors

have also considered mitigations that

could be deployed to increase headroom

although not required in either of the

main downside scenarios tested. Further

possible actions currently being pursued

by the Directors but not considered as

mitigants in the current assessment

include the acquisition of a cash flow–

generating asset in the UK North Sea,

contributing to Group overheads and

refinancing of the Egypt debt increasing

the amortisation period.

Based on this analysis, the Directors have

a reasonable expectation that the Group

can continue in operation and meet its

liabilities as they fall due over the three-

year period to March 2028.

Capricorn Energy PLC

Annual Report and Accounts 2024

Strategic Report Corporate Governance Financial Statements Additional Information

Impact

HighSignificantMediumLowInsignificant

Low Medium High

Likelihood

Emerging risks

Within the Group’s risk assessment framework, emerging risks

are considered as part of the identification phase. These are risks

that cannot yet be fully assessed, risks that are known but are

not likely to have an impact for several years, or risks which

are unknown but could have implications for the business

moving forward. Capricorn monitors updates from

organisations updates such as BRINDEX and Oil & Gas UK

and reviews the World Economic Forum Global Risks Report

to better understand emerging trends in the sector.

Capricorn’s concessions in Egypt are the Group’s primary

revenue generating assets and any material political or fiscal

country destabilisation could potentially disrupt or, in the

extreme, immobilise the Group’s Egyptian operations. The

Group is actively looking to grow the asset base and considers

potential emerging macroeconomic exposures which could

degrade the value of opportunities.

PRINCIPAL RISKS TO THE GROUP IN 2024-2025

The following pages provide a summary overview of the principal risks to

the Group at the end of 2024, the potential impacts, the mitigation measures,

the risk appetite and the KPIs or strategic objectives the risks may impact.

Risk

Viability

Increasing EGPC receivables balance Y

Volatile oil and gas prices Y

Failure to replace long-term reserves and

resources

Underperformance of Egypt assets Y

Political and fiscal uncertainties Y

Future challenges and costs as markets

transition to net zero

Lack of adherence to HSSE policies

Principal risk: Increasing EGPC receivables balance

Strategic objective

Self-funding

business model

Owner:

Chief Financial Officer

Risk appetite

Low – The Group faces an uncertain economic and regulatory

environment in some countries of operation. The Group is willing

to invest in countries where political and/or fiscal risks may occur,

provided such risks can be adequately managed to minimise the

impact where possible.

Impact Mitigation 2024 movement Related KPIs

‒ Reduced capital

availability leading

to less drilling with

impact on reserves

and production

‒ Requirement for

cash injections from

existing funds

‒ Uncertain financial

outcomes

‒ JV partner default on

facility agreement and

other agreements

Maintain positive

relationships with

governments.

Active and regular

discussions with EGPC to

agree payment schedules.

Payment in Egyptian Pounds

where amounts can be

immediately reinvested

in the JV.

Other settlement

mechanisms available.

This risk remained static in 2024.

As at December 2024, the Company had $180m in

outstanding accounts receivable due from EGPC.

There was a material improvement of collections against

Capricorn’s Egypt accounts receivable since YE2024 with

cash receipts of $135m in 2024 compared to $109m in

2023. Collections in the first half of the year were strong, but

there was a significant deterioration in the second half of

the year. The Egyptian business environment did improve

in 2024 and we will continue to monitor future capital

expenditure commitments against collection of receivables.

Egypt has never defaulted on oil and gas, and has

always honoured payment obligations.

A: Cash

receipts from

operations

B: Net

production

E: Receivables

position

Capricorn Energy PLC

Annual Report and Accounts 2024

PRINCIPAL RISKS TO THE GROUP IN 2024-2025 CONTINUED

Principal risk: Volatile oil and gas prices

Strategic objective

Self-funding

business model

Owner:

Chief Financial Officer

Risk appetite

Medium – Exposure to commodity prices is fundamental to the

Group’s activities; however, the Group manages its investment

programme to ensure that a threshold economic return is delivered

and the business model is funded even in sustained downside

price scenarios.

Impact Mitigation 2024 movement Related KPIs

‒ Reduction in future

cash flow

‒ JV partner capital

constraints

Sensitivity analysis

conducted to assess

robustness of Group financial

forecasts for funding plan.

Operators’ cost initiatives

delivering material cost

reductions on development

projects.

Plan expenditure within

cash flow receipt forecast.

This risk remained static in 2024.

An underlying increase in demand, combined with

below target supply from OPEC and continued tension

over the Ukraine and Gaza crises, helped to maintain

higher oil prices in 2024.

Oil price fluctuations are expected to continue in 2025

and this could materially impact the cash flow from

Egypt production.

A: Cash

receipts from

operations

B: Net

production

C: Opex

Costs

E: Receivables

position

Principal risk: Political and fiscal uncertainties

Strategic objective

Conservative

balance sheet

Owner:

Chief Executive Officer

Risk appetite

Medium – The Group faces an uncertain economic and regulatory

environment in some countries of operation. The Group is willing

to invest in countries where political and/or fiscal risks may occur,

provided such risks can be adequately managed to minimise the

impact where possible.

Impact Mitigation 2024 movement Related KPIs

‒ Loss of value

‒ Uncertain financial

outcomes

Operate to the highest

industry standards with

regulators and monitor

compliance with the Group’s

licence, PSC and taxation

requirements.

External specialist advice

sought on legal and tax

issues as required.

Maintain positive

relationships with

governments and

key stakeholders.

Ongoing monitoring of

the political and regulatory

environments in which

we operate.

Working responsibly

is an important factor

in maintaining our access

to funding.

This risk remained static in 2024.

Egypt experienced significant economic challenges in

2023 and 2024, which led to the currency’s devaluation

and an inflation spike. Capricorn’s primary revenue

generating assets are based in Egypt and there is a risk

that further political or fiscal challenges may impact on

business activities, including further pressures on the

receivables balance.

The Group received a notification relating to the 2020

sale of its Senegal assets, claiming that a registration

duty and capital gains payment should have been

paid on the transfer to Woodside of our PSC interests.

Woodside, as recipient of the tax assessment, has filed

an action with the High Court of Dakar disputing this

assessment in Q3 2024. Woodside paid the full $50m

contingent consideration to Capricorn in January 2025.

A: Cash

receipts from

operations

Capricorn Energy PLC

Annual Report and Accounts 2024

Strategic Report Corporate Governance Financial Statements Additional Information

Principal risk: Failure to replace long-term reserves and resources

Strategic objective

Operational excellence

Owner:

Chief Operating Officer

Risk appetite

Medium – Reserves and resources replacement is an element of

the sustainability of the Group and its ability to grow. Exposure to

development, exploration and appraisal failure is inherent in accessing

the upside potential of exploration and development projects.

Impact Mitigation 2024 movement Related KPIs

‒ Inability to deliver

Group strategy

‒ Reduction in

share price

‒ Reputational damage

Highly competent team

applying a thorough review

process to prospects and

development opportunities,

and a team of geoscientists

with a track record of

delivering success.

Maturation of opportunities

within existing fields.

Positive and regular

engagement with operators

and partners to share

knowledge, offer support

and exert influence.

Ongoing work to technically

mature the unconventional

potential.

This risk remained static in 2024.

Following resumption of drilling activity in July,

Capricorn has continued with its liquids focused

strategy, principally focused in the BED area. We have

been working closely with the operator, Cheiron, to

manage the delivery of an optimised well sequence

with a reduced rig count. Our strategy remains focused

on managing the subsurface risk and extending the

field limits of the Abu Roash G accumulations. A new

development lease application was submitted in the

first half of 2024, with the aim of securing the potential

extension of such accumulations.

The prioritisation of the development drilling meant

the exploration drilling was delayed until Q1 2025.

Exploration drilling will resume in Q1 2025 with a work

programme to fulfil the outstanding commitments on

the West El Fayium (WEF), South East Horus (SEH) and

North Um Baraka (NUMB) concessions. The operator

is planning up to six exploration wells in total. The first

of these wells, WEF-1X, spudded in February 2024. In

addition to targeting several conventional objectives

the well will also test the emerging Abu Roash

unconventional play.

Reserves replacement has been aided by reservoir

modelling work in BED to understand the water

injection as well as the progress on the merged

concessions which converts contingent resources

to reserves.

B: Net

production

D: Net 2P

entitlement

reserves

Capricorn Energy PLC

Annual Report and Accounts 2024

PRINCIPAL RISKS TO THE GROUP IN 2024-2025 CONTINUED

Principal risk: Underperformance of Egypt assets

Strategic objective

Operational excellence

Owner:

Chief Operating Officer

Risk appetite

Low – Delivering operational excellence in all the Group’s activities is

a strategic objective for the Group. The Group works closely with all

JV partners to mitigate the risk and impact of any operational delay or

underperformance. Therefore, the Group has a low appetite for risks,

which may impact on operating cash flow.

Impact Mitigation 2024 movement Related KPIs

‒ Delay or reduction

in cash flow

‒ Reserves downgrade

or impairment

‒ Cost/schedule

overruns

‒ Negative impact

on asset value

‒ HSSE incidents

‒ Reputational damage

Actively engage with all

partners early to establish

good working relationships.

Actively participate in

operational and technical

meetings to challenge, apply

influence and/or support

partners to establish a

cohesive joint venture view.

Conduct independent

economic analysis on all

investment opportunities.

Only vote in favour of those

that meet Capricorn’s

requirements.

Actively monitor and look

for wells and project delivery

improvement opportunities,

in liaison with our joint

venture partners.

This risk decreased in 2024.

2024 WI production on a produced basis averaged

23,763 boepd for the year. This was towards the high

end of the FY24 20,000-24,000 boepd guidance.

Over the year Capricorn focused on improving

knowledge of and optimising the producing assets in

Egypt with the goal of establishing a more predictable

operations base. Working with our operating partner

Cheiron, the Company prioritised liquid-focused

operations in the BED area and efforts continue to

actively manage reservoirs with water injection, to add

production and reserves.

Development drilling activity is planned to continue in

2025 with a continuation of the strategy that has been

taken at BED. In addition, wells will be drilled on the

Alam El Shawish West (AESW) concession, targeting

the Abu Roash G (ARG) reservoir. Workovers are an

important, cost-efficient mechanism to maintain

production and Capricorn will continue to proactively

high-grade opportunities, supporting the operator

in prioritising economic projects.

A: Cash

receipts from

operations

B: Net

production

C: Opex

costs

D: Net 2P

entitlement

reserves

Capricorn Energy PLC

Annual Report and Accounts 2024

Strategic Report Corporate Governance Financial Statements Additional Information

Principal risk: Lack of adherence to HSSE policies

Strategic objective

Operational excellence

Owner:

Chief Executive Officer

Risk appetite

Low – The Group continuously strives to reduce risks that could

lead to an HSSE incident to as low as reasonably practicable.

Impact Mitigation 2024 movement Related KPIs

‒ Serious injury or death

‒ Environmental impacts

‒ Reputational damage

‒ Regulatory penalties

and clean-up costs

‒ Physical impacts of

climate change

Effectively managing HSSE

risk exposure is a priority for

the Board and management

team.

HSSE training is included as

part of all staff and contractor

inductions.

Process in place for

assessing an operator’s

overall operating and HSSE

capabilities, including

undertaking audits to

determine the level of

oversight required.

Business resilience and

emergency response

procedures and equipment

are maintained and regularly

tested to ensure the

Group can respond to an

emergency quickly, safely

and effectively.

Third-party specialists in

place to assist with security

arrangements and travel

risk assessments.

Leading and lagging

indicators and targets

developed in line with

industry guidelines and

benchmarks.

This risk remained static in 2024.

The Group had no operated activities in 2024 and

the key Capricorn controlled HSSE risks were office

and travel based.

Capricorn continued to monitor the HSSE performance

of our operating partner in Egypt. The partner delivered a

strong performance in relation to HSSE, achieving scores

for total recordable injury rate (TRIR) and LTIF which were

better than IOGP statistics. There were no recordable

spills above the IOGP level to the environment.

With ongoing non-operated activities in Egypt, the

Group will continue to work with partners to responsibly

deliver value for all stakeholders.

F: Health

and safety

Capricorn Energy PLC

Annual Report and Accounts 2024

PRINCIPAL RISKS TO THE GROUP IN 2024-2025 CONTINUED

Principal risk: Future challenges and costs as markets transition to net zero

Strategic objective

Prudent approach to

risk management

Owner:

Chief Executive Officer

Risk appetite

Medium – The Group recognises global commitments to achieve a

transition to lower carbon sources of energy. Capricorn’s strategy is

to play a responsible and competitive role in the production of oil and

gas within this transition. Capricorn acknowledges the contribution

its activities have on carbon emissions, and the Group continues to

develop short-, medium- and long-term actions to minimise and

mitigate this contribution.

Impact Mitigation 2024 movement Related KPIs

‒ Providers of capital

limit exposure to fossil

fuel projects

‒ Increasing costs

‒ Climate-related

policy changes

‒ Reduced demand

for oil

‒ Reputational damage

‒ Retaining and

attracting talent

Measuring and reporting our

GHG emissions in line with

the Task Force on Climate-

related Financial Disclosures

(TCFD) and Streamlined

Energy and Carbon

Reporting (SECR).

Promotion of efficient

energy use in activities

with business partners

and service providers.

Consideration of climate

change in investment

decisions.

Portfolio resilience modelling

based on the International

Energy Agency’s (IEA)

Sustainable Development

Scenarios.

Endorsement of Global Gas

Flare Reduction Partnership.

Alignment with UN SDGs.

Active participation in

industry initiatives.

This risk remained static in 2024.

Capricorn remains committed to its emissions reduction

pathway with accelerated short- and medium-term

GHG equity emission reduction targets. The short-

term target will be achieved and the Group remains on

track to meet the 2030 and 2040 targets. Capricorn

continues to support decarbonisation initiatives relating to

projects to reduce flaring, venting and fugitive emissions.

Capricorn’s non-operated Scope 1 forms the majority

of our overall emissions footprint, and emissions have

been consistently lower within 2024 than our 2023

baseline. Total Scope 1 and 2 emissions in 2024

were 143,460 tCO

e, which was lower than the

2023 emission baseline, which was reported last

year as 226,900 tCO

G: Scope 1

and 2 equity

emissions

Capricorn Energy PLC

Annual Report and Accounts 2024

Strategic Report Corporate Governance Financial Statements Additional Information

TCFD REPORTING

Capricorn Energy’s climate-related financial disclosures made in the 2024 Annual Report are aligned

with the TCFD’s recommendations and recommended disclosures, consistent with the Financial

Conduct Authority’s LR9.8.6 requirement. We have analysed the impact of transition risks of climate

change on our portfolio using the IEA’s scenario analysis and have also assessed the potential impact

of the physical and transition risks and opportunities of climate change on our assets.

We are continuing to develop good

practices and standards for transparency

consistent with TCFD recommendations.

Our latest reporting includes 11 TCFD-

recommended disclosures across four

areas. Capricorn has completed the TCFD

recommended disclosures consistent

with the all sector guidance, as well as

the supplemental guidance for non-

financial groups, including the energy

sector. Capricorn continues to monitor

changes and updates within the UK ESG

reporting landscape.

Governance

Disclose the organisation’s

governance around climate-related

risks and opportunities.

Capricorn attaches high importance to

climate change considerations at Board

level and throughout the organisation,

together with our broader environmental,

societal and governance responsibilities.

In 2022, the Board established the

Sustainability Committee, highlighting

the importance of ESG matters within

the Board and wider organisation.

The committee was established to

ensure dedicated time was allocated to

discuss important matters in respect of

Capricorn’s role in the energy transition,

including the identification of climate-

related risks and opportunities. Emissions

targets is also an important KPI in the

determination of management and staff

variable remuneration. Relevant principal

climate-related risks and opportunities

are reviewed and challenged with

management four times a year, before they

are presented at the Audit Committee.

During 2024, the Board:

‒ Received an ESG regulatory and

reporting update from PwC. The

update covered the current UK

sustainability reporting landscape

and potential future requirements.

‒ Received an update on Capricorn’s

decarbonisation initiatives in the

Egyptian assets.

‒ Considered relevant principal climate-

related risks and opportunities which

were presented to the Board, at least

four times during the year.

a) Describe the Board’s oversight of

climate-related risks and opportunities

Relevant principal climate-related risks

and opportunities are recognised as a

major concern for the planet, as well as

the future of the oil and gas industry. The

Board, supported by the Sustainability

Committee, takes full responsibility

for the governance of climate-related

risks and opportunities

The Sustainability Committee

Overall, responsibility for the system

of risk management, internal control

and reviewing the effectiveness of such

systems rests with the Board. Relevant

principal climate-related risks and

opportunities are presented to the

Board, at least four times per year.

Capricorn uses risk registers, described

in the risk management section on page

15, to identify and report climate-related

risks and opportunities and the associated

mitigation measures. Reporting of

these risks and opportunities within the

organisation is structured so that risks

are escalated through various internal

management channels to relevant

Board committees and to the Board

itself. Relevant principal climate-related

risks and opportunities are discussed,

as noted, during risk discussions but

also when considering annual work

programmes and budgets, acquisitions

and divestments, and when considering

annual performance objectives.

b) Describe management’s role in

assessing and managing climate-related

risks and opportunities

Capricorn’s CEO takes ultimate

responsibility and accountability for

the Company’s ESG policy, including

climate-related strategy and targets.

The Chair of Capricorn’s Board is the

Director responsible at the Board level.

Capricorn’s Board reviews climate and

energy transition issues, concerning

both Capricorn’s own position and risk

management, and international policy

and stakeholder drivers. The Board and

Audit Committee also perform a regular

review of the Group principal risk register

and associated controls and actions. This

offers management and the Directors an

opportunity to agree on and challenge

the relevant principal climate-related

risks and opportunities.

The risk and compliance team are

responsible for monitoring the fast-

changing external environment,

including the regulatory and technological

spheres, with relevant principal climate-

related risks and opportunities discussed

on a regular basis with the Company’s

senior leadership.

With ESG embedded within Capricorn’s

KPIs, all departments benefit by ensuring

the Company remains on track to fulfil

its emissions targets. This includes

overseeing Capricorn’s carbon emissions

from existing assets and ensuring that

new opportunities are in line with the

Company’s net zero commitments.

The risk and compliance team are

responsible for TCFD reporting, including

scenario modelling to assess the impact

of transition risks of climate change on

Capricorn’s portfolio. In conjunction with

HSSE, risk and compliance also support

the development and implementation of

decarbonisation initiatives for the Group’s

non-operated assets. The decarbonisation

initiatives implemented within 2024 have

been described within the Environmental,

Governance, People and Social section.

Climate-related risk mitigation is

embedded into Capricorn’s culture, as

climate impact becomes a key strategic

consideration across different business

functions. For example, screening of

new opportunities is underpinned by

resilience testing against transition risks

of climate change. Energy efficiency and

carbon emissions are also considered in

selecting contractors for drilling, marine

and aviation services. The most polluting

products and services are eliminated from

the tender process. Capricorn also uses a

commuting emissions app with the dual

benefit of expanding Capricorn’s reporting

disclosure capability, in addition to helping

inform staff of their direct emissions.

Capricorn Energy PLC

Annual Report and Accounts 2024

Strategy

Disclose the actual and potential impacts

of climate-related risks and opportunities

on the organisation’s businesses,

strategy and financial planning, where

such information is material.

a) Describe the climate-related risks

and opportunities the organisation

has identified over the short, medium

and long-term

In developing our strategy, Capricorn’s

Board and leadership team consider

a wide range of opportunities and risks

across three discrete time horizons.

Short term (to 2025): The next year is

defined by detailed business and financial

plans, which are performance managed

in delivery of our 2025 and 2030 targets.

Medium term (to 2030): Looking out

to the end of the decade enables us to

consider our progress towards the long-

term targets and adjust course of action

if required.

Long-term (post-2030): We use a

scenario planning approach – IEA’s Stated

Policies Scenario (STEPS), Announced

Pledges Scenario (APS) and Net Zero

Emissions (NZE) scenarios – to account for

a wide range of uncertainties in the post-

2030 period. Our aim is to ensure we have

a resilient portfolio, which will deliver value

to key stakeholders in the most ambitious

climate scenario.

Risk management

Disclose how the organisation

identifies, assesses and manages

climate-related risks.

a) Describe the organisation’s

processes for identifying and

assessing climate-related risks

The Group’s framework for risk

management promotes a bottom-up

approach to risk management with top-

down support and challenge. Climate-

related risks and opportunities and the

associated mitigation measures and

action plans are maintained in a series of

risk registers at Group, asset, function and

project level. The Group uses a number

of tools to identify climate related risks

including, but not limited to, hazard

identification, social impact assessments

and environmental hazard identification.

Climate-related risks are classified in

alignment with TCFD’s description

of physical and transition risks:

Transition risks – risks related to the

transition to a lower carbon economy

including policy and legal, technology,

markets, and reputational risks.

Physical risks – risks related to the

physical impacts of climate change

including event-driven risks such as

changes in the severity and/or frequency

of extreme weather events.

The Group has established impact criteria,

which assigns a score of one to five for

impact and probability of occurrence. This

drives the overall assessment of the risk

and will determine if the risk is within the

appetite limits. Material risks for Capricorn

are risks with a score of 15 (out of 25)

and above. The Group has identified one

principal risk in relation to climate change

– future challenges and costs as markets

transition to net zero. The transition and

physical risks identified on the next page

are child risks to the principal risk and their

impact and likelihood are aggregated to

calculate the principal risk score.

Further information is included in the risk

disclosure page on page 22.

b) Describe the organisation’s processes

for managing climate-related risks

Climate-related risks and opportunities,

and the associated mitigation measures

and action plans, are maintained in a

series of risk registers at Group, asset,

function and project level. Risk registers

are maintained using Microsoft Excel. The

Group applies one of the 4Ts to each risk:

Tolerate, Treat, Transfer or Terminate.

All risks categorised as Treat are required

to have actions assigned to them to

reduce the impact or likelihood of the risk

occurring. Reporting of these risks within

the organisation is structured so that risks

are escalated through various internal

management, Board committees and to

the Board itself for challenge and oversight.

Further information on the risk, appetite

levels, impacts and mitigations can be

found on page 22 and on pages 25-27.

c) Describe how processes for

identifying, assessing and

managing climate-related risks are

integrated into the organisation’s

overall risk management

Climate-related risks are captured at

various levels within the Group and

in line with the Group process for risk

management. All projects, be it a drilling

project, an acquisition opportunity or

a new country entry, are required to

maintain a risk register. Project teams

are multi-disciplined, which ensures

that all categories of risk, including

climate-related risks, are identified,

assessed and managed.

There is also a dedicated ESG risk

climate-related risks. This risk register is

maintained by the Risk and Compliance

Manager and is reviewed twice a year.

This ensures all climate-related risks are

integrated into the Group’s overall risk

management processes and will be

presented and challenged at various

forums within the Group.

TCFD REPORTING CONTINUED

Capricorn Energy PLC

Annual Report and Accounts 2024

Strategic Report Corporate Governance Financial Statements Additional Information

Capricorn considers the following risks to be key climate related risks in the short, medium and long-term.

Type Climate-related risks Metric Capricorn’s response

Transition

risks

Policy and legal (medium to long-term)

Implementation

of carbon pricing

mechanisms in both

compliance and non-

compliance markets.

Changes in legislation

and country policy.

Exposure to litigation.

EU/UK compliance

markets – carbon

prices $100/tCO

e and

$110/tCO

e by 2030,

respectively.

Within the voluntary

market we use – $36/

tCO

e in 2024, rising to

$50/tCO

e in 2030 as

our base case.

Tracking of oil and gas

policy decisions for

countries of operation.

In line with IEA and other energy companies in the EU and UK

compliance markets, we use carbon prices of $100/tCO

e and

$110/tCO

e by 2030, respectively. For other regions, where carbon

price is not currently applicable, we use our internal carbon pricing

assumptions starting at $36/tCO

e in 2024, rising to $50/tCO

in 2030.

Use of long-term oil price assumptions that consider the demand

effects of global carbon taxation.

Continued efforts to decarbonise operations.

Ongoing monitoring of policy and legislation development in

countries of interest.

Technology (medium to long-term)

Increasing costs of

transition to lower

emissions technology.

Substitution of existing

products and services

with lower emissions

options.

Internal and joint

venture budget

tracking and

monitoring.

Implementation of decarbonisation technologies at the field level

in Egypt.

Increase in production within the portfolio, with decarbonisation

options, including carbon capture, utilisation, and storage (CCUS).

Application of inherently lower emission equipment and

contractor services.

Market (medium to long-term)

Decline in oil demand

and oil price.

Faster than expected

shift away from gas,

leading to lower

gas prices.

Changing market

sentiment as

consumers switch

away from fossil fuels.

Access to capital.

Increased cost of

raw materials

Monitoring of energy

demand indices

(e.g. IEA).

Low-cost portfolio, generates value in a 1.5 degree scenario.

Embed low oil and gas prices, as well as carbon prices when

screening for new investments.

Ensure strong balance sheet, low leverage, strong free

cash flow generation.

Reputation (short term)

Public perception of

how the oil and gas

industry is changing.

Lack of trust in the oil

and gas industry’s net

zero ambitions.

Maintain transparency relating to all ESG issues.

Comply with the highest reporting standards.

Ensure continued engagement with external stakeholders.

Capricorn Energy PLC

Annual Report and Accounts 2024

Capricorn considers the following risks to be key climate-related risks in the short, medium and long-term.

Materiality Chronic

(long-term)

Risk exposure Risk impact Capricorn’s response

Climate scenarios

Physical risks

These identified

physical risks apply

to Capricorn’s

current portfolio of

12 physical assets,

all of which are in

Egypt. Currently,

our Egyptian assets

represent 100%

of our production

portfolio and

therefore are

considered our core

assets and highest

priority within the

portfolio.

Capricorn’s portfolio

was modelled

based on exposure

to climate risk, from

current scenarios

of 1.5ºC warming

through to 2050,

reviewing both 2-3ºC

and 4ºC warming

scenarios.

It was identified

that portfolio risk

exposure was

consistently scored

as very high for

drought and heat

stress from current

day through to 2050.

A key outcome

of physical risk

modelling of

Capricorn’s portfolio

is that operations

already take place in

very high drought

exposed and heat

stress environments,

with little impact on

production.

Drought >2030 +1.5ºC >6 months

drought

duration for

all scenarios

from now to

2050.

Likelihood: probable (all

climate scenarios)

Drought may cause

increases to the cost of

freshwater supply as

well as impact to raw

materials from suppliers,

who may be impacted by

freshwater scarcity.

However, it is reasonable

to assume that Capricorn

Energy will adapt to

these conditions, in

view that the business

already operates in highly

drought exposed regions.

Drought stress

(prolonged periods of

rain and water shortage)

has been identified as the

most material risk in the

2040-50 timeframe.

Short-term response –

undertaken

Water conservation

practices including

efficient water use

through public

awareness campaigns,

installing water-saving

devices, and promoting

practices like rainwater

harvesting.

Diversification of water

sources including

reducing the reliance

on a single water

source by developing

alternative sources such

as desalination plants,

recycled wastewater, and

groundwater recharge.

Helping our communities

adapt to physical risks, for

example our corporate

social responsibility (CSR)

project in Egypt, which

delivered 80 50m

water

tanks, basic livestock

veterinarian training,

health checks and

livestock to communities

close to our producing

assets.

2050 2-3ºC

2050 4ºC

Heat stress >2030 +1.5ºC 80-180

days in a

heatwave.

Likelihood: probable (all

climate scenarios)

Heatwaves can affect

labour productivity/work

performance as well as

talent attraction.

Operationally, high

temperatures could

cause gas and fluid leaks

in pipelines, storage

tanks and welded

joints, resulting in

environmental damage.

Heat stress can also lead

to higher operational

costs associated with

the additional energy

required to cool buildings

and equipment.

Short-term response –

propose action

Ensure there is proper

ventilation and cooling,

including installing

fans, air conditioning, or

evaporative coolers to

maintain a comfortable

temperature for workers.

Ensure easy access to

cool drinking water

and encourage regular

hydration and provide

electrolyte-replenishing

drinks to maintain proper

hydration levels.

Capricorn will maintain

a good practice fire loss

control maintenance and

mitigation regime.

2050 2-3ºC

2050 4ºC

TCFD REPORTING CONTINUED

Capricorn Energy PLC

Annual Report and Accounts 2024

Strategic Report Corporate Governance Financial Statements Additional Information

Capricorn has recognised and is currently working on scoping and implementing a number of climate-related opportunities.

Type Climate-related opportunities Capricorn’s response

Energy

source/

resilience

(short to

medium

term)

Use of lower-emission sources of

energy shift toward decentralised

energy generation.

Use of supportive policy incentives.

Use of new technologies.

Participation in carbon market.

In Egypt, we are replacing diesel generators with cleaner-burning gas

generators, electrifying well sites and downhole pumps using centralised

power generation and exploring the use of flare gas to produce hydrogen

to reduce our reliance on diesel and gas.

We have completed a CCUS feasibility study in Egypt.

We are actively engaged in voluntary carbon markets. We have acquired

a portfolio of high-quality carbon offsets, including nature-based, landfill

gas and refrigerant gases sequestration.

Resilience

(long-term)

Resource substitutes/diversification. We are evaluating clean energy diversification opportunities, including

diesel substitution and the application of methane pyrolysis.

Products

and

services

(short to

medium

term)

Development and/or expansion of low

emission goods and services (short term).

When operating assets, to minimise energy use in drilling operations and

associated activities without compromising safety or cost, we assess the fuel

consumption of rigs, vessels and helicopters as part of the tender process.

Lower energy consumption – and therefore emissions – could provide a

point of differentiation if other technical and commercial considerations are

comparable. We already trialled this approach when tendering vessels for

geophysical and geotechnical survey work in the UK and Mauritania (both

exited). We will strive to align our supply chain products and services with

our own emission reduction target of net zero by 2040.

Resource

efficiency

(short to

medium

term)

Use of more efficient production

and distribution processes

(short to medium term).

Use of recycling (short term).

Move to more efficient buildings

and transport (short term).

We seek to continuously improve the performance of our operating

assets, reducing their carbon intensity, including elimination of flaring

from our operations in Egypt.

We work internally to reduce our carbon footprint within our office

environment, for example paper consumption and recycling.

We have relocated to a smaller open-plan office, which is considerably

more efficient at distributing heat.

Capricorn Energy PLC

Annual Report and Accounts 2024

Our emissions reduction pathway in action

Focus on equity Scope 1 and Scope 2

net zero by 2040 with emission reduction

targets of 15% by 2025 and 30% by 2030.

Zero routine flaring

First UK independent to commit to

World Bank Zero Routine Flaring by 2030.

Portfolio resilience

Current portfolio creates value in stringent

transition scenario testing.

Clear principles underpin target

Avoid, reduce and substitute

‒ Power generator rationalisation

and fuel substitution of diesel for

clean-burning gas progressing.

‒ Electrification of BED area with

completion in Q1 2025.

‒ North East Abu Gharadig 2 (NEAG 2)

power centralisation concept select

underway including solar PV evaluation.

‒ Exploring feasibility for installation of

waste heat recovery units at Obaiyed

Central Processing Platform.

‒ Flare gas recovery and optimisation

activities at AESW and NEAG.

‒ Assessing methane monitoring

solutions. Satellite data is being utilised

and a programme has been established

to train engineers on the new FLIR

GFX320 camera which is used for leak

detection and maintenance/repair.

Sequester

The joint venture completed a technical

feasibility study to identify candidate

subsurface storage sites at our BED

and Obaiyed concessions.

Offset

Capricorn has a portfolio of high-quality

carbon offsets.

2025

20232022

2030 2040

net

zero

By 2040

reach

Short-

term

target

Long-

term

target

Where

we are

now

Short- to

medium-term

target

By 2030, reduce

emissions by

30%

By 2025, reduce

emissions by

Highlights

‒ Electrification of operations

‒ Flare and vent reduction, including

zero flaring by 2030

‒ Enhanced detection and reduction

of fugitive emissions

Opportunities

‒ Carbon capture and storage

opportunities

‒ Portfolio of high-quality carbon offsets.

15%

Commitment

to equity

Scope 1 and

Scope 2 net

zero by 2040

Baseline

TCFD REPORTING CONTINUED

Capricorn Energy PLC

Annual Report and Accounts 2024

Strategic Report Corporate Governance Financial Statements Additional Information

100%

96%

123%

113%

73%

Capricorn

planning

(=impairment)

Capricorn planning

(=impairment) at

NZE carbon price

IEA

STEPS

IEA

NZE

IEA

APS

100%

b) Describe the impact of climate-

related risks and opportunities on the

organisation’s businesses, strategy

and financial planning

Capricorn is fully incorporating climate

change-related risks and opportunities

into its investment decision-making.

Our capital allocation decisions are made

using rigorous planning assumptions,

informed by climate change and energy

transition scenario analysis. We carefully

consider the environmental performance

of assets and opportunities as part of our

screening process, underpinned by our

net zero commitment. This commitment

also drives our decarbonisation strategy.

All new oil and gas opportunities are

screened at gas price (adjusted for certain

regional markets). We also consider a

range of other scenarios as part of our

opportunity screening process.

c) Describe the resilience of the

organisation’s strategy, taking into

consideration different climate-

related scenarios, including a 2°C

or lower scenario

The TCFD recommends the use of

scenario analysis in disclosure of climate-

related risks and opportunities. Scenario

analyses aligned with the TCFD framework

help companies explore different futures

and the implications of climate-related

circumstances on business strategy.

The findings of the recently conducted

scenario analysis exercise, which tested

the resilience of Capricorn’s Egypt

portfolio against IEA’s STEPS, APS and

NZE scenarios, showed that our assets

will generate value in the most ambitious

climate scenario, aligned with a 1.5 degree

warming. This gives us confidence that

our valuation and planning assumptions

are robust and that we will continue

to create value for all key stakeholders –

even in the most aggressive carbon

reduction scenario.

Capricorn’s assumptions used for our

financial planning and balance sheet

impairment testing include $65/bbl.

(flat) oil price (long-term, inflated at 3%

from 2027) and carbon prices of $36/tCO

in 2024, rising to $50/tCO

e in 2030.

Carbon prices were applied to Scope 1

and 2 emissions from Capricorn’s

Egypt operations.

The scenario analysis shows that our

Egyptian production portfolio, when

modelled using IEA’s NZE carbon prices,

delivers 96% of the value we drive

from our financial planning purposes.

Capricorn’s portfolio outperforms our

planning scenario by 23% in the Stated

Policies Scenario (STEPS) and 13% in the

Announced Pledges Scenario (APS).

IEA scenarios are modelled using IEA’s

assumptions associated with each of the

scenarios. IEA scenarios: STEPS assumes

policies and targets announced by

governments are enacted and estimates

an average temperature rise of 2.7°C (up to

3.3°C). APS sees an accelerated transition

to a low-carbon world and projects a 66%

chance to limit temperature rise to 1.8°C

and a 50% chance to limit it to 1.65°C.

NZE scenario is aligned with the Science-

Based Targets initiative, limiting the global

warming to 1.5°C by 2100 compared to

pre-industrial levels.

Egypt: Asset value relative to Capricorn planning case net asset value, including carbon costs

Net asset value

Carbon costs

Capricorn Energy PLC

Annual Report and Accounts 2024

Metrics and targets

Disclose the metrics and targets used to assess and manage relevant climate-related risks and opportunities where such information

is material.

Capricorn’s principal metrics and targets used to assess and manage climate-related risks and opportunities are presented in the table below.

TCFD recommended disclosures Risk and opportunity Targets/metrics

a) Disclose the metrics used by

the organisation to assess climate-

related risks and opportunities

in line with its strategy and risk

management process.

Transition and physical risks, including

policy, market and long-term chronic

effect of global warming. Opportunity

to invest in clean projects, with carbon

pricing risk-adjusted returns fully

recognised. Participation in carbon

market. Improved resilience of the

existing portfolio.

For carbon prices within the voluntary market,

we use $36/tCO

e in 2024, rising to $50/tCO

in 2030 as our base case.

For emissions, we measure progress against our

2022 baseline.

‒ Monitoring of energy demand indices

(e.g. IEA).

‒ Remuneration policy with embedded climate-

related targets; see page 58.

‒ Pro-active engagement with our employees

on commuting to increase awareness and

help deliver net zero.

‒ Key assumptions: commodity prices for

opportunity screening and financial planning.

‒ Internal and joint venture budget tracking

and monitoring for products and services.

Rising water stress, including conflicting

uses and availability.

Aqueduct water-risk atlas – Egypt identified

as a high-water stress area.

Capricorn’s environmental impact;

see pages 10-13.

b) Disclose Scope 1, Scope 2

and, if appropriate, Scope 3 GHG

emissions and the related risks.

Measurement and disclosure of GHG

emissions from Scope 1, 2 and 3 help

emissions management and creation of

a clear pathway to net zero. Risks include

exposure to carbon price due to changes

in policy, as well as significant reputation

risks if emissions are not managed.

Equity Scope 1 and 2 net zero by 2040 with

interim targets of 15% by 2025 and 30% by

2030; see page 9 and our Data Tracker on

our website.

Scope 1 and Scope 2 emissions for 2024 and

trends on an operational and equity basis are

outlined within our Data Tracker.

We have undertaken reporting of our Scope 3

emissions to include emissions from categories

1, 3, 4, 5, 6 and 7 (operated) and 9, 10 and 11

(equity), for further details please see our Data

Tracker.

TCFD climate-related risk and management;

see page 24.

c) Describe the targets used by the

organisation to manage climate-

related risks and opportunities and

performance against targets.

Summary of targets aimed at helping

achieve our net zero strategic goal.

Given the dynamic nature of Capricorn’s

portfolio, we will use 2022 as a baseline

year on our journey to carbon neutrality.

Climate-related KPIs, which are assessed as

being strategically important to the Group,

are annually set by the Board. Targets are

typically linked to emissions reductions and

environmental reporting risks and opportunities.

Equity Scope 1 and 2 net zero by 2040 with

interim targets of 15% by 2025 and 30%

by 2030; see page 9.

Flaring and planned progress; see our

Data Tracker on our website.

TCFD REPORTING CONTINUED

Capricorn Energy PLC

Annual Report and Accounts 2024

Strategic Report Corporate Governance Financial Statements Additional Information

FINANCIAL & OPERATIONAL REVIEW

2024 Financial and operational

highlights

‒ Development drilling in Egypt

concentrated on a liquids focused

strategy

‒ Revenues of $147m; with an average

oil price of $79.3/boe and gas price of

$2.9/mscf

‒ Production costs of $42m, equivalent

to $4.8/boe on a WI basis

‒ $63m capex on Egypt producing assets

‒ Group net cash of $23m; comprising

$123m cash and $100m debt

‒ WI Egypt oil and gas production

of 23,763 boepd at the upper end

of guidance of 20,000 - 24,000

boepd, comprising 44% liquids; net

entitlement sales volumes 9,737 boepd

‒ Net cash inflows of $66m from Egypt

operations post-capex, including

$135m cash receipts

‒ Egyptian receivables position of

$184m with $9m expected credit loss

adjustments

‒ Gross G&A of $24m*

‒ $57m cash returned to shareholders

via a $50m special dividend paid in

June 2024 and $7m share buyback

completed in November 2024

‒ Profit of $11m; loss from continuing

operations of $12m, profit from

discontinued operations of $23m

* Before depreciation and share-based payment

charges including $2m legacy costs

2025 Outlook

‒ Post year end $50m Senegal

contingent payment received from

Woodside in January 2025

‒ Production in 2025 is guided in the

range of 17-21,000 boepd, 39% of

which is forecast to be liquids

‒ Capex guidance of $85m - $95m

‒ In 2025 operating costs are forecast to

be $5-7/boe

‒ Completion of a new concession

agreement, consolidating the eight

existing concession agreements where

we have an equal share with Cheiron

into a single, integrated agreement in

preparation for final approval by the

Egyptian competent authorities. The

Alam El Shawish West (AESW) joint

venture (20% WI) is also expected to

commence negotiations to improve the

concession agreement terms in 2025

‒ Development drilling will continue

to focus on the delineation and

development of the Abu Roash G

(ARG) reservoir in Badr El Din (BED)

and the continuing implementation of

waterflood. In Q1 2025 two wells will

be drilled on the AESW concession,

targeting the ARG reservoir

‒ Exploration drilling in Egypt

commenced in February 2025 with

the spudding of WEF-1X, the first of

up to six wells, fulfilling outstanding

commitments on the South East Horus

(SEH), West El Fayoum (WEF) and

North Um Baraka (NUMB) concessions.

‒ M&A opportunities in the UK North

Sea and MENA region continue to be

evaluated in line with our strict set of

strategic, financial and returns criteria

to diversify and expand our operations

‒ The Company will continue to pursue

the recovery of Waldorf’s missed

payment of $22.5m and the additional

$7m should the Columbus acquisition

expire on the long stop date (31 March

2025)

‒ Post year end $25m Shell contingent

payment paid

‒ Post year end appointed Canaccord

Genuity Limited as joint corporate

broker

Reserves

Capricorn engaged GLJ Ltd. (GLJ) to

undertake an independent oil and gas

reserves evaluation on the Company’s

Egypt assets, to document the 2024 year

end reserves position. GLJ undertook a

full review of the producing assets and

the inventory of new well opportunities to

assess total proved developed producing

(PDP), total proved (1P), total proved

plus probable (2P), and total proved plus

probable plus possible (3P) reserves. The

reserves were prepared in accordance

with the latest SPE Petroleum Resources

Management System (PRMS) approved

definitions of Reserves and Resources. GLJ

based their evaluation on information and

data provided by Capricorn. The highlights

of the reserves report are summarised

below:

‒ Relative to year end 2023, 2024

production reduced net entitlement

interest reserves by 3.6 mmboe

‒ Developed reserves additions in 2024

replaced 24% of production with 98%

of this addition occurring in the BED

area

‒ 54% of the 2P reserves are categorised

as undeveloped

‒ The net present value (NPV) of future

net entitlement revenues, discounted

at 15% (NPV15) for the 2P basis is

$169m.

Upon ratification of the new terms

associated with the consolidation of the

eight development concessions held

equally with Cheiron, Capricorn intends to

publish an updated competent persons

report to describe the improved impact on

the reserves position of these new terms

and licence extension. A similar process of

concession agreement renegotiation has

begun on the nearby AESW block where

the Company has a 20% working interest.

2P Oil & Condensate reserves (mmbo) 2P Natural Gas (bcf) Reserves Total 2P Reserves Boe (mmboe)

Net WI Net Entitlement Net WI Net Entitlement Net WI Net Entitlement

17. 8 7.0 125.9 48.3 40.3 15.6

Capricorn Energy PLC

Annual Report and Accounts 2024

FINANCIAL & OPERATIONAL REVIEW CONTINUED

Production

WI production in 2024 across the four

main concession areas of Obaiyed

(Capricorn 50% WI), BED (Capricorn 50%

WI), North East Abu Gharadig (Capricorn

26% WI) and AESW (Capricorn 20% WI)

averaged 23,763 boepd (44% liquids) for

the year, at the upper end of the guidance

range for WI production of 20,000 -

24,000 boepd.

Over the year Capricorn focused on

improving knowledge of and optimising

the producing assets in Egypt with

the goal of establishing a better

understanding of resource potential and

correspondingly forecasting of future

production. Working with our operating

partner Cheiron, the Company prioritised

liquids focused operations in the BED area

and efforts continue to actively manage

reservoirs with water injection, to add

production and reserves. Cash receipts

totalled $135m during the year across

all concessions.

Development drilling activity is planned

to continue in 2025 with a continuation

of the strategy that has been taken at

BED. In addition, wells will be drilled on

the AESW concession, targeting the ARG

reservoir. Workovers are an important,

cost-efficient mechanism to maintain

production and Capricorn will continue

to proactively high-grade opportunities,

supporting the Operator in prioritising

economic projects. Capricorn anticipates

that the consolidation of the eight

development concessions shared equally

with Cheiron will provide a catalyst for

increased development activity and

work is progressing with the Operator

to ensure operational readiness and a

comprehensive understanding of the

opportunities across the portfolio.

Exploration

Exploration drilling resumed in Q1 2025

with a work programme to fulfil the

outstanding commitments on the WEF,

SEH and NUMB concessions. The Operator

is planning up to six exploration wells

in total. The first of these commenced

in February with the WEF-1X well. In

addition to targeting several conventional

objectives the well will also test the

emerging Abu Roash unconventional play.

FINANCIAL REVIEW

Key production statistics

Year ended

31 December

2024

Year ended

31 December

2023

Production – net WI share (boepd) 23,763 30,044

Sales volumes – net EI oil (boepd) 3,847 5,367

Sales volume – net EI gas (mscfd) 32,980 38,049

Average price per bbl ($) 79.3 81.2

Revenue from production ($m) 147 200

Average production costs per boe ($) 4.8 5.4

Profit/(Loss) for the Year

Year ended

31 December

2024

Year ended

31 December

2023

Profit/(Loss) from the Egypt business operating segment 1 (60)

Loss from other Group continuing operations (13) (82)

Profit/(Loss) from discontinued operations 23 (2)

Profit/(Loss) after taxation 11 (144)

Egypt business operating segment

results

In Egypt, total revenue was $147m

(2023: $200m). $112m (2023: $159m)

was generated on sale of liquids with an

average price of $79.3 per bbl (2023: $81.2

per bbl) on net entitlement sales volumes

of 1,408,300 bbls (2023: 1,959,000 bbls).

Gas revenue was $35.2m (2023: $40.8m)

from volumes of 12,071,000 mscf (2023:

13,887,800 mscf) at the contracted rate

of $2.9/mscf (2023: $2.9/mscf). Additional

expected credit loss provisions against

revenue receivable led to a charge of $4m

(2023: $9m) to the Income Statement.

Cost of sales in the year were $42m (2023:

$60m), including inventory movements.

Production costs decreased slightly to

$4.8 per boe (2023: $5.4 per boe), on

working interest production over the

year, while depletion charges were $85m

(2023: $120m), at a weighted average rate

of $25.2 per boe (2023: $22.8 per boe)

across the concessions.

Capricorn records other income on

additional production that is notionally

allocated to the Group to cover tax due on

profits from the concessions. This is offset

by an equal and opposite tax charge. In the

current year, the value of this income and

notional tax gross-up is $30m (2023: $54m).

At the balance sheet date, Capricorn and

our partner Cheiron were sufficiently

advanced in negotiations with EGPC

to amend the terms of the concession

agreements on the 50:50 concessions

in the BED and Obaiyed areas to allow

the modified terms and extended field

lives to be incorporated into fair value

models used for impairment testing, now

performed on a single cash generating

unit. The increase in value generated

through the expected terms of the

new concession is sufficient to reverse

previously recorded impairment across

the Obaiyed concession area. $16m of an

impairment reversal was recorded in the

year, with a related deferred tax charge

of $7m. In the prior year, impairment was

recorded on producing assets of $29m

and goodwill of $15m. Related deferred

tax credits were $67m. Impairment of

goodwill does not reverse in subsequent

years.

A fair value loss of $5m (2023: $8m) on

the mark-to-market valuation of deferred

consideration due relating to the 2021

business combination was recorded in the

year, increasing the final instalment due

under this transaction to the maximum

$25m, which was paid in January 2025.

Net finance costs in Egypt of $18m

(2023: $17m), includes loan interest and

charges and the total tax charge on Egypt

operations for the year is $32m (2023:

$40m), being the tax gross-up charge of

$30m and a deferred tax charge of $2m.

Results from other continuing

operations

The loss on other continuing operations of

$13m (2023: $82m) includes unsuccessful

exploration costs of $6m (2023: $18m)

with no further general exploration costs

in the year (2023: $16m) as the Group

ceased all exploration activity outside

Egypt. $5m (2023: $16m) of unsuccessful

exploration costs related to Mexico and

$1m to historic UK licences (2023: $2m

across all other countries). Capricorn

continued to monitor opportunities to

Capricorn Energy PLC

Annual Report and Accounts 2024

Strategic Report Corporate Governance Financial Statements Additional Information

add producing assets to the portfolio,

particularly in the UK and MENA, with

costs relating to business development

activities absorbed within administration

charges in the current year.

Net finance income of $7m (2023: $14m)

includes interest earned on cash and cash

equivalents of offset by finance charges

and foreign exchange losses, the lower

values in the current year a reflection

of reduced cash on the balance sheet

following last year’s shareholder returns.

A current tax credit of $5m (2023: nil)

was recorded in the year in respect of tax

refunds due on tax withheld on dividends

due from shares previously held in India.

The dividends themselves remain subject

to ongoing legal challenge and remain a

contingent asset.

General and administrative costs

(G&A)

Following the restructuring of Capricorn

across 2023, reducing the Group’s

overhead charge has been a key priority.

Gross departmental administration

charges of $24m (2023: $79m), excluding

non-cash depreciation and amortisation

charges and share-based payment

charges, include redundancy payments

in 2023 of $16m. Once remaining historic

legacy contracts end, Capricorn expects

to achieve further savings bringing total

gross G&A down to the Board’s stated

target of ~$20m per year after adjusting

for inflation.

Net administration costs were $24m

(2023: $62m) after including the non-

cash items above and after deducting

timewriting recharges to assets. $3m of

net administrative costs related to Egypt

(2023: $2m) with the remaining $20m

(2023: $60m) incurred in the UK.

Discontinued operations

The Group made a profit from

discontinued operations of $23m during

the year following recognition of $50m

Senegal contingent consideration offset

by losses of $27m relating to historical

transactions in the North Sea. No provision

for any possible Senegal tax liability has

been recorded.

Settlement of earnout consideration

due on disposal of UK Producing

assets

Under the 2023 settlement agreement

Capricorn was due to receive $22m in

January 2025 and Waldorf’s 25% WI in the

Columbus gas field in the UK North Sea.

However, Waldorf’s ongoing default on its

obligations make it highly unlikely that the

$22m will be received in full and Capricorn

have reduced this receivable to $2m in the

balance sheet, reflecting Waldorf’s revised

settlement offer. The Columbus transfer

is also not expected to complete and

the related $7m long-term receivable has

been fully impaired. A $26m loss has been

recorded in the year (2023: net loss of $2m,

being a fair value loss on earnout receivable

of $40m and a loss on completion of the

settlement agreement of $2m offset by a

refund of historic costs of $4m and interest

received on earnout payments due of $2m).

Further consideration on Senegal

asset sale and ongoing tax

assessment

Capricorn disposed of its interests

in Senegal in 2020. Under the sale

agreement, Capricorn was due further

consideration of $50m which was

received in January 2025. As all conditions

relating to the payment of this additional

consideration had been met by the

balance sheet date, the receivable was

recorded during the year, generating

income of the full $50m.

In November 2023, Capricorn received

notice under the sales agreement from

the purchaser, that it had received

an assessment from the Senegal tax

authorities relating to operations in Senegal,

with two assessments raised that could

impact Capricorn relating to capital gains

tax and registration duties. Capricorn’s belief

is that neither claim is valid and is working

with the purchaser to defend the Group’s

position. No provision has been made in

the financial statements at the year end

and it is increasingly likely that international

arbitration will be required to resolve this

disputed assessment.

Net cash outflow for the Year

Opening net cash as at 1 January 2024 76

Dividend paid and share repurchase (57)

Net cash inflow from Egypt operations 1 106

Net cash inflow from UK discontinued operations 2

Exploration expenditure – Legacy assets (1)

Development expenditure – Egypt (40)

Deferred consideration – Egypt (25)

Proceeds on disposal of financial asset 3

Administration expenses, corporate assets, and office lease costs (22)

Net finance costs, equity and other movements (20)

Tax refund 1

Closing net cash as at 31 December 2024 23

1 Operating cash flow from Cash Flow Statement of $86m, plus add back of $20m of administrative and other

costs reallocated

Cash and cash equivalent balances at

31 December 2024 of $123m (2023:

$190m) were offset by borrowings in

Egypt of $100m (2023: $114m), excluding

prepaid facility fees and accrued interest.

Cash held outside of Egypt was $78m

(2023: $184m), while the net debt of the

Egypt business was $54m (2023: $106m).

Capricorn have committed not to inject

further cash into the Egypt business, other

than to meet committed exploration

spend and deferred consideration

payments, both covered by Parent

Company Guarantee. Loan facilities are

non-recourse to the Group’s non-Egypt

assets. Restricted cash balances of $3m

(2023: $5m) and $46m (2023: $5m) exist

in the UK and Egypt respectively. Egypt

restricted cash may be used to fund non-

operated concessions in Egypt and make

principal and interest payments on the

loan facilities.

Total loan repayments in the year were

$14m (2023: $48m). The facilities are

subject to bi-annual redetermination

processes. During the latest

redetermination process, the modelling

bank discovered an error in its model that

had been present since inception and

should have resulted in higher repayments

falling due from September 2023 onward.

Following positive discussions with lenders

to resolve this error, the borrowers agreed

to higher than previously modelled

repayments falling due on the Senior

Facility in Q1 2025, with the remaining

amounts repayable across 2025 and

2026 as previously forecast. The higher

cash balances held in Egypt at the 2024

year end reflect the expected principal

and interest payments due to lenders in

Q1 2025. The latest banking model was

approved in February 2025 and therefore

the balance sheet classification of amounts

falling due within and greater than one

year do not reflect the latest changes.

Capricorn Energy PLC

Annual Report and Accounts 2024

FINANCIAL & OPERATIONAL REVIEW CONTINUED

Balance Sheet

The Group’s net asset position at 31 December 2024 is summarised as follows:

Development assets and goodwill – Egypt 222

Other long-term assets 13

Working capital – non-Egypt 124

Cash and cash equivalents 78

Trade and other receivables and payables, and provisions 46

Working capital – Egypt 31

Trade and other receivables and payables, and inventory 85

Net debt, including total loan liabilities and unamortised facility fees (54)

Lease liabilities due after one year (5)

Well abandonment provisions due after one year (7)

Deferred consideration on business combination (25)

Net deferred tax liabilities (4)

Net assets 349

Development assets and goodwill

Over H1 2024, Capricorn did not approve

further drilling activity in Egypt until there

was an improvement in the receivables

positions from EGPC. By the end of

February 2024, only one rig was operating,

completing pre-approved producing

wells, down from a maximum of six during

2023. Receipts of $93m across H1 2024

led to a resumption of a three-rig drilling

programme in late June 2024. A further

$43m was received in H2 2024.

Reduced additions in 2024 of $63m

(2023: $91m) reflect this pause in activity

and Capricorn will continue to ensure that

future drilling commitments are aligned to

ongoing cash collections.

Depletion charges in 2024 of $85m (2023:

$120m) are based on booked reserves

as at 31 December 2024 and take no

account of expected upward revisions

following the amendment of terms to the

concession agreement. Reserves booked

at the year end decreased due to the

reclassification of reserves not expected

to be extracted within the existing licence

term. The impairment reversal of $16m

includes a restriction to reflect depletion

that would have arisen on a higher cost

base in the calculation.

Goodwill remains unchanged from the

prior year end at $11m.

Other long-term assets

Non-oil and gas property, plant and

equipment and intangible assets at the

year end totalled $13m (2023: $15m)

which includes $7m (2023: $7m) relating

to unamortised carbon credits and $5m

(2023: $7m) of leasehold offices held as

right-of-use assets. Carbon credits are

tested for impairment within the Egypt

cash generating unit.

Prior year assets included amounts due

from Waldorf which have either been

reclassified to current assets and impaired

or written off in full as previously noted.

Working capital

Working capital outside of Egypt includes

the $50m due in relation to Senegal first oil

offset by residual balances from the Group’s

previous international exploration activities

and funding of corporate activities.

Egypt trade receivables at the year end

were $175m (2023: $169m), an increase of

$6m across the year, net of expected credit

loss adjustments. $168m (2023: $143m)

of this amount was overdue.

Net working capital liabilities across

the Egypt concessions were $100m

(2023: $66m), with the increase

reflecting a build-up in the payables

position at the gross joint venture level as

Capricorn preserved cash to ensure debt

repayments can be met.

Tax assets and liabilities

Deferred tax assets of $18m (2023:

$8m) and deferred tax liabilities of

$22m (2023: $10m) are recorded across

the concessions in Egypt. Assets and

liabilities are calculated on a concession-

by-concession basis, having regard

to availability of future profits when

considering the recognition of deferred

tax assets. Although tax is paid on the

contractors’ behalf by EGPC under the

Egypt concession agreements, the liability

remains with the contractor until the point

of settlement, hence the recording of

assets and liabilities on the balance sheet.

The non-Egypt current tax receivable of

$4m relates to the India tax refunds and

is included in working capital above.

Equity movements

Across 2024 Capricorn returned $57m

(2023: $560m) to shareholders, $50m

(2023: $541m) by way of dividends and

$7m (2023: $19m) in share repurchases,

bringing the latter programme to an

end. The Company undertook share

consolidations in conjunction with the

payment of these dividends in both years.

Across the year, Capricorn acquired $11m

(2023: $20m) of its own shares to meet

anticipated share awards to current and

past employees. $10m (2023: $28m) of

shares vested in the year.

This Strategic report has been

approved by the Board and is signed

on their behalf by

Randy Neely

Chief Executive

27 March 2025

Capricorn Energy PLC

Annual Report and Accounts 2024

Strategic Report Corporate Governance Financial Statements Additional Information

Corporate

Governance

Contents

Board of Directors 36

Corporate governance statement 38

Audit committee report 44

Sustainability committee report 49

Nomination and governance committee report 50

Directors’ remuneration report 53

Directors’ report 67

UK Corporate Governance Code

The Board continues to assess its approach to corporate

governance through application of the Financial Reporting

Council’s (FRC’s) UK Corporate Governance Code (the “Code”)

and reports against the 2018 Code for the year ended

31 December 2024 within the following reports. A copy

of the Code can be found at www.frc.org.uk.

Capricorn Energy PLC

Annual Report and Accounts 2024

Committee membership key

Committee Chair

Audit Committee

Remuneration Committee

Nomination & Governance Committee

Sustainability Committee

BOARD OF DIRECTORS

Maria

Gordon

Non-Executive Chair

(51)

Randy

Neely

Chief Executive

(58)

Richard

Herbert

Senior Independent Director

(66)

Tom

Pitts

Non-Executive Director

(59)

Patrice

Merrin

Non-Executive Director

(76)

Sachin

Mistry

Non-Executive Director

(45)

Committee membership

R S

N S

Term of office Maria was appointed as a

Non-Executive Director in

February 2023 and Chair

in May 2024

Randy was appointed as an

Executive Director in June 2023.

Richard was appointed as a

Non-Executive Director and

Senior Independent Director

in February 2023.

Term of office Tom was appointed as a

Non-Executive Director

in February 2023.

Patrice was appointed as a

Non-Executive Director in

June 2023.

Sachin was appointed as a

Non-Executive Director in

June 2024.

Independent On appointment No Yes

Independent Yes Yes No

Skills and experience ‒ Master’s degree, Fletcher

School of Law and Diplomacy,

Tufts University

‒ Bachelor’s degree in Political

Science, University of

Wisconsin

‒ Chartered Financial Analyst

(CFA)

‒ Corporate Director Certificate,

Harvard Business School

Maria has strong governance

experience, having served as

Chair, senior director and

committee member of various

public companies. She currently

serves as Non-Executive Chair

of Constellation Oil Services, a

deep-water drilling oil services

company based in Brazil. She

has two decades of direct

investment experience in senior

roles, including as Head of

Emerging Markets Equity

Strategy at Goldman Sachs

and PIMCO. With that she

brings considerable expertise

in portfolio management and

equity and debt capital markets.

‒ Bachelor of Commerce,

Accounting, University of

Calgary

Randy has more than 25 years of

industry experience in executive

and financial roles, including CFO

of Zodiac Exploration, CFO of

Pearl Exploration & Production

and CFO of Trident Exploration.

Most recently, he was President

and CEO of TransGlobe Energy,

an Egypt-focused production

and development business with

operations in the Eastern and

Western Deserts. At TransGlobe

Energy, Randy led negotiations,

which resulted in an amended,

extended and consolidated

concession agreement with

EGPC in Egypt. Ultimately the

negotiations led to the merger

between TransGlobe and

VAALCO Energy in October 2022.

Randy obtained designations

as a Chartered Public Accountant

(CPA) CFA.

‒ Bachelor’s degree in Geology,

University of Bristol

Richard is a petroleum geologist

with more than 40 years’

experience in the oil and gas

sector, including leading

executive roles across the world’s

major hydrocarbon provinces.

Most recently, Richard served

as CEO of Frontera Energy

Corporation and Global Head

of Exploration for BP.

His career started at Phillips

Petroleum, followed by 19 years

at BP in senior exploration and

development positions spanning

Southeast Asia, Latin America,

the US, Angola and the UK North

Sea. After leaving BP, Richard

spent six years with TNK-BP in

Russia, serving first as Vice-

President, Exploration and then

EVP Technology. After that,

he worked in Canada as

Vice-President, Exploration of

Talisman Energy for five years,

before returning to BP as Head

of Exploration in 2013.

Skills and experience ‒ Master’s degree, Queens’

College, University of

Cambridge

Tom has more than 25 years’

investment banking and private

equity experience in public and

private markets. He is currently

a partner at LionRock Capital,

having previously served in

senior leadership positions at

firms including Credit Suisse,

Morgan Stanley and D.E. Shaw.

Tom has broad experience in

emerging markets, capital

markets and structuring of

complex financial products.

He has direct investment

experience in numerous

emerging and frontier markets

including Vietnam, Pakistan,

Sri Lanka, Indonesia and Laos.

‒ B.A. Politics & Psychology,

Queen’s University

‒ Completed the Advanced

Management Programme

at INSEAD

Patrice has significant experience

across the energy, resources and

commodity sectors. She served

for nine years as an independent

Non-Executive Director of

Glencore plc and is also the

Non-Executive Chair of Metals

Acquisition Limited. In 2022 she

joined the board of Lancium Inc.,

a leading energy technology and

infrastructure private company

dedicated to accelerating the

energy transition.

Previous roles held by Patrice

include President, CEO and

Director of Luscar Ltd., Canada’s

largest thermal coal producer,

prior to which she had been EVP

and COO of Sherritt International,

a Canadian diversified miner,

energy producer and power

generator. In addition, she was

a director of Climate Change

and Emissions Management

Corporation, created to support

Alberta’s initiatives on climate

change and the reduction

of emissions.

‒ Master’s in Mechanical

Engineering, Imperial College

London

Sachin is a Portfolio Manager at

Palliser Capital, a global multi-

strategy fund and one of the

largest investors in Capricorn. He

will add to the Board’s oversight

of the Company as it advances its

long-term priorities to drive the

most value for shareholders.

He brings to the Board more than

20 years of investment, advisory

and financial strategy experience

across numerous developed

and emerging markets. Prior to

joining Palliser Capital, he served

as Portfolio Manager at LIM

Advisers and before that as an

Executive Director at Elliot

Advisers for over eight years.

Sachin held various roles in the

corporate finance department

of UBS earlier in his career.

Key external appointments Public companies:

Non-Executive Director of

Bank of Georgia Group PLC

Non-Executive Chair of

Constellation Oil Services

Holding S.A.

Non-public companies:

None

Public companies:

None

Non-public companies:

None

Public companies:

Chief Executive Officer

of Angus Energy PLC

Non-public companies:

None

Key external appointments Public companies:

None

Non-public companies:

Non-Executive Vice Chairman of

Harmony Advisors

Non-Executive Director of

SIG-i Capital

Director of Haglöfs AB

Public companies:

Non-Executive Chair of

Metals Acquisition Limited

Lead Independent Director of

Lancium Inc.

Non-public companies:

None

Public companies:

None

Non-public companies:

None

Capricorn Energy PLC

Annual Report and Accounts 2024

Strategic Report Corporate Governance Financial Statements Additional Information

Maria

Gordon

Non-Executive Chair

(51)

Randy

Neely

Chief Executive

(58)

Richard

Herbert

Senior Independent Director

(66)

Tom

Pitts

Non-Executive Director

(59)

Patrice

Merrin

Non-Executive Director

(76)

Sachin

Mistry

Non-Executive Director

(45)

Committee membership

R S

N S

Term of office Maria was appointed as a

Non-Executive Director in

February 2023 and Chair

in May 2024

Randy was appointed as an

Executive Director in June 2023.

Richard was appointed as a

Non-Executive Director and

Senior Independent Director

in February 2023.

Term of office Tom was appointed as a

Non-Executive Director

in February 2023.

Patrice was appointed as a

Non-Executive Director in

June 2023.

Sachin was appointed as a

Non-Executive Director in

June 2024.

Independent On appointment No Yes

Independent Yes Yes No

Skills and experience ‒ Master’s degree, Fletcher

School of Law and Diplomacy,

Tufts University

‒ Bachelor’s degree in Political

Science, University of

Wisconsin

‒ Chartered Financial Analyst

(CFA)

‒ Corporate Director Certificate,

Harvard Business School

Maria has strong governance

experience, having served as

Chair, senior director and

committee member of various

public companies. She currently

serves as Non-Executive Chair

of Constellation Oil Services, a

deep-water drilling oil services

company based in Brazil. She

has two decades of direct

investment experience in senior

roles, including as Head of

Emerging Markets Equity

Strategy at Goldman Sachs

and PIMCO. With that she

brings considerable expertise

in portfolio management and

equity and debt capital markets.

‒ Bachelor of Commerce,

Accounting, University of

Calgary

Randy has more than 25 years of

industry experience in executive

and financial roles, including CFO

of Zodiac Exploration, CFO of

Pearl Exploration & Production

and CFO of Trident Exploration.

Most recently, he was President

and CEO of TransGlobe Energy,

an Egypt-focused production

and development business with

operations in the Eastern and

Western Deserts. At TransGlobe

Energy, Randy led negotiations,

which resulted in an amended,

extended and consolidated

concession agreement with

EGPC in Egypt. Ultimately the

negotiations led to the merger

between TransGlobe and

VAALCO Energy in October 2022.

Randy obtained designations

as a Chartered Public Accountant

(CPA) CFA.

‒ Bachelor’s degree in Geology,

University of Bristol

Richard is a petroleum geologist

with more than 40 years’

experience in the oil and gas

sector, including leading

executive roles across the world’s

major hydrocarbon provinces.

Most recently, Richard served

as CEO of Frontera Energy

Corporation and Global Head

of Exploration for BP.

His career started at Phillips

Petroleum, followed by 19 years

at BP in senior exploration and

development positions spanning

Southeast Asia, Latin America,

the US, Angola and the UK North

Sea. After leaving BP, Richard

spent six years with TNK-BP in

Russia, serving first as Vice-

President, Exploration and then

EVP Technology. After that,

he worked in Canada as

Vice-President, Exploration of

Talisman Energy for five years,

before returning to BP as Head

of Exploration in 2013.

Skills and experience ‒ Master’s degree, Queens’

College, University of

Cambridge

Tom has more than 25 years’

investment banking and private

equity experience in public and

private markets. He is currently

a partner at LionRock Capital,

having previously served in

senior leadership positions at

firms including Credit Suisse,

Morgan Stanley and D.E. Shaw.

Tom has broad experience in

emerging markets, capital

markets and structuring of

complex financial products.

He has direct investment

experience in numerous

emerging and frontier markets

including Vietnam, Pakistan,

Sri Lanka, Indonesia and Laos.

‒ B.A. Politics & Psychology,

Queen’s University

‒ Completed the Advanced

Management Programme

at INSEAD

Patrice has significant experience

across the energy, resources and

commodity sectors. She served

for nine years as an independent

Non-Executive Director of

Glencore plc and is also the

Non-Executive Chair of Metals

Acquisition Limited. In 2022 she

joined the board of Lancium Inc.,

a leading energy technology and

infrastructure private company

dedicated to accelerating the

energy transition.

Previous roles held by Patrice

include President, CEO and

Director of Luscar Ltd., Canada’s

largest thermal coal producer,

prior to which she had been EVP

and COO of Sherritt International,

a Canadian diversified miner,

energy producer and power

generator. In addition, she was

a director of Climate Change

and Emissions Management

Corporation, created to support

Alberta’s initiatives on climate

change and the reduction

of emissions.

‒ Master’s in Mechanical

Engineering, Imperial College

London

Sachin is a Portfolio Manager at

Palliser Capital, a global multi-

strategy fund and one of the

largest investors in Capricorn. He

will add to the Board’s oversight

of the Company as it advances its

long-term priorities to drive the

most value for shareholders.

He brings to the Board more than

20 years of investment, advisory

and financial strategy experience

across numerous developed

and emerging markets. Prior to

joining Palliser Capital, he served

as Portfolio Manager at LIM

Advisers and before that as an

Executive Director at Elliot

Advisers for over eight years.

Sachin held various roles in the

corporate finance department

of UBS earlier in his career.

Key external appointments Public companies:

Non-Executive Director of

Bank of Georgia Group PLC

Non-Executive Chair of

Constellation Oil Services

Holding S.A.

Non-public companies:

None

Public companies:

None

Non-public companies:

None

Public companies:

Chief Executive Officer

of Angus Energy PLC

Non-public companies:

None

Key external appointments Public companies:

None

Non-public companies:

Non-Executive Vice Chairman of

Harmony Advisors

Non-Executive Director of

SIG-i Capital

Director of Haglöfs AB

Public companies:

Non-Executive Chair of

Metals Acquisition Limited

Lead Independent Director of

Lancium Inc.

Non-public companies:

None

Public companies:

None

Non-public companies:

None



For more information go to www.capricornenergy.com/about-us/board/

Capricorn Energy PLC

Annual Report and Accounts 2024

CORPORATE GOVERNANCE STATEMENT

Dear Shareholder

Following a year of significant change across Capricorn, 2024

has been a steady year with a refocused organisation and the

new executive team and Board in place.

There continues to be regular engagement with stakeholders,

both within the organisation and externally. The Company’s

approach to stakeholder engagement during the year is set out on

pages 7 and 8, which also includes a statement from our Directors

in accordance with Section 172 of the Companies Act 2006.

Details of our strategy and key performance indicators (KPIs)

can be found on pages 5 and 9. The Board regularly reviews and

develops its framework of effective and prudent controls, which

enables risks and opportunities to the execution of the strategy to

be identified and addressed. The risk management section of this

Annual Report is on page 15 and the internal control statement

on page 42 further describes these processes and controls.

Following extensive change in the Board and employee

headcount in 2023, the Board underwent a three year external

Board evaluation with Gould Consulting in H2 2024. Further

information on this review can be found below in the section

titled “Board performance evaluation”.

Employee engagement remains a key focus of the Company and

of the Board. The Employee Voice Forum (EVF), which is our formal

workforce advisory panel, established in 2019 in line with the FRC’s

UK Corporate Governance Code, continued during 2024. The EVF

currently comprises three employees from a range of functions and

regions and has a rotating membership. Members gather questions

and areas of consideration from employees in their allocated

departments and bring these to the forum for discussion. These

issues of importance to employees are then discussed with the

Board, allowing Board members to gain a greater understanding

and feel for the Company’s culture and to identify any areas that

may impact or enhance it. Appropriate consideration of matters

raised to the Board through the forum can then be made in the

context of the Board’s decision-making. The EVF’s scheduled

meetings were held in May and September 2024.

Compliance with the UK Corporate Governance Code

As a company incorporated in the United Kingdom with a listing

category of ‘Equity shares (commercial companies)’ on the London

Stock Exchange, Capricorn is required to report against the

UK Corporate Governance Code (as published by the FRC and

available on its website at www.frc.org.uk). This statement reports

compliance with the version published in July 2018. Capricorn is

fully committed to achieving compliance with the principles and

provisions set out in the Code and the Board is responsible for

ensuring that an appropriate framework is in place to do so.

The information in this statement (together with the Strategic

Report, Audit Committee Report, Nomination & Governance

Committee Report, Sustainability Committee Report, Directors’

Remuneration Report and Directors’ Report) describes the

manner in which the Company has applied the main principles of

governance set out in the Code and complied with the individual

Code provisions. The Board considers that the Company has

complied with the 2018 version of the Code throughout 2024,

except as noted below.

Provisions 24 and 32 of the Code require the Audit and

Remuneration Committees to comprise at least three

independent non-executive directors. Following certain Board

changes in Summer of 2024, the Board determined it was

appropriate to reduce both Committees’ composition to two

independent non-executive directors. This decision was made in

light of the Company’s removal from the FTSE 350 in June 2023,

despite the continuing technical requirement for the Company

(for a limited period) to remain subject to the rules governing

“larger Companies” until 1 January 2025.

The Board

It is important that the Capricorn Board has the required skills,

experience and expertise to allow it to operate effectively and

efficiently across a number of geographies and disciplines given

the international nature of its business. The Board has considered

the competencies of its Directors, which includes industry

experience in addition to financial, regulatory, risk management

and sustainability experience, to ensure that it is fit for purpose in

pursuing the strategy of the Company. The majority of the Board

was put in place over the course of 2023 with these objectives

fully in mind and continues to review these competencies to

ensure they are appropriate for the Company’s requirements.

Board appointments, for both executive and non-executive

positions, consider an individual’s objectivity and integrity along

with the abilities, skills, experience and diversity that they can

bring to the Board. This process is applied below Board level in

senior management and other appointments, and such matters

are taken into account when considering succession plans.

Board changes

There has been a change of the Non-Executive Chair with the

departure in May 2024 of Craig van der Laan and the departure

of Hesham Mekawi in late June 2024.

The Board currently comprises one Executive Director and five

Non-Executive Directors, including the Chair. The Directors of the

Company as at the date of this statement are set out in the table

below. Further biographical information about our Directors is also

included in the Board of Directors section on pages 36 and 37.

Name

Role

Date of

appointment

(in current role)

Date of last

re-election

Maria Gordon Non-Executive

Chair

1 February

2023

23 May 2024

Randy Neely Chief Executive 1 June 2023 23 May 2024

Richard Herbert Senior

Independent

Director

1 February

2023

23 May 2024

Patrice Merrin Non-Executive

Director

26 June

2023

23 May 2024

Sachin Mistry Non-Executive

Director

23 May 2024 N/A

Tom Pitts Non-Executive

Director

1 February

2023

23 May 2024

Further information on the diversity within the Capricorn Board,

including in terms of its wide range of experience and expertise

across the industry, governance, technical and commercial arenas,

is included in the Nomination & Governance Committee Report

on pages 50 to 52 and in the Strategic Report section of this

Annual Report.

Current Board competencies

Operations – 1

Mergers and acquisitions – 6

Talent management – 2

Egypt – 1

Oil and gas – 2

Audit/Accounting – 3

ESG – 2

Listed company experience – 3

Capricorn Energy PLC

Annual Report and Accounts 2024

Strategic Report Corporate Governance Financial Statements Additional Information

Division of responsibilities between

the Chair and the Chief Executive

The Company has a clear division of responsibilities between

the positions of Chair and the Chief Executive, which is set out

in writing and agreed by the Board.

Chair: key responsibilities Chief Executive: key responsibilities

‒ Leading the Board in

an ethical manner and

promoting effective

Board relationships;

‒ Ensuring that the Board

plays a full and constructive

part in the determination

and development of the

Company’s strategy;

‒ Building a well-balanced

Board, considering Board

composition and Board

succession;

‒ Ensuring the effectiveness

of the Board and individual

Directors;

‒ Overseeing the annual

Board evaluation and acting

on its results;

‒ Ensuring appropriate

induction and development

programmes for Directors;

‒ Setting the Board agenda,

chairing Board meetings and

overseeing implementation

of the Board’s decisions; and

‒ Engagement with

shareholders and other

stakeholders when

appropriate.

‒ Managing the business and

proposing and developing

the Company’s strategy

and overall objectives in

consultation with the Board;

‒ Driving the successful and

efficient achievement of the

Company’s KPIs and strategic

objectives;

‒ Leading the executive team

in ensuring the effective

implementation of decisions

of the Board and its

committees;

‒ Providing strong and

coherent Company

leadership and effectively

communicating the

Company’s culture, values

and behaviours internally

and externally; and

‒ Engagement with

shareholders and other

stakeholders.

Senior Independent Director

Richard Herbert assumed the role of Senior Independent Director

upon his appointment to the Board on 1 February 2023.

The main responsibilities of this role are as follows:

‒ to provide a sounding board for the Chair and to serve as an

intermediary with other Directors when necessary;

‒ to be available to shareholders and other stakeholders if

they have any concerns, which contact through the normal

channels of Chair, Chief Executive or Chief Financial Officer

has failed to resolve or for which such contact is inappropriate;

‒ to meet with the other Non-Executive Directors without the

Chair present, at least annually, in order to appraise the Chair’s

performance; and

‒ to act as Chair of the EVF.

Board performance evaluation

Background

The annual performance evaluation process is considered by

the Board as an opportunity to improve its effectiveness and

to enhance its processes and procedures where appropriate.

The performance evaluation process carried out during 2024

was externally facilitated by Gould Consulting, in line with the

Code recommendation that this evaluation be conducted by

an external party at least every three years. Previously externally

facilitated evaluations took place in 2021, 2018, 2015 and 2012,

with evaluations conducted internally in the intervening years.

2024 evaluation

Feedback was received from individual Board members and

senior executives through a formal process including written

survey and personal interview. It was concluded that the Board

was performing well and that it benefited from a strong group

of individuals who bought significant experience to the table.

Against industry benchmarks, the Board is operating at, or above,

these benchmarks in the majority of areas. Following the results

of the evaluation it was agreed that the areas of key focus for 2025

would include continuing review and discussion on succession

planning in light of required Board competencies; to continue

to ensure evolving risks were discussed regularly at Board level;

to continue to refine the Group’s strategy and to provide oversight

of the evolving organisational culture. As part of the Board

improvement plan, continuing education for the Directors will

focus on risk and governance during the first half of 2025.

Independence of Non-Executive Directors

The Board considers the independence of each of the Non-

Executive Directors on an ongoing basis, taking into account their

integrity, their objectivity and their contribution to the Board and

its committees. The Board believes that the following behaviours

are essential for a Director to be considered independent:

‒ provides an objective, robust and consistent challenge to

the assumptions, beliefs and views of senior management

and the other Directors;

‒ questions intelligently, debates constructively and challenges

rigorously and dispassionately;

‒ acts at all times in the best interests of the Company and its

shareholders and other stakeholders;

‒ has a detailed and extensive knowledge of the Company’s

business and of the market as a whole, which provides a solid

background against which they can consider the Company’s

strategy objectively and help the Executive Director(s) develop

proposals on strategy; and

‒ has no close ties or material relationships with the Company,

either directly or indirectly.

Maria Gordon was independent on her appointment to the Board

and confirmed as independent on the date of her appointment

as Chair in May 2024. Sachin Mistry is a current employee of

a shareholder and is not considered to be an Independent

Non-Executive Director under the provisions of the Code. With

the exception of Sachin Mistry, the remaining Directors are

independent in their appointment and have no relationship, other

than by being nominated, with the nominating shareholder and

are, therefore, each considered independent by the Board.

Time commitment of Non-Executive Directors

The Board recognises its responsibility under the Code to take

into account other demands on each Director’s time, with a view

to ensuring that its Directors (particularly those Non-Executive

Directors who sit on other public company boards) have sufficient

time to devote to their role on the Capricorn Board. Prior to

appointment, each individual’s other significant commitments

are disclosed and there is also a policy in place to ensure that

additional external appointments are not undertaken without

prior consultation. The other directorships held by each Non-

Executive Director (where applicable) are disclosed in the Board

of Directors section on pages 36 and 37.

None of our Non-Executive Directors sit on more than three public

company boards (including Capricorn) and those that do sit on

other public company boards have taken appropriate steps to

ensure that they have sufficient time to devote to their role on the

Capricorn Board.

Re-election of Directors

In accordance with the Code, each of the Company’s Directors

are subject to annual re-election by shareholders. As such, each

of the current Directors will seek re-election at the Annual General

Meeting (AGM) to be held on 22 May 2025.

Induction and development

New Directors received a full and appropriate induction on

joining the Board. This involves a tailored programme of meetings

with other Board members, senior management and the

Company Secretary.

Capricorn Energy PLC

Annual Report and Accounts 2024

The Company ensures that new Directors also receive additional

induction support and training when assuming any additional

responsibilities such as membership of Board committees. Where

appropriate, the Company arranges for new Non-Executive

Directors to receive additional briefings on key matters regularly

discussed by the Board.

The Company provides, on an ongoing basis, the necessary

resources for developing and updating its existing Directors’

knowledge and capabilities. In particular, the Company

is committed to the provision of continuing professional

development training for its Directors. In 2024, the Company

continued with its practice of providing a Directors’ education

programme consisting of a number of seminars for Board

members, which are presented by the Company’s external

advisers, guest speakers or members of senior management

on subjects appropriate to the Company’s business, including

changes to legislation, regulation and market practice. During

2024, the subjects covered by these seminars included ESG

reporting and regulation as well as updates on changes to listing

requirements in the UK.

These seminars were incorporated into the schedule for the

relevant Board meeting and were attended by all Directors

present at such meetings. Any Director may request that a

particular subject be covered in a seminar.

Information and support

The Board has full and timely access to all relevant information

to enable it to discharge its duties. Under the direction of the

Chair, the Company Secretary is responsible for ensuring good

information flows within the Board and its committees, and

between executive management and Non-Executive Directors,

as well as facilitating induction and assisting with professional

development as required. The Company Secretary ensures the

presentation of high-quality information to the Board and its

committees, and that all papers and information are delivered

in a timely fashion. Board and committee papers are delivered

securely through an electronic platform.

The Company Secretary is responsible for advising the Board,

through the Chair, on all UK Corporate Governance Code and

related matters, and each Director has access to the advice

and services of the Company Secretary.

There is also a procedure agreed by the Board for Directors,

in furtherance of their duties, to take independent professional

advice if necessary, at the Company’s expense.

Conflicts of interest

The Board has in place a procedure for the consideration and

authorisation of conflicts or possible conflicts with the Company’s

interests. All Directors are aware of the requirement to submit

details to the Company of any current situations (appointments or

otherwise) which may give rise to a conflict, or potential conflict,

of interest. The Board will continue to monitor and review potential

conflicts of interest on a regular basis.

Whistleblowing

The Group has a robust Whistleblowing Policy in place, through

which the workforce can raise any matters of concern – further

information on the Group’s Whistleblowing Policy is included

in the Audit Committee Report on page 48.

Matters reserved to the Board and delegation of authority

The Board has a formal schedule of matters specifically reserved

to it for decision, which is divided into categories covering different

types of decisions, including:

‒ corporate;

‒ Board/Directors;

‒ financial/operational; and

‒ legal/regulatory.

Board meetings

During 2024, a total of 11 scheduled meetings of the Board

were held. Four of these meetings were conducted over two

consecutive days following the usual format for Board meetings,

described below, with another seven shorter meetings held to

update the Board and/or to approve specific matters during 2024.

Board committee meetings are also scheduled for the same dates

as Board meetings and are either split over two days or scheduled

for one day, depending on the number of committee meetings

required. Board committee meetings take place prior to the main

part of the Board meeting so that the Chair of each committee

can provide a report to the Board. These are followed by the

remainder of the formal business of the Board meeting. The Chair

also holds a short meeting with the other Non-Executive Directors

(without the Executive Director).

Details of attendance at each of the Board meetings during 2024,

and at meetings of each of the Board committees, are set out

below. The Company has very successfully used its technological

communication platforms to ensure that Directors who are

unable to attend any meeting in person are still able to attend all

scheduled Board and committee meetings and were also able

to do so ‘on camera’.

The formal agenda for each scheduled Board meeting is set by the

Chair in consultation with the Chief Executive and the Company

Secretary. The system for establishing agenda items means that

the Chair, the Board and each of the Board committees have the

confidence that all required items are included on their agenda at

the most appropriate time of the year and that there is sufficient

time allocated for discussion, allowing the Directors to discharge

their duties effectively.

Formal minutes of all Board and committee meetings are

circulated to all Directors prior to the subsequent Board meeting

and are considered for approval at that Board meeting. In addition,

the members of the Board are in frequent contact between

meetings. There is also a procedure in place to allow Board

meetings to be convened at short notice where required to deal

with specific matters which need to be considered between

scheduled Board meetings.

As noted above, the Non-Executive Directors have a practice of

meeting informally at the end of each Board meeting without or

the Executive Directors being present. At these Non-Executive

forums, the Non-Executive Directors are invited by the Chair to

bring forward any matter pertaining to the business of the Board

that they believe would benefit from discussion in such forums.

This practice also applies after Board committee meetings to

ensure that Non-Executive Directors can discuss any relevant

issues arising from those meetings without management

being present.

CORPORATE GOVERNANCE STATEMENT CONTINUED

Capricorn Energy PLC

Annual Report and Accounts 2024

Strategic Report Corporate Governance Financial Statements Additional Information

Board committees

Board committee structure during 2024

Board of Directors

Audit

Committee

Remuneration

Committee

Nomination &

Governance

Committee

Sustainability

Committee

Each of the Board committees is provided with all necessary

resources to enable them to undertake their duties in an effective

manner and has formal terms of reference approved by the

Board. Copies of the terms of reference, which were reviewed and

updated in line with the 2018 version of the Code and approved by

the Board in March 2022, are available on the Company’s website.

The Company Secretary acts as secretary to the Board committees.

The minutes of all committee meetings are circulated to all

Directors. In line with best practice, more detailed reports from the

Audit, Nomination & Governance and Sustainability Committees

are presented as separate reports rather than including these in

the Corporate Governance Statement. Summary details of the

composition of each committee at the end of 2024 are set out

in the table on the following page.

Directors’ attendance at 2024 Board and committee meetings

The table below sets out the attendance record of each Director at scheduled Board and committee meetings during 2024.

Board Board

Audit

Committee

Remuneration

Committee

Nomination &

Governance

Committee

Sustainability

Committee

Meetings held during 2024

12 4 5 2 2

Meetings attended /

meetings held in 2024

during directorship

Meetings attended /

meetings held in 2024

during membership

Meetings attended /

meetings held in 2024

during membership

Meetings attended /

meetings held in 2024

during membership

Meetings attended /

meetings held in 2024

during membership

Current Directors

Maria Gordon (Chair) 11/12

1/1 5/5 2/2 –

Randy Neely (Chief Executive) 12/12 – – – 2/2

Richard Herbert

(Senior Independent Director) 11/12 4/4 5/5 2/2

Sachin Mistry 7/7 – – – 1/1

Tom Pitts 11/12 4/4 5/5 –

Patrice Merrin 12/12 – – 2/2 2/2

Former Directors

Craig van der Laan 5/5 – – 1/1 –

Hasham Mekawi 6/6 – – 1/1 1/1

Notes:

(1) During 2024, certain Directors who were not committee members attended meetings of the Audit Committee, Remuneration Committee and Nomination & Governance

Committee by invitation. These details have not been included in the table.

(2) Maria Gordon was conflicted from attendance at a board meeting held to review her appointment as Chair.

Key issues considered within Board meetings during 2024

Code Requirement Key discussions Outcome

Ensuring an effective and entrepreneurial

Board to promote long-term sustainable

success

‒ Macroeconomic environment

‒ M&A opportunities in the UK and MENA

‒ Growth opportunities in Egypt connected

to integration of concession agreements

‒ Board evaluation results

‒ The Board discussed M&A opportunities

at all meetings

‒ Proposals for integration of concession

agreements was approved for submission

‒ Discussion on board improvement plan

Establishing and aligning purpose,

values and strategy with culture

‒ Culture and values are properly detailed

in Group KPIs

‒ SID chairs the company Employee

Voice Forum

Ensuring necessary resourcing is in place

and establishing a framework of controls

to enable risk to be assessed

‒ Reviewed principal risks and uncertainties

and emerging risks

‒ Regular workshops on risk and controls

Effective engagement with shareholders

and stakeholders

‒ External insight into regulatory and

political environment in Egypt

‒ Regular discussions on managing

government relations in Egypt

Appointments are subject to formal

rigorous and transparent procedure with

effective succession plan for Board and

senior management

‒ Appointment of COO and CFO ‒ Detailed discussion on succession

planning

Capricorn Energy PLC

Annual Report and Accounts 2024

Remuneration Committee

Member Date of appointment

R. Herbert (Chair) 26 June 2023

(Chair with effect from 23 May 2024)

T. Pitts 1 February 2023

M. Gordon 1 February 2023

Audit Committee

Member Date of appointment

T. Pitts (Chair) 1 February 2023

R. Herbert 1 February 2023

Nomination & Governance Committee

Member Date of appointment

M. Gordon (Chair) 1 February 2023

(Chair with effect from 23 May 2024)

R. Herbert 23 May 2024

P. Merrin 26 June 2023

Sustainability Committee

Member Date of appointment

P. Merrin (Chair) 26 June 2023

S. Mistry 23 May 2024

R. Neely 26 June 2023

Shareholders and the Annual General Meeting (AGM)

Communications with shareholders are given high priority by

the Board. The Company has implemented the provisions of the

Companies Act 2006 regarding electronic communication with

its shareholders, in order to give shareholders more choice and

flexibility in how they receive information from the Company.

Capricorn responds promptly to correspondence from shareholders

and the Company’s website contains a wide range of information

on the Company, including a dedicated investor relations section.

In order to ensure that the members of the Board develop an

understanding of the views of major shareholders, there is regular

dialogue with institutional shareholders, including meetings with

executive management after the announcement of the year-end

and half-year results. The Board is kept informed of any issues raised

by shareholders both as a standing agenda item in Board papers

and through feedback at Board meetings, and following results

or other significant announcements. In addition, the Company

maintains an investor relations database, which details all meetings

with investors or other related stakeholders. All analyst reports

relating to the Company are also distributed to the Board.

A list of the Company’s major shareholders can be found in the

Directors’ Report on page 68. The Company recognises that

the success of the comply-or-explain approach under the Code

depends on an ongoing and open dialogue with shareholders,

and remains committed to engaging with shareholders, as well

as governance and proxy voting agencies, on any matter which

they wish to discuss in relation to the Company’s governance.

During the last 18 months, certain Directors have also engaged

directly (either through meetings or by telephone/written

correspondence) with specific investors, investor groups and

proxy advisory agencies on a range of matters including progress

against strategic objectives, diversity and remuneration. During

2024, engagement with investors was of notably high importance

following the strategic review and investor meetings were held

either through virtual communications platforms or in person.

AGM details (2024 and 2025) Overview

2024 AGM: was held on

Thursday, 23 May 2024

at The Cellar Room,

Kimpton Charlotte Square Hotel,

38 Charlotte Square, Edinburgh

‒ 15 ordinary resolutions and

4 special resolutions were

proposed and all received

shareholder approval

2025 AGM: to be held on

Thursday, 22 May 2025 at

Hawthornden Lecture Theatre,

National Gallery, The Mound,

Edinburgh EH2 2EL

(full details in Notice of AGM)

‒ 12 ordinary resolutions and

4 special resolutions are

proposed for shareholder

approval

It is policy for all Directors to be present at the AGM, when possible,

with the Chair of each of the Board committees also expected to

attend and be prepared to answer shareholder questions on areas

within their remit.

The proxy votes for and against each resolution, as well as

abstentions, will be counted before the AGM and the results will be

made available following the meeting after the shareholders have

voted in a poll on each resolution. Both the Form of Proxy and the

poll card for the AGM include a ‘vote withheld’ option in respect of

each resolution to enable shareholders to abstain on any particular

resolution. It is explained on the Form of Proxy that a ‘vote withheld’

is not a vote in law and will not be counted in the calculation of the

proportion of the votes ‘for’ or ‘against’ a resolution.

Information pursuant to the Takeover Directive

The Company has provided the additional information required by

the Disclosure and Transparency Rules of the UK Listing rules (and

specifically the requirements of DTR 7.2.6 in respect of Directors’

interests in shares; appointment and replacement of Directors;

powers of the Directors; restrictions on voting rights and rights

regarding control of the Company) in the Directors’ Report.

Internal control

The Board has overall responsibility for the Group’s system of

internal control, which includes all material controls, including

financial, operational and compliance controls and related risk

management, and for regularly reviewing its effectiveness. The

system of internal control is designed to identify, evaluate and

manage significant risks associated with the achievement of the

Group’s strategic objectives. Because of the limitations inherent in

any system of internal control, Capricorn’s system is designed to

meet its particular needs and the risks to which it is exposed, with

a focus on managing risk rather than eliminating risk altogether.

Consequently, it can only provide reasonable and not absolute

assurance against material misstatement or loss.

The Company has in place an Integrated Internal Control and

Assurance Framework (the “Framework”), which plays a critical role

in setting out how the Company manages and assures itself that the

risks relating to the achievement of corporate vision, strategy and

objectives are effectively controlled. The Framework is based on the

Committee of Sponsoring Organisations (COSO) framework and its

five key components, which is a commonly used and recognised

international framework for considering internal control systems.

The COSO framework seeks to help organisations develop systems

of internal control which help facilitate the achievement of business

objectives and improvements in Company performance. The COSO

framework also supports organisations in adapting to increasingly

complex business environments and managing risks to acceptable

levels with the aim of safeguarding shareholders’ interests and

Company assets. The Capricorn risk framework accords with the

FRC guidance on risk management and internal control.

The Framework has been in place for the 2024 financial year and

up to the date of approval of the Annual Report and Accounts. The

Board, supported by the Audit Committee, has carried out a review

of the effectiveness of the systems of internal control during 2024

and will ensure that a similar review is performed in 2025. In so doing,

the Board and Audit Committee took into account the assurance

provided by the year-end internal control report in respect of the

CORPORATE GOVERNANCE STATEMENT CONTINUED

Capricorn Energy PLC

Annual Report and Accounts 2024

Strategic Report Corporate Governance Financial Statements Additional Information

effectiveness of the Group’s system of internal control. The Board is

accordingly satisfied that effective controls are in place and that risks

have been mitigated to a tolerable level across the Group in 2024.

Particular attention has been placed by the Company’s

management on ensuring that an effective system of internal

control has been maintained during the year in relation to the

key risks in the Company’s business activities.

Enhancements have been made during 2024 to the following

key controls, business processes and procedures:

‒ compliance certificates were completed by all staff members

and contractors confirming compliance with the Group’s Code

of Ethics;

‒ several activities were completed to enhance our bribery

and corruption controls across the business, including the

revision of country-specific risk assessments for Egypt, which

supplemented the overarching Group risk assessment already

in place;

‒ a compliance dashboard was maintained to assess compliance

with several key regulations impacting the Group, including

the UK Bribery Act, the General Data Protection Regulation,

the Corporate Criminal Offence for the failure to prevent the

facilitation of tax evasion and modern slavery. The dashboard

was maintained by the Risk & Compliance Manager. There were

no material weaknesses identified;

‒ to ensure awareness, understanding and compliance on

important governance, regulatory and security topics, mandatory

e-learning was implemented across the Group, which included

comprehensive modules on bribery and corruption, health and

safety, cyber security, cyber fraud and tax evasion; and

‒ the Board completed a risk workshop in December which

assessed the key risks and opportunities which could influence

the achievement of the Group’s strategic objectives.

Work has commenced to prepare for the upcoming changes

to the internal control requirements under Provision 29 of the

UK Code. A scoping exercise has been completed to identify the

material financial, operational, compliance and reporting controls

for the principal risks. Assurance maps have been updated to

reflect areas where further assurance may be required. A dry-run

of the process will be conducted ahead of formal reporting.

The following describes the key elements of the Framework

and the processes used by the Board during 2024 to review the

effectiveness of the system and the approach to be taken in 2024.

1. Strategic direction

The Company’s strategy and business plan are debated by and

approved by the Board. The Chief Executive is responsible for

managing the Company’s business and implementing the

Company’s strategic objectives in consultation with the Board.

The Chief Executive is also responsible for implementing

the decisions of the Board and its committees and driving

performance measured against the Company’s KPIs.

2. Operating management

The Company refreshes its work programme and budget on an

annual basis in line with its overall strategy.

3. Risk management

The Board is responsible for maintaining sound risk management

and internal control systems across the Capricorn Group. The Board

must satisfy itself that the significant risks faced by the Group

are being managed appropriately and that the system of risk

management and internal control is sufficiently robust to respond

to internal or external changes in the Group’s business environment.

The Group Risk Management Process defines the steps through

which Capricorn seeks to systematically identify, analyse, assess,

treat and monitor the business risks faced by the Group. The Group

Risk Management Process also identifies the risk management

organisational structure through which business risks are managed

and regularly reviewed at operating-, asset-, country- and Company-

level. Asset-, project-, country- and functional-level risk registers

are used to capture, assess, monitor and review risks before the

principal risks are consolidated into the Group risk register.

4. Assurance

The ’three lines of defence’ framework adopted by the Board

provides three levels of assurance against the risks facing the

Company: firstly at the operational level; secondly through

overview by functional management and the Risk Management

Committee; and thirdly through internal or joint venture audits.

The integrated internal control and assurance framework

document includes a description of the Company’s business

and assurance models and of its organisation and committee

structure, and defines the relevant roles and responsibilities. The

framework defines the key policies and procedures which govern

the way in which Capricorn conducts its business and is therefore

a core part of its system of internal control.

During 2024, the Directors reviewed the effectiveness of the

Company’s system of financial and non-financial controls,

including operational and compliance controls, risk management

and high-level internal control arrangements through the

completion of internal control self-assessment questionnaires.

These questionnaires, which are tailored to each region or

function, are designed to provide an internal assessment of the

effectiveness of key controls for the Group’s principal risks.

Additionally, assurance maps for principal risks are developed,

which outline the key sources of assurance across the ‘three lines

of defence’. The ‘three lines of defence model’ is a method of

assessing different sources of assurance the Group can rely on when

analysing key risks and controls. Assurance is gained through the

application of the business management system, which directs

the day-to-day running of the business (first line), the oversight

functions within Capricorn which provide challenge to the risk and

control environment (second line) and any third-party reviews the

Group instructs to assess the status of a risk/control (third line). The

assurance maps help identify potential areas of control weakness

and/or ineffective use of assurance resources across the Group, which

influenced the topics included in the 2024 Group internal audit plan.

The Directors derived assurance from the following internal and

external controls during 2024:

‒ a schedule of matters specifically reserved for decision by

the Board;

‒ implementation of the Capricorn business management

System for key business activities;

‒ an appropriate organisational culture and structure;

‒ control over non-operated joint venture activities through

delegated representatives;

‒ specific delegations of authority for all financial transactions

and other key technical and commercial decisions;

‒ segregation of duties where appropriate;

‒ accounting and procurement system controls including access

controls and approval processes;

‒ business and financial reporting, including KPIs;

‒ functional management reviews;

‒ an annual ‘letters of assurance’ process, through which asset

and functional managers review and confirm the adequacy

of internal financial and non-financial controls and their

compliance with Company policies, and report any control

weaknesses identified in the past year and actions taken in

respect of any weaknesses identified in the prior year;

‒ an annual internal audit plan, which is approved by the Audit

Committee and Board, and is driven by risks and key controls;

‒ reports from the Audit Committee;

‒ reports from audits by host governments and co-venturers;

‒ independent third-party reviews; and

‒ the skills and experience of the workforce.

Maria Gordon

Chair

27 March 2025

Capricorn Energy PLC

Annual Report and Accounts 2024

AUDIT COMMITTEE REPORT

Dear Shareholder

Composition of the Audit Committee

I was appointed Chair of the Audit Committee in February 2023. Serving with me is my fellow Independent Non-Executive Director,

Richard Herbert. The members of the Committee have been chosen to provide the range of financial and commercial experience

needed to fulfil these duties. Richard is considered by the Board to be independent.

Summary of Audit Committee meetings during 2024 and subsequent to the year end

The Audit Committee met five times in 2024, with meetings arranged around the key external reporting dates. The first two meetings

in March 2024 focused on concluding the 2023 year-end external audit process (reported in the 2023 Annual Report and Accounts).

Meetings in June, and September centred on the Group’s half year reporting and a December meeting on planning for the 2024 year-

end. A subsequent meeting in March 2025 was held to conclude on the 2024 year-end process.

Meetings are attended by senior Capricorn staff, including the Chief Financial Officer, Eddie Ok, (who joined in April 2024), the Head

of Finance and the Risk and Compliance Manager, with other senior staff joining as appropriate for the matters under discussion.

The Group’s Chief Executive Officer, Randy Neely, also attended all meetings. The Group’s external auditors attend all meetings.

Responsibilities and activities during the year

The Audit Committee’s primary responsibilities include the integrity of the Group’s Financial Statements, the effectiveness of the Group’s

risk management and internal assurance processes and related governance and compliance matters.

The terms of reference of the committee consider the requirements of the UK Corporate Governance Code and are available for inspection

on the Group’s website. A summary of the committee’s principal responsibilities and activities during the year are set out below.

Principal responsibilities of the Committee Activities during the year Key areas formally discussed

Financial

Statements

‒ Monitoring the integrity of the

Financial Statements of the Group

and formal announcements

relating to the Group’s financial

performance.

‒ Reviewing any significant financial

reporting judgements.

‒ Reviewing the appropriateness

of accounting policies, their

consistent application and

disclosures in financial statements.

‒ March 2024: 2023 Financial

Statements update, conclusions

and approval.

‒ June 2023: Half year key accounting

issues.

‒ September 2024: Approval of half

year financial statements.

‒ December 2024: Year end key

accounting issues overview.

‒ March 2025: Approval of 2024

year-end financial statements.

‒ Going concern conclusions,

linkage to the viability statement.

‒ Significant accounting issues at

the half year and year end (see

below).

External audit ‒ Overseeing the Group’s

relationship with the external

auditors, including:

• making recommendations

to the Board as to the

appointment or reappointment

of the external auditor;

• reviewing their terms of

engagement and engagement

for non-audit services; and

• monitoring the external

auditor’s independence,

objectivity and effectiveness.

‒ At each meeting the Committee

receives an updated report from

the external auditors which either

explains their plans and scope for

the forthcoming audit or review

or contains the conclusions from

their work performed.

‒ Reviewing the external auditor’s

scope and audit plan for the 2024

year-end.

‒ Discussing the materiality levels

set by the auditor.

‒ Approval of the auditor’s

remuneration.

‒ Consideration of the results of the

external audit with the auditor

and management.

‒ Assessment of the effectiveness

of the external audit.

Internal risk

management

and assurance

‒ Reviewing the Group’s internal

financial controls and internal

control and risk management

systems and oversight of the

Group’s Risk Management

Committee.

‒ Monitoring and reviewing the

effectiveness of the Group’s

internal audit function.

‒ At each meeting, the Audit

Committee receives:

• an update from management

on the latest Risk and Assurance

Committee meetings and

risk management process

and, where applicable, an

update from the Group Risk

and Compliance Manager

on progress of internal

audits and their output and

recommendations.

‒ Reviewing the Group’s corporate

and operational risk register.

‒ Selection of internal audit

work planned.

‒ Assessment of key findings raised

from internal audits conducted

in the year.

Whistleblowing

procedures

‒ Reviewing the Group’s

whistleblowing procedures and

ensuring that arrangements are

in place for the proportionate

and independent investigation of

possible improprieties in respect

of financial reporting and other

matters and for appropriate follow-

up action.

‒ The Committee’s annual review

and approval of the Group’s

whistleblowing procedures was

performed at the December 2024

meeting.

‒ Reviewing and approving of

the Group’s whistleblowing

procedures.

Capricorn Energy PLC

Annual Report and Accounts 2024

Strategic Report Corporate Governance Financial Statements Additional Information

Principal responsibilities of the Committee Activities during the year Key areas formally discussed

Other matters ‒ Reviewing the Group’s policy for

approval of non-audit work to the

Company’s auditor.

‒ Reviewing booking of Group

reserves and resources.

‒ The Committee’s annual review

and approval of the Group’s policy

for approval of non-audit work was

undertaken at the December 2024

meeting.

‒ Richard Herbert is Chair of the

Capricorn’s Reserves and Resources

Reporting Committee, providing

direct oversight to the Audit

Committee.

‒ Review and approval of the Group

policy for approval of non-audit

work to the Company’s auditor.

‒ Classification of reserves and

resources for disclosure in the

Annual Report.

The review of the Annual Report and Accounts for fair, balanced and understandable presentation and disclosure, while considered

by the Audit Committee, is formally performed, and approved by the full Board.

Financial statements

At each reporting date, the Audit Committee review the results for the relevant period and the key assets and liabilities in the Group

balance sheet, focussing on the key estimates, assumptions and judgments that management has used in applying the relevant

accounting standard.

The key issues identified at the December 2024 year-end were, the impairment review performed on the Group’s property, plant and

equipment – development/producing assets and goodwill resulting in a reversal of impairment, expected credit loss adjustments against

trade receivables and other receivables relating to past transactions, and the accounting treatment for consideration receivable and

disclosure of the tax demand relating to divested interests in Senegal. As always, the assessment of the ability of the Group to continue

to operate as a going concern and the viability statement is also considered by the Audit Committee.

2024 year end significant accounting issues:

Reversal of impairment

At the year end, Capricorn and Cheiron were in advanced discussions with EGPC on amendment to the terms of the concession

agreements across the 50:50 concessions in Egypt. These negotiations provide evidence of improved commercial terms, including

field-life extensions, expected in the near-term, giving rise to a significant increase in the fair value of the assets.

The Audit Committee reviewed managements determination that the expected terms of the ongoing negotiations with EGPC should be

considered in estimating the fair value less cost of disposal on the Group’s Egypt assets and concluded that this was the correct approach

in accordance with IAS 36. After seeking clarity on the status of negotiations ongoing at the balance sheet date, the Audit Committee

agreed with management’s assessment. Further the committee agreed that the BED and Obaiyed concessions should be tested for

impairment as a single cash generating unit.

The Audit Committee reviewed the impairment test results including the revised cash-generating unit for the merged concessions.

Richard Herbert updated the committee in his capacity of Chair of the Group’s Reserves and Resources Committee. The Audit Committee

also reviewed and approved the commercial assumptions used in the impairment test calculations including macro assumptions on oil

and gas prices and inflation and asset-specific assumptions on the timing of collection of receivables and discount rates to be applied to

cash flow models.

The Audit Committee concluded that the reversal of impairment recorded in the financial statements was a true reflection of the

increased fair value resulting from the improved commercial terms under the concession agreement modernisation negotiations

and that the quantum of the reversal had been correctly calculated.

Capricorn Energy PLC

Annual Report and Accounts 2024

Deferred consideration due from Waldorf

Following the December 2023 settlement agreement, Capricorn was due $22.5m from Waldorf Petroleum in January 2025 relating

to the final instalment related to the sale of UK producing assets in 2021. Further, approval from the North Sea Transit Authority (NSTA)

was outstanding for the transfer of a 25% Working Interest in the Columbus field from Waldorf to Capricorn.

Due to ongoing financial difficulties, in February 2025 Waldorf announced a restructuring plan compromising Capricorn’s ability to

collect the sums due to the Group. Under Waldorf’s plans, Capricorn will receive only $1.5m of the $22.5m due. While Capricorn is

considering options to object to the restructuring plan, management have increased the expected credit loss adjustment against the

receivable due to reduce the net recovery to the $1.5m offered by Waldorf. The Audit Committee agreed that this loss adjustment was

appropriate at this time.

The Group previously carried $7m on the balance sheet as a long-term receivable reflecting the value attributed to the Columbus asset

in the settlement agreement (a cash alternative of this amount was due should approval from the NSTA not be received). Though the

deadline for NSTA approval of the transfer has been extended to 31 March 2025, it is not expected that the NSTA will approve the transfer.

With little expectation of being able to recover the additional $7m that becomes due from Waldorf, management have fully impaired the

other long-term receivable. Again, the Audit Committee agreed that this was the appropriate accounting treatment at this time.

Woodside receivable and Senegal tax assessment

Capricorn have recorded income of $50m in the year ending 31 December 2024 reflecting amounts received from Woodside in January

2025 to settle additional consideration due on the 2021 sale of the Group’s oil and gas assets in Senegal. Management concluded that

recognition in the 2024 results was appropriate given that all conditions requiring to be met for payment of the $50m had been achieved

in advance of the balance sheet date. The Audit Committee agreed with management’s conclusion.

In December 2023 Capricorn received notification that the Senegal tax authorities had raised an assessment against Woodside,

including two items relating to the Group’s period of ownership, being a claim for registration duties payable on transfer of assets from

Capricorn to Woodside and a capital gains tax assessment on the transfer. The Audit Committee were fully briefed throughout the year of

progress on discussions between management and counterparties at Woodside towards a negotiated settlement with the Senegalese

tax authorities and the increasing likelihood of international arbitration being required to settle the issue.

In anticipation of arbitration, Capricorn have sought legal advice which supports the merits of the Group’s defence and would result

in no liability arising. Management therefore continues to disclose the assessment as a contingent liability with no provision made in

the financial statements. The Audit Committee challenged management on this issue and were comfortable the correct accounting

treatment had been followed.

Going concern and viability

At each reporting date, management considers the factors relevant to support a statement of going concern included in note 1.2 to the

Financial Statements. The Audit Committee reviews and challenges management’s conclusions so that we may, in turn, provide comfort

to the Board that management’s assessment has been considered, challenged and is appropriate.

The Audit Committee carefully reviewed management’s going concern conclusion based on the Group’s latest cash and debt position.

Downside case assumptions were reviewed, run with sustained low oil prices, reduced production, cost increases and a reduction in

available finance and default by joint venture partners. In all cases, the Group retained a significant funding surplus. This confirmed that

the Group is fully funded to meet its work programme and firm commitments over the period of 12 months from the date of signing

the Financial Statements. The Audit Committee subsequently recommended to the Board that the Group continues to use the going

concern basis in preparing its Financial Statements.

The Committee also reviews and challenges management on the sensitivity analysis performed to support the Group’s viability statement,

included in the Strategic Report on page 16. The viability statement review included assessing both the operational risks identified by

management, including reserve downgrades and major emergency incidents and corporate risks identified, including volatile oil prices,

failure to deliver the net zero 2040 roadmap and continuing issues with the collection of receivables in Egypt. Following this challenge,

the Committee recommended approval of the viability statement to the Board.

External audit

PricewaterhouseCoopers LLC (PwC) has been Capricorn’s external auditors since 2013. An audit tender process was run in December 2023

and PwC was reappointed as the Group’s auditor at the 2024 AGM and therefore continue as the Group’s auditor for the year ending

31 December 2024. PwC may serve a maximum of eight further year end audit engagements before mandatory rotation, though the

Audit Committee continue to evaluate the performance of the auditors on an ongoing basis. Bruce Collins remains lead audit partner

and the 2024 year end represents his fourth year in this role. Bruce may serve a maximum of five years as lead audit partner and the

Audit Committee will work with Bruce during the coming months to identify his successor to allow a smooth transition following the

2025 year end audit.

AUDIT COMMITTEE REPORT CONTINUED

Capricorn Energy PLC

Annual Report and Accounts 2024

Strategic Report Corporate Governance Financial Statements Additional Information

Assessment of external audit process

The Audit Committee has an established framework to assess the effectiveness of the external audit process that will continue going

forward. This comprises:

Audit Committee action Audit Committee conclusion

An assessment of the independence of the auditors. The Audit Committee considered PwC to be independent.

A review of the audit plan including the materiality level set by the

auditors and the process they have adopted to identify Financial

Statement risks and key areas of audit focus (summarised in the

Independent Auditors Report on page 71).

The Audit Committee accepted the level of materiality set by

the auditors.

A review of the Audit Quality Inspection (“AQI”) report on our

auditor, published by the FRC with particular emphasis on any

key messages applicable to Capricorn.

There were no matters raised in the AQI report that caused concern

for the Audit Committee.

A review of the final audit report, noting key areas of auditor

judgement and the reasoning behind the conclusions reached.

The Audit Committee reviewed findings on the key audit issues

identified. The Committee was satisfied that appropriate challenge

had been made of management and that the audit process was robust.

Regular communications through formal papers submitted

and presentations to the committee, including a review

by the committee of the extent to which the auditors have

challenged management.

The audit plan for the year ending 31 December 2024 was

presented to the Audit Committee in December 2024 and is

summarised in the Independent Auditor’s Report on page 71.

Audit findings on significant matters are presented to the

Committee in March 2025, together with the work performed

by the auditors to challenge management’s key estimates

and assumptions.

Separate meetings were held between myself as Chair of the Audit

Committee and the lead audit engagement partner.

Any significant points discussed in separate meetings were brought

to the attention of the full Audit Committee.

A formal questionnaire issued to all Audit Committee members

and senior Capricorn management who are involved in the audit

covering the robustness of the audit process, the quality of delivery,

the quality of reporting and the quality of the auditor’s people

and service.

The Audit Committee were satisfied with the robustness of the

audit process.

Of particular focus for the committee is the assessment of the judgement applied by PwC during each stage of the audit process

including setting audit materiality, identifying the risks to the Financial Statements, evaluating audit findings and communicating those

areas of judgement to the committee.

The Audit Committee noted the level of planned materiality and agreed on the levels of misstatements to be reported to the committee.

The final audit report was presented to the Audit Committee in March 2025. The committee agreed with the conclusions reached by the

auditors, noting the degree of judgement around areas of significant audit risk.

The significant accounting issues identified by the Audit Committee were included in the significant matters identified by the external

auditors in their audit plan. There were no other specific areas that the Audit Committee requested the auditors to look at.

At the end of each annual reporting cycle, the Audit Committee reflect on the quality of the audit provided by the auditors. At each Audit

Committee meeting, the auditor presents an update on their progress and, where appropriate, conclusions on their half year review and

full year audit and how the audit has been conducted in relation to the plan presented to the Audit Committee, with the Committee able

to challenge the audit at any point.

Following conclusion of the 2024 year end audit, Audit Committee members and senior management provided their feedback on the

effectiveness of the external audit process and following discussions at the March 2025 meeting, the Audit Committee concluded that

the 2024 audit process had been effective.

Internal risk management and assurance

The Audit Committee reviews the Group’s principal risks at each meeting. The Group’s risk management project plan is also presented

with the Audit Committee closely monitoring the close out of recommendations raised during completed internal audits as well as noting

progress of ongoing audits and plans for future audits, ensuring they remain on schedule. The Audit Committee also complete an annual

review of managements formal internal controls assessment.

The Group’s principal risk dashboard is updated in advance of every meeting and changes to operational and corporate risks noted and

discussed. The Audit Committee will challenge management on the classification of risks where further clarification is sought on either

the assessment of the likelihood of a risk materialising or its estimated financial impact.

Capricorn Energy PLC

Annual Report and Accounts 2024

Internal audit

For internal audit, the Group adopts a co-source approach to supplement the in-house team and this ensures we have access to specialist

skills and experience as required.

Prior to the beginning of each year, an internal audit plan is developed by management, based on a review of the outcome of the previous

year’s internal audits, the outcome of the annual assessment of effectiveness of internal control and the principal risks in the Group

Risk Matrix and identified mitigation measures. The plan is then presented to the Audit Committee for review and approval. The Audit

Committee also receive updates on the internal audit work plan at each meeting.

The external auditor does not place any reliance on the work undertaken by the Group’s internal audit function due to the nature of the

scope and the timing of their work. The external auditor does however, attend all Committee meetings where internal audit updates

are given.

During 2024, the Group’s internal auditors conducted one audit on cyber security. No high-risk findings were identified across the audits

conducted.

Working responsibly – whistleblowing and related policies

The Group is committed to working responsibly as part of its strategy to deliver value for all stakeholders. This means delivering value

in a safe, secure, environmentally and socially responsible manner.

As part of this, the Audit Committee is responsible for ensuring the Group has a robust Whistleblowing Policy in place and this policy

is reviewed annually by the Committee. The Group’s current version of the policy was first presented to, and approved by, the Audit

Committee at the March 2022 meeting and most recently re-approved at the December 2024 meeting.

The Committee is also responsible for and is satisfied that arrangements are in place for the proportionate and independent investigation

of possible improprieties in respect of financial reporting and other matters and for appropriate follow-up action.

The Group has in place a comprehensive anti-bribery and corruption management system and Code of Ethics. Regular training updates

are provided to all employees and long-term contractors in addition to the training that is provided to all new staff joining the Company.

As Capricorn enters new countries, monitoring is undertaken, and training is refreshed. Further information regarding these policies can

be found on the Group’s website.

Other matters:

Provision of non-audit services

Capricorn has a long-established policy in relation to the supply of non-audit services by the external auditor. The Group will engage

an external adviser to provide non-audit services on the basis of the skills and experience required for the work, where benefit will be

derived as a result of the third party’s knowledge of the Group and at a reasonable cost. These advisers may include the Group’s external

auditor, under a restricted set of circumstances as permitted under the 2024 FRC Ethical Standard, although, before the engagement

commences, the Audit Committee must be satisfied that the auditor’s objectivity and independence would not be compromised in any

way as a result of being instructed to carry out those services.

The policy on approval of non-audit fees for the Group’s auditor is re-approved annually. All non-audit fees should be approved by the

Audit Committee in advance of the engagement with a practical workaround of only seeking approval from the Committee Chair, rather

than seeking full committee approval, in advance for fees below an approved threshold of £100,000. This approval will then be ratified

at the next meeting of the committee.

The policy is available online on the Group’s website.

A full analysis of remuneration paid to the Group’s external auditor in respect of both audit and non-audit work is provided in note 7.5

to the Financial Statements.

Board and committee performance evaluation

Details of Board and Audit Committee performance can be found on page 39.

Tom Pitts

Audit Committee Chair

27 March 2025

AUDIT COMMITTEE REPORT CONTINUED

Capricorn Energy PLC

Annual Report and Accounts 2024

Strategic Report Corporate Governance Financial Statements Additional Information

SUSTAINABILITY COMMITTEE REPORT

Members and meetings in 2024

Member since Resigned

Meetings attended/meetings held

in 2024 during membership

Patrice Merrin (Chair) June 2023 – 2/2

Sachin Mistry May 2024 – 1/1

Randy Neely June 2023 – 2/2

Hesham Mekawi February 2023 June 2024 1/1

I am pleased to present Capricorn’s Sustainability Committee Report for 2024.

Matters of environment, safety, social responsibility and sustainability are considered within each Board deliberation and decision and

are, therefore, a key element of the Company’s Board meetings. It is important that leadership sets the tone from the top, particularly in

relation to setting strategy and metrics, and therefore the Board has continued to support and promote a dedicated committee to review

the Company’s sustainability initiatives and reporting. Delegating the responsibilities which originally sat with the Board allows additional

focus and scrutiny. It is intended that the Sustainability Committee will continuously identify areas where Capricorn can improve, as well

as ensuring high standards of governance and reporting in this area.

I am joined in membership of the committee by Randy Neely and Sachin Mistry. Together we have extensive knowledge and awareness

of the importance of sustainability in this industry and in the wider environment as we move through the energy transition.

The remit of the committee includes:

‒ advising and supporting the Board in the drafting of the sustainability roadmap, and assessing progress and reviewing disclosures

being made regarding the roadmap;

‒ reviewing the policies, practices and performance relating to sustainability and the disclosures and annual reporting on sustainability;

‒ reviewing the policies, practices and performance relating to safety, including in particular regarding the safe and responsible

performance of the Group’s operations;

‒ reviewing the policies, practices and performance relating to social responsibility; and

‒ reviewing the policies, practices and performance relating to environmental matters including the protection of the environment and

disclosure of greenhouse gas (CHG) emissions.

The committee and Board remain committed to two meetings of the Sustainability Committee each year. The meetings of the committee

took place in May and December 2024, with full committee attendance, and considered, amongst those matters listed above, the following

key issues:

‒ received an ESG regulatory and reporting update from PwC. The update covered the current UK sustainability reporting landscape

and potential future requirements;

‒ received an update on progress against key mandatory and voluntary reporting submissions, including Task Force on Climate-related

Financial Disclosures (TCFD) and CDP;

‒ received an update on Capricorn’s decarbonisation initiatives in the Egyptian assets;

‒ received an update on Capricorn’s environmental, social and governance (ESG) ratings position relative to peers;

‒ received an update on the Group’s charitable giving programme in the UK and the projects selected for support; and

‒ received an update on the Group’s social investment projects in Egypt and the progress made in delivering the project objectives.

Further information on the Company’s approach to sustainability matters can be found in the Strategic Report on pages 10 to 14 and

23 to 30.

Patrice Merrin

Sustainability Committee Chair

27 March 2025

Capricorn Energy PLC

Annual Report and Accounts 2024

NOMINATION AND GOVERNANCE COMMITTEE REPORT

Capricorn’s Nomination & Governance Committee plays a leading role in ensuring that the composition of the Board is appropriate to

enable the Company to deliver on its strategic aims whilst promoting its values and culture. It is vital that the Board has in its membership

what is needed to provide appropriate challenge and effective leadership for the business, and the committee looks to ensure the Board

maintains the correct balance of skills and representation. Board succession is an important area of planning for the ongoing success of

the Company and is a key focus of the Nomination & Governance Committee.

The membership of the committee during 2024 is set out in the table above and is comprised solely of Independent Non-Executive Directors.

The remit of the Nomination & Governance Committee includes:

‒ reviewing and evaluating the structure, size and composition (including the balance of skills, knowledge, experience and diversity)

of the Board;

‒ giving full consideration to succession planning for Directors and other senior executives, ensuring plans are in place for orderly

succession and taking into account the Company’s strategy and the challenges and opportunities that it faces;

‒ overseeing the development of a diverse pipeline for succession;

‒ ensuring that appointments made to the Board promote diversity of gender, social and ethnic backgrounds;

‒ monitoring the operation of the UK Corporate Governance Code and its implementation and compliance by the Company;

‒ reviewing developments in corporate governance and advising the Board with respect to developments in the law and practice

of corporate governance; and

‒ reviewing and approving changes to the Board’s corporate governance practices and policies.

Board changes

The Board benefited from greater stability following new appointments and 100% turnover in 2023. Craig van der Laan stepped down

as Chair in May 2024 and a smooth transition of the role followed to existing Board member Maria Gordon. Having duly considered

launching a process to include external candidates for the position as new Chair from May 2024, the Board agreed that it was appropriate

for an existing Director to be elevated to the role of Chair without conducting an external search, particularly given Maria’s strong mix of

leadership, governance and strategic skills. Hesham Mekawi resigned in June 2024 to take up a full time international executive role and

Sachin Mistry joined the Board in May 2024, bringing investment expertise to the Board.

The committee evaluates the balance of skills, knowledge, independence, experience and diversity on the Board and considers candidates

on merit and against objective criteria and, within that context, has sought to ensure that any appointment made promotes diversity

of gender, social and ethnic backgrounds, and cognitive and personal strengths, ensuring also that appointees will have enough time

available to devote to the relevant position. No member of the Nomination & Governance Committee, who was also a proposed appointee,

has voted on his or her own appointment.

Members and meetings in 2024

Member since Resigned

Meetings attended/meetings held

in 2024 during membership

Maria Gordon (Chair) February 2023 – 2/2

Patrice Merrin June 2023 – 2/2

Richard Herbert May 2024 – 1/1

Craig van der Laan February 2023 May 2024 1/1

Hesham Mekawi February 2023 June 2024 1/1

Capricorn Energy PLC

Annual Report and Accounts 2024

Strategic Report Corporate Governance Financial Statements Additional Information

Succession planning

The Nomination & Governance Committee regularly considers the combination of skills, experience, independence and knowledge

of the Company and makes recommendations as appropriate. Diversity is an important principle of a well-functioning Board and

encompasses multiple aspects, including gender, social and ethnic diversity, and cognitive diversity to ensure the that the Board benefits

from a wider selection of personal strengths and experience. All appointments are made on merit and objective criteria, promoting the

diversity principles.

Working together, the Board and Nomination & Governance Committee maintain a comprehensive succession plan for appointments

to the Board, ensuring there is an appropriate balance of skills and experience that continues to align with the Company’s strategic aims.

Details of the competencies of the Board are noted in the Corporate Governance Statement on page 38. External commitments of the

Board are also regularly reviewed and the committee are of the opinion that the Board members are able to allocate sufficient time to

the Company to undertake their roles and effectively discharge their responsibilities, despite some members having executive and non-

executive roles in other companies. As the Company continues to refine its strategy, in early 2025 the committee will further examine

the requirement to bring further diversity to the Board.

The Company’s succession planning includes contingency plans for the sudden or unexpected departure of an Executive Director and

other senior roles, which are reviewed by the Board.

The Board has a good understanding of the Company’s talent management and succession planning, receiving regular updates from

the Head of HR, as well as knowledge of the range of measures being used to continue to develop and recruit talented senior employees.

Diversity

The Nomination & Governance Committee recognises the value of building a diverse Board, not just in terms of gender and social and

ethnic background, but also to promote diversity of cognitive and personal strengths. There have been two women members of the Board

throughout 2024 and as at 31 December 2024 women currently represent 33.3% of the Board membership (being two women out of

six members). The Board acknowledges that the Company does not currently meet the 40% targets for women on the Board or in senior

Board positions, and recognises that, to gain the benefits of a diverse membership, further female representation is required.

Number of Board

members

Percentage

of the Board

Number of senior

positions on the

Board (CEO, CFO

SID and Chair)

Number in executive

management

Percentage

of executive

management

Men 4 66.7% 2 5 100%

Women 2 33.3 % 1 0 0%

Not specified/prefer not to say – – – – –

Notes:

(1) Data for this table was collected through a standardised process of self-declaration.

(2) The CFO is not a Director therefore he has been excluded from this analysis.

The Directors’ range of knowledge and practice covers not only a wealth of experience of operating in the oil and gas industry but also

extensive technical, operational, financial, governance and commercial expertise. Since 1 January 2024, the Board continues to be diverse

in terms of the range of nationalities, culture and international experience of its members. The committee will continue to monitor and

consider diversity for all future Board appointments, whilst also continuing to recruit on merit.

Number of Board

members

Percentage

of the Board

Number of senior

positions on the

Board (CEO, CFO

SID and Chair)

Number in executive

management

Percentage

of executive

management

White British or other white

(including minority white groups) 5 83% 3 4 80%

Mixed/multiple ethnic groups – – – – –

Asian/Asian British 1 17% – – –

Black/African/Caribbean/Black British – – – – –

Other ethnic group, including Arab _ _ – 1 20%

Not specified/prefer not to say – – – – –

Notes:

(1) Data for this table was collected through a standardised process of self-declaration.

(2) The CFO is not a Director therefore he has been excluded from this analysis.

(3) Eddie Ok joined the Company as Chief Financial Officer with effect from 6 April 2024. This table reflects the position following his appointment.

Capricorn Energy PLC

Annual Report and Accounts 2024

The Company does not have a fixed target for diversity at Board level but applies the Company wide diversity policy to all appointments.

The Company is adjusting to changing needs of the business and the impact of Board turnover in 2023. The priority for the immediate

future will be the stability and retention where appropriate of current Board members. This will restrict the ability of the Company to seek

specific targets for diversity in the immediate 12 months.

At levels below the Board, we continue to think more broadly than gender diversity in all areas of our work, taking into account diversity

in many dimensions. Our diversity and inclusion strategy aims to nurture an inclusive and sustainable culture, where differences are

encouraged, embraced and recognised as key drivers of value to all our stakeholders. A diverse and inclusive culture, where everyone can

uniquely contribute and thrive, and which values and encourages individual differences is nurtured throughout Capricorn. The Board is

committed to ensuring such a culture is embedded in the organisation. Looking at our broader talent pool, the gender diversity of our

employee population is 40% female and 60% male. The Board and the committee will continue to monitor and consider diversity for all

future Board and senior management appointments, whilst also continuing to recruit on merit. Diversity and inclusion (D&I) remains an

important focus of the Company and is embedded within our strategic framework, which is designed to cultivate D&I across the business.

Our Code of Ethics and associated Company policies commit Capricorn to providing a workplace free of discrimination where diversity

is valued and all employees can fulfil their potential based on merit. We also strive to ensure there is a fully inclusive workplace, while

providing the right development opportunities to ensure existing staff have rewarding careers. During the year, the Company undertook a

group-wide survey of all staff on perceptions concerning the culture of the Company including equity and inclusion within the organisation.

Looking forward to 2025, the Board and Nomination & Governance Committee, alongside the Capricorn organisation, will continue to

promote diversity in its widest possible sense. Our strategies, policies and practices encourage this and seek to ensure that the potential

of our team can be met, driving the success of the individuals within it and the business as a whole.

Board and committee performance evaluation

The Board is committed to annual evaluations of its performance in order to assess and improve its effectiveness on an ongoing basis,

with the individual Directors also evaluated to determine whether each Director continues to contribute effectively. The Board evaluation

for 2024 was conducted externally and a summary of the results and recommendation are included within the Corporate Governance

section of the Annual Report on page 39. The Nomination & Governance Committee will continue to work together with the Board in

seeking to address any performance evaluation outcomes relating to Board composition and succession planning.

Maria Gordon

Nomination & Governance Committee Chair

27 March 2025

NOMINATION AND GOVERNANCE COMMITTEE REPORT CONTINUED

Capricorn Energy PLC

Annual Report and Accounts 2024

Strategic Report Corporate Governance Financial Statements Additional Information

DIRECTORS’ REMUNERATION REPORT

PART 1 – ANNUAL STATEMENT FROM THE CHAIR OF THE COMMITTEE

Dear Shareholder,

As the Chair of Capricorn’s Remuneration Committee, I am pleased to present our Directors’ Remuneration Report for 2024, a period

during which we continued to apply the executive remuneration policy that was strongly supported at the 2023 AGM (the “Approved

Remuneration Policy”).

The committee remains of the view that the Approved Remuneration Policy is still fit for purpose and it will, therefore, continue to be applied

during 2025. The Approved Remuneration Policy, as originally presented to shareholders, can be found on pages 79 to 87 of the 2022

Annual Report and Accounts (a copy of which is available on the Company’s website at www.capricornenergy.com/annual-report-2022).

Part 2 of this report, which contains our Annual Report on Remuneration, explains how the Approved Remuneration Policy was applied

throughout 2024 and also sets out how it will be operated in 2025. This Remuneration Report will be subject to an advisory vote at the

AGM to be held on 22 May 2025.

New Chair of the committee

On 23 May 2024 I replaced Maria Gordon as Chair of the committee following her appointment as Chair of the Company.

Summary of 2024 business context and key remuneration decisions

The work of the committee in 2024 was conducted against a backdrop of a year in which the Company continued to improve its

financial discipline and the operational performance of the Egyptian business, which helped the Company achieve the upper end

of production guidance.

Against this background, the key remuneration related decisions made by the committee in 2024 are described in more detail in the

Annual Report on Remuneration contained on pages 55 to 66 and can be summarised as follows:

‒ Base salary increases

Notwithstanding the 5% standard annual salary increase awarded to the wider employee group for 2024, the base salary of the Chief

Executive Officer, Randy Neely, did not change with effect from 1 January 2024 and remained at the £500,000 level paid in 2023.

‒ 2024 annual bonus – structure and outturn

Under the Executive Director’s bonus scheme for 2024 (the overall structure of which was unchanged from the prior year),

the Chief Executive Officer was eligible for an annual bonus of up to 125% of salary that was entirely dependent on the achievement

of Group KPIs.

Based on an assessment of the extent to which the relevant targets were achieved at the end of the year, the committee made a bonus

award to Randy Neely of 86% of maximum (equating to 107.5% of annual salary). Under the Approved Remuneration Policy, 75% of this

award has been paid to Randy in cash, with the balance being delivered to him in the form of a deferred share award that will normally

vest after a period of three years.

‒ LTIP – grant of 2024 awards

During 2024, the committee made further grants under the Company’s Long-term Incentive Plan (“LTIP”) that was adopted at the 2017

AGM. Consistent with the approach that was adopted in 2023, the Chief Executive Officer’s award was granted at 200% of salary and

its vesting is dependent on the achievement of specified absolute shareholder return targets (further details of which can be found on

page 60) that will be measured over the period of three years to 31 December 2026.

‒ DBP – grant of awards relating to 2023 annual bonus plan

On 2 April 2024, Randy Neely was granted a share award under the terms of the Company’s Deferred Bonus Plan (“DBP”). This grant

(further details of which can be found on page 61) related to the deferred element of his 2023 annual bonus.

Members and meetings in 2024

Member since Resigned

Meetings attended/meetings held

in 2024 during membership

Richard Herbert (Chair) June 2023 – 5/5

Tom Pitts February 2023 – 5/5

Maria Gordon February 2023 – 5/5

Capricorn Energy PLC

Annual Report and Accounts 2024

‒ Other decisions made, and discretions exercised, by the committee during 2024

The only other substantive decisions made and/or discretions exercised by the committee during 2024 related to the operation of the

Company’s various share-based incentive schemes. In particular, the committee:

• assessed the extent to which the performance conditions attached to certain outstanding incentive awards that were granted

in 2021 had been satisfied. The result of this assessment was that the awards in question (none of which were held by current or

former Executive Directors) immediately lapsed in full;

• exercised its discretion to disapply ‘dividend equivalent’ rights attaching to LTIP awards in relation to the special dividend paid as

part of the return of cash that was approved by shareholders in May 2024; and

• decided to give participants in the Company’s Share Incentive Plan (SIP) the ability, if they so wished, to reinvest the above noted

special dividend that was paid in respect of their plan holding in further ‘dividend shares’.

Consideration of remuneration arrangements for the wider workforce during 2024

The Company continued to consider remuneration practice in relation to all staff when determining share scheme awards and senior

executive pay arrangements in accordance with current policy. Dialogue with, and consideration of, staff remains an important focus

for the Company through various mechanisms including meetings of the Company’s EVF which continued to be chaired by me

throughout 2024.

Decisions have been made by the committee in the context of the requirements of the 2018 UK Corporate Governance Code and,

in particular, after considering the various factors set out in its Provision 40, being clarity, simplicity, risk, predictability, proportionality

and alignment to culture. The committee is satisfied that, during 2024, the Approved Remuneration Policy operated as intended and

delivered outcomes that fairly reflected business achievements over the year.

Implementation for 2025

An overview of the way in which the Approved Remuneration Policy will be applied in 2025 is set out on page 66 in the Annual Report

on Remuneration. In summary:

‒ following a review by the committee, it has been concluded that there be no increase to the salary of Randy Neely. A salary increase

from January 2025 was awarded to the workforce (3% for the UK based employees and 18% for Egypt based employees);

‒ the Chief Executive Officer’s bonus scheme for 2025 will be similar to the one operated in 2024, being an opportunity to receive a

bonus of up to 125% of base salary depending on the extent to which specified measures relating to the Company’s strategic priorities

for the period are satisfied; and

‒ given the extensive consultation that took place on the Company’s long-term incentivisation arrangements in 2023, and to ensure

a consistency of approach, the LTIP will be operated in 2025 in broadly the same manner as in 2024 with an award of 200% of salary

being made to Randy Neely, the vesting of which will be conditional on the satisfaction of recalibrated shareholder return targets.

Feedback on Directors’ Remuneration Report

As your Remuneration Committee Chair, I remain committed to an approach to pay which is aligned with our strategy and which is in

the best interests of the business and our stakeholders. I am keen to maintain the current dialogue with our investors so that the different

perspectives on pay are taken into account by the Committee when making key decisions.

We welcome questions and feedback from all those interested in the content of this report. We also look forward to receiving your

support for the Directors’ Remuneration Report at the AGM to be held in May 2025.

Richard Herbert

Remuneration Committee Chair

27 March 2025

DIRECTORS’ REMUNERATION REPORT CONTINUED

Capricorn Energy PLC

Annual Report and Accounts 2024

Strategic Report Corporate Governance Financial Statements Additional Information

PART 2 – ANNUAL REPORT ON REMUNERATION

Introduction

This Annual Report on Remuneration provides details of the way in which the committee operated during the financial year to

31 December 2024 and explains how Capricorn’s Approved Remuneration Policy (which was approved by shareholders at the

Company’s AGM held on 26 June 2023) was implemented during that period. It also summarises how the policy will be applied

in 2025.

In accordance with the requirements of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008

(as amended) (the “Regulations”), this part of the report will be subject to an advisory vote at the 2025 AGM.

The Company’s auditor is required to report to Capricorn’s shareholders on the ‘auditable parts’ of this Annual Report on Remuneration

(which have been highlighted as such below) and to state whether, in their opinion, those parts have been properly prepared in accordance

with the Regulations and the Companies Act 2006.

On the basis that Capricorn has fewer than 250 UK employees, the Company is not required to:

‒ publish or report its gender pay gap information; or

‒ provide pay ratio information in relation to the total remuneration of the Chief Executive.

Operation of the Remuneration Committee during 2024

Members of the Remuneration Committee

The members of the Remuneration Committee during 2024 were as follows:

‒ Richard Herbert (became the committee’s Chair on 23 May 2024);

‒ Maria Gordon (ceased to be Chair of the committee on 23 May 2024); and

‒ Tom Pitts.

The individuals who served on the committee during 2024, each of whom was an independent Non-Executive Director of the Company

throughout the period, had no personal financial interest (other than as shareholders) in the matters decided, no potential conflicts of

interest from cross-directorships and no day-to-day involvement in running the business. Details of attendance at the committee’s meetings

during 2024 are shown in Part 1 above. Prior to his appointment as Chair, Richard Herbert had served on the remuneration committee of

another public company for more than 12 months.

Biographical information on the individuals who are currently committee members is shown on pages 36 and 37.

Internal assistance provided to the committee

The Company’s Chief Executive Officer is not a member of the Remuneration Committee but may attend its meetings by invitation

and is consulted in respect of certain of its proposals. The Chief Executive Officer is not involved in any discussions in respect of their

own remuneration. During the year, the committee also received assistance and advice on remuneration policy from the Legal Director.

External assistance provided to the committee

As and when the Remuneration Committee considers it appropriate, it takes external advice on remuneration from a number of sources.

During the year, it received the following assistance:

Adviser

Assistance provided to the committee

during 2024 Fees for committee assistance in 2024

Other services provided to the Company

during 2024

Deloitte LLP

Appointed by the committee

to give periodic advice on

various aspects of the directors’

remuneration packages. Also

assisted with the preparation of

the 2023 and 2024 Directors’

Remuneration Reports and

provided support on a number

of miscellaneous remuneration-

related projects.

£24,900 Provided advice on various aspects

of remuneration practice across

the Group.

Shepherd and

Wedderburn LLP

Appointed by the Company to

carry out regular calculations in

relation to the LTIP performance

conditions. Also assisted with the

preparation of the 2023 and 2024

Directors’ Remuneration Reports.

£15,757 General legal services to the Group

throughout the year.

Notes:

(1) The bases for charging the fees set out in the table were agreed by the committee at or around the time the particular services were provided and, in general, reflected the time

spent by the adviser in question on the relevant matter.

(2) Deloitte LLP is a member of the Remuneration Consultants Group and its work is governed by the Code of Conduct in relation to executive remuneration consulting in the UK.

Deloitte LLP were selected to provide services to the Company following a competitive tender process in 2023.

(3) The committee reviews the performance and independence of all its advisers on a continuous basis. No issues relating to performance or independence were noted by the

committee during the year.

(4) Shepherd and Wedderburn LLP continue to provide legal services to the Company following a long standing corporate relationship.

Capricorn Energy PLC

Annual Report and Accounts 2024

Statement of shareholder voting at general meetings

The table below shows the voting outcome at the last general meeting(s) at which shareholders were asked by the Company to approve

a resolution relating to its Directors’ Remuneration Report and Directors’ Remuneration Policy.

Description of resolution

Date of general

meeting

Number of

votes ‘For’ and

‘Discretionary’ % of votes cast

Number of

votes ‘Against’ % of votes cast

Total number of

votes cast

Number

of votes

‘Withheld’

To approve the 2023 Directors’

Remuneration Report

23 May

2024 53,352,788 98.48% 825,681 1.52% 54,178,469 14,855

To approve the 2023 Directors’

Remuneration Policy

26 June

2023 102,605,294 99.33% 689,037 0.67% 103,294,331 8,819

Note:

(1) A vote withheld is not a vote in law.

The committee welcomed the endorsement of both the above resolutions that was shown by the vast majority of shareholders at the

relevant meetings and gave due consideration to any concerns raised by investors who did not support the resolutions.

Single total figure table for 2024 (audited)

The tables below set out the remuneration received by the Executive Director and Non-Executive Directors during the year in the

following categories.

Executive Director during 2024

Fixed remuneration Variable remuneration Totals

Annual bonus

…

Financial

year

Salary and

fees Benefits

Pension

SIP

…paid in

cash

…deferred

into shares

…total

bonus

Long-term

incentives

Total

remuneration

Total fixed

remuneration

Total variable

remuneration

Executive Director

Randy

Neely

2024 £500,000 £4,266 £62,500 £3,599 £403,125 £134,375 £537, 500 £0 £1,107,865 £570,365 £537,500

2023 £291,667 £15,764 £36,458 £3,599 £195,116 £65,038 £260,154 £0 £607,6 42 £347,488 £260,154

Notes:

(1) The standard taxable benefits available to the Executive Director during 2024 (unchanged from 2023) were permanent health insurance, private dental and health insurance,

death-in-service benefit and a gym and fitness allowance. In 2023, Randy Neely was also reimbursed for non-recurring fees totalling £12,775 that were incurred by him during

that period in connection with the receipt of immigration services.

(2) Additional disclosures relating to the pension provision for the Executive Director during 2024 are set out on page 57.

(3) This column shows the face value (at date of award) of matching and free shares provided to the Executive Director under the all employee SIP during the relevant period.

Further details on the way in which the SIP was operated during 2024 are set out on page 62.

(4) Under the Company’s 2024 annual bonus scheme for Executive Directors, 75% of any amount awarded to an individual is paid out in cash with the balance being delivered in

the form of a deferred share award, which normally vests after a period of three years from grant. Further information in relation to the annual bonus scheme for 2024 is provided

on pages 58 to 59.

(5) There was no vesting of LTIP awards in respect of 2023 and 2024.

(6) Randy Neely became an employee of the Company on 1 July 2023 and was appointed as Chief Executive Officer on that same date.

(7) Following the end of the year to 31 December 2024, the committee considered whether there were any circumstances that could or should result in the recovery or withholding

of any sums pursuant to the clawback arrangements contained within the Company’s Approved Remuneration Policy. The conclusion reached by the committee was that it was

not aware of any such circumstances.

DIRECTORS’ REMUNERATION REPORT CONTINUED

Capricorn Energy PLC

Annual Report and Accounts 2024

Strategic Report Corporate Governance Financial Statements Additional Information

Non-Executive Directors

Fixed remuneration

Totals

Financial year Salary and fees Benefits Total remuneration

Directors

Maria Gordon

2024 £210,962 – £210,962

2023 £110,000 – £110,000

Richard Herbert

2024 £118,333 – £118,333

2023 £103,430 – £103,430

Sachin Mistry

2024 _ – _

2023 – – –

Tom Pitts

2024 £105,000 – £105,000

2023 £105,417 – £105,417

Patrice Merrin

2024 £95,000 – £95,000

2023 £49,327 – £49,327

Former Directors

Craig van der Laan

4, 5

2024 £107,654 £1,233 £108,887

2023 £ 247,50 0 £1,500 £249,000

Hesham Mekawi

2024 £90,000 – £90,000

2023 £129,231 – £129,231

Notes:

(1) Non-Executive Directors do not receive any pension, annual bonus or long-term incentives from the Company.

(2) Maria Gordon was appointed as Chair of the Company on 23 May 2024 (prior to which she was a Non-Executive Director).

(3) Sachin Mistry was appointed as a Director on 23 May 2024. In terms of the relationship agreement between the Company and Palliser Capital, he is not entitled to any

remuneration, fee, bonus or other financial reward or compensation in connection with this role.

(4) Craig van der Laan and Hesham Mekawi stepped down from the Board on 23 May 2024 and 27 June 2024 respectively. In both cases, their fees for 2024 in the above table

reflect the period from the start of the year to the date of departure.

(5) Craig van der Laan’s benefits in 2023 and 2024 relate to the reimbursement of costs associated with the preparation and lodgement of UK tax returns.

(6) Patrice Merrin was appointed to the Board on 26 June 2023.

Executive Director’s base salary during 2024 (audited)

On his appointment as Chief Executive Officer on 1 June 2023, Randy Neely’s annual salary was set at £500,000 which remained

unchanged during 2024.

Executive Director’s pension provision during 2024 (audited)

In accordance with the terms of the Approved Remuneration Policy, the Company operates a defined contribution, non-contributory

Group personal pension plan which is open to all UK permanent employees. During 2024, the Company contributed 12.5% of basic

annual salary on behalf of all qualifying employees (including Executive Directors).

The Company also has a pension committee which meets on a regular basis to assess the performance and suitability of the Company’s

pension arrangements.

Randy Neely received cash payments in lieu of pension equal to 12.5% of basic salary entitlement for the year ended 31 December 2024,

details of which are set out on the previous page in the “pension” column of the single total figure table.

Annual bonus – 2024 structure and outcome (audited)

During 2024, Capricorn operated an annual bonus scheme for all employees and Executive Directors. The maximum level of bonus

award for the Chief Executive Officer was 125% of salary.

For all participants other than the Chief Executive Officer, 2024 bonus awards were based on achievement against a mixture of personal

objectives, project-based KPIs and Group-wide KPIs. When determining the level of award attributable to the personal performance

element of these individuals’ bonuses, consideration was also given to the extent to which they demonstrated the Company’s ‘high

performance behaviours’ during the period and also the level of their understanding, application and compliance with the Company’s

various standards and policies. The final level of all bonuses awarded to employees below Executive Director/PDMR (persons discharging

managerial responsibilities) level was reviewed and approved by the committee.

Consistent with the approach adopted in 2023, 100% of the Chief Executive’s bonus opportunity for the year to 31 December 2024 was

determined by reference to the extent to which certain Group KPIs were achieved. A summary of the relevant targets, ascribed weightings,

payment scales and achievement levels is set out on the next page.

Capricorn Energy PLC

Annual Report and Accounts 2024

KPI measures and performance achieved in 2024

Performance measure Weighting Threshold (0%) Target (1% to 99%) Stretch (100%)

Performance

score

Production

Production in line with market guidance 15% Low end of guidance Middle of

guidance

At or above guidance 15%

Opex per bbl cost targets in line with

market guidance

5% High end of guidance Middle of

guidance

At or below guidance 5%

Deliver effective Reserves Conversion

Ratio in relation to production

5% RCR = 25%` RCR≥50% RCR≥75% 2%

Financial Performance

Improve receivables position 20% ≥10 EGP payments

of $5m and 2 cargoes

of payment equivalent

≥10 EGP payments

of $5m and 3 cargoes

of payment equivalent

≥10 EGP payments

of $5m and 4 cargoes

of payment equivalent 18%

Liquidity management 3% Stretch target met if company is a going concern 3%

Compliance with debt liquidity covenants 2% Stretch target met if zero breaches 1%

Corporate projects

Delivery of projects

of strategic significance

12.5% Measured against progress in portfolio expansion including

asset due diligence completed and assets secured

11%

Progress negotiations with EGPC to

improve fiscal terms

12.5% Measured against progress with EGPC over fiscal terms negotiation 12%

HSSE/ESG

Achieve positive LTIF against

benchmarks and no spills to the

environment

2.5% Stretch target met if performance better than IOGP benchmarks 2.5%

Safety workshops, safety leadership visits

and social investments

2.5% No objectives

completed

Two objectives

completed

All objectives

completed

2.5%

Emissions reductions versus relevant

baselines

2.5% 0% reduction 5% reduction 10% reduction 2.5%

Sustainability reporting 2.5% Stretch target met if reporting completed against

TCFD, CDP and GRI (Global reporting initiative)

2.5%

Partnerships

Collaboration with partners on

production, technical and compliance

matters

10% Compliance objective Threshold plus

technical objectives

Target plus

production objective

Mature the unconventionals across Badr

El Din (BED) and WEF concessions

5% Progress against measured against technical work and drilling 3%

Overall performance 86%

Notes:

(1) Target fully met: Full year production was at the top end of guidance.

(2) Target fully met: OPEX costs were below guidance.

(3) Target partially met: New activity resulted in a Proved, Developed and Producing (PDP) ratio of 43%.

(4) Target partially met: Stretch target was met but points deducted to recognise overall receivables balance.

(5) Target fully met: Group continues to operate as a going concern.

(6) Target partially met: Deliberate action was taken to preserve liquidity in the face of non-payment by Egypt which resulted in an event of default on the Senior facility.

(7) Target partially met: Extensive due diligence completed on several assets.

(8) Target fully met: Significant progress achieved in EGPC negotiations.

(9) Target fully met: LTIF rate lower than IOGP benchmarks.

(10) Target fully met: Safety projects completed, and social investment programme delivered.

(11) Target fully met: Emission reductions greater than 10%.

(12) Target fully met: Continued reporting against TCFD, CDP and GRI.

(13) Target partially met: Score reflects some of the challenges in the JV partnership.

(14) Target partially met: Good progress on maturing the unconventionals but there were delays to drilling programme.

DIRECTORS’ REMUNERATION REPORT CONTINUED

Capricorn Energy PLC

Annual Report and Accounts 2024

Strategic Report Corporate Governance Financial Statements Additional Information

2024 annual bonus scheme – overview of award and actual payments made

In accordance with its normal practice, the above outturn from the assessment of the Group KPIs was subject to a further review by

the committee in order to assess whether the resulting level of award that it would generate for the Chief Executive Officer under the

annual bonus scheme structure for 2024 would be fair and reasonable in the context of the Company’s overall financial and operational

performance during the year. In particular, due consideration was given to strong performance in Egypt reflected by the share price

improvement in the reporting period. The conclusion reached was that the amounts to be paid to the Chief Executive Officer were

appropriate in the circumstances and there was no requirement for the committee to make any adjustments pursuant to its overarching

discretion under the annual bonus scheme, details of which are set out in the Approved Remuneration Policy.

The application of the outturn from the above performance condition assessments resulted in an outcome of 86% of maximum for

Randy Neely.

Randy Neely

Group KPI measures

Award calculation Max. bonus opportunity (as % of salary) 125%

Award percentage (as calculated above) 86%

Total award (as % of salary) 107.5%

Total award (as an amount) £537,50 0

Form of payment Cash payment

£403,125

Deferred share award

£134,375

Notes:

(1) The cash payment due under the annual bonus scheme was paid to the Chief Executive Officer shortly after completion of the assessment of the relevant performance

measures and conditions.

(2) Under the Company’s annual bonus scheme for 2024, 25% of any amounts awarded are delivered in the form of share awards granted under the DBP. Any such awards normally

vest on the third anniversary of grant, with such vesting usually being conditional only on the continued employment of the individual with the Group. Full details of the award

made to the Chief Executive Officer in respect the annual bonus scheme for 2024 (which was granted after the year-end) will be included in next year’s Annual Report on

Remuneration.

Long-term incentives

Introduction

During the year to 31 December 2024, the Chief Executive Officer participated in the Company’s Long-term Incentive Plan (“LTIP”)

(which was approved by shareholders at the AGM held on 19 May 2017) and its Deferred Bonus Plan (“DBP”).

The LTIP enables selected senior individuals to be granted conditional awards or nil-cost options over ordinary shares, the vesting of which

is normally dependent on both continued employment with the Group and the extent to which pre-determined performance conditions

are met over a specified period of three years. The Chief Executive Officer did not have any LTIP awards vesting in respect of the financial

year ending 31 December 2024.

The DBP is the mechanism by which the required proportion of an Executive Director’s annual bonus can be deferred into shares;

it involves the individual being granted a conditional award or nil-cost option over ordinary shares with a face value equal to the amount

of bonus being deferred. The vesting of any such awards (which will normally take place on or around the third anniversary of grant)

is normally dependent on continued employment with the Group. Such vesting is not, however, conditional on the satisfaction of any

additional performance conditions.

LTIP awards granted during 2024 (audited)

Overview of award granted

On 2 April 2024, the following award under the LTIP was granted to the Chief Executive Officer:

Form of award

Basis of award

granted

Share price at

date of grant

No. of shares over

which award originally

granted

Face value (£000) of

shares over which

award originally

granted

% of shares over

which award

originally granted that

vest at threshold

Vesting determined by

performance over

Randy Neely Nil-cost

option

2 x base salary

of £500,000

£1.75 571,428 £1,000 0% 3 years up to

31 December

2026

Notes:

(1) Details of the performance conditions applicable to the above award are provided on the following page.

(2) No price is payable by participants for their shares on the exercise of a nil-cost option granted under the LTIP.

(3) This figure represents the closing mid-market price of a share in the Company for the dealing day immediately preceding the date of grant (the actual closing price on

2 April 2024 was £1.71).

(4) The value shown in this column has been calculated by multiplying the “number of shares over which the award was originally granted” by the “share price at date of grant”.

(5) In the period following the grant of the above award, no change has been made to the exercise price or the date on which it will become exercisable.

Capricorn Energy PLC

Annual Report and Accounts 2024

Performance conditions

In line with the approach that was adopted in 2023, and consistent with feedback previously received during meetings with major

shareholders, the committee determined that the vesting of LTIP awards granted in 2024 would be linked to the satisfaction of the

following share price targets at the end of a prescribed period of three years.

Share price at the end of the three-year measurement period Percentage of ordinary shares comprised in award that vest

Less than or equal to US$2.557 0%

US$3.669 100%

Between US$2.557 and US$3.669 0%-100% on a straight-line basis

Notwithstanding the extent to which the above targets have been satisfied, there are a number of circumstances in which the committee

can adjust the level of vesting applied to the award. When determining whether to adjust the level of vesting, the committee will take

into account all factors which it deems relevant at the time including, but not limited to, the underlying performance of the Company

and/or the individual, the progress made against execution of the Company’s strategy and the wider external environment in which the

Company operates. In particular, final vesting may be scaled back by up to 40% if the committee determines that insufficient shareholder

value has been generated during the first two years of the performance period.

Additional information in relation to the above targets is as follows:

‒ when calculating the level of achievement, share prices will normally be averaged over a 90-day period;

‒ the share price targets can be varied to take account of post-grant events such as share capital variations and returns of capital; and

‒ in accordance with the terms of the Approved Remuneration Policy, and irrespective of the Company’s share price performance over

the measurement period, the committee retains the discretion (in exceptional circumstances) to adjust the vesting outcome for the

award where the original result produced by the application of the performance conditions would be inappropriate or unreasonable

given the circumstances that exist at that time.

Post vesting holding period

Following its vesting, the award granted to the current Chief Executive Officer in 2024 will be subject to a two-year holding period during

which it cannot normally be exercised.

Dividend equivalent rights

As with awards granted under the LTIP in previous years, the 2024 grant to the current Chief Executive Officer was made on terms that

he will receive a payment (in cash and/or shares) on, or shortly following, the settlement of his award of an amount equivalent to the

dividends that would have been payable on the shares acquired between the date of grant and the expiry of any applicable holding

period. Where required, the committee will decide the basis on which the value of such dividends will be calculated, which may assume

the reinvestment of dividends. The rules of the LTIP also give the committee the discretion to disapply these provisions in relation to all

or part of any special dividend. This discretion was exercised by the committee in relation to each of the special dividends that were paid

by the Company during 2023 and 2024 on the basis that the economic position of participants in the LTIP was effectively preserved

through the operation of the share consolidation that formed part of the return of cash mechanism on each occasion.

LTIP – awards vesting/lapsing during the year (audited)

No awards granted to Executive Directors of the Company vested or lapsed during 2024.

LTIP – awards exercised during 2024 (audited)

Details of previously vested LTIP awards (which were in the form of nil-cost options) that were exercised during 2024 by individuals who

were former Executive Directors are as follows:

Date of grant Plan Date of vesting

Date of

exercise

Number

of shares

acquired on

exercise Exercise price

Market value

of shares

on date

of exercise

Gain on

exercise

Former Directors

Simon Thomson 13/03/19 LTIP 16/03/22 19/03/24 507,151 Nil £1.4206 £720,459

James Smith 13/03/19 LTIP 16/03/22 15/04/24 329,853 Nil £1.655 £545,907

Notes:

(1) Both of the exercises set out in this table occurred after the date on which the individual in question ceased to be an Executive Director.

(2) In accordance with the Company’s post-employment shareholding requirements for Executive Directors, the net-of-tax number of shares acquired by Simon Thomson and

James Smith pursuant to these exercises was immediately placed in a nominee structure and must normally be retained by them until the second anniversary of their cessation

of employment.

DIRECTORS’ REMUNERATION REPORT CONTINUED

Capricorn Energy PLC

Annual Report and Accounts 2024

Strategic Report Corporate Governance Financial Statements Additional Information

LTIP – other awards held by Executive Directors during 2024 (audited)

For the sake of completeness, set out below are details of the other unvested award under the LTIP that was held by the current Executive

Director during the year:

Date of grant

Plan

Form of

award

Basis of

award granted

Share price at

date of grant

No. of shares

over which

award

originally

granted

Face value

(£000) of

shares over

which award

originally

granted

% of shares over

which award

originally granted

that vest at

threshold

Vesting

determined by

performance

over

Director

Randy Neely 28/07/23 LTIP Nil-cost

option

2 x base

salary of

£500,000

£1.857 538,502 £1,000 0% 3 years up

to 31 May

2026

Notes:

(1) Details of the performance conditions applicable to the above award were provided in last year’s Directors’ Remuneration Report.

(2) No price is payable by participants for their shares on the exercise of a nil-cost option granted under the LTIP.

(3) This figure represents the average of the closing mid-market prices of a share in the Company for the three dealing days immediately preceding the date of grant.

(4) The value shown in this column has been calculated by multiplying the “number of shares over which the award was originally granted” by the “share price at date of grant”.

(5) During 2024, no change has been made to the exercise price of the above award or the date on which it will become exercisable.

DBP awards granted during 2024 (audited)

On 2 April 2024, the following grant under the DBP was made to the Chief Executive Officer in respect of the portion of his 2023 annual

bonus award which was to be deferred in accordance with the Approved Remuneration Policy:

Form of

award

Basis of award granted

Share price at

date of grant

No. of shares

over which

award

originally

granted

Face value

(£000) of

shares over

which award

originally

granted

% of shares

over which

award

originally

granted

that vest at

threshold

Vesting

determined by

performance

over

Directors

Randy Neely Nil-cost

option

25% x 2023 annual bonus

award of £260,154

£1.75 37,164 £65 100% N/A

Notes:

(1) No price is payable by participants for their shares on the exercise of a nil-cost option granted under the DBP.

(2) This figure represents the closing mid-market price of a share in the Company for the dealing day immediately preceding the date of grant (the actual closing price on

2 April 2024 was £1.71).

(3) The value shown in this column has been calculated by multiplying the “number of shares over which the award was originally granted” by the “share price at date of grant”.

(4) The above award will normally vest on or around the third anniversary of its date of grant. As explained on page 59, such vesting is dependent on continued employment with

the Group but not on the satisfaction of any additional performance conditions.

(5) In the period following the grant of the above award, no change has been made to the exercise price or the date on which it will become exercisable.

Participation of executive directors in all-employee share schemes during 2024 (audited)

Introduction

In order to encourage increased levels of long-term share ownership amongst its general employee population, the Company launched

an HM Revenue and Customs-approved SIP in April 2010. The SIP provides eligible employees, including Executive Directors, with the

following benefits:

‒ “Partnership shares” – employees can authorise deductions of up to £1,800 per tax year from pre-tax salary, which are then used to

acquire ordinary shares on their behalf.

‒ “Matching shares” – the Company can award further free shares to all participants who acquire partnership shares on the basis of up

to two matching shares for every one partnership share purchased. For the tax year 2024/2025, the Company awarded two matching

shares for every one partnership share purchased and intends to continue using this award ratio for the tax year 2025/2026.

‒ “Free shares” – employees can be given up to £3,600 worth of ordinary shares free in each tax year. On 26 April 2024, an award of free

shares was made to employees.

In certain circumstances, the rules of the SIP also allow participants to reinvest dividends paid on their plan shares in further ‘dividend shares’.

As the SIP is an ‘all employee’ arrangement, no performance conditions are imposed in relation to any matching or free shares awarded

pursuant to its terms.

Capricorn Energy PLC

Annual Report and Accounts 2024

Details of executive directors’ SIP participation in 2024

Details of the shares purchased by and awarded to Executive Directors under the SIP during the course of the year are as follows:

Total SIP shares

held at

01/01/24

Free shares awarded on

26/04/24 at a price of

£1.688 per share

Total SIP shares held

following share capital

consolidation on

24 May 2024

Dividend shares

purchased on 07/06/24

at a price of

£1.705 per share

Total SIP shares

held at

31/12/24

Director

Randy Neely 2,107 2,132 3,326 1,069 4,395

Notes:

(1) As a SIP participant at the time, and therefore the beneficial owner of the shares awarded to him at under the plan, Randy Neely benefited from the return of cash (and was

subject to the associated share capital consolidation) in the same way as all other participants.

(2) The committee decided to give participants in the SIP the ability, if they so wished, to reinvest the special dividend that was paid during 2024 in respect of their plan holding in

further “dividend shares”.

The total number of shares held (or previously held) by the above individual under the SIP is included in their beneficial shareholding

disclosed in the Directors’ Report on page 67.

Shareholding guidelines for Directors (audited)

A formal share ownership policy for Executive Directors has been in place for a number of years under which they are required, during

employment, to build up and maintain a target holding, currently equal to 200% of salary. In order to facilitate the achievement of

the requirement, the share ownership policy provides that, until the necessary holding is achieved, an Executive Director is normally

obliged to retain shares with a value equal to 50% of the net-of-tax gain arising from any vesting or exercise under the Company’s share

incentive plans.

In addition, Executive Directors are normally obliged to maintain a specified holding of shares for a period of two years following cessation

of employment. In particular:

‒ the requirement is to maintain a post-employment holding of relevant shares equal to 200% of final salary;

‒ if this targeted holding has not been achieved at the point employment ceases, the requirement will apply to all relevant shares held

at that time;

‒ ‘relevant shares’ will include all shares acquired by the individual on the exercise of awards that vest under any of the Company’s

discretionary share plans, including the LTIP and the DBP (other than those that are sold in order to satisfy tax liabilities arising

on exercise);

‒ shares subject to awards that vest but which remain unexercised (e.g. because a holding or deferral period applies), or which have been

granted under the DBP, will also count as ‘relevant shares’, but on a net-of-tax basis;

‒ until such time as the 200% of salary target is achieved, any relevant shares acquired by an individual will be placed in a nominee

structure;

‒ relevant shares held by or on behalf of an individual will also count towards the satisfaction of the ‘in-service’ share ownership policy

that is described above;

‒ for the avoidance of doubt, any shares acquired by an individual other than pursuant to a discretionary share plan (e.g. purchases using

his/her own resources) will not be subject to the post-employment holding requirement; and

‒ the committee will retain the discretion to reduce or waive the post-employment holding requirement in limited circumstances

(such as on the death of the individual or where his/her personal circumstances change).

DIRECTORS’ REMUNERATION REPORT CONTINUED

Capricorn Energy PLC

Annual Report and Accounts 2024

Strategic Report Corporate Governance Financial Statements Additional Information

The following table discloses the beneficial interest of each Director in the ordinary shares of the Company as at 31 December 2024 (or

date of cessation of directorship, if earlier). Following his appointment in 2023, Randy Neely is continuing to build his interest towards the

shareholding guideline. His interest in Company shares will be enhanced through part deferral of the 2024 bonus and 2025 LTIP grants.

Shares held

Ordinary shares over which LTIP and DBP

awards held

Compliance with

shareholding requirements

Share awards not subject to

performance conditions

Share awards

subject to

performance

conditions

In-service

requirement

Post-

cessation

requirement

Ordinary

shares held

in the SIP

Total

holding of

ordinary

Vested

awards

Unvested

awards

Total

interest in

ordinary

Value of

holding as a

% of salary

5 6

Value of

holding as a

% of salary

5 7

Executive Director

Randy Neely – 4,395 4,395 – 37,164 1,109,930 1,151,489 11% 9%

Non-Executive Directors

Maria Gordon – – – – – – – – –

Richard Herbert – – – – – – – – –

Sachin Mistry 9,223,965 – 9,223,965 – – – 9,223,965 – –

Tom Pitts – – – – – – – – –

Patrice Merrin – – – – – – – – –

Former Directors

Craig van der Laan – – – – – – – – –

Hesham Mekawi – – – – – – – – –

Notes:

(1) Includes shares held by connected persons.

(2) This column shows all vested but unexercised awards under the LTIP and DBP that were held by the director concerned as at 31 December 2024 (or date of cessation of

directorship, if earlier). During 2024, no awards were exercised by any of the directors included in the above table.

(3) This column shows all unvested awards under the DBP that were held by the director concerned as at 31 December 2024 (or date of cessation of directorship, if earlier).

(4) This column shows all unvested and outstanding awards under the LTIP that were held by the director concerned as at 31 December 2024 (or date of cessation of directorship,

if earlier) including those granted during the year. Details of these entitlements, the vesting of which is subject to the satisfaction of performance conditions, are set out on page 60.

(5) Share price used is the average price for the period of 90 days up to and including 31 December 2024.

(6) This holding includes (i) all shares held by the individual; and (ii) the net-of-tax number of all shares subject to vested but unexercised LTIP awards and outstanding DBP awards.

(7) This holding includes the net-of-tax number of all shares subject to (i) vested but unexercised LTIP awards; and (ii) outstanding DBP awards.

(8) The shareholding numbers noted in the table above were unchanged as at the earlier of 18th March 2025 or the date of cessation of directorship of the individual listed.

Loss of office payments and payments to past Directors during 2024 (audited)

Simon Thomson

As disclosed in the Directors’ Remuneration Reports for the past two years, Simon Thomson stepped down from his position as Chief

Executive Officer on 24 January 2023 and was subsequently placed on garden leave until 21 April 2023, at which time the Company

exercised its right to end his employment and make a PILON for the balance of his contractual notice period (being 21 April 2023 to

1 February 2024) by way of phased monthly payments, subject to mitigation. In respect of the year to 31 December 2024, Simon

received £63,851.

During 2024, both Simon Thomson and James Smith (who stepped down as Chief Financial Officer on 1 February 2023 and ceased

employment on 14 April 2023) exercised their final outstanding awards under the LTIP which had vested prior to their cessation of

employment. Details of these transactions are set out on page 60.

Dilution of share capital pursuant to share plans during 2024

In any 10-year rolling period, the number of ordinary shares which may be issued in connection with the Company’s “discretionary share

plans” (which includes the LTIP and the share option/award schemes used to incentivise less senior employees) cannot exceed 5% of the

Company’s issued ordinary share capital.

In addition, in any 10-year rolling period, the number of ordinary shares which may be issued in connection with all of the Company’s

employee share schemes (whether discretionary or otherwise) cannot exceed 10% of the Company’s issued ordinary share capital.

It should also be noted that all shares acquired by or awarded to participants under the SIP and the DBP are existing ordinary shares

purchased in the market. As a result, neither the SIP nor the DBP involves the issue of new shares or the transfer of treasury shares.

Board appointments with other companies during 2024

The Board believes, in principle, in the benefits of Executive Directors accepting positions as Non-Executive Directors of other companies

in order to widen their skills and knowledge for the benefit of the Company, provided that the time commitments involved are not unduly

onerous. The Executive Directors are permitted to retain any fees paid for such appointments.

The appointment of any Executive Director to a non-executive position with another company must be approved by the Nomination

& Governance Committee. In the case of a proposed appointment to a company within the oil and gas industry, permission will only

normally be given if the two companies do not compete in the same geographical area.

Capricorn Energy PLC

Annual Report and Accounts 2024

Relative importance of spend on pay

Set out below are details of the amounts of, and percentage change in, remuneration paid to or receivable by all Group employees and

distributions to shareholders in the years ended 31 December 2023 and 2024.

Financial Year 2023 Financial Year 2024 % change

Employee costs (US$m)

36.8 10.3 (72)%

Distributions (US$m)

560.0 57.1 (89.8)%

Notes:

(1) 2024 employee costs are significantly lower than the prior year as a result of a material reduction in the Group’s staff headcount.

(2) For the purposes of the above table, ‘Distributions’ include amounts distributed to shareholders by way of dividend and share buyback. The figure for 2024 represents the

aggregate of: (i) the return of cash that took place in May of that year; and (ii) the share-buybacks that occurred in the period.

TSR performance graph and further information on Chief Executive pay

Introduction

The following chart demonstrates the growth in value of a £100 investment in the Company and an investment of the same amount

in both the FTSE 250 Index and the FTSE 350 Oil & Gas Producers Index over the last 10 years. These comparisons have been chosen

on the basis that: Capricorn was a constituent member of the FTSE 250 Index for a significant proportion of the previous 10 years; and

the FTSE 350 Oil & Gas Producers Index comprises companies that are exposed to broadly similar risks and opportunities as Capricorn.

The table following the graph illustrates the movements in the total remuneration of the Company’s Chief Executive during the same

10-year period.

Performance graph – comparison of 10-year cumulative TSR on an investment of £100

£50

£100

£150

£200

£250

Dec 14 Dec 15 Dec 16 Dec 17 Dec 18 Dec 19 Dec 20 Dec 21 Dec 24Dec 23Dec 22

FTSE 250 Capricorn FTSE 350 Oil & Gas

Total remuneration of Chief Executive during the same 10-year period

Financial year Chief Executive

Total remuneration of

Chief Executive

Annual variable element

award rates for Chief

Executive (as % of max.

opportunity)

Long-term incentive

vesting rates for Chief

Executive (as % of original

award level)

2024 Randy Neely £1,107,865 86% N/A

2023 Randy Neely £607,6 42 71%

N/A

2023 Chris Cox £393,107 80%

N/A

2023 Simon Thomson £49,155 N/A N/A

2022 Simon Thomson £1,908,773 22.5% 59%

2021 Simon Thomson £1,950,892 60.5% 67.7%

2020 Simon Thomson £1,479,731 75% 27.4%

2019 Simon Thomson £1,173,630 65% 0%

2018 Simon Thomson £2,204,001 70% 56.7%

2017 Simon Thomson £2,992,615 76.9% 90.8%

2016 Simon Thomson £2,081,601 80.2% 81.7%

2015 Simon Thomson £1,292,167 75% 23.4%

Notes:

(1) The amounts disclosed in this column have been calculated using the same methodology prescribed by the Regulations for the purposes of preparing the single total figure

table shown on page 56.

(2) Randy Neely was awarded a bonus for the financial year to 31 December 2023 of 71% of maximum opportunity (being 125% of salary). This figure was then pro-rated by

reference to the part of the year that he was employed by the Company, resulting in a final award of 52% of annual base salary.

(3) Chris Cox was awarded a bonus for the financial year to 31 December 2023 of 80% of the maximum opportunity (being 100% of salary). This figure was then pro-rated by

reference to the part of the year that he was employed by the Company, resulting in a final award of 32.9 % of annual base salary.

DIRECTORS’ REMUNERATION REPORT CONTINUED

Capricorn Energy PLC

Annual Report and Accounts 2024

Strategic Report Corporate Governance Financial Statements Additional Information

Percentage annual change in Directors’ remuneration elements compared to all Group employees

The table below compares the percentage change in various elements of each Directors’ remuneration between:

‒ 2023 and 2024;

‒ 2022 and 2023;

‒ 2021 and 2022;

‒ 2020 and 2021; and

‒ 2019 and 2020,

and the average percentage change in the same remuneration elements of all the Group’s employees in respect of those same periods.

Between 2023 and 2024 Between 2022 and 2023 Between 2021 and 2022 Between 2020 and 2021 Between 2019 and 2020

change

in base

salary/

fees

change

taxable

benefits

change

annual

bonus

change

in base

salary/

fees

change

taxable

benefits

change

annual

bonus

change

in base

salary/

fees

change

taxable

benefits

change

annual

bonus

change

in base

salary/

fees

change

taxable

benefits

change

annual

bonus

change

in base

salary/

fees

change

taxable

benefits

change

annual

bonus

All Group

employees 7%

(6.2)% 90% 6.0% (24.0)% (4.0)% 4.4% (0.25)% (13.0)% 2.0% (6.1)% (16.7)% 3.0% (0.4)% 2.2%

Executive Director

Randy

Neely

71.4% (72.9)%

106.6%

N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A

Non-Executive Directors

Maria

Gordon

6 7

91.8% N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A

Richard

Herbert

14.4% N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A

Tom

Pitts

(0.4)% N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A

Patrice

Merrin

92.6% N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A

Sachin

Mistry

N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A

Former Directors

Craig

van der Laan (56.5)% (17. 8)% N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A

Hesham

Mekawi (30.4)% N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A

Notes:

(1) The standard level of salary increase across the Group in 2024 was 5%. However, a small number of individuals based in Egypt received higher percentage increases which raised

the average for all employees to 7%.

(2) Randy Neely was appointed as an Executive Director on 1 June 2023.

(3) This fall in taxable benefits for Randy Neely was attributable to the fact that, in 2023, he was reimbursed for non-recurring fees totalling £12,775 that were incurred by him

during that period in connection with the receipt of immigration services.

(4) The percentage increase in Randy Neely’s bonus is, in part, attributable to the fact that his award for 2023 was pro-rated by reference to his June start date in that year.

(5) The Non-Executive Directors are not eligible to participate in the annual bonus scheme.

(6) Each of Maria Gordon, Richard Herbert and Tom Pitts were appointed as Directors on 1 February 2023, with Patrice Merrin being appointed on 26 June 2023.

(7) Maria Gordon was appointed as Chair of the Company on 23 May 2024 (prior to which she was a Non-Executive Director).

(8) As explained on page 57, Sachin Mistry is not entitled to any remuneration, fee, bonus or other financial reward or compensation in connection with his role as a Director.

(9) Craig van der Laan and Hesham Mekawi stepped down from the Board on 23 May 2024 and 27 June 2024 respectively.

Capricorn Energy PLC

Annual Report and Accounts 2024

Implementation of remuneration policy in 2025

The following table provides details of how the Company intends to implement the key elements of the Approved Remuneration Policy

during the year to 31 December 2025.

Remuneration element Implementation during 2025

Base salary Notwithstanding the 3% standard annual salary increase awarded to UK based employees of the Group for

2025, Randy Neely’s base salary did not change with effect from 1 January 2025 and will stay at the £500,000

level paid in 2023 and 2024.

Benefits It is expected that there will be no change to the benefit provision in 2025. Executive Directors will be given the

opportunity to participate in the SIP on the same terms as apply to all other eligible employees in the arrangement.

Annual bonus In accordance with the requirements of the policy, Executive Directors will be eligible to receive a bonus of up to

125% of base salary depending on the extent to which specified measures are satisfied over 2025. Of the bonus

award, 25% will be deferred into shares for a period of three years.

Similar to prior years, for senior executives in the wider Group, the 2025 bonus will continue to be based on

a balanced scorecard of measures linked to strategy. The committee reviewed the scorecard in early 2025

and determined that the 2024 KPI framework remains appropriate, with some updates to the weightings.

The performance measure categories for 2025 are HSE (5%), production and OPEX (20%), financial (25%) and

corporate projects (50%).

LTIP It is intended that, during the early part of 2025, the Chief Executive Officer will be granted a further award

pursuant to the rules of the LTIP on the following terms:

‒ the award will be granted over shares worth 200% of salary;

‒ the extent to which the award vests will be determined by reference to the satisfaction of absolute shareholder

return conditions over the period of three consecutive financial years starting on 1 January 2025; and

‒ the overall structure of these conditions will mirror those applied to the award granted to the Chief Executive

Officer in 2024, with the precise targets to be applied to the 2025 award being set by the committee at the

time of its grant.

Full disclosure of the 2025 LTIP award will be provided in the 2025 Directors’ Remuneration Report.

Retirement benefits During 2025 the Company will contribute 12.5% of basic salary on behalf of the Executive Director or pay them

an equivalent amount of additional salary. This rate of pension contributions is equal to the amount paid to the

wider UK employee population.

Non-Executive Chair’s and Non-Executive Directors’ fees

For 2025, the annual fees for Non-Executive Directors and the Non-Executive Chair remain unchanged at £80,000 and £270,000

respectively.

The additional fees for committee chair and membership in 2025 (which are unchanged from the prior year) are as follows:

Chair Member

Audit Committee/Remuneration Committee £15,000 £10,000

Sustainability Committee £10,000 £5,000

Nomination & Governance Committee – £5,000

Date of appointment and forthcoming election/re-election

The following table sets out the dates on which each of the current Directors was first appointed and specifies the dates on which those

individuals are next subject to election or re-election:

Director Date of original appointment Date when next subject to election or re-election

Maria Gordon 1 February 2023 22 May 2025

Richard Herbert 1 February 2023 22 May 2025

Sachin Mistry 23 May 2024 22 May 2025

Tom Pitts 1 February 2023 22 May 2025

Patrice Merrin 26 June 2023 22 May 2025

Randy Neely 1 June 2023 22 May 2025

Notes:

(1) Randy Neely’s service contract provides 12 calendar months notice period to be given by the Company.

The Directors’ Remuneration Report was approved by the Board on 26 March and signed on its behalf by:

Richard Herbert

Chair of the Remuneration Committee

27 March 2025

DIRECTORS’ REMUNERATION REPORT CONTINUED

Capricorn Energy PLC

Annual Report and Accounts 2024

Strategic Report Corporate Governance Financial Statements Additional Information

DIRECTORS’ REPORT

The Directors of Capricorn Energy PLC (registered in Scotland with company number SC226712) (the “Company”) present their Annual

Report and Accounts for the year ended 31 December 2024 together with the audited consolidated Financial Statements of the Group

and Company for the year. These will be laid before shareholders at the AGM to be held on 22 May 2025. The Directors’ Report and

the Strategic Report which includes trends and factors likely to affect future development, performance and position of the business,

our section 172 Statement (see pages 7 and 8) and a description of the principal risks and uncertainties of the Company’s Group

(see pages 17 to 22) which are hereby incorporated by reference, collectively comprise the management report as required under

the Financial Conduct Authority’s Disclosure Guidance and Transparency Rules.

Results and dividend

The Group made a gain after tax of $5.8m.

In June 2024 the Company paid a special dividend of approximately $50m amounting to a payment of 43 Pence for each Ordinary Share.

Strategic report

Details of the Group’s strategy and business model during the year and the information that fulfils the requirements of the Strategic Report

can be found in the Strategic Report section of this document on pages 2 to 34, which are deemed to form part of this report by reference.

Details of Capricorn’s offices and Capricorn’s advisers are given at the end of this report.

Change of control

All of the Company’s share incentive plans contain provisions relating to a change of control and further details of these plans

are described in the Directors’ Remuneration Policy (details of which can be reviewed within the 2023 Annual Report at

www.capricornenergy.com/investors/annual-report-2023). Generally, outstanding options and awards will vest and become

exercisable on a change of control, subject to the satisfaction of performance conditions, if applicable, at that time.

Other than in respect of the $325m senior debt facility agreement entered into by Capricorn Egypt Limited and its partner Cheiron

with Société Générale and other syndicated banks dated 24 June 2021 and the $80m junior debt facility agreement entered into by

Capricorn Egypt Limited and its partner Cheiron with Trafigura Ventures V B.V. and Deutsche Bank A.G. dated 24 June 2021 (together

the “Egypt Facility Agreements”), there are no significant agreements to which the Company or a member of the Group is a party that

take effect, alter or terminate in the event of a change of control of the Company. In terms of each of the Egypt Facility Agreements,

if there is a change of control of the Company, the majority lenders may cancel the commitments and all outstanding amounts will

become immediately due and payable.

Corporate governance

The Company’s Corporate Governance Statement is set out on pages 38 to 43 and is deemed to form part of this report by reference.

Directors

The names and biographical details of the current Directors of the Company are given in the Board of Directors section on pages

36 and 37. The beneficial interests of all the Directors who held this office during 2024 in the ordinary shares of the Company as at

31 December 2024 (and at 17 March 2025) are shown below:

Number of shares as at

31 December 2023

Number of shares as at

31 December 2024

Number of shares as at

17 March 2025

Maria Gordon 0 0 0

Randy Neely 2,107 4,395 4,395

Richard Herbert 0 0 0

Tom Pitts 0 0 0

Patrice Merrin 0 0 0

Sachin Mistry

– 9,223,965 9,223,965

Former Directors

Craig van der Laan

0 0 0

Hesham Mekawi

0 0 0

Notes:

The figures in the table above include shares held by connected persons.

(1) Appointed as a Director on 23 May 2024.

(2) Resigned as a director on 23 May 2024.

(3) Resigned as a Director on 27 June 2024.

Details of outstanding awards over ordinary shares in the Company held by the Directors (or any members of their families) are set out

in the Directors’ Remuneration Report on page 63.

None of the Directors have a material interest in any contract, other than a service contract or letter of appointment,

with the Company or any of its subsidiary undertakings. Details of the Directors’ service contracts and letters of appointment

are set out in the Directors’ Remuneration Policy (details of which can be reviewed within the 2023 Annual Report at

www.capricornenergy.com/investors/annual-report-2023).

Capricorn Energy PLC

Annual Report and Accounts 2024

Share capital and voting rights

The issued share capital of the Company is shown in section 7.1 of the notes to the Financial Statements. As at 25 March 2025,

70,558,339 ordinary shares of 799/122 pence each (the “Ordinary Shares”) have been issued, are fully paid up and are quoted

on the London Stock Exchange.

The rights attaching to the Ordinary Shares are set out in the Company’s Articles of Association. There are no special control rights

in relation to the Company’s shares and the Company is not aware of any agreements between holders of securities that may result

in restrictions on the transfer of securities or on voting rights. Each share carries the right to one vote at shareholders meetings

of the Company. Shareholders are entitled to 21 days notice of the general meetings of the Company and have rights to appoint

a nominated proxy (in advance) to exercise their vote, to speak, and to vote on a show of hands or on a poll.

Major interests in share capital

As at 31 December 2024 and 18 March 2025 (being the latest practicable date prior to the date of this report), the Company had

received notification that shareholdings of 3% and over were as set out in the table below.

Fund Manager

Shares as at

31 December 2024

Share capital

Shares as at

18 March 2025

Share capital

Goldman Sachs collateral account 3,227,648 4.57 3,375,755 4.78

Newtyn Partners 12,294,098 17.42 12,294,098 17.42

Palliser Capital 9,223,965 13.07 9,223,965 13.07

Kite Lake Capital Management 5,630,814 7.98 5,630,814 7.9 8

Morgan Stanley as principal 7,099,080 10.06 8,949,755 12.68

Dimensional Fund Advisors 2,838,551 4.02 2,798,130 3.97

Madison Avenue Partners 3,756,489 5.32 3,759,796 5.33

Bank of America Merrill Lynch International collateral account 2,152,107 3.05 – –

Cairn Energy ESOP – – 2,753,042 3.90

Janus Henderson Investors – – 2,468,292 3.50

BlackRock – – 2,289,739 3.25

Political donations

No political donations were made and no political expenditure was incurred during the year.

Charitable donations

The Company made charitable donations for the following purposes:

Community, Economic and Environmental Benefit: £30,125

Community Health: £70,000

Greenhouse gas emissions

Details of the Group’s GHG emissions can be found in the Strategic Report section on page 13, which are deemed to form part of this

report by reference. Our response to the SECR framework has been provided on page 22 of this Annual Report and Accounts and is also

deemed to form part of this report by reference.

Employee and stakeholder engagement

Details of the Company’s engagement with employees and external stakeholders are noted in the Strategic Report on page 14 and in our

Section 172 Statement on pages 7 and 8, which are hereby incorporated in this report by reference.

Financial instruments

The financial risk management objectives and policies of the Company are detailed in Section 3.9 of the Financial Statements.

Acquisition of own shares

The Board announced a share buyback in May 2023, purchasing approximately $25m of shares in the open market up to 31 December

2024, of which approximately $7m was completed during 2024. As at 31 December 2024 a total of 3,435,747 shares were purchased for

cancellation over the course of the financial year at a total cost of $7,139,327.40 (this number includes (i) 1,840,311 shares of 735/143p

prior to 23 April 2024; and (ii) following a share consolidation in June 2024, the buyback proceeded with purchase of a further 1,595,436

shares of 799/122p each). This concludes the share buyback authorised by the Directors and there are no current plans to resume a share

buyback programme for the Company.

Appointment and replacement of Directors

The Company’s Articles of Association provide that Directors can be appointed by the Company by ordinary resolution, or by the Board.

The Nomination & Governance Committee makes recommendations to the Board on the appointment and replacement of Directors.

Further details of considerations governing the appointment and replacement of Directors are set out in the Corporate Governance

Statement on pages 50 to 52 and in the Company’s Articles of Association.

Directors’ indemnities

As permitted by the Company’s Articles of Association, the Directors have the benefit of an indemnity which is a qualifying third-party

indemnity provision as defined in Section 234 of the Companies Act 2006 (a “Qualifying Third-Party Indemnity Provision”). The indemnity

was in force throughout the last financial year and is currently in force.

DIRECTORS’ REPORT CONTINUED

Capricorn Energy PLC

Annual Report and Accounts 2024

Strategic Report Corporate Governance Financial Statements Additional Information

Powers of the Directors

Subject to the Company’s Articles of Association, UK legislation and any directions given by special resolution, the business of the

Company is managed by the Board. The Directors currently have powers both in relation to the issuing and buying back of the Company’s

shares and are seeking renewal of these powers at the forthcoming AGM.

Articles of Association

Unless expressly specified to the contrary therein, the Company’s Articles of Association may be amended by a special resolution of the

Company’s shareholders.

Statement of directors’ responsibilities in respect of the financial statements

The directors are responsible for preparing the Annual Report and Accounts, the Directors’ Remuneration Report and the financial

statements in accordance with applicable law and regulation.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have prepared the

group and the company financial statements in accordance with UK-adopted international accounting standards.

Under company law, directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the

state of affairs of the group and company and of the profit or loss of the group for that period. In preparing the financial statements, the

directors are required to:

‒ select suitable accounting policies and then apply them consistently;

‒ state whether applicable UK-adopted international accounting standards, subject to any material departures disclosed and explained

in the financial statements;

‒ make judgements and accounting estimates that are reasonable and prudent; and

‒ prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group and company will

continue in business.

The directors are responsible for safeguarding the assets of the group and company and hence for taking reasonable steps for the

prevention and detection of fraud and other irregularities.

The directors are also responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and

company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and company and enable

them to ensure that the financial statements and the Directors’ Remuneration Report comply with the Companies Act 2006.

The directors are responsible for the maintenance and integrity of the company’s website. Legislation in the United Kingdom governing

the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Directors’ confirmations

The directors consider that the Annual Report and Accounts, the Directors’ Remuneration Report and accounts, taken as a whole, is fair,

balanced and understandable and provides the information necessary for shareholders to assess the group’s and company’s position and

performance, business model and strategy.

Each of the directors, whose names and functions are listed in the Board of Directors section confirm that, to the best of their knowledge:

‒ the group and company financial statements, which have been prepared in accordance with UK-adopted international accounting

standards, give a true and fair view of the assets, liabilities and financial position of the group and company, and of the profit of the

group; and

‒ the Strategic Report includes a fair review of the development and performance of the business and the position of the group and

company, together with a description of the principal risks and uncertainties that it faces.

Disclosure of information to auditors

Each of the Directors of the Company as at 26 March 2025, being the date this report is approved, confirm that, as far as they are aware,

there is no relevant audit information of which the Company’s auditors are unaware. In making this confirmation, the Directors have taken

appropriate steps to make themselves aware of the relevant audit information and to establish that the Company’s auditors are aware of

this information.

AGM 2025

The AGM of the Company will be held at Hawthornden Lecture Theatre, National Gallery, The Mound, Edinburgh EH2 2EL at 10.00 a.m.

on 22 May 2025. The resolutions to be proposed at the AGM are set out and fully explained in the Notice of AGM which has been notified

to shareholders together with this Annual Report and Accounts. Full details are included in the Notice of AGM.

Recommendation

The Board considers that all of the resolutions to be considered at the AGM are in the best interests of the Company and its shareholders

as a whole and unanimously recommends that you vote in favour of all of the proposed resolutions.

This Annual Report was approved by the Board of Directors and authorised for issue on 26 March 2025.

By order of the Board

Paul Ervine

Company Secretary

27 March 2025

Capricorn Energy PLC

Annual Report and Accounts 2024

Financial Statements

Independent Auditors’ Report 71

Group Income Statement 77

Group Balance Sheet 78

Group Statement of Cash Flows 79

Group Statement of Changes in Equity 80

Section 1 – Basis of preparation

1.1 Accounting policies 81

1.2 Going concern 82

Section 2 – Oil and gas assets,

operations and other non-current assets

2.1 Gross profit: revenue and cost of sales 84

2.2 Intangible exploration/appraisal assets 85

2.3 Property, plant & equipment –

development/producing assets 86

2.4 Goodwill 87

2.5 Other property, plant & equipment

and intangible assets 88

2.6 Other long-term receivables 88

2.7 Provisions – well decommissioning 89

2.8 Capital commitments 89

Section 3 – Working capital, financial instruments and

long-term liabilities

3.1 Cash and cash equivalents 90

3.2 Loans and borrowings 91

3.3 Lease liabilities 92

3.4 Inventory 92

3.5 Trade and other receivables 93

3.6 Financial liabilities at fair value

through profit or loss 94

3.7 Trade and other payables 94

3.8 Financial instruments 95

3.9 Financial risk management:

objectives and policies 96

3.10 Asset held-for-sale 98

Section 4 – Income Statement analysis

4.1 Segmental analysis 99

4.2 Administrative and other expenses 102

4.3 Employee benefits: staff costs, share-based

payments and Directors’ emoluments 102

4.4 Finance income 105

4.5 Finance costs 105

4.6 Earnings per ordinary share 105

Section 5 – Taxation

5.1 Tax strategy and governance 107

5.2 Tax charge on profit/(loss) for the year 107

5.3 Current tax receivable 108

5.4 Deferred tax assets and liabilities 108

Section 6 – Discontinued operations

6.1 Profit/(Loss) from discontinued operations 110

6.2 Cash flow information for

discontinued operations 111

6.3 Discontinued operations –

Senegal contingent liability 111

Section 7 – Capital structure

and other disclosures

7.1 Issued capital and reserves 112

7.2 Return of cash to shareholders 113

7.3 Capital management 113

7.4 Guarantees 113

7.5 Auditors’ remuneration 114

Company Financial Statements

Company Balance Sheet 115

Company Statement of Cash Flows 116

Company Statement of Changes in Equity 117

Section 8 – Notes to the

Company Financial Statements

8.1 Basis of preparation 118

8.2 Investments in subsidiaries 118

8.3 Long-term intercompany receivables 121

8.4 Cash and cash equivalents 121

8.5 Other receivables 121

8.6 Trade and other payables 121

8.7 Financial instruments 121

8.8 Capital management 123

8.9 Related party transactions 123

Contents

Capricorn Energy PLC

Annual Report and Accounts 2024

Strategic Report Corporate Governance Financial Statements Additional Information

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF CAPRICORN ENERGY PLC

Report on the audit of the financial statements

Opinion

In our opinion, Capricorn Energy PLC’s group financial statements and company financial statements (the “financial statements”):

‒ give a true and fair view of the state of the group’s and of the company’s affairs as at 31 December 2024 and of the group’s profit and

the group’s and company’s cash flows for the year then ended;

‒ have been properly prepared in accordance with UK-adopted international accounting standards as applied in accordance with the

provisions of the Companies Act 2006; and

‒ have been prepared in accordance with the requirements of the Companies Act 2006.

We have audited the financial statements, included within the Annual Report and Accounts (the “Annual Report”), which comprise:

the Group Balance Sheet and Company Balance Sheet as at 31 December 2024; the Group Income Statement, the Group Statement

of Comprehensive Income, the Group and Company Statements of Cash Flows and the Group and Company Statements of Changes

in Equity for the year then ended; and the notes to the financial statements, comprising material accounting policy information and

other explanatory information.

Our opinion is consistent with our reporting to the Audit Committee.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities

under ISAs (UK) are further described in the Auditors’ responsibilities for the audit of the financial statements section of our report. We

believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence

We remained independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial

statements in the UK, which includes the FRC’s Ethical Standard, as applicable to listed public interest entities, and we have fulfilled our

other ethical responsibilities in accordance with these requirements.

To the best of our knowledge and belief, we declare that non-audit services prohibited by the FRC’s Ethical Standard were not provided.

Other than those disclosed in note 7.5, we have provided no non-audit services to the company or its controlled undertakings in the

period under audit.

Our audit approach

Context

Capricorn Energy PLC is an independent, UK-based energy company, focused on oil and gas exploration, development and production.

Capricorn’s activities are focused in Egypt. Capricorn’s headquarters and finance team are in Edinburgh supported by a team in Egypt.

Overview

Audit scope

‒ We conducted audit work on 11 components. 2 of these components were subject to a full scope audit, the remaining 9 were subject to

specified scope. All audit work performed to support the group audit report was performed by the group engagement team in the UK.

Our audit scope covered 97.7% of total assets.

Key audit matters

‒ Valuation of Expected Credit Loss (“ECL”) of EGPC receivable (group)

‒ Valuation of Goodwill and Production assets (group)

‒ Valuation of Investments in subsidiaries (parent)

Materiality

‒ Overall group materiality: US$6,197,000 (2023: US$6,675,000) based on 1% of Total Assets.

‒ Overall company materiality: US$4,713,000 (2023: US$4,178,000) based on 1% of Total Assets.

‒ Performance materiality: US$4,647,000 (2023: US$5,006,000) (group) and US$3,534,000 (2023: US$3,113,000) (company).

The scope of our audit

As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements.

Key audit matters

Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the audit of the financial

statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud)

identified by the auditors, including those which had the greatest effect on: the overall audit strategy; the allocation of resources in the

audit; and directing the efforts of the engagement team. These matters, and any comments we make on the results of our procedures

thereon, were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we

do not provide a separate opinion on these matters.

This is not a complete list of all risks identified by our audit.

Capricorn Energy PLC

Annual Report and Accounts 2024

The key audit matters below are consistent with last year.

Key audit matter How our audit addressed the key audit matter

Valuation of Expected Credit Loss (“ECL”) of EGPC receivable

(group)

Under IFRS 9, a lifetime expected credit loss should be assessed

when there are trade receivables with a significant increase in

credit risk since initial recognition. Lifetime ECL’s are the expected

credit losses that result from all possible default events over the

expected life of the financial instrument. EGPC net receivables

totalled $175.4m as of 31 December 2024 (2023: $168.5m).

Although the gross amount has increased throughout the

year, Capricorn has been receiving cash payments throughout

the period. Management’s ECL is based on the sovereign risk

overview default rating for the Arab Republic of Egypt which

has been applied to the outstanding receivables based on

the months outstanding. Management has assessed that

the expected credit loss for the EGPC trade receivables at

31/12/2024 is $8.7m. This is an area of audit focus given the value

of the balance of receivables outstanding and the estimates

involved in determining the ECL under IFRS 9. Refer to note 3.5

of the financial statements.

In our audit of the accounts receivable and ECL balances we have:

‒ Held discussions with management and the revenue team to

understand the current position of the receivable including

the status of recovering amounts outstanding;

‒ Obtained management’s ECL calculation and confirmed the

methodology is in line with IFRS 9;

‒ Verified that the sovereign debt rating used by management

in their ECL calculation was consistent with publicly available

market data on the credit rating of Egypt;

‒ Validated the aging profile of the receivable, and cash received

during the period, and concluded that the 12-month credit

default risk rating, pro-rated for amounts overdue by more

than 12 months, is appropriate;

‒ Recalculated the expected ECL using the IFRS 9 methodology;

and

‒ Evaluated the financial statement disclosure.

Based on our procedures, we concluded that the ECL and related

disclosures were appropriate.

Valuation of Goodwill and Production assets (group)

Goodwill of $25.4m arose on the acquisition of the Western

Desert assets in Egypt in 2021, which was impaired to $10.8m in

the prior year. Under IAS 36 Goodwill is required to be tested for

impairment annually, and management performed this test as

at 31 December 2024. The carrying value of oil & gas production

assets at 31 December 2024 was $210.8m (2023: $217.6m).

Under IAS 36, where there is an impairment trigger, non-

current production assets must be evaluated for impairment.

Management has determined that the significant progress made

during 2024 on negotiating the revised Production Sharing

Contract (‘PSC’) terms in Egypt resulting in revised field life and

commercial terms are an indicator that previous impairments

may be reversed. The recoverable amount was determined

by the fair value less cost of disposal (FVLCD) method using a

discounted cash flow model. Based upon the discounted cash

flow projections used by management, there was an impairment

reversal of $15.7m to producing assets recognised in the current

year. Based upon the discounted cash flow projections used

by management, there was no impairment to goodwill in

the current year. This is an area of audit focus given the value

of the goodwill and production assets and the judgements

and estimates made by management in their impairment

assessment. Refer to notes 2.3, 2.4 and 2.8 to the financial

statements.

In auditing the valuation of Goodwill and Production assets for the

year ended 31 December 2024, we have performed the following

procedures:

‒ Validated the reserves estimates prepared by management’s

experts (both internal and external). We evaluated management’s

experts for competence and objectivity;

‒ Discussed reserves estimates with management’s experts to

assess any key judgements or differences between the internal

and external experts. Where there were differences, we sought

explanations for these;

‒ Understood the source of management’s forecast oil and gas

production, validated to reserves data and assessed Capricorn’s

previous ability to forecast oil and gas production figures;

‒ Compared the timing of cash receipts for the sale of

hydrocarbons to the recent history of recovery and considering

other forward-looking factors;

‒ Evaluated the reasonableness of opex and capex assumptions by

comparing expected future operating and capital costs to current

and past performance and other sources of evidence;

‒ Benchmarked assumptions including comparing the commodity

price, inflation and discount rates used to expected ranges

prepared by our own Valuation experts;

‒ Assessed the composition of each CGU based on the

requirements of IAS 36, including the change in CGUs in the year;

‒ Validated the mathematical accuracy and integrity of the model

and agreed the net book values to Capricorn’s books and records;

‒ Obtained and understood the concession agreements to confirm

terms that may affect the valuation;

‒ Considered the global focus on clean energy transition and

climate change in the context of the assumptions, in particular in

relation to the cost of carbon;

‒ Assessed the results of management’s sensitivity analysis, and

performed our own sensitivities; and;

‒ Assessed the disclosures in the financial statements.

Based on the procedures performed, we determined that the

valuation of Goodwill and Production assets and related disclosures

were appropriate.

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF CAPRICORN ENERGY PLC CONTINUED

Capricorn Energy PLC

Annual Report and Accounts 2024

Strategic Report Corporate Governance Financial Statements Additional Information

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF CAPRICORN ENERGY PLC CONTINUED

Key audit matter How our audit addressed the key audit matter

Valuation of Investments in subsidiaries (parent)

The carrying value of investments in the company balance

sheet is $382.8m. At the year end, investments in subsidiaries

were reviewed for indicators of impairment or reversals and

impairment tests conducted where indicators were identified.

Following this review, management concluded that an

impairment reversal should be recognised in relation to the

company’s investment in Capricorn Oil Limited reflecting an

increase in the recoverable amount of the underlying assets.

Management has determined that the significant progress made

during 2024 on negotiating the revised Production Sharing

Contract (‘PSC’) terms in Egypt resulting in revised field life and

commercial terms are an indicator that previous impairments

may be reversed. This resulted in an impairment reversal of

$47.5m in 2024. This is an area of audit focus because the support

for the carrying value is based on judgements and estimates

made by management in their impairment assessment, in

particular in respect of projected cash flows and discount rate.

Refer to note 8.2 to the financial statements.

In assessing the carrying value of investments in subsidiaries, we

undertook the following work:

‒ For the investment in Capricorn Oil Group, we compared the

resulting investment balance to our audit work on the other

assets and liabilities of the Group, including considering the

impact on underlying fair value of the group’s producing

assets;

‒ Validated the mathematical accuracy and integrity of the

model and agreed the net book value of assets and liabilities

into the Company’s books and records; and

‒ Evaluated the disclosure in the financial statements.

Based on the procedures performed, we concluded that the

valuation of investments in subsidiaries was appropriate.

How we tailored the audit scope

We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial statements

as a whole, taking into account the structure of the group and the company, the accounting processes and controls, and the industry in

which they operate.

We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial statements

as a whole, taking into account the structure of the group and the company, the accounting processes and controls, and the industry in

which they operate.

The Group’s activities are managed centrally from the Group’s Head Office in Edinburgh, with components representing each of the

geographical locations in which they operate. We have included components which accounted for the largest share of the Group’s results

or where we considered there to be areas of significant risk. We identified 2 components which, in our view, required an audit of their

complete financial information due to their relative size or risk characteristics. The work in the remaining 9 components was determined

by their individual contribution to the Group’s overall financial performance or balance sheet, and their risk profile. All components were

audited by the Group engagement team in the UK.

The impact of climate risk on our audit

Our audits considered the impact of climate change. As part of our audit, we made enquiries with management to understand the

process adopted to assess the extent of the potential impact of climate risk on the Group’s financial statements and to support the

disclosures made in the Strategic Report. We also read the Group’s governance process in response to climate risk.

Using our knowledge of the business, we focused our work on how the impact of climate commitments made by the Group would

impact the assumptions within the discounted cash flows prepared by management that are used in the Group’s goodwill and producing

asset impairment tests. We also evaluated whether the impact of both physical and transitional risks had been appropriately included in

management’s going concern and viability assessments. We considered the completeness of management’s climate impact assessment

by reading the external reporting made by management as well as internal climate plans and Board minutes.

We also considered the completeness of the impact on financial statement line items by comparing management’s assessment of the

impact of climate risk, including the potential impact on the underlying assumptions and estimates as outlined in Section 2 of the Notes

to the Group financial statements.

Finally, we assessed the consistency of the information in the front half of the Annual Report regarding the Task Force on Climate-Related

Financial Disclosures (TCFD) and the financial statements.

Materiality

The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality. These,

together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our

audit procedures on the individual financial statement line items and disclosures and in evaluating the effect of misstatements, both

individually and in aggregate on the financial statements as a whole.

Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:

Financial statements – group Financial statements – company

Overall materiality US$6,197,000 (2023: US$6,675,000). US$4,713,000 (2023: US$4,178,000).

How we

determined it

1% of Total Assets 1% of Total Assets

Rationale for

benchmark applied

We believe that total assets is an appropriate measure

that reflects the size of the Group’s operations.

The company’s purpose is to hold investments in the

subsidiaries of the group. The company has limited

income statement transactions, therefore the appropriate

benchmark for assessing materiality is total assets.

Capricorn Energy PLC

Annual Report and Accounts 2024

For each component in the scope of our group audit, we allocated a materiality that is less than our overall group materiality. The range

of materiality allocated across components was between US$400,000 and US$5,887,000. Certain components were audited to a local

statutory audit materiality that was also less than our overall group materiality.

We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected

misstatements exceeds overall materiality. Specifically, we use performance materiality in determining the scope of our audit and the

nature and extent of our testing of account balances, classes of transactions and disclosures, for example in determining sample sizes.

Our performance materiality was 75% (2023: 75%) of overall materiality, amounting to US$4,647,000 (2023: US$5,006,000) for the group

financial statements and US$3,534,000 (2023: US$3,113,000) for the company financial statements.

In determining the performance materiality, we considered a number of factors – the history of misstatements, risk assessment and

aggregation risk and the effectiveness of controls – and concluded that an amount at the upper end of our normal range was appropriate.

We agreed with the Audit Committee that we would report to them misstatements identified during our audit above US$309,000

(group audit) (2023: US$333,750) and US$235,000 (company audit) (2023: US$208,000) as well as misstatements below those amounts

that, in our view, warranted reporting for qualitative reasons.

Conclusions relating to going concern

Our evaluation of the directors’ assessment of the group’s and the company’s ability to continue to adopt the going concern basis of

accounting included:

‒ Obtaining and evaluating management’s going concern assessment, base case forecasts and downside scenarios, and comparing

the forecasts to approved budgets;

‒ Considering the historical reliability of management’s cash flow forecasting;

‒ Assessing key inputs into the models, including operational and head office cost assumptions, commodity prices, production

forecasts and payment profiles, comparing these to the inputs used in other key accounting estimates in the financial statements or

other sources of evidence;

‒ Assessing the mitigating actions identified by management in downside scenarios and corroborating these to internal and external

sources of evidence;

‒ Assessing management’s consideration of the terms and conditions of group’s debt facility relating to its assets in Egypt, including

the non-recourse nature of the debt to the parent company and the Capricorn group outside of Egypt, as well as the impact of cross

guarantee clauses contained within the Group’s debt facility and and in relation to contractual arrangements relating to the contingent

consideration due on the purchase of the assets in Egypt;

‒ Assessing management’s severe but plausible downside scenario to understand the impact of changes in cash flow on the resources

available to the group;

‒ Assessing management’s consideration of ongoing Senegal tax claim, including reviewing contractual and legal documentation;

‒ Assessing the mathematical accuracy of management’s model; and

‒ Evaluating the disclosures in relation to management’s going concern assessment.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually

or collectively, may cast significant doubt on the group’s and the company’s ability to continue as a going concern for a period of at least

twelve months from when the financial statements are authorised for issue.

In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the preparation

of the financial statements is appropriate.

However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the group’s and the

company’s ability to continue as a going concern.

In relation to the directors’ reporting on how they have applied the UK Corporate Governance Code, we have nothing material to add or

draw attention to in relation to the directors’ statement in the financial statements about whether the directors considered it appropriate

to adopt the going concern basis of accounting.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this

report

Reporting on other information

The other information comprises all of the information in the Annual Report other than the financial statements and our auditors’

report thereon. The directors are responsible for the other information. Our opinion on the financial statements does not cover the other

information and, accordingly, we do not express an audit opinion or, except to the extent otherwise explicitly stated in this report, any form

of assurance thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider

whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise

appears to be materially misstated. If we identify an apparent material inconsistency or material misstatement, we are required to

perform procedures to conclude whether there is a material misstatement of the financial statements or a material misstatement of the

other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information,

we are required to report that fact. We have nothing to report based on these responsibilities.

With respect to the Strategic report and Directors’ Report, we also considered whether the disclosures required by the UK Companies Act

2006 have been included.

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF CAPRICORN ENERGY PLC CONTINUED

Capricorn Energy PLC

Annual Report and Accounts 2024

Strategic Report Corporate Governance Financial Statements Additional Information

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF CAPRICORN ENERGY PLC CONTINUED

Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report certain opinions and matters

as described below.

Strategic report and Directors’ Report

In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic report and Directors’

Report for the year ended 31 December 2024 is consistent with the financial statements and has been prepared in accordance with

applicable legal requirements.

In light of the knowledge and understanding of the group and company and their environment obtained in the course of the audit,

we did not identify any material misstatements in the Strategic report and Directors’ Report.

Directors’ Remuneration

In our opinion, the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance with the

Companies Act 2006.

Corporate governance statement

The Listing Rules require us to review the directors’ statements in relation to going concern, longer-term viability and that part of the

corporate governance statement relating to the company’s compliance with the provisions of the UK Corporate Governance Code

specified for our review. Our additional responsibilities with respect to the corporate governance statement as other information are

described in the Reporting on other information section of this report.

Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the corporate governance

statement is materially consistent with the financial statements and our knowledge obtained during the audit, and we have nothing

material to add or draw attention to in relation to:

‒ The directors’ confirmation that they have carried out a robust assessment of the emerging and principal risks;

‒ The disclosures in the Annual Report that describe those principal risks, what procedures are in place to identify emerging risks and

an explanation of how these are being managed or mitigated;

‒ The directors’ statement in the financial statements about whether they considered it appropriate to adopt the going concern basis

of accounting in preparing them, and their identification of any material uncertainties to the group’s and company’s ability to continue

to do so over a period of at least twelve months from the date of approval of the financial statements;

‒ The directors’ explanation as to their assessment of the group’s and company’s prospects, the period this assessment covers and why

the period is appropriate; and

‒ The directors’ statement as to whether they have a reasonable expectation that the company will be able to continue in operation

and meet its liabilities as they fall due over the period of its assessment, including any related disclosures drawing attention to any

necessary qualifications or assumptions.

Our review of the directors’ statement regarding the longer-term viability of the group and company was substantially less in scope than

an audit and only consisted of making inquiries and considering the directors’ process supporting their statement; checking that the

statement is in alignment with the relevant provisions of the UK Corporate Governance Code; and considering whether the statement

is consistent with the financial statements and our knowledge and understanding of the group and company and their environment

obtained in the course of the audit.

In addition, based on the work undertaken as part of our audit, we have concluded that each of the following elements of the corporate

governance statement is materially consistent with the financial statements and our knowledge obtained during the audit:

‒ The directors’ statement that they consider the Annual Report, taken as a whole, is fair, balanced and understandable, and provides

the information necessary for the members to assess the group’s and company’s position, performance, business model and strategy;

‒ The section of the Annual Report that describes the review of effectiveness of risk management and internal control systems; and

‒ The section of the Annual Report describing the work of the Audit Committee.

‒ We have nothing to report in respect of our responsibility to report when the directors’ statement relating to the company’s

compliance with the Code does not properly disclose a departure from a relevant provision of the Code specified under the Listing

Rules for review by the auditors.

We have nothing to report in respect of our responsibility to report when the directors’ statement relating to the company’s compliance

with the Code does not properly disclose a departure from a relevant provision of the Code specified under the Listing Rules for review

by the auditors.

Responsibilities for the financial statements and the audit

Responsibilities of the directors for the financial statements

As explained more fully in the Statement of directors’ responsibilities in respect of the financial statements, the directors are responsible

for the preparation of the financial statements in accordance with the applicable framework and for being satisfied that they give a true

and fair view. The directors are also responsible for such internal control as they determine is necessary to enable the preparation

of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the group’s and the company’s ability to continue as

a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the

directors either intend to liquidate the group or the company or to cease operations, or have no realistic alternative but to do so.

Auditors’ responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement,

whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance,

but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists.

Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be

expected to influence the economic decisions of users taken on the basis of these financial statements.

Capricorn Energy PLC

Annual Report and Accounts 2024

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our

responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our

procedures are capable of detecting irregularities, including fraud, is detailed below.

Based on our understanding of the group and industry, we identified that the principal risks of non-compliance with laws and regulations

related to compliance with oil and gas laws and regulations in Egypt, and we considered the extent to which non-compliance might

have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the

financial statements such as the Companies Act 2006, the Listing Rules and tax legislation. We evaluated management’s incentives and

opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the

principal risks were related to posting of manual journal entries to manipulate financial performance and management bias through

judgements and assumptions in significant accounting estimates. Audit procedures performed by the engagement team included:

‒ Enquiries of management around known or suspected instances of non-compliance with laws and regulations, claims and litigation,

and instances of fraud;

‒ Evaluation of management’s controls designed to prevent and detect irregularities;

‒ Review of board minutes;

‒ Challenging management on the judgements and assumptions made in their significant accounting estimates; and

‒ Identifying and testing journal entries, including any journal entries representing unusual account combinations.

There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance

with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not

detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve

deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

Our audit testing might include testing complete populations of certain transactions and balances, possibly using data auditing techniques.

However, it typically involves selecting a limited number of items for testing, rather than testing complete populations. We will often seek

to target particular items for testing based on their size or risk characteristics. In other cases, we will use audit sampling to enable us to draw

a conclusion about the population from which the sample is selected.

A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at:

www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’ report.

Use of this report

This report, including the opinions, has been prepared for and only for the company’s members as a body in accordance with Chapter 3

of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for

any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed

by our prior consent in writing.

Other required reporting

Companies Act 2006 exception reporting

Under the Companies Act 2006 we are required to report to you if, in our opinion:

‒ we have not obtained all the information and explanations we require for our audit; or

‒ adequate accounting records have not been kept by the company, or returns adequate for our audit have not been received from

branches not visited by us; or

‒ certain disclosures of directors’ remuneration specified by law are not made; or

‒ the company financial statements and the part of the Directors’ Remuneration Report to be audited are not in agreement with the

accounting records and returns.

We have no exceptions to report arising from this responsibility.

Appointment

Following the recommendation of the Audit Committee, we were appointed by the members on 23 May 2013 to audit the financial

statements for the year ended 31 December 2013 and subsequent financial periods. The period of total uninterrupted engagement

is 12 years, covering the years ended 31 December 2013 to 31 December 2024.

Other matter

The company is required by the Financial Conduct Authority Disclosure Guidance and Transparency Rules to include these financial

statements in an annual financial report prepared under the structured digital format required by DTR 4.1.15R 4.1.18R and filed on the

National Storage Mechanism of the Financial Conduct Authority. This auditors’ report provides no assurance over whether the structured

digital format annual financial report has been prepared in accordance with those requirements.

Bruce Collins (Senior Statutory Auditor)

for and on behalf of PricewaterhouseCoopers LLP

Chartered Accountants and Statutory Auditors

Edinburgh

27 March 2025

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF CAPRICORN ENERGY PLC CONTINUED

Capricorn Energy PLC

Annual Report and Accounts 2024

Strategic Report Corporate Governance Financial Statements Additional Information

GROUP INCOME STATEMENT

FOR THE YEAR ENDED 31 DECEMBER 2024

		2024	2023
	Note	$m	$m
Continuing operations
Revenue	2.1	1 4 7. 8	2 01 . 0
Other income	2.1	30.1	54 .1
Cost of sales	2.1	(41 .6)	(59 .6)
Depletion charge	2.3	(8 5. 1)	(120.4)
Gross profit		51 . 2	7 5.1
Pre-award costs		–	(1 .1)
General exploration costs		(1 . 1)	(26. 9)
Unsuccessful exploration well costs	2.2	(8 .9)	(20.5)
Reversal of impairment/(Impairment) of property, plant & equipment – development/producing
assets	2.3	1 5.7	(29. 1)
Impairment of goodwill	2.4	–	(14. 6)
Expected credit loss adjustment on revenue receivable	3.5	(3. 9)	(9.0)
Other operating income		1.0	0.6
Administrative and other expenses	4.2	(23. 9)	(61 . 9)
Operating profit/(loss)		30.1	(8 7. 4)
Fair value loss – deferred consideration on business combination	3.6	(5 . 2)	(8.0)
Other (losses)/gains through profit or loss	3.10	(0.1)	0. 8
Impairment of an asset held-for-sale	3.10	–	(4.0)
Finance income	4.4	9. 5	21 .8
Finance costs	4.5	(20. 4)	(25. 3)
Profit/(Loss) before tax from continuing operations		13. 9	(102 . 1)
Taxation
Tax charge	5.2	(26. 5)	(40 .5)
Loss from continuing operations		(12 .6)	(142 . 6)
Profit/(Loss) from discontinued operations	6.1	23. 2	(1. 4)
Profit/(Loss) for the year attributable to equity holders of the Parent		10 .6	(14 4 . 0)
Loss per share for loss from continuing operations:
Loss per ordinary share – basic and diluted ($)	4.6	(0.1 6)	(0 .74)
Profit/(Loss) per share for profit/(loss) attributable to equity holders of the Parent:
Profit/(Loss) per ordinary share – basic and diluted ($)	4.6	0.14	(0 .75)

GROUP STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2024

	2024	2023
	$m	$m
Profit/(Loss) for the year attributable to equity holders of the Parent	10 .6	(14 4 . 0)
Other comprehensive (expense)/income – items that may be recycled to the Income Statement
Currency translation differences	(1 .2)	5.1
Currency translation differences recycled on liquidation of subsidiaries	(0. 4)	–
Other comprehensive (expense)/income for the year	(1 .6)	5.1
Total comprehensive income/(expense) for the year attributable to equity holders of the Parent	9.0	(1 38.9)
Total comprehensive (expense)/income from:
Continuing operations	(14 . 2)	(1 3 7. 5)
Discontinued operations	23. 2	(1.4)
	9.0	(13 8.9)

Capricorn Energy PLC

Annual Report and Accounts 2024

GROUP BALANCE SHEET

AS AT 31 DECEMBER 2024

		2024	2023
	Note	$m	$m
Non-current assets
Intangible exploration/appraisal assets	2.2	–	2. 5
Property, plant & equipment – development/producing assets	2.3	210 . 8	2 1 7. 6
Goodwill	2.4	10 . 8	10 . 8
Other property, plant & equipment and intangible assets	2.5	13 .0	14 . 5
Other long-term receivable	2.6	–	2 7. 6
Deferred tax asset	5.4	18 . 3	7. 6
		252 . 9	28 0.6
Current assets
Cash and cash equivalents	3.1	12 3. 4	18 9. 5
Inventory	3.4	8 .0	8.3
Trade and other receivables	3.5	2 31 . 4	18 6.0
Current tax receivable	5.3	4.0	–
		366 .8	3 83.8
Asset held-for-sale	3.10	–	3. 2
Total assets		619 .7	6 6 7. 6
Current liabilities
Provisions – well abandonment	2.7	0.5	–
Loans and borrowings	3.2	26 . 4	15.4
Lease liabilities	3.3	1.0	1.0
Deferred consideration on business combinations	3.6	25.0	25.0
Trade and other payables	3.7	110 . 6	82 .0
		163 . 5	123. 4
Non-current liabilities
Provisions – well abandonment	2.7	6.8	5. 5
Loans and borrowings	3.2	72 .9	9 6.4
Lease liabilities	3.3	5.1	6.4
Deferred consideration on business combinations	3.6	–	19. 8
Deferred tax liabilities	5.4	22 .1	9.6
		10 6 .9	1 3 7. 7
Total liabilities		270. 4	2 61 .1
Net assets		349 .3	406.5
Equity attributable to equity holders of the Parent
Called-up share capital	7.1	7. 3	7. 6
Share premium	7.1	0.9	0.8
Shares held by ESOP/SIP Trusts	7.1a, b	(6 .7)	(6.3)
Foreign currency translation	7.1c	(8 7. 3)	(8 5 .7)
Merger and capital reserves	7.1d	46.2	45. 9
Retained earnings		388. 9	444.2
Total equity		349 .3	406.5

The Financial Statements on pages 77 to 114 were approved by the Board of Directors on 27 March 2025 and signed on its behalf by:

Randy Neely

Chief Executive

Capricorn Energy PLC

Annual Report and Accounts 2024

Strategic Report Corporate Governance Financial Statements Additional Information

GROUP STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2024

		2024	2023
	Note	$m	$m
Cash flows from operating activities:
Profit/(Loss) before tax from continuing operations		13. 9	(102 . 1)
Profit/(Loss) before tax from discontinued operations	6.1	23. 2	(5.5)
Profit/(Loss) before tax including discontinued operations		3 7. 1	(1 0 7. 6)
Adjustments for non-cash income and expense and non-operating cash flows:
Other income – tax entitlement volumes		(30.1)	(5 4.1)
Unsuccessful exploration well costs		8.9	20. 5
Depreciation, depletion and amortisation		86.8	1 2 7. 1
Impairment of goodwill		–	14 . 6
(Reversal of impairment)/Impairment of property, plant & equipment – development/producing assets		(1 5 .7)	29.1
Expected credit loss adjustment on revenue receivable		3.9	9.0
Share-based payments charge		1.9	2.5
Fair value loss – deferred consideration on business combination		5.2	8 .0
Other losses/(gains) through profit or loss		0.1	(0. 8)
Loss/(Gain) on financial assets at fair value through profit or loss – discontinued operations		–	10 . 4
Impairment of an asset held-for-sale		–	4.0
Loss on disposal of a financial asset – discontinued operations		26 .1	1 .7
Loss on disposal of a subsidiary – discontinued operations		0 .7	–
Gain on disposal of oil and gas asset – discontinued operations		(50. 0)	–
Finance income		(9. 5)	(21 .8)
Finance costs		20. 4	25. 3
Adjustments to operating cash flows for movements in current assets and liabilities:
Inventory movement		0. 3	(0 .2)
Trade and other receivables movement	3.5	(9 .1)	(69 .0)
Trade and other payables movement	3.7	9. 1	(38.6)
Net cash flows from/(used in) operating activities		86.1	(39. 9)
Cash flows from investing activities:
Expenditure on intangible exploration/appraisal assets		(1 .0)	(16 .4)
Expenditure on property, plant & equipment – development/producing assets		(39 .7)	(4 4. 2)
Expenditure on other property, plant & equipment and intangible assets		(0. 9)	(0. 3)
Deferred consideration received – discontinued operations		2.0	18 2. 4
Deferred consideration paid on business combination		(25. 0)	(25.0)
Proceeds on disposal of financial assets	3.10	3.1	–
Tax refund received on investing activities		1.4	–
Interest received and other finance income		8.8	24 . 3
Net cash flows (used in)/from investing activities		(51 . 3)	120. 8
Cash flows from financing activities:
Repayment of borrowings	3.2	(13. 5)	(4 8. 3)
Lease payments	3.3	(0. 9)	(2 .2)
Dividends paid	7.2	(50.1)	(5 42 .1)
Share repurchase	7.1	(7. 3)	(18. 9)
Other interest and charges		(1 4.8)	(1 6.0)
Proceeds from issue of shares		0.2	0. 8
Cost of shares purchased	7.1a , b	(10 . 9)	(19. 5)
Net cash flows used in financing activities		(9 7. 3)	(6 4 6. 2)
Net decrease in cash and cash equivalents		(62 . 5)	(565. 3)
Opening cash and cash equivalents at beginning of year		189. 5	75 6. 8
Foreign exchange differences		(3.6)	(2.0)
Closing cash and cash equivalents	3.1	12 3. 4	18 9. 5

Capricorn Energy PLC

Annual Report and Accounts 2024

GROUP STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2024

Equity share

capital

and share

premium

held by

ESOP/SIP

Trusts

Foreign

currency

translation

Merger

and capital

reserves

Retained

earnings

Total equity

At 1 January 2023	503.4	(15. 3)	(9 0.8)	45. 5	678. 8	1,12 1.6
Loss for the year	–	–	–	–	(14 4 . 0)	(14 4 . 0)
Currency translation differences	–	–	5.1	–	–	5.1
Total comprehensive expense	–	–	5.1	–	(14 4 . 0)	(138.9)
Dividends paid	–	–	–	–	(5 41 . 1)	(5 41 . 1)
Share repurchase	(0.4)	–	–	0.4	(18.9)	(18.9)
Share-based payments	–	–	–	–	2.5	2.5
Exercise of employee share options	0. 8	–	–	–	–	0.8
Share premium cancelled	(495 . 4)	–	–	–	49 5. 4	–
Cost of shares purchased	–	(19. 5)	–	–	–	(19.5)
Cost of shares vesting	–	28 . 5	–	–	(28. 5)	–
At 31 December 2023	8.4	(6 .3)	(8 5 .7)	45.9	444. 2	406.5
Profit for the year	–	–	–	–	10 . 6	10 .6
Currency translation differences	–	–	(1 .2)	–	–	(1 .2)
Currency translation differences recycled on liquidation of subsidiaries	–	–	(0.4)	–	–	(0. 4)
Total comprehensive income	–	–	(1 .6)	–	10 .6	9.0
Dividends paid	–	–	–	–	(50. 1)	(50.1)
Share repurchase	(0.3)	–	–	0.3	(7. 3)	(7. 3)
Share-based payments	–	–	–	–	1.9	1.9
Exercise of employee share options	0.1	0.1	–	–	–	0.2
Cost of shares purchased	–	(10 .9)	–	–	–	(10 . 9)
Cost of shares vesting	–	10. 4	–	–	(10 .4)	–
At 31 December 2024	8.2	(6 .7)	(8 7. 3)	46.2	388 .9	3 49.3

Capricorn Energy PLC

Annual Report and Accounts 2024

Strategic Report Corporate Governance Financial Statements Additional Information

SECTION 1 – BASIS OF PREPARATION

This section includes the Group’s general accounting policies applicable across the Financial

Statements. Accounting policies specific to individual notes to the Financial Statements are

embedded in the notes themselves.

1.1 Accounting policies

a) Basis of preparation

The consolidated Financial Statements of Capricorn Energy PLC (“Capricorn” or “the Group”) for the year ended 31 December 2024

were authorised for issue in accordance with a resolution of the Directors on 27 March 2025. Capricorn is a limited company

incorporated and domiciled in the United Kingdom whose shares are publicly traded. The registered office is located at 50 Lothian

Road, Edinburgh, Scotland, EH3 9BY. The registered company number is SC226712.

Capricorn prepares its Financial Statements on a historical cost basis, unless accounting standards require an alternate

measurement basis. Where there are assets and liabilities calculated on a different basis, this fact is disclosed either in the relevant

accounting policy or in the notes to the Financial Statements. The Financial Statements comply with the Companies Act 2006 as

applicable to companies using UK-adopted International Financial Reporting Standards (IFRS).

All accounting policies have been applied consistently across all years disclosed.

The Group’s Financial Statements are prepared on a going concern basis.

b) Accounting standards

The Financial Statements of Capricorn has been prepared in accordance with UK-adopted international accounting standards and

with the requirements of the Companies Act 2006 as applicable to companies reporting under those standards. During the year, no

new standards or amendments to standards were adopted that had a material impact on Capricorn’s results or Financial Statement

disclosures.

There are no new standards or amendments issued by the International Accounting Standards Board and endorsed under the

Companies Act, which have yet to be adopted by the Group that will materially impact the Group’s Financial Statements.

c) Basis of consolidation

The consolidated Financial Statements include the results of Capricorn Energy PLC and its subsidiary undertakings to the balance

sheet date. Where subsidiaries follow differing accounting policies from those of the Group, those accounting policies have been

adjusted to align with those of the Group. Intercompany balances and transactions between Group companies are eliminated

on consolidation, though foreign exchange differences arising on intercompany balances between subsidiaries with differing

functional currencies are not offset.

The results of subsidiaries acquired or incorporated in any year are included in the Income Statement and Statement of Cash Flows

from the effective date of acquisition, while the results of subsidiaries disposed of or liquidated during the year are included in the

Income Statement and Statement of Cash Flows to the date at which control passes from the Group.

d) Joint arrangements

Capricorn is a partner (joint operator as defined by IFRS 11) in oil and gas exploration, development and production licences which are

unincorporated joint arrangements. All of the Group’s current interests in these arrangements are determined to be joint operations.

A full list of oil and gas licence interests can be found on page 124.

Costs relating to an interest in a joint operation incurred on non-well specific exploration activities or costs directly associated

with the production of hydrocarbons are charged immediately to the Income Statement. Costs relating to exploration wells

are capitalised in accordance with the Group’s accounting policy for intangible exploration/appraisal assets (note 2.2) pending

determination of the success of the well. All costs associated with development activities for oil and gas assets are capitalised

in property, plant & equipment – development/producing assets (note 2.3). All costs capitalised in either exploration/appraisal or

development/producing assets relate to interests in joint operations.

Capricorn’s working capital balances relating to joint operations are included in trade and other receivables (note 3.5) and trade and

other payables (note 3.7). Any share of finance income or costs generated or incurred by the joint operation is included within the

appropriate income statement account.

Capricorn Energy PLC

Annual Report and Accounts 2024

SECTION 1 – BASIS OF PREPARATION CONTINUED

1.1 Accounting policies continued

e) Foreign currencies

These Financial Statements continue to be presented in US dollars ($), the functional currency of the Parent.

In the Financial Statements of individual Group companies, Capricorn translates foreign currency transactions into the functional

currency at the rate of exchange prevailing at the transaction date (or an approximation thereof where not materially different).

Monetary assets and liabilities denominated in a foreign currency are translated into the functional currency at the rate of exchange

prevailing at the balance sheet date. Exchange differences arising are taken to the Income Statement except for those incurred on

borrowings specifically allocable to development projects, which are capitalised as part of the cost of the asset, though there were

none in either the current or preceding year.

The Group maintains the Financial Statements of the Parent and subsidiary undertakings in their functional currency. Where

applicable, the Group translates subsidiary Financial Statements into the presentation currency, US dollars, using the closing rate

method for assets and liabilities, which are translated at the rate of exchange prevailing at the balance sheet date and monthly

average rates for income statement accounts. Capricorn takes exchange differences arising on the translation of net assets of Group

companies whose functional currency is non–US dollar directly to the foreign currency translation reserve within equity.

Rates of exchange to $1 were as follows:

	Closing	YTD average	Closing	YTD average
	2024	2024	2023	2023
GBP	0.799	0.782	0.785	0.804

f) Exceptional items

Where items have a significant impact on profit or loss, occur infrequently and are not part of the Group’s normal operating cycle,

such items may be disclosed as exceptional items on the face of the Income Statement.

1.2 Going concern

The Directors have considered the factors relevant to support a statement of going concern. In assessing whether the going concern

assumption is appropriate, the Board considered the Group cash flow forecasts under various scenarios, identifying risks and mitigating

factors. The cash flow forecasts assessed for the going concern assessment cover the period to March 2026.

As the Directors will not commit to investing further Group funds into the Egypt business, separate cash flow forecasts have been run

for Capricorn Egypt Limited, the Egypt asset-holding subsidiary and the remaining Capricorn Energy PLC Group. Capricorn Egypt is a

party to the Junior and Senior borrowing facilities entered in connection with the Group’s Egypt assets, however these facilities are

non-recourse to the rest of the Capricorn Group. At the year end and at the date of this report, events of default exist on the facility.

Group cash flow forecasts have been run on base-case and downside assumptions. Base case assumptions include committed exploration

costs for which a parent company guarantee has been issued and forecast administrative costs. A downside scenario includes an increase

to administrative costs, a tax settlement payable in Senegal and additional payments coming due under joint and several obligations.

Scenarios run exclude future returns to shareholders. For Egypt cash flows, along with base-case assumptions, a downside scenario run

modelled a return to lower oil prices, with an oil price of $65/bbl over the first six months of 2025 falling to $60/bbl thereafter, a 20%

reduction in forecast production from 2026 onward and reductions to collections against outstanding Egypt trade receivables. An oil-price

crash scenario assumes a fall in the oil price to $40/bbl at the end of Q1 2025 with a recovery to $50/bbl by the end of 2026. All Egypt

cash-flow forecasts assume that the lenders do not enforce current events of default and seek immediate repayment of the facility.

Under both Group scenarios Capricorn continue to operate as a going concern with sufficient cash balances, allowing the Group to meet

its current and contracted commitments outside Egypt as and when they fall due for a period of at least 12 months from the date of

signing these Financial Statements.

In addition, Capricorn Egypt Limited is forecast to have sufficient resources to meet its contractual obligations as they fall due across all

three scenarios, though headroom is limited at certain points across the going concern period. If any unforeseen changes in assumptions

were to adversely impact the subsidiary, and with no further injection of funds from the parent, it may not be able to meet all debt

repayments that fall due in the period which could result in lenders taking control of the assets. While the assets would then be heavily

impaired to expected recoverable amounts, the remaining Capricorn Energy PLC Group would be unaffected and would continue as a

going concern.

Further, under the terms of the borrowing facilities, Capricorn Egypt Limited jointly and severally guarantee the performance of the

obligations of the joint venture counterparty. Should the counterparty fail to meet its repayment obligations, the lender could enforce this

guarantee, though other routes to recovery would be more likely. Though considered remote, a default by the counterparty could also

result in the lenders assuming control of the Egypt subsidiary to recover amounts due. Again, the remaining Capricorn Energy PLC Group

would be unaffected and would continue as a going concern.

The Board and Audit Committee assessments of risk and mitigants to the Group’s operational existence beyond this 12-month period is

included in the Viability Statement on page 16.

Capricorn Energy PLC

Annual Report and Accounts 2024

Strategic Report Corporate Governance Financial Statements Additional Information

SECTION 2 – OIL AND GAS ASSETS, OPERATIONS AND OTHER NON-CURRENT ASSETS

This section contains details of Capricorn’s oil and gas assets, including the gross profit

generated from operations in Egypt, development/producing assets and associated

impairment tests performed which resulted in the reversal of impairment at the year end.

Key estimates and assumptions in this section:

Cash generating units for impairment testing

Capricorn’s impairment test is performed across the BED and Obaiyed concessions areas as a single cash-generating unit (CGU). This

change from previous years reflects the proposed merger of the eight current concession areas into one single concession, discussed

further below.

Reversal of impairment

At the year end, Capricorn reviews its assets for indicators of impairment, or an indicator that previous impairments may be reversed.

At the end of 2024, Capricorn and its joint venture partner were in advanced negotiations with EGPC on revised terms to the concessions

owned 50:50 between Capricorn and Cheiron in the BED and Obaiyed areas. Negotiation on the key terms concluded in February 2025

with the aim of receiving formal ratification by the summer of 2025. Revised terms of the new merged concession include a significant

extension to the field life and improved cost oil and profit oil terms for the contractors, revised gas prices and a bonus payment to be

made to EGPC. These improved commercial terms and additional commercial reserve volumes due to licence extensions which, given

the advanced stage of negotiations at the year end, would be considered by a market participant determining a fair value, indicate that

impairment charged in previous years on the Obaiyed concession may have reversed. Subsequent tests performed confirmed a full

reversal of impairment, after adjusting for depletion charges.

Reserve estimates for depletion calculations reflect the commercial terms in place at the year end and are not adjusted for the expected

increases in reserves that will arise on formal ratification of the merged concession. Tax barrels are excluded from depletion calculations.

Estimation of fair value of assets for use in impairment tests

The fair value less cost of disposal of property, plant & equipment – development/producing assets in Egypt used in the Group’s

impairment tests and has been measured using the net present value of discounted future cash flows over the commercial field life of

the concessions, based on the revised field life and commercial terms included in the revised concession terms agreements agreed with

EGPC and expected to be formally ratified in the summer of 2025 where applicable. These valuations represent a level 3 estimate of fair

value. This fair value estimate is materially different from the value in use estimates of the assets, calculated on the economic field life and

reserve estimates that existed at the year end on the current economic terms.

The key assumptions used in the Group’s discounted cash flow models used to estimate the fair value of the asset reflect past experience

and take account of external factors. These assumptions include:

– drilling plans aligned with forecast cash collections from EGPC;

– short/medium-term oil price based on the forward curve for two years from the balance sheet date;

– long-term oil price of $65/bbl (2023: $65/bbl) escalated at 2% per annum;

– Egypt price differentials to base oil prices;

– proved and probable reserves estimates and production profiles, based on internal estimates under revised concession terms;

– timing of collection of revenues assumed to be nine months from date of production;

– cost profiles for future costs escalated at 4.0% per annum (2023: 4.0% per annum);

– carbon prices based on World Energy Outlook 2023 (“WEO-2023”) Net Zero Emissions by 2050 Scenario; and

– post-tax discount rates of 15% (2023: 15%).

Climate change assumptions

Capricorn’s cost of carbon assumptions are included in the fair value models used to attribute value to the assets. Those models will also

determine the useful life-of-field assumptions for each producing asset and increasing costs of carbon could result in reduced commercial

reserve volumes. Sensitivities performed on alternate carbon cost assumptions did not have a significant impact on the fair values of the

assets in Egypt.

Capricorn’s models have no residual value attributed to producing assets as at the end of the economic field life title passes to the

Egyptian Government. There are therefore no decommissioning assets or liabilities to record. There are currently no assets that have been

identified as at risk of becoming stranded.

Capricorn Energy PLC

Annual Report and Accounts 2024

SECTION 2 – OIL AND GAS ASSETS, OPERATIONS AND OTHER NON-CURRENT ASSETS CONTINUED

2.1 Gross profit: revenue and cost of sales

Accounting policies

Revenue

Revenue from oil sales represents the Group’s share of sales from its producing interests in Egypt, at the point in time when

ownership of the oil has passed to the buyer. On domestic sales, the point of sale is determined to be the point when oil is delivered

to communal storage tanks in onshore facilities. Sales relating to the export of oil are recognised once the cargo is fully loaded onto

a crude tanker and the necessary export documentation received. Revenue is measured using the monthly average Brent oil price,

plus or minus the applicable price differential premium or discount to reach the Official Selling Price and is recorded at fair value,

including estimates to reduce revenue to the Group’s expected entitlement share of sales volumes.

Revenue from the sale of gas in Egypt is recorded based on the volume of gas accepted each day by customers at the delivery point.

Revenue from royalties is calculated on production from fields in Mongolia.

Other income – tax entitlement volumes

Under the concession agreements in Egypt, income tax due on taxable profit is paid on Capricorn’s behalf by EGPC from their share

of production. To reflect this arrangement through the concession agreements, Capricorn notionally receive a greater share of

hydrocarbon production, grossing up the Group’s entitlement interest share of production, by the amount required to cover the tax

payable. The oil is produced and sold on Capricorn’s behalf and proceeds remitted to the tax authorities. This income does not meet

the IFRS definition of revenue and is therefore shown as other income with an equal and opposite tax charge recorded through

current taxation.

Cost of sales and inventory

Cost of sales include Capricorn’s share of costs incurred by the joint operation in extracting oil and gas. Also included are marketing

and transportation costs and loss-of-production insurance costs payable over the year.

Oil inventory is measured at market value in accordance with established industry practice.

	Year ended	Year ended
	31 December	31 December
	2024	2023
	$m	$m
Oil sales	111.6	159.1
Gas sales	35.2	40.8
Revenue from oil and gas sales	146.8	199.9
Royalty income	1.0	1.1
Total revenue	147.8	201.0
Other income – tax entitlement volumes	30.1	54.1
Other income	30.1	54.1
Production costs and inventory movements	(41.6)	(59.6)
Cost of sales	(41.6)	(59.6)
Depletion (note 2.3)	(85.1)	(120.4)
Gross profit	51.2	75.1

Revenue

Capricorn recognised oil and gas revenue on eight producing concessions in Egypt, based on an entitlement interest. Payment terms

are within 30 days from the date of the invoice for oil sales and 45 days from the date of the invoice for gas sales. All sales in the year were

domestic sales.

Oil and gas revenue in Egypt for the year ended 31 December 2024 was $146.8m (2023: $199.9m), from net entitlement production of

3.6 mmboe (2023: 4.4 mmboe) of which ~39% (2023: ~45%) was liquids. Oil sales averaged $79.3/boe (2023: $81.2/boe) and with gas

sales at $2.9/mscf (2023: $2.9/mscf). Other income represents tax paid on Capricorn’s behalf by EGPC – see section 5.

Production costs over the period were $41.6m (2023: $59.6m), or $4.8/boe (2023: $5.4/boe) (on a working interest (WI) basis).

Capricorn Energy PLC

Annual Report and Accounts 2024

Strategic Report Corporate Governance Financial Statements Additional Information

SECTION 2 – OIL AND GAS ASSETS, OPERATIONS AND OTHER NON-CURRENT ASSETS CONTINUED

2.2 Intangible exploration/appraisal assets

Capricorn follows a full successful efforts accounting policy for oil and gas assets.

Costs incurred prior to obtaining the legal rights to explore an area are expensed immediately to the Income Statement as pre-

award costs.

Expenditure incurred on the acquisition of a licence interest is initially capitalised on a licence-by-licence basis. Costs are held,

undepleted, within intangible exploration/appraisal assets until such time as the exploration phase on the licence area is complete

or commercial reserves have been discovered and a field development plan approved.

Non-well specific exploration expenditure incurred in the process of determining oil and gas exploration targets is charged directly

to the Income Statement in the year it is incurred.

Exploration/appraisal drilling costs directly relating to an exploration well are capitalised until the success or otherwise of the well

has been established. The success or failure of each exploration/appraisal effort is judged on a well-by-well basis. Drilling costs are

written off on completion of a well unless the results indicate that hydrocarbon reserves exist and there is a reasonable prospect

that these reserves are commercial and work to confirm the commercial viability of such hydrocarbons is intended to be carried

out in the foreseeable future. Where results of exploration drilling indicate the presence of hydrocarbons which are ultimately not

considered commercially viable, all related costs are written off to the Income Statement.

Following appraisal of successful exploration wells, if commercial reserves are established and technical feasibility for extraction

demonstrated and approved in a field development plan, then the related capitalised intangible exploration/appraisal costs are

transferred into a single field cost centre within property, plant & equipment – development/producing assets, after testing for

impairment.

Proceeds from the disposal or farm-down of part or all of an exploration/appraisal asset are credited initially to that interest with any

excess being credited to the Income Statement.

		Other
	Egypt	countries	Total
	$m	$m	$m
Cost
At 1 January 2023	–	1.0	1.0
Additions	5.1	16.9	22.0
Unsuccessful exploration costs	(2.6)	(17.9)	(20.5)
At 31 December 2023	2.5	–	2.5
Additions	–	6.4	6.4
Unsuccessful exploration costs	(2.5)	(6.4)	(8.9)
At 31 December 2024	–	–	–
Net book value
At 31 December 2022	–	1.0	1.0
At 31 December 2023	2.5	–	2.5
At 31 December 2024	–	–	–

Additions to intangible exploration/appraisal assets were funded through cash and working capital, including increased provisions for well

abandonment costs.

Egypt

Unsuccessful exploration costs of $2.5m relate to work performed on well locations that are no longer expected to be drilled.

Other countries

Additions of $6.4m (2023: $16.9m) relate to an increase of $1.7m (2023: $1.9m) on estimated historic UK well abandonment costs, and

$4.7m (2023: $15.0m) of past costs no longer expected to be recovered following the exit of from all remaining licences in Mexico. All

additions were immediately written off as unsuccessful exploration costs.

Capricorn Energy PLC

Annual Report and Accounts 2024

SECTION 2 – OIL AND GAS ASSETS, OPERATIONS AND OTHER NON-CURRENT ASSETS CONTINUED

2.3 Property, plant & equipment – development/producing assets

Accounting policy

Costs

All costs incurred after the technical feasibility and commercial viability of producing hydrocarbons have been demonstrated

and a development plan approved are capitalised within development/producing assets on a field-by-field basis. Subsequent

expenditures are capitalised only where it either enhances the economic benefits of the development/producing asset or replaces

part of the existing development/producing asset. Any remaining costs associated with the part replaced are expensed.

Costs of borrowings relating to the ongoing construction of development/producing assets and facilities are capitalised during

the development phase of the project. Capitalisation ceases once the asset is ready to commence production.

Net proceeds from any disposal, part disposal or farm-down of development/producing assets are credited against the appropriate

portion of previously capitalised cost. A gain or loss on disposal of a development/producing asset is recognised in the Income

Statement to the extent that the net proceeds, measured at fair value, exceed or are less than the appropriate portion of the net

capitalised costs.

Depletion

Depletion is charged on a unit-of-production basis, based on proved and probable reserves on a field-by-field basis. Fields within

a single development or concession area may be combined for depletion purposes. Where production commences prior to

completion of the development, costs to be depleted include the costs-to-complete of the facility required to extract the volume

of reserves recorded.

Impairment

Development/producing assets are reviewed for indicators of impairment at the balance sheet date. Indicators of impairment for

the Group’s development assets include:

– downward revisions of reserve estimates;

– increases in cost estimates for development projects; or

– a decrease in the oil price or other negative changes in market conditions.

Impairment tests are carried out on each development/producing asset at the balance sheet date where an indicator of impairment

is identified. The test compares the carrying value of an asset to its recoverable amount based on the higher of its fair value less

costs of disposal or value in use. Where the fair value less costs of disposal supports the carrying value of the asset, no value-in-use

calculation is performed.

If it is not possible to calculate the fair value less costs of disposal of an individual asset, the fair value less costs of disposal is calculated

for the CGU containing the asset and tested against the carrying value of the assets and liabilities in the CGU for impairment. Where

an asset can be tested independently for impairment, this test is performed prior to the inclusion of the asset into a CGU for further

impairment tests.

If the carrying amount of the asset or CGU exceeds its recoverable amount, an impairment charge is made.

Where there has been a charge for impairment in an earlier year, that charge will be reversed in a later year where there has been

a change in circumstances to the extent that the recoverable amount is higher than the net book value at the time. In reversing

impairment losses, the carrying amount of the asset will be increased to the lower of its original carrying value or the carrying value

that would have been determined (net of depletion) had no impairment loss been recognised in prior years.

Capricorn Energy PLC

Annual Report and Accounts 2024

Strategic Report Corporate Governance Financial Statements Additional Information

SECTION 2 – OIL AND GAS ASSETS, OPERATIONS AND OTHER NON-CURRENT ASSETS CONTINUED

2.3 Property, plant & equipment – development/producing assets continued

	Egypt
	$m
Cost
At 1 January 2023	480.9
Additions	91.3
At 31 December 2023	572.2
Additions	62.6
At 31 December 2024	634.8
Accumulated depletion and impairment
At 1 January 2023	205.1
Depletion charge	120.4
Impairment	29.1
At 31 December 2023	354.6
Depletion charge	85.1
Reversal of impairment	(15.7)
At 31 December 2024	424.0
Net book value
At 31 December 2022	275.8
At 31 December 2023	217.6
At 31 December 2024	210.8

Egypt

Additions have been funded through cash and working capital wholly within the Egypt business. Capricorn continue to align capital

investment in the Egypt assets with payments received against the outstanding trade receivables balance. Additions in the year

predominantly relate to the costs of producing wells drilled. Only one well completed in the first half of the year as Capricorn paused

investment pending collection of receivables due from EGPC. Drilling recommenced on 29 June 2024 and a further 12 wells were

completed before the end of the year, with a further well that spudded on 18 December completing in January 2025. All but one of the

wells was drilled in the BED concession, with the other drilled in the AESW concession.

Depletion of $85.1m (2023: $120.4m) was charged to the Income Statement based on entitlement interest production during the year.

The costs for depletion include future capital costs-to-complete consistent with the life-of-field reserve estimates used in the calculation.

Impairment review

At 31 December 2024, the Group’s development/producing assets in Egypt were reviewed for indicators of impairment or reversal of

previous impairments. Following significant progress on the revised concession agreement with EGPC at the year end, the anticipated

increased field lives and improved commercial terms were an indicator that previous impairments may be reversed. Impairment tests

were conducted across the BED and Obaiyed concessions as a single CGU and resulted in the full reversal of prior year impairment after

adjusting for additional notional depletion. Given the significant headroom generated by the increase in fair value under the improved

terms, there are no reasonable changes to assumptions that would reduce the reversal of impairment recorded, therefore no sensitivity

analysis has been provided. AESW and NEAG concessions were reviewed for indicators of impairment but as no indicator was identified,

no impairment tests have been performed.

At 31 December 2023, indicators of impairment were identified where a pause in development drilling activity had resulted in

downgrades to reserves volumes booked, with previously booked reserves no longer expected to be recovered within the licence term.

Subsequent impairment tests identified impairment of $29.1m.

2.4 Goodwill

	Egypt
	$m
At 1 January 2023	25.4
Impairment	(14.6)
At 31 December 2023 and 2024	10.8

Goodwill arose on the acquisition of the Western Desert assets in Egypt in 2021. Goodwill has been tested for impairment at

31 December 2024 and no impairment was identified. As there are no reasonable changes to assumptions that would result in an

impairment of goodwill, no sensitivity analysis has been provided.

An impairment of $14.6m was recorded in 2023 as a result of reserves downgrades at the year end. IAS 36 prohibits reversal of

impairment of goodwill in subsequent years.

Capricorn Energy PLC

Annual Report and Accounts 2024

SECTION 2 – OIL AND GAS ASSETS, OPERATIONS AND OTHER NON-CURRENT ASSETS CONTINUED

2.5 Other property, plant & equipment and intangible assets

				Right-of-
				use assets
				– leasehold
	Carbon		Property, plant &	property	Total
	credits	Intangible assets	equipment	(restated)	(restated)
	$m	$m	$m	$m	$m
Cost
At 1 January 2023	6.8	41.3	10.8	12.8	71.7
Additions	–	1.9	0.3	15.5	17.7
Disposals	–	(32.8)	(11.2)	(21.5)	(65.5)
Foreign exchange	–	1.8	0.4	0.8	3.0
At 31 December 2023	6.8	12.2	0.3	7.6	26.9
Additions	–	0.9	–	–	0.9
Disposals	–	(8.8)	–	–	(8.8)
Right-of-use asset adjustment	–	–	–	(0.6)	(0.6)
Foreign exchange	–	(0.3)	–	–	(0.3)
At 31 December 2024	6.8	4.0	0.3	7.0	18.1
Accumulated depreciation and amortisation
At 1 January 2023	–	38.7	10.6	8.3	57.6
Charge for the year	–	3.9	0.2	2.6	6.7
Disposals	–	(32.7)	(11.2)	(10.5)	(54.4)
Foreign exchange	–	1.7	0.4	0.4	2.5
At 31 December 2023	–	11.6	–	0.8	12.4
Charge for the year	–	0.6	0.1	1.0	1.7
Disposals	–	(8.8)	–	–	(8.8)
Foreign exchange	–	(0.3)	–	0.1	(0.2)
At 31 December 2024	–	3.1	0.1	1.9	5.1
Net book value
At 31 December 2022	6.8	2.6	0.2	4.5	14.1
At 31 December 2023	6.8	0.6	0.3	6.8	14.5
At 31 December 2024	6.8	0.9	0.2	5.1	13.0

Prior year comparatives for right-of-use assets have been restated to reflect the disposal of fully amortised office leases for the previous

head office in Edinburgh and satellite office in London. Additional disposals of $9.8m have been recorded. The closing net book value of

right-of-use assets at 31 December 2023 is unchanged. In 2023, the total additions of $15.5m in right-of-use assets related to office lease

contracts in the UK for the Edinburgh head office. One lease entered into during 2023 was subsequently cancelled leading to a further

disposal of $9.5m, bringing total restated disposals to $21.5m.

Intangible assets disposals in 2024 and 2023 relate to fully amortised, historic software costs written off including the Group’s legacy ERP

system which was replaced in the current year.

In 2022, the Group invested $6.8m in verified carbon credits, which will be used to offset the Group’s future emissions from its operations

in Egypt, in order to achieve its net zero targets. For more details see the TCFD Report, on pages 23 to 30. None of the carbon credits

purchased have subsequently been retired. Amortisation of the carbon credits will commence on first retirement. The carrying value of

carbon credits are included within the Egypt cash generating unit for impairment testing.

2.6 Other long-term receivables

	At	At
	31 December	31 December
	2024	2023
	$m	$m
Other long-term receivable	–	7.0
Deferred consideration	–	20.6
	–	27.6

Under the earnout consideration settlement agreement with Waldorf, Capricorn agreed for part-settlement of consideration due through

the receipt of Waldorf’s 25% WI non-operated interest in the UK Columbus gas field, subject to approval from the North Sea Transition

Authority (“NSTA”). The settlement agreement provided that a $7.0m payment to Capricorn would be due should the transfer not receive

NSTA approval, and this sum was recorded as an other long-term receivable in the prior year. With Waldorf’s liquidity issues and proposed

restructuring, NSTA approval of the transfer is not expected and, as recovery of the cash alternate appears highly unlikely, the receivable

has been impaired in full. The $20.6m of deferred consideration due at 31 December 2023, also relating to the Waldorf settlement

agreement, were reclassified as current assets during the year where amounts due were further impaired. See note 6.1 for further details.

Capricorn Energy PLC

Annual Report and Accounts 2024

Strategic Report Corporate Governance Financial Statements Additional Information

SECTION 2 – OIL AND GAS ASSETS, OPERATIONS AND OTHER NON-CURRENT ASSETS CONTINUED

2.7 Provisions – well abandonment

	Total
	$m
At 1 January 2023	3.4
Change in estimate	1.9
Unwinding of discount	0.1
Well abandonment expenses paid	(0.2)
Foreign exchange	0.3
At 31 December 2023	5.5
Change in estimate	1.7
Unwinding of discount	0.3
Foreign exchange	(0.2)
At 31 December 2024	7.3
Amounts due less than one year	0.5
Amounts due greater than one year	6.8
At 31 December 2024	7.3

Well abandonment provisions at 31 December 2024 represent the present value of costs related to the abandonment of two wells on the

Tybalt P1632 licence in the UK.

In 2024, the abandonment work plan was updated resulting in increases to the abandonment provision of $1.7m (2023: $1.9m).

The provision is based on operator cost estimates, subject to internal review and amendment where considered necessary, and is

calculated using assumptions based on existing technology and the current economic environment, with a cost escalation of 2.0%

for 2024 and 3.0% for 2025-2027 years (2023: 4.0%) and a discount rate of 4.1% (2023: 3.4%) per annum. The reasonableness of these

assumptions is reviewed at each reporting date to take into account any material changes required.

2.8 Capital commitments

	At	At
	31 December	31 December
	2024	2023
	$m	$m
Oil and gas expenditure:
Intangible exploration/appraisal assets	7.6	7.9
Contracted for	7.6	7.9

Capital commitments represent Capricorn’s share of obligations in relation to its interests in joint operations. These commitments include

Capricorn’s share of the capital commitments of the joint operations themselves.

The capital commitments for intangible exploration/appraisal assets of $7.6m (2023: $7.9m) relate to remaining licence commitments in

Egypt.

At 31 December 2024 and 31 December 2023, no capital commitments for property, plant & equipment – development/producing

assets are recorded as operator budgets are still to be agreed and approved.

There were no short-term lease commitments at the 2024 balance sheet date (2023: $nil).

Capricorn Energy PLC

Annual Report and Accounts 2024

SECTION 3 – WORKING CAPITAL, FINANCIAL INSTRUMENTS AND LONG-TERM LIABILITIES

This section includes detail on the Group’s loan facilities, movements in lease liabilities

and financial assets and liabilities at the year end. The Group’s financial risk management

objectives and policies are also contained in this section.

Significant accounting judgements and key estimates and assumptions in this section:

Expected credit loss adjustment on Egypt trade receivables

Capricorn reviews expected credit loss adjustments that reduce the value of receivables in Egypt at each reporting date. While Capricorn

ultimately expects to recover the full value of receivables, the credit risk assessment is based on latest market observed risk ratings and

the current ageing of receivables.

There is no reasonable change in assumptions that would lead to material impact on the Financial Statements.

3.1 Cash and cash equivalents

	At	At
	31 December	31 December
	2024	2023
	$m	$m
Cash at bank	16.2	12.8
Bank deposit less than three months	–	20.0
Money market funds	107.2	156.7
	123.4	189.5

At 31 December 2024, $48.7m (2023: $10.6m) of cash and cash equivalents are restricted and not available for immediate ordinary

business use. This includes $45.5m (2023: $5.6m) of cash and cash equivalents in Egypt. Restricted cash in Egypt may be used to fund

ongoing working capital requirements of the producing assets and to fund principal and interest payments on the Group’s debt facilities.

Cash and cash equivalents earn interest at floating rates. Short-term investments are made for varying periods, which can be as short

as instant access but generally not more than three months, depending on the cash requirements of the Group. At 31 December 2023

and 31 December 2024, Capricorn had invested surplus funds into money market funds and short-term bank deposits. These meet the

criteria of cash and cash equivalents.

Capricorn limits the placing of funds and other investments to banks or financial institutions that have ratings of BBB- or above

from at least two of Moody’s, Standard & Poor’s or Fitch, unless a sovereign guarantee is available from an BBB- rated government.

The limits set by the counterparties vary between $20.0m and $200.0m depending on the ratings of the counterparty. No investments

are placed with any counterparty with a five-year credit default swap exceeding 250 bps. Investments in money market liquidity funds

are only made with BBB-rated liquidity funds and the maximum holding in any single fund is 20% of total investments.

Capricorn Energy PLC

Annual Report and Accounts 2024

Strategic Report Corporate Governance Financial Statements Additional Information

SECTION 3 – WORKING CAPITAL, FINANCIAL INSTRUMENTS AND LONG-TERM LIABILITIES CONTINUED

3.2 Loans and borrowings

	Year ended	Year ended
	31 December	31 December
	2024	2023
Reconciliation of opening and closing liabilities to cash flow movements:	$m	$m
Opening liabilities	111.8	158.6
Loan repayments in the year disclosed in the statement of Cash Flows
Senior Debt Facility	(13.5)	(48.3)
Non-cash movements:
Accrued debt facility interest	0.1	0.6
Amortisation of debt arrangement fees	0.9	0.9
Closing liabilities	99.3	111.8
Amounts due less than one year	26.4	15.4
Amounts due greater than one year	72.9	96.4
Closing liabilities	99.3	111.8

Capricorn Egypt debt facilities

In September 2021, Capricorn Egypt Limited entered into a $325.0m Senior Debt Facility and an $80.0m Junior Debt Facility jointly

with Cheiron, the joint operation partner in Egypt, to finance the acquisition of the Egyptian Western Desert portfolio. The facility

commitments are split 50:50 with Cheiron. Facility commitments began amortising in September 2022 and the maximum drawdown

available to Capricorn at 31 December 2024 was $60.1m (2023: $73.6m) for the Senior Debt Facility and $40.0m (2023: $40.0m) for the

Junior Debt Facility. All drawings in the year were denominated in US dollars.

With effect from 1 July 2023, the Secured Overnight Financing Rate (SOFR) replaced LIBOR as the benchmark for calculating interest on the

two facilities. Interest on debt drawn is charged at the appropriate SOFR for the currency drawn plus an applicable margin. The Senior

Debt Facility remains subject to biannual redeterminations, has a market standard suite of covenants, including biannual liquidity tests,

and is cross-guaranteed by the Group companies party to the facility, including Cheiron. Capricorn has provided no guarantee outside the

subsidiary holding the Egypt assets.

At 31 December 2024, the borrowers have agreed a rollover of the debt, giving the Group the ability to defer settlement of the loan in

accordance with the last approved banking model. Capricorn and Cheiron were seeking a waiver from the lenders for events of default

under the facilities that had occurred previously together with approval of the latest banking model and redetermination.

In conjunction with the waiver request, a revised banking model was approved in February 2025 on completion of the latest

redetermination process and increases the principal amounts repayable by Capricorn under the Senior Facility to $42.6m in 2025, with

the balance of $17.6m due over the period from 1 January 2026 to end of September 2026. The Junior Facility is forecast to be repayable

across 2026 and 2027. The increase in the principal repayment in 2025 corrects an error identified in the banking model, which was used to

determine previous payment profiles and the allocation between current and long-term liabilities at the year end.

Capricorn Energy PLC

Annual Report and Accounts 2024

SECTION 3 – WORKING CAPITAL, FINANCIAL INSTRUMENTS AND LONG-TERM LIABILITIES CONTINUED

3.3 Lease liabilities

Accounting policy

Lease liabilities are measured and recorded on commencement of the asset being brought into use. Measurement is based on the

lower of fair value of the asset or the net present value of fixed lease commitments under the contract. Lease payments made in

excess of the fixed instalments are charged direct to the Income Statement as variable lease costs.

Lease payments are allocated between capital and interest based on the rate implicit in the lease agreement. Where this is not

practical to determine, the Group’s incremental borrowing rate is used.

Where there are changes subsequent to initial recognition, adjustments are made to both the lease liability and the capitalised

asset. The interest rate used where the rate implicit in the lease is not determinable is updated at the date of the remeasurement.

No lease liability is recognised for leases where the period over which the right-of-use of an asset is obtained is forecast to be less than

12 months. Leases for low value items are not recorded as a liability but are charged as appropriate when the benefit is obtained.

	At	At
	31 December	31 December
	2024	2023
Reconciliation of opening and closing liabilities to cash flow movements:	$m	$m
Opening liabilities	7.4	4.3
Lease payments in the year disclosed in the statement of Cash Flows as financing cash flows
Total lease payments	(0.9)	(2.2)
Non-cash movements:
Lease additions	–	15.5
Lease disposal	–	(9.5)
Lease termination	–	(1.6)
Lease adjustment	(0.7)	–
Lease interest charges	0.4	0.5
Foreign exchange	(0.1)	0.4
Closing lease liabilities	6.1	7. 4
Amounts due less than one year	1.0	1.0
Amounts due greater than one year	5.1	6.4
Total lease liabilities	6.1	7.4

As at 31 December 2024, the balance of $6.1m (2023: $7.4m) wholly relates to office lease costs in the UK and Egypt. Additions of $15.5m

in 2023 relate to new office lease liabilities in the UK.

During 2023, Capricorn’s lease of two floors for the head office on Lothian Road, Edinburgh expired. The Group had previously entered

into lease agreements for two floors in new office premises in Edinburgh, but following the Board’s strategic review, plans to move into

those new offices were cancelled. Capricorn reached agreement to cancel the lease of one floor in 2023 and to sub-lease the remaining

floor in early 2024. The remaining floor has a lease term of 15 years with a break clause after 10 years. The Group subsequently entered

into a lease agreement for new premises on a different floor within the Lothian Road building. This lease is for an initial three years with

the option to extend for a further two.

As at 31 December 2024, the Group did not incur any further fixed or variable lease costs. There are no material costs relating to short-

term leases or the lease of low value assets. Amortisation charges relating to right-of-use assets and the carrying value at the year end are

disclosed in note 2.5. The maturity analysis of lease liabilities is included in note 3.8.

3.4 Inventory

Accounting policy

Spare parts inventories in Egypt are maintained by Bapetco on behalf of the operator Cheiron. Inventory is held at the lower of cost

and net realisable value, where net realisable value is measured at cost less provisions for obsolescence, based on the age of the

items held.

	31 December	31 December
	2024	2023
	$m	$m
Spare parts – Egypt concessions	8.0	8.3

Capricorn Energy PLC

Annual Report and Accounts 2024

Strategic Report Corporate Governance Financial Statements Additional Information

SECTION 3 – WORKING CAPITAL, FINANCIAL INSTRUMENTS AND LONG-TERM LIABILITIES CONTINUED

3.5 Trade and other receivables

Accounting policy

Trade receivables represent amounts due from the sale of oil and gas from the Group’s assets in Egypt and royalty payments

receivable from producing fields in Mongolia. Other receivables primarily represent recharges to joint operations. Joint operation

receivables relate to Capricorn’s interest in its oil and gas joint arrangements, including Capricorn’s participating interest share of the

receivables of the joint arrangements themselves.

Trade receivables, other receivables and joint operation receivables, which are financial assets, are measured initially at fair value and

subsequently recorded at amortised cost.

A loss allowance is recognised, where material, for expected credit losses on all financial assets held at the balance sheet date.

Expected credit losses are the difference between the contractual cash flows due to Capricorn and the discounted actual cash

flows that are expected to be received. Where there has been no significant increase in credit risk since initial recognition, the loss

allowance is equal to 12-month expected credit losses. Where the increase in credit risk is considered significant, lifetime credit

losses are provided. For trade receivables, a lifetime credit loss is recognised on initial recognition where material.

Prepayments, which are not financial assets, are measured at historic cost.

	At	At
	31 December	31 December
	2024	2023
	$m	$m
Trade receivables	175.4	168.5
Other receivables	54.1	11.0
Prepayments	0.8	1.5
Joint operation receivables	1.1	5.0
	231.4	186.0

Trade receivables relate to the Group’s producing assets in Egypt. Capricorn remain in discussions with EGPC to manage the receivables

position and retain the capability to restrict further investment in Egypt to match revenue collections. At 31 December 2024, the

expected credit loss adjustment offsetting receivables is $8.7m (2023: $9.0m). $4.2m of prior year expected credit loss adjustments were

offset against historic invoices where no further recovery is expected leaving a net charge of $3.9m to the Income Statement in the year.

Trade receivables are initially recorded at fair value, adjusting for expected credit losses, and subsequently measured at amortised cost.

Revenue is recognised at the point in time where title passes to the customer and payment becomes unconditional. The fair value

measurement of revenue for oil and gas sales in Egypt includes adjustments to invoiced quantities for expected entitlement share

adjustments.

The other receivables balance of $54.1m (2023: $11.0m) includes $50.0m of further consideration due on the past sale of assets in

Senegal (see note 6.1 for details) (2023: $nil), interventure receivables of $0.6m (2023: $1.4m), VAT recoverable in the UK of $0.1m (2023:

UK and Mexico $3.6m), money market interest receivable of $0.9m (2023: $0.6m) and the earnout settlement receivable of $1.5m, after

impairment (2023: $2.0) (see note 6.1).

	Year ended	Year ended
	31 December	31 December
	2024	2023
Reconciliation of opening and closing receivables to operating cash flow movements:	$m	$m
Opening trade and other receivables	186.0	142.5
Closing trade and other receivables	(231.4)	(186.0)
Increase in trade and other receivables	(45.4)	(43.5)
Foreign exchange	(1.4)	(1.2)
Senegal consideration receivable	50.0	–
Decrease in joint operation receivables relating to investing activities	(7.7)	(18.5)
Decrease in other receivables relating to investing activities	(4.4)	(4.2)
Decrease in prepayments relating to investing activities	–	(2.2)
Increase/(Decrease) in prepayments and other receivables relating to financing activities	0.3	(1.4)
Trade and other receivables movement on earnout settlement	(0.5)	2.0
Trade and other receivables cash flow movement	(9.1)	(69.0)

The movements in joint operation receivables relating to investing activities relate to the Group’s share of the receivables of joint

operations in respect of exploration, appraisal and development activities.

Capricorn Energy PLC

Annual Report and Accounts 2024

SECTION 3 – WORKING CAPITAL, FINANCIAL INSTRUMENTS AND LONG-TERM LIABILITIES CONTINUED

3.6 Financial liabilities at fair value through profit or loss

	At	At
	31 December	31 December
	2024	2023
Financial liabilities	$m	$m
Non-current liabilities
Financial liabilities at fair value through profit or loss – deferred consideration on business combination	–	19.8
	–	19.8
Current liabilities
Financial liabilities at fair value through profit or loss – deferred consideration on business combination	25.0	25.0
	25.0	25.0

Financial liabilities at fair value through profit or loss – deferred consideration on business combination

Deferred consideration was due to Shell following the Egypt business combination in 2021, with amounts due linked to the average

annual dated Brent oil price for each year up to and including the current year end. A maximum $50.0m is due for each year, split 50:50

between Capricorn and Cheiron where the average oil price exceeds $75/bbl. Capricorn’s full $25.0m share was payable in respect of

2023 and 2024 and settled in May 2024 and January 2025 respectively. No further amounts are due to Shell from Capricorn though the

Group remain joint and severally liable were Cheiron to default on their remaining payment due.

During the year, the Group made a loss of $5.2m (2023: $8.0m) on fair value movements increasing the financial liability to the full $25.0m

due.

3.7 Trade and other payables

Accounting policy

Trade and other payables are non-interest bearing and are measured at fair value initially then amortised cost subsequently.

Joint operation payables are payables that relate to Capricorn’s interest in its oil and gas joint arrangements, including Capricorn’s

participating interest share of the trade and other payables of the joint arrangements themselves. Where Capricorn is operator

of the joint operation, joint operation payables also include amounts that Capricorn will settle to third parties on behalf of joint

operation partners. The amount to be recovered from partners for their share of such liabilities are included within joint operation

receivables.

	At	At
	31 December	31 December
	2024	2023
	$m	$m
Trade payables	0.1	0.3
Other taxation and social security	0.6	0.5
Accruals and other payables	6.3	7. 9
Joint operation payables	103.6	73.3
	110.6	82.0

Joint operation payables include $13.7m (2023: $6.4m) and $89.9m (2023: $66.9m) relating to exploration/appraisal asset and

development/producing asset costs respectively. $99.6m relates to the Group’s operations in Egypt.

	Year ended	Year ended
	31 December	31 December
	2024	2023
Reconciliation of opening and closing payables to operating cash flow movements:	$m	$m
Opening trade and other payables	(82.0)	(84.9)
Closing trade and other payables	110.6	82.0
Increase/(Decrease) in trade and other payables	28.6	(2.9)
Foreign exchange	(0.5)	1.6
Decrease in trade payables relating to investing activities	–	0.7
Increase in joint operation payables relating to investing activities	(18.2)	(38.1)
Increase in accruals and other payables relating to investing activities	(0.7)	–
(Increase)/Decrease in accruals and other payables relating to financing activities	(0.1)	0.1
Trade and other payables movement recorded in operating cash flows	9.1	(38.6)

Movements above for investing activities relate to exploration, appraisal and development activities through the Group’s joint operations.

Movements relating to production activities are included in amounts through operating cash flows.

Capricorn Energy PLC

Annual Report and Accounts 2024

Strategic Report Corporate Governance Financial Statements Additional Information

SECTION 3 – WORKING CAPITAL, FINANCIAL INSTRUMENTS AND LONG-TERM LIABILITIES CONTINUED

3.8 Financial instruments

Below is the comparison by category of carrying amounts and fair values of all the Group’s financial instruments that are carried in the

Financial Statements.

Financial assets

	At	At
	31 December	31 December
	2024	2023
Carrying amount and fair value	$m	$m
Financial assets at amortised cost
Other long-term receivable – deferred consideration	–	20.6
Cash and cash equivalents	123.4	189.5
Trade receivables	175.4	168.5
Other receivables	54.1	11.0
Joint operation receivables (excluding VAT)	1.1	3.2
	354.0	392.8

In 2023, the fair value of other long-term receivables held at amortised cost relating to deferred consideration does not materially differ from

its carrying value.

Due to the short-term nature of remaining financial assets held at amortised cost, their carrying amount is considered to be the same as

their fair value.

There are no material impairments of financial assets held on the Balance Sheet at either 31 December 2024 or 2023 other than the

impairment of other long-term receivables and other receivables relating to amounts due on the settlement agreement with Waldorf

Production Limited (see note 6.1).

Financial liabilities

	At	At
	31 December	31 December
	2024	2023
Carrying amount and fair value	$m	$m
Financial liabilities at amortised cost
Trade payables	0.1	0.3
Accruals and other payables	6.3	7. 9
Joint operation payables	103.6	73.3
Lease liabilities	6.1	7. 4
Loans and borrowings	99.3	111.8
Financial liabilities at fair value
Deferred consideration on business combinations	25.0	44.8
	240.4	245.5

The fair value of financial liabilities has been calculated by discounting the expected future cash flows at prevailing interest rates.

Maturity analysis of financial liabilities

The expected financial maturity of the Group’s financial liabilities at 31 December 2024 is as follows:

	<1 year	1–2 years	2–5 years	>5 years
	$m	$m	$m	$m
Financial liabilities at amortised cost
Trade payables	0.1	–	–	–
Accruals and other payables	6.3	–	–	–
Joint operation payables	103.6	–	–	–
Lease liabilities	1.0	1.0	2.7	1.4
Loans and borrowings	33.9	47.0	40.1	–
Financial liabilities at fair value
Deferred consideration on business combinations	25.0	–	–	–
	169.9	48.0	42.8	1.4

Capricorn Energy PLC

Annual Report and Accounts 2024

SECTION 3 – WORKING CAPITAL, FINANCIAL INSTRUMENTS AND LONG-TERM LIABILITIES CONTINUED

3.8 Financial instruments continued

Financial liabilities continued

The expected financial maturity of the Group’s financial liabilities at 31 December 2023 was as follows:

	<1 year	1–2 years	2–5 years	>5 years
	$m	$m	$m	$m
Financial liabilities at amortised cost
Trade payables	0.3	–	–	–
Accruals and other payables	7. 9	–	–	–
Joint operation payables	73.3	–	–	–
Lease liabilities	1.0	1.3	3.3	1.8
Loans and borrowings	27.1	33.9	84.9	–
Financial liabilities at fair value
Deferred consideration on business combinations	25.0	19.8	–	–
	134.6	55.0	88.2	1.8

Fair value

	At	At
	31 December	31 December
	2024	2023
	$m	$m
Liabilities measured at fair value – Level 2
Financial liabilities at fair value
Deferred consideration on business combinations	25.0	43.8
Liabilities measured at fair value – Level 3
Financial liabilities at fair value
Deferred consideration on business combinations	–	1.0
	25.0	44.8

3.9 Financial risk management: objectives and policies

The main risks arising from the Group’s financial instruments are commodity price risk, liquidity risk, credit risk and foreign currency risk.

The Board of Capricorn Energy PLC, through the Treasury Subcommittee, reviews and agrees policies for managing each of these risks

and these are summarised below.

The Group’s treasury function and executive team as appropriate are responsible for managing these risks, in accordance with the policies

set by the Board. Management of these risks is carried out by monitoring of cash flows, investment and funding requirements using a

variety of techniques. These potential exposures are managed while ensuring that the Company and the Group have adequate liquidity

at all times in order to meet their immediate cash requirements. There are no significant concentrations of risks unless otherwise stated.

The Group does not enter into or trade financial instruments, including derivatives, for speculative purposes.

The primary financial assets and liabilities comprise cash, short- and medium-term deposits, money market liquidity funds, intra-group

loans and other receivables and financial liabilities held at amortised cost. The Group’s strategy is to finance its operations through a

mixture of retained profits and bank borrowings. Other alternatives such as equity issues and other forms of non-investment-grade

debt finance will be reviewed by the Board, when appropriate.

Commodity price risk

Commodity price risk arises principally from the Group’s Egyptian production, which could adversely affect revenue and debt availability

due to changes in commodity prices.

The Group measures commodity price risk through an analysis of the potential impact of changing commodity prices. Based on this

analysis and considering materiality and the potential business impact, the Group may choose to hedge. However, the Group did not

enter into any commodity price hedging arrangements during either year covered by this report.

Liquidity risk

The Group closely monitors and manages its liquidity risk using both short- and long-term cash flow projections, incorporating debt

financing plans and active portfolio management of investments. Cash forecasts are regularly produced and sensitivities run for different

scenarios including, but not limited to, further delays in the settlement of trade receivables in Egypt, changes in asset production profiles

and cost schedules as well as collection assumptions on receivables related to legacy items.

During the year, the Group’s treasury function has actively managed the Group’s US dollar and EGP position in Egypt. EGP has been

maintained at sufficient levels to meet upcoming local and joint operation payments falling due, but limiting holding significant funds

to avoid exposure to currency devaluation. US dollar payments have been carefully managed to match cash inflows on receivable

settlements preserving sufficient funds to meet upcoming debt repayments as and when they fall due.

Capricorn Energy PLC

Annual Report and Accounts 2024

Strategic Report Corporate Governance Financial Statements Additional Information

SECTION 3 – WORKING CAPITAL, FINANCIAL INSTRUMENTS AND LONG-TERM LIABILITIES CONTINUED

3.9 Financial risk management: objectives and policies continued

Liquidity risk continued

The Group runs sensitivities on its liquidity position at various times throughout the year. This includes scenarios forecasting different levels

of capital expenditure dependant on uncertain payment schedules from EGPC. Further details are noted in the Viability Statement provided

on page 16. Details of the Group’s debt facilities can be found in note 3.2. The Group is subject to biannual forecast liquidity tests as part of

the facility agreements.

Future liquidity of the Egypt business is dependent upon the timing of payments from EGPC to address the overdue receivables position.

The Group preserve liquidity by committing only to further investment that can be funded through collections. Outside of Egypt the

Group has sufficient funds to settle all other financial liabilities.

The Group invests cash in a combination of money market liquidity funds and term deposits with a number of international and UK

financial institutions, ensuring sufficient liquidity to enable the Group to meet its short- and medium-term expenditure requirements.

Credit risk

Credit risk arises from cash and cash equivalents, investments with banks and financial institutions, trade and other receivables and joint

operation receivables.

Customers, joint operation partners and other debtors are subject to a risk assessment using publicly available information and credit

reference agencies, with follow-up due diligence and monitoring if required. At the year end, the Group’s trade receivables primarily

relates to amounts due from EGPC for oil and gas sales in Egypt. Amounts are recognised after providing for expected credit losses, based

on management’s assessment of credit risk.

Credit risk for investments with banks and other financial institutions is managed by the Group treasury function in accordance with

Board-approved policies. These policies limit counterparty exposure, maturity, collateral and take account of published ratings, market

measures and other market information. The limits are set to minimise the concentration of risks and therefore mitigate the risk of

financial loss through counterparty failure.

Capricorn’s policy is to invest with banks or other financial institutions that, firstly, offer the greatest degree of security in the view of

the Group and, secondly, the most competitive interest rates. Repayment of principal is the overriding priority and this is achieved by

diversification and shorter maturities to provide flexibility. The Board monitors the Group’s policy and updates as required.

At the year end, the Group does not have any significant concentrations of bad debt risk with financial institutions. As at 31 December

2024, the Group had investments with 10 counterparties (2023: 14) to ensure no concentration of counterparty investment risk.

At 31 December 2023 and 2024, the Group’s investments were a combination of instant access and term deposits.

The maximum credit risk exposure relating to financial assets is represented by the carrying value as at the balance sheet date.

Capricorn Energy PLC

Annual Report and Accounts 2024

SECTION 3 – WORKING CAPITAL, FINANCIAL INSTRUMENTS AND LONG-TERM LIABILITIES CONTINUED

3.9 Financial risk management: objectives and policies continued

Foreign currency risk

Capricorn manages exposures that arise from non-functional currency receipts and payments by matching receipts and payments in the

same currency and actively managing the residual net position.

The Group also aims where possible to hold surplus cash, debt and working capital balances in the functional currency of the subsidiary,

thereby matching the reporting currency and functional currency of most companies in the Group. This minimises the impact of foreign

exchange movements on the Group’s Balance Sheet.

Where residual net exposures do exist and they are considered significant, the Company and Group may from time to time opt to use

derivative financial instruments to minimise exposure to fluctuations in foreign exchange and interest rates.

The following table demonstrates the sensitivity to movements in the $:GBP exchange rate, with all other variables held constant, on the

Group’s monetary assets and liabilities. These are considered to be reasonably possible changes for the purposes of sensitivity analysis.

The Group’s exposure to foreign currency changes for all other currencies, including EGP, is not material.

		At 31 December 2024	At 31 December 2023
	Effect		Effect
	on profit before	Effect on	on profit	Effect on
	tax	equity	before tax	equity
	$m	$m	$m	$m
10% increase in GBP to $	(7.6)	(0.9)	(8.1)	(1.0)
10% decrease in GBP to $	7.6	0.9	8.1	1.0

3.10 Asset held-for-sale

Previously, Capricorn invested INR508,089,142 ($6.9m) into a non-listed trust in India. The asset was recorded as a non-current financial

asset and measured at fair value. During 2023, an agreement to sell the investment resulted in reclassification of the asset from a financial

asset at fair value through profit or loss to an asset held-for-sale.

At 1 January 2023, the investment had a fair value of $6.5m, which subsequently increased to $7.2m at the date of reclassification

giving rise to a fair value gain in the year of $0.8m, offset by an exchange loss of $0.1m. On reclassification to an asset held-for-sale an

impairment of $4.0m was recorded.

In March 2024, the sale completed and Capricorn received £2.4m ($3.1m) resulting a loss on sale of investment of $0.1m through the

Income Statement in 2024.

	Total
	$m
Cost as at 1 January 2023	6.5
Fair value gain	0.8
Exchange loss	(0.1)
Impairment	(4.0)
As at 31 December 2023	3.2
Cash received	(3.1)
Loss on sale of investment	(0.1)
At at 31 December 2024	–

Capricorn Energy PLC

Annual Report and Accounts 2024

Strategic Report Corporate Governance Financial Statements Additional Information

SECTION 4 – INCOME STATEMENT ANALYSIS

This section contains further income statement analysis, including segmental analysis,

details of employee benefits payable in the year, finance income and finance costs.

Significant accounting judgements in this section:

Segmental disclosures and discontinued operations

IFRS 8 ‘Operating Segments’ does not provide guidance as to whether segment disclosures apply to discontinued operations. Capricorn

have included the results of discontinued operations within the “Other Capricorn Energy Group” segment for both years presented.

Key estimates and assumptions in this section:

There are several key estimates and assumptions used in the calculation of the Group’s share-based payment charges. These are detailed in

note 4.3 (b).

4.1 Segmental analysis

Operating segments

Capricorn had two reportable operating segments during 2024 relating to its operations in Egypt and Mexico. “Other countries” combine

costs relating to legacy assets in Mauritania and Suriname and ongoing new venture activities in the UK.

The “Other Capricorn Energy Group” segment exists to accumulate the activities and results of the Parent and other holding companies

together with other unallocated expenditure and net assets/liabilities, including amounts of a corporate nature not specifically

attributable to any of the business units.

Non-current assets as analysed on a segmental basis consist of: intangible exploration/appraisal assets; property, plant & equipment –

development/producing assets; goodwill; and other property, plant & equipment and intangible assets.

	At	At
	31 December	31 December
	2024	2023
Geographical information: non-current assets	$m	$m
Egypt	221.8	232.0
Mexico	–	0.2
Other countries	–	27.6
Other Capricorn Energy Group	12.8	13.2
Total non-current assets	234.6	273.0

100

Capricorn Energy PLC

Annual Report and Accounts 2024

SECTION 4 – INCOME STATEMENT ANALYSIS CONTINUED

4.1 Segmental analysis continued

Operating segments continued

The segment results for the year ended 31 December 2024 are as follows:

				Other
				Capricorn
			Other	Energy
	Egypt	Mexico	countries	Group	Total
	$m	$m	$m	$m	$m
Revenue	146.8	–	–	1.0	147.8
Other income	30.1	–	–	–	30.1
Cost of sales	(41.6)	–	–	–	(41.6)
Depletion charges	(85.1)	–	–	–	(85.1)
Gross profit	50.2	–	–	1.0	51.2
General exploration costs	(1.1)	–	–	–	(1.1)
Unsuccessful exploration costs	(2.5)	(4.7)	(1.7)	–	(8.9)
Impairment reversal of property, plant & equipment –
development/producing assets	15.7	–	–	–	15.7
Expected credit loss adjustment on revenue receivable	(3.9)	–	–	–	(3.9)
Other operating income	–	–	–	1.0	1.0
Depreciation – purchased assets	–	–	–	(0.1)	(0.1)
Amortisation – right-of-use assets	(0.3)	–	–	(0.7)	(1.0)
Amortisation of other intangible assets	–	(0.1)	–	(0.5)	(0.6)
Other administrative expenses	(2.6)	(0.3)	(0.5)	(18.8)	(22.2)
Operating profit/(loss)	55.5	(5.1)	(2.2)	(18.1)	30.1
Fair value loss – deferred consideration	(5.2)	–	–	–	(5.2)
Other (losses)/gains through profit or loss	–	–	–	(0.1)	(0.1)
Interest income	1.8	0.1	–	7.1	9.0
Interest expense	(13.7)	–	–	(0.4)	(14.1)
Other net finance (expense)/income	(5.6)	(1.1)	(0.2)	1.1	(5.8)
Profit/(Loss) before tax from continuing operations	32.8	(6.1)	(2.4)	(10.4)	13.9
Tax charge	(31.9)	–	–	5.4	(26.5)
Profit/(Loss) for the year from continuing operations	0.9	(6.1)	(2.4)	(5.0)	(12.6)
Profit from discontinued operations	–	–	–	23.2	23.2
Profit/(Loss) attributable to equity holders of the Parent	0.9	(6.1)	(2.4)	18.2	10.6
Balances as at 31 December 2024:
Capital expenditure	62.6	–	–	0.9	63.5
Total assets	469.5	1.6	7.5	141.1	619.7
Total liabilities	246.9	4.3	7.5	11.7	270.4
Non-current assets	221.8	–	–	12.8	234.6

Revenue in the Egypt segment contains revenue generated from eight concessions in the Western Desert, onshore the Arab Republic

of Egypt. 94.0% ($138.0m) of revenue related to sales to a single customer.

All transactions between segments are carried out on an arm’s length basis.

101

Capricorn Energy PLC

Annual Report and Accounts 2024

Strategic Report Corporate Governance Financial Statements Additional Information

SECTION 4 – INCOME STATEMENT ANALYSIS CONTINUED

4.1 Segmental analysis continued

Operating segments continued

The segment results for the year ended 31 December 2023 were as follows:

				Other
				Capricorn
			Other	Energy
	Egypt	Mexico	countries	Group	Total
	$m	$m	$m	$m	$m
Revenue	199.9	–	–	1.1	201.0
Other income	54.1	–	–	–	54.1
Cost of sales	(59.6)	–	–	–	(59.6)
Depletion charges	(120.4)	–	–	–	(120.4)
Gross profit	74.0	–	–	1.1	75.1
Pre-award costs	(0.7)	–	–	(0.4)	(1.1)
General exploration costs	(10.4)	(10.3)	(6.2)	–	(26.9)
Unsuccessful exploration costs	(2.6)	(16.0)	(1.9)	–	(20.5)
Impairment of property, plant & equipment – development/producing assets	(29.1)	–	–	–	(29.1)
Impairment of goodwill	(14.6)	–	–	–	(14.6)
Expected credit loss adjustment on revenue receivable	(9.0)	–	–	–	(9.0)
Other operating income	–	–	–	0.6	0.6
Depreciation – purchased assets	–	–	–	(0.2)	(0.2)
Amortisation – right-of-use assets	(0.3)	–	–	(2.3)	(2.6)
Amortisation of other intangible assets	–	(0.3)	–	(3.6)	(3.9)
Other administrative expenses	(1.9)	(2.9)	(0.1)	(50.3)	(55.2)
Operating profit/(loss)	5.4	(29.5)	(8.2)	(55.1)	(8 7.4)
Fair value loss – deferred consideration	(8.0)	–	–	–	(8.0)
Gain on financial assets at fair value through profit or loss	–	–	–	0.8	0.8
Impairment of an asset held-for-sale	–	–	–	(4.0)	(4.0)
Interest income	0.4	–	0.1	19.9	20.4
Interest expense	(15.0)	–	–	(0.5)	(15.5)
Other net finance (expense)/income	(2.7)	1.7	(0.5)	(6.9)	(8.4)
Loss before tax from continuing operations	(19.9)	(27. 8)	(8.6)	(45.8)	(102.1)
Tax charge	(40.5)	–	–	–	(40.5)
Loss for the year from continuing operations	(60.4)	(27.8)	(8.6)	(45.8)	(142.6)
Loss from discontinued operations	–	–	–	(1.4)	(1.4)
Loss attributable to equity holders of the Parent	(60.4)	(27. 8)	(8.6)	(47.2)	(144.0)
Balances as at 31 December 2023:
Capital expenditure	96.4	15.0	1.9	1.9	115.2
Total assets	426.8	8.6	29.8	202.4	667.6
Total liabilities	237. 2	5.2	5.9	12.8	261.1
Non-current assets	232.0	0.2	27.6	13.2	273.0

Revenue in the Egypt segment contains revenue generated from eight concessions in the Western Desert, onshore the Arab Republic of

Egypt. 93.1% ($187.1m) of revenue related to sales to a single customer.

All transactions between the segments were carried out on an arm’s length basis.

102

Capricorn Energy PLC

Annual Report and Accounts 2024

SECTION 4 – INCOME STATEMENT ANALYSIS CONTINUED

4.2 Administrative and other expenses

	Year ended	Year ended
	31 December	31 December
	2024	2023
	$m	$m
Administrative expenses	23.9	55.0
Other expenses – corporate transactions	–	6.9
	23.9	61.9

In 2023, the corporate transactions costs of $6.9m related to corporate transactions that were subsequently terminated.

4.3 Employee benefits: staff costs, share-based payments and Directors’ emoluments

a) Staff costs

	Year ended	Year ended
	31 December	31 December
	2024	2023
	$m	$m
Wages and salaries	9.6	18.4
Social security costs	1.9	0.5
Redundancy costs	0.3	16.5
Other pension costs	0.4	1.9
Share-based payments	1.9	2.5
	14.1	39.8

Staff costs are shown gross before amounts recharged to joint operations. The share-based payments charge represents amounts in respect

of equity-settled options. Social security costs include pro-rata accruals for NIC expected to be due on share-based payments forecast to

vest in future years.

The monthly average number of full-time equivalent employees, including Executive Directors and individuals employed by the Group

working on joint operations was:

		Number of employees
	Monthly	Monthly
	average	average
Continuing operations:	2024	2023
UK	28	90
Egypt	16	22
Mexico	1	5
	45	117

103

Capricorn Energy PLC

Annual Report and Accounts 2024

Strategic Report Corporate Governance Financial Statements Additional Information

SECTION 4 – INCOME STATEMENT ANALYSIS CONTINUED

4.3 Employee benefits: staff costs, share-based payments and Directors’ emoluments continued

b) Share-based payments

Income Statement charge

	Year ended	Year ended
	31 December	31 December
	2024	2023
	$m	$m
Included within gross staff costs (continuing operations):
SIP	0.4	2.1
LTIP	1.4	(0.1)
Employee share scheme	0.1	0.5
	1.9	2.5

In 2023, a reversal of prior year charges of $2.4m was recorded against LTIP share-based payment charges, relating to two former

Directors who left the business in 2023, forfeiting their awards.

Details of awards with a significant impact on the results for the current and prior year are given below, together with a summary of the

remaining awards.

Share-based payment schemes and awards details

The Group operates a number of share award schemes for the benefit of its employees.

The number of share awards made by the Company during the year is given in the table below, together with their weighted average fair

value (WAFV) and weighted average grant or exercise price (WAGP/WAEP):

		Year ended 31 December 2024				Year ended 31 December 2023
		WAGP/				WAGP/
	WAFV	WAEP		Number	WAFV	WAEP		Number
	£	£		of shares	£	£		of shares
SIP – free shares	1.69	1.69		59,696	1.72	1.72	87,99	0
SIP – matching shares	2.07	2.07		30,786	2.11	2.11	190,212
LTIP	0.78	1.75		2,412,942	0.99	1.86	1,483,771
Deferred bonus	1.75	1.75		37,164	–	–		–
Employee share scheme		–	–	–	2.48	1.87		228,175
				2,540,588				1,990,148

The awards existing under the LTIP with the WAGP are as follows:

	2024			2023
	Number		WAGP	Number		WAGP
	of shares		£	of shares		£
At 1 January	11,784,135	1.79	27,	38 6,242	1.72
Granted during the year	2,412,942	1.75	1,483,771		1.86
Exercised during the year	(3,043,566)	1.64	(4,734,541)		1.84
Lapsed during the year	(4,523,413)	1.81	(12,351,337)		1.61
At 31 December	6,630,098	1.82	11,784,135		1.79

The weighted average remaining contractual life of outstanding awards under the LTIP at 31 December 2024 was 1.2 years (2023: 0.6 year).

Included in the above are 210,303 of exercisable LTIP awards (2023: 757,365). No exercise price is payable in respect of LTIP awards.

The awards existing under all share schemes other than the LTIP with the weighted average of the grant price, exercise price and notional

exercise prices (WAGP/WAEP) are as follows:

	2024				2023
	Number	WAGP/WAEP	Number		WAGP/WAEP
	of shares	£	of shares		£
At 1 January	2,037,947	1.90	7,423,24	8	1.79
Consolidation of shares	(37,191)	1.84	(912,177)		1.82
Granted during the year	127,646	1.74	506,377		2.21
Exercised during the year	(385,689)	1.69	(3,853,745)		1.75
Lapsed during the year	(1,032,085)	1.82		(1,125,756)	1.88
At 31 December	710,628	1.90		2,037,947	1.90

The weighted average remaining contractual life of outstanding awards under all other schemes at 31 December 2024 was 7.2 years

(2023: 6.6 years). Included in the above are 14,552 of exercisable employee share awards (ESAS) (2023: 278,927) and exercisable share

options of nil (2023: 197,122). No exercise price is payable in respect of ESAS.

104

Capricorn Energy PLC

Annual Report and Accounts 2024

SECTION 4 – INCOME STATEMENT ANALYSIS CONTINUED

4.3 Employee benefits: staff costs, share-based payments and Directors’ emoluments continued

b) Share-based payments continued

Assumptions and inputs

The fair value of the Capricorn Energy PLC LTIP scheme awards and the ESAS share awards were calculated using a Monte Carlo model.

Capricorn Energy PLC share awards normally have a 10-year life from the date of grant. Awards were exercised on a regular basis

throughout the year, subject to the normal employee dealing bans imposed by the Company at certain times. The weighted average

share price during the year was £1.90 (2023: £2.10).

For awards issued prior to 2023, vesting percentage is by reference to the market performance of the Company’s TSR compared with a

group of peer companies. Vesting percentages for LTIPs can be above 100%. For the ESAS, 100% vesting occurs if the Company’s TSR is

in excess of the median of the comparator group, otherwise the ESAS will lapse in full.

In 2023, following the Company’s restructure, it was recognised that relative TSR is a more common measure in the market, however,

it was considered at that time not to be an appropriate measure of success. The Company awarded two types of LTIP shares to all

employees and senior executives and no ESAS shares were awarded in 2023 and 2024. It was determined that the vesting of the 2023

and 2024 LTIP award would be linked to absolute shareholder returns.

Vesting percentages that will be delivered for their achievement, are as follows:

LTIP – Senior Executive award

Share price at the end of the three-year measurement period	Percentage of ordinary shares comprised in award that vest
Less than or equal to $2.56 (2023: $2.56)	0%
$3.70 or higher (2023: $3.68)	100%
Between $2.56 and $3.70 (2023: $2.56 and $3.68)	0%–100% on a straight-line basis

Senior Executive award vesting may be scaled back by up to 40% if the Committee determines that insufficient shareholder value has

been generated during the first two years of the performance period.

LTIP – Staff award

Share price at the end of the three-year measurement period	Percentage of ordinary shares comprised in award that vest
Less than or equal to $2.22 (2023: $2.23)	0%
$2.56 or higher (2023: $2.56)	100%
Between $2.22 and $2.56 (2023: $2.23 and $2.56)	0%–100% on a straight-line basis
	2024	2023
Fair value of the awards using Monte Carlo simulation model	$		$
Senior Executive award	0.77	1.05
Staff award	1.32	1.50

c) Directors’ emoluments and remuneration of key management personnel

Details of each Director’s remuneration, pension entitlements, share options and awards pursuant to the LTIP are set out in the Directors’

remuneration report on pages 53 to 66. Directors’ remuneration, their pension entitlements and any share awards vested during the year

are provided in aggregate in note 8.9.

Remuneration of key management personnel

The remuneration of the Directors of the Company and senior management who are identified as the key management personnel of the

Group is set out below in aggregate.

	Year ended	Year ended
	31 December	31 December
	2024	2023
	$m	$m
Short-term employee benefits	5.6	6.0
Post-employment benefits	0.1	2.7
Share-based payments	0.6	0.5
	6.3	9.2

In addition, employer’s National Insurance Contributions for key management personnel in respect of short-term employee benefits were

$0.5m (2023: $0.2m).

Share-based payments shown above represent the cost to the Group of key management personnel’s participation in the Company’s

share schemes, measured under IFRS 2.

During 2024, none (2023: 1,244,941) of the shares awarded to key management personnel vested under the LTIP. In February 2023,

228,175 shares were awarded under the ESAS to an individual within key management personnel under a stand-alone agreement;

153,159 shares lapsed in July 2023; the remaining of 75,016 shares were exercised at £1.87 in July 2023.

105

Capricorn Energy PLC

Annual Report and Accounts 2024

Strategic Report Corporate Governance Financial Statements Additional Information

SECTION 4 – INCOME STATEMENT ANALYSIS CONTINUED

4.4 Finance income

	Year ended	Year ended
	31 December	31 December
	2024	2023
	$m	$m
Bank and other interest receivable	8.5	21.8
Other finance income	0.6	–
Exchange gain recycled from Other Comprehensive Income	0.4	–
	9.5	21.8

4.5 Finance costs

	Year ended	Year ended
	31 December	31 December
	2024	2023
	$m	$m
Loan interest	12.8	15.0
Facility fees amortisation	0.9	0.9
Other interest and finance charges and unwind of discount	2.8	1.7
Exchange loss	3.9	7.7
	20.4	25.3

Loan interest of $12.8m (2023: $15.0m) was charged on the Egypt Junior and Senior Debt Facilities.

4.6 Earnings per ordinary share

Basic and diluted earnings per share are calculated using the following measures of (loss)/profit:

	Year ended	Year ended
	31 December	31 December
	2024	2023
	$m	$m
Loss and diluted loss after taxation from continuing operations	(12.6)	(142.6)
Profit/(Loss) and diluted profit/(loss) attributable to equity holders of the Parent	10.6	(144.0)

The following reflects the share data used in the basic and diluted earnings per share computations:

	Number	Number
	of shares	of shares
	2024	2023
	’000	’000
Weighted average number of shares	79,557	196,128
Less weighted average shares held by ESOP and SIP Trusts	(1,310)	(2,777)
Basic and diluted weighted average number of shares	78,247	193,351

The share repurchase programme and share consolidation reduced the weighted average number of shares in 2024 (see note 7.1). 2023

weighted average number of shares have not been adjusted, on the basis that the share consolidation is considered to be in substance a share

repurchase at fair value.

106

Capricorn Energy PLC

Annual Report and Accounts 2024

SECTION 5 – TAXATION

This section highlights the Group’s taxation policies, including both the accounting policy

and wider strategy and governance policies. Details can also be found on deferred tax

liabilities and deferred tax assets existing at the year end and the current tax charge

recorded on Egypt’s taxable profits.

Significant accounting judgements in this section:

Recognition of deferred tax liabilities and tax charge on profits from Egypt concessions

Under the Egypt concession agreements, each contractor’s share of income tax due on taxable profit for the year is paid on the contractor’s

behalf by EGPC from their share of production. The tax liability however remains with the contractor to the point of settlement. Therefore,

Capricorn recognises deferred tax liabilities on temporary taxable difference where the carrying value of non-current assets exceeds their

tax written down values.

Capricorn also records a tax charge in the year for tax that is payable on the Group’s share of profits from production. Other income is

recorded within gross profit to reflect the sale of additional volumes by EGPC on behalf of the Group to settle the tax liability arising;

see note 2.1.

Deferred taxation – recognition of deferred tax assets on Egypt concessions

At the year-end, Capricorn recognise deferred tax assets across four concessions where available tax losses are expected to be recovered,

within a period not exceeding five years, on forecast future taxable profits over which the losses can be utilised. Future taxable profits

forecasts are based on existing concession terms in Egypt.

Accounting policy

The total tax charge or credit represents the sum of current tax and deferred tax.

The current tax charge or credit is based on the taxable profit or loss for the year. Taxable profit or loss differs from net profit or loss as

reported in the Income Statement because it excludes items of income or expense that are taxable or deductible in other years and

it further excludes items that are never taxable or deductible. Where there are uncertain tax positions, Capricorn assesses whether it

is probable that the position adopted in tax filings will be accepted by the relevant tax authority, with the results of this assessment

determining the accounting that follows. If it is not considered probable that the income tax filing position will be accepted by the

tax authority, the uncertainty is reflected within the carrying amount of the applicable tax asset or liability by using either the most

likely amount or an expected value of the tax treatment, depending on which method is considered to better predict the resolution

of the uncertainty, based on the underlying facts and circumstances.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities

in the Financial Statements and the corresponding tax bases used in the computation of taxable profit or loss.

Deferred tax assets are recognised for deductible temporary differences that exist only where it is probable that taxable profits will

be generated against which the carrying value of the deferred tax asset can be recovered.

Deferred tax liabilities are recognised for all taxable temporary differences except in respect of taxable temporary differences

associated with investments in subsidiaries, associates and interests in joint operations where the timing of the reversal of the

temporary difference can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future.

A deferred tax asset or liability is not recognised if a temporary difference arises on initial recognition of an asset or liability in a

transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable

profit or loss. However, where the recognition of an asset is associated with an interest in a joint operation, which applies to all of

Capricorn’s intangible exploration/appraisal assets and property, plant & equipment – development/producing asset additions, and

Capricorn is not able to control the timing of the reversal of the temporary difference or the temporary difference is expected to

reverse in the foreseeable future, a deferred tax asset or liability shall be recognised.

Current and deferred tax is calculated using tax rates and laws that have been enacted or substantively enacted by the balance

sheet date.

107

Capricorn Energy PLC

Annual Report and Accounts 2024

Strategic Report Corporate Governance Financial Statements Additional Information

SECTION 5 – TAXATION CONTINUED

5.1 Tax strategy and governance

The Group’s tax strategy is fully aligned with its overarching business objectives and principles and applies to all taxes paid or borne

by the Group. Capricorn aims to be a good corporate citizen, managing its tax affairs in a transparent and responsible manner in all

the jurisdictions in which it operates, and seeks to build and maintain open and constructive relationships with all tax authorities. The

Group is committed to transparency of tax contributions and other payments to governments and supports the Extractive Industries

Transparency Initiative. Capricorn reports payments to governments in its Annual Report and Accounts as well as additional voluntary

disclosures of taxes paid by the Group.

Capricorn undertakes tax planning that supports the business and reflects commercial and economic activity. The Group’s policy is to

not enter into any artificial tax avoidance schemes but to build and maintain strong collaborative working relationships with all relevant

tax authorities based on transparency and integrity. Capricorn aims for certainty in relation to the tax treatment of all items; however, it

is acknowledged that this will not always be possible, for example where transactions are complex or there is a lack of maturity in the

tax regime in the relevant jurisdiction in which the Group is operating. In such circumstances Capricorn will seek external advice where

appropriate and ensure that the approach adopted in any relevant tax return includes full disclosure of the position taken. Capricorn may

also seek to work directly with tax authorities to resolve uncertainties where the tax laws are unclear or complex.

5.2 Tax charge on profit/(loss) for the year

Analysis of tax charge on profit/(loss) for the year

	Year ended	Year ended
	31 December	31 December
	2024	2023
	$m	$m
Current tax charge:
Overseas corporation tax charge – Egypt	30.1	54.1
Overseas corporation tax credit – India	(5.4)	–
Total current tax charge on profit/(loss) from continuing operations	24.7	54.1
Deferred tax charge/(credit):
Deferred tax charge/(credit) on intangible/tangible assets – Egypt	1.8	(12.3)
Deferred tax credit on non-current assets – Egypt – adjustment	–	(1.4)
Deferred tax charge/(credit) from continuing operations	1.8	(13.7)
Total tax charge on profit/(loss) from continuing operations	26.5	40.5
UK deferred tax credit	–	(4.1)
Total deferred tax credit on loss from discontinued operations	–	(4.1)

The current tax charge in Egypt of $30.1m (2023: $54.1m) is settled by EGPC on the Group’s behalf.

Factors affecting the tax charge for the year

A reconciliation of the income tax charge applicable to the profit/(loss) before income tax to the UK statutory rate of income tax is as follows:

	Year ended	Year ended
	31 December	31 December
	2024	2023
	$m	$m
Profit/(Loss) before tax from continuing operations	13.9	(102.1)
Profit/(Loss) before tax multiplied by the UK statutory rate of corporation tax of 25% (2023: 23.52%)	3.5	(20.7)
Effect of:
Special tax rates and reliefs applying to oil and gas activities in the UK	(2.1)	(1.1)
Special tax rates and reliefs applying to oil and gas activities in Egypt	5.1	13.4
Temporary differences not recognised	7.1	23.5
Permanent items non-deductible	18.3	14.3
India tax refund not subject to tax	(5.4)	–
Group relief surrendered against profits/gains arising in discontinued operations	–	11.1
Total tax charge on profit/(loss) from continuing operations	26.5	40.5

The reconciliation shown above has been based on the average UK statutory rate of corporation tax for 2024 of 25% (2023: 23.52%). The

Finance Act 2023 was enacted on 11 July 2023 and increased the UK main rate of corporation tax from 19% to 25% with effect from

1 April 2023.

The applicable UK statutory corporation tax rate applying to North Sea oil and gas activities is currently 40% (2023: 40%). The temporary

Energy (Oil and Gas) Profits Levy was increased to 35% from 1 January 2023 (substantively enacted in November 2022) and further

increased to 38% on profits arising after 1 November 2024 (substantively enacted November 2024).

108

Capricorn Energy PLC

Annual Report and Accounts 2024

SECTION 5 – TAXATION CONTINUED

5.2 Tax charge on profit/(loss) for the year continued

Factors affecting tax charge for the year continued

The applicable statutory tax rate applying to oil and gas activities in Egypt is currently 40.55% (2023: 40.55%).

The applicable rates have been reflected in these financial statements as appropriate.

The effect of temporary differences not recognised of $7.1m (2023: $23.5m) includes:

– a $2.1m (2023: $0.7m) movement in the year in respect of the unrecognised deferred tax asset on UK ring-fence corporation tax

losses, energy (oil and gas) profits levy losses, supplementary charge tax and oil and gas investment allowances;

– a $(0.1)m (2023: $17.6m) movement in the year in respect of unrecognised deferred tax assets on Egypt oil and gas assets and tax losses;

– a $4.7m (2023: $(0.2)m) movement in the year in respect of UK tax losses and other temporary differences arising in the year on which

no deferred tax asset was recognised; and

– a $0.4m (2023: $4.9m) movement in the year in respect of overseas tax losses and other temporary differences arising in the year on

which no deferred tax was recognised.

The effect of permanent items non-deductible of $18.3m (2023: $14.3m) includes:

– $2.2m (2023: $2.2m) in respect of share-based payment charges;

– $(4.7)m (2023: $(3.5)m) predominantly in respect on non-taxable adjustments related to foreign exchange and tax relief on exercised

share options;

– $17.9m (2023: $10.8m) in respect of costs in Egypt considered non-deductible for tax purposes;

– $1.1m (2023: $(1.7)m) in respect of overseas costs considered non-deductible/taxable; and

– $1.8m (2023: $6.4m) in respect of other permanent items considered non-deductible.

5.3 Current tax receivable

Capricorn are due a refund of tax previously withheld in India on dividends due to the Group from its past shareholding in Vedanta

Limited. The total refund due to the Group is $5.4m, with $1.4m received during the year and $4.0m outstanding at the year end.

Recovery is expected within the next 12 months.

5.4 Deferred tax assets and liabilities

Reconciliation of movement in deferred tax assets/(liabilities):

	Temporary
	difference in
	respect of non-		Other
	current assets	Losses	temporary
	(restated)	(restated)	differences	Total
	$m	$m	$m	$m
Deferred tax assets
At 1 January 2023	8.7	–	–	8.7
Deferred tax charge through the Income Statement – continuing operations	(4.4)	3.3	–	(1.1)
At 31 December 2023	4.3	3.3	–	7.6
Deferred tax credit through the Income Statement – continuing operations	13.2	(2.5)	–	10.7
At 31 December 2024	17. 5	0.8	–	18.3
Deferred tax liabilities
At 1 January 2023	(24.3)	9.1	(13.2)	(28.4)
Deferred tax credit through the Income Statement – continuing operations	14.8	–	–	14.8
Deferred tax (charge)/credit through the Income Statement – discontinued
operations	–	(9.1)	13.2	4.1
At 31 December 2023	(9.6)	–	–	(9.6)
Deferred tax charge through the Income Statement – continuing operations	(12.5)	–	–	(12.5)
At 31 December 2024	(22.1)	–	–	(22.1)

Prior year comparatives have been restated to correctly disclose the deferred tax impact of temporary differences in respect of non-current

assets from the deferred tax impact of tax losses within Egypt deferred tax assets. There is no change to the net deferred tax asset or

liability recognised at 31 December 2023.

Deferred tax assets/(liabilities) in Egypt:

	As at	As at
	31 December	31 December
	2024	2023
	$m	$m
Assets	18.3	7.6
Liabilities	(22.1)	(9.6)
	(3.8)	(2.0)

109

Capricorn Energy PLC

Annual Report and Accounts 2024

Strategic Report Corporate Governance Financial Statements Additional Information

SECTION 5 – TAXATION CONTINUED

5.4 Deferred tax assets and liabilities continued

Recognised deferred tax assets

Egypt

Deferred tax assets of $18.3m (2023: $7.6m) are recognised in respect of Egypt oil and gas non-current assets temporary differences

of $43.2m (2023 restated: $10.6m) and Egypt tax losses of $2.0m (2023 restated: $8.1m) on four concessions where future profits are

expected to be available to recover the value of the assets.

At the balance sheet date the Group has $69.5m (2023: $33.0m) of temporary differences in respect of Egypt non-current assets and

$38.9m (2023: $38.6m) of Egypt tax losses, which can be offset against future oil and gas profits in Egypt. No deferred tax asset is

recognised in respect of these temporary differences as it is not considered probable that these amounts will be utilised in future periods.

Deferred tax liabilities

Egypt

Deferred tax liabilities of $22.1m (2023: $9.6m) are recognised across five concessions in respect of taxable temporary differences of

$54.5m (2023: $23.6m) related to Egypt oil and gas non-current assets. No tax losses are available to offset these taxable temporary

differences.

Previously a deferred tax liability of $4.1m was recognised in respect of earnout consideration due in relation to the disposal of UK oil

and gas producing assets. Following settlement of the earnout in 2023 (see note 6.1) the chargeable gain arising was fully sheltered by

available tax losses and no tax charge arose. The deferred tax liability therefore reversed in full.

Unrecognised deferred tax assets

No deferred tax asset is recognised on the following as it is not considered probable that it will be utilised in future periods:

	At	At
	31 December	31 December
	2024	2023
	$m	$m
UK RFCT trading losses	254.7	244.6
UK SCT loss	250.8	253.1
UK other ring fence temporary differences	629.3	626.4
UK excess management expenses	450.9	414.6
UK non-trade deficits	93.2	79.6
UK temporary differences on share-based payments	34.0	34.0
UK disallowed tax interest expenses	–	11.3
Egypt fixed asset temporary differences	11.8	20.9
Egypt ring fence corporation tax trading losses	35.6	29.7

110

Capricorn Energy PLC

Annual Report and Accounts 2024

SECTION 6 – DISCONTINUED OPERATIONS

This section contains details of the profit from discontinued operations in the year, primarily

arising on further consideration receivable on the sale of assets in Senegal in 2021 offset by

impairment of amounts receivable from Waldorf Production Limited relating to the sale of

UK assets, also in 2021.

Significant accounting judgements in this section

Senegal tax assessment

On 14 November 2023, Capricorn received notification of tax assessment raised in Senegal against Woodside Petroleum (“Woodside”).

The claim contains two items that Capricorn is responsible for under the agreement for the sale of the assets from Capricorn to Woodside,

with a total claim of $43.5m including interest and penalties. Capricorn strongly refutes that any tax is due and will robustly defend the

Group’s position. At the balance sheet date, no provision has been made in the Financial Statements, with further disclosures of this

contingent liability in note 6.3.

6.1 Profit/(Loss) from discontinued operations

Settlement of earnout consideration due

On 2 November 2021, Capricorn completed the sale of its interests in the UK Catcher and Kraken producing assets to Waldorf

Production Limited (“Waldorf”).

Consideration under the agreement included contingent consideration (‘earnout consideration’) dependent on oil prices from 2021 to

the end of 2025 and minimum production levels being achieved. The first annual payment of earnout consideration of $75.8m due on

2021 production was received in 2022. The second annual payment of $134.4m due on 2022 production was settled in March 2023.

On 18 December 2023, Capricorn entered into a settlement agreement with Waldorf for the full and final settlement of the remaining

earnout consideration due. Under the agreement, Capricorn received an initial payment of $48.0m in December 2023, with a further

$2.0m received at the end of Q1 2024. An additional payment of $22.5m was due in early January 2025 and Capricorn were also due

to receive Waldorf’s 25% non-operated WI in the Columbus gas field, subject to the necessary approvals. However, due to financial

difficulties impacting Waldorf, the $22.5m has not been received and instead written down to an estimated recoverable value of only

$1.5m. The transfer of the Columbus asset is also not expected to complete and the related long-term receivable fully impaired.

At the date of the settlement agreement, the fair value of the earnout was $79.3m, a fall of $10.4m across the year, reflecting oil price

movements. With combined proceeds from the settlement agreement of $77.6m, after adjusting for expected credit losses of $1.9m,

the Group recorded a loss on the settlement of the earnout of $1.7m 2023 and $26.1m in 2024.

A breakdown of the total profit from discontinued operations is as follows:

	Year ended	Year ended
	31 December	31 December
	2024	2023
	$m	$m
Cost of sales
Cost of sales – recovery of production costs	–	4.3
Operating profit	–	4.3
Gain on disposal of oil and gas assets	50.0	–
Loss on disposal of a subsidiary	(0.7)	–
Loss on financial asset at fair value through profit or loss – earnout consideration	–	(10.4)
Loss on disposal of a financial asset	(26.1)	(1.7)
Finance income	–	2.3
Profit/(Loss) before tax from discontinued operations	23.2	(5.5)
Tax credit	–	4.1
Profit/(Loss) after tax from discontinued operations	23.2	(1.4)

	2024	2023
	$		$
Earnings per share for profit/(loss) from discontinued operations
Profit/(Loss) per ordinary share – basic and diluted ($)	0.30	(0.01)

In January 2025, Capricorn received a further $50.0m consideration relating to the disposal of oil and gas assets in Senegal in 2021. This

consideration was dependant on several conditions being met, including the date of first oil and an average oil price above set levels, and

these were all achieved by the end 2024.

An audit of the Kraken and Catcher joint operations for the period from January 2019 to December 2020 resulted in a refund of production

costs from the operator of $4.3m, which was credited to discontinued operations in 2023.

The fair value loss in 2023 was recognised on changes in the valuation of earnout consideration receivable prior to the December 2023

settlement agreement.

111

Capricorn Energy PLC

Annual Report and Accounts 2024

Strategic Report Corporate Governance Financial Statements Additional Information

SECTION 6 – DISCONTINUED OPERATIONS CONTINUED

6.2 Cash flow information for discontinued operations

	Year ended	Year ended
	31 December	31 December
	2024	2023
	$m	$m
Net cash flows from operating activities	–	4.3
Net cash flows from investing activities	2.0	184.7
Net increase in cash and cash equivalents	2.0	189.0

The 2022 earnout of $134.4m and related interest payment of $2.3m were received in March 2023. In December 2023, a further

settlement of $48.0m was received following the settlement with Waldorf. In 2024, a further $2.0m was received under the terms of the

settlement agreement (see note 6.1).

6.3 Discontinued operations – Senegal contingent liability

On 14 November 2023, Capricorn received notification that Woodside had received a notice from the Senegalese Tax Authority. The

notice from the Senegalese Tax Authority states that:

‒ Senegalese registration duty ($29.0m including interest and penalties) should have been paid on the transfer (in December 2020) by

Capricorn to Woodside of its PSC interests offshore Senegal; and

‒ Senegalese real estate capital gains tax ($14.5m including interest and penalties) should have been withheld by Woodside from the

price paid to Capricorn in respect of the sale of those PSC interests.

Under the terms of the sale agreement between Capricorn and Woodside, Capricorn is responsible for any registration duty and for any

capital gains tax arising in connection with the sale of the PSC interests.

Capricorn’s analysis remains that no Senegalese registration duty or capital gains tax is payable, based on analysis at the time of the

transaction. Capricorn will continue to vigorously defend its position on this matter, including exercising rights under the sale agreement

to participate in the defence of any such claim.

112

Capricorn Energy PLC

Annual Report and Accounts 2024

SECTION 7 – CAPITAL STRUCTURE AND OTHER DISCLOSURES

This section includes details of Capricorn’s issued share capital and equity reserves.

Other disclosures include details on the independent auditors’ remuneration. Details on the

Group’s policy on the award of non-audit work to the independent auditors can be found in

the report of the Audit Committee.

Significant accounting judgements and key estimates and assumptions in this section:

There are no significant accounting judgements or key estimates and assumptions in this section.

7.1 Issued capital and reserves

Called-up share capital

		Number	Number	Number
		21/13p	490/143p	735/143p	799/122p	21/13p	490/143p	735/143p	799/122p
		ordinary	ordinary	ordinary	ordinary	ordinary	ordinary	ordinary	ordinary
		’000	’000	’000	‘000	$m	$m	$m	$m
Allotted, issued and fully paid ordinary shares
At 1 January 2023	315,072		–	–	–	8.0	–	–	–
Share consolidation – 15 May 2023	(315,072)	148,534		–	–	(8.0)	8.0	–	–
Share repurchase		–	(5,697)	–	–	–	(0.3)	–	–
Share consolidation – 5 October 2023		–	(142,837)	95,225	–	–	(7.7)	7.7	–
Share repurchase		–	–	(1,447)	–	–	–	(0.1)	–
At 31 December 2023		–	–	93,778	–	–	–	7.6	–
Share repurchase		–	–	(1,840)	–	–	–	(0.2)	–
Share consolidation – 24 May 2024		–	–	(91,938)	72,153	–	–	(7.4)	7.4
Share repurchase		–	–	–	(1,595)	–	–	–	(0.1)
At 31 December 2024		–	–	–	70,558	–	–	–	7.3

	2024
Share premium	$m
At 1 January 2023	495.4
Share premium cancellation	(495.4)
Arising on shares issued for employee share options	0.8
At 31 December 2023	0.8
Arising on shares issued for employee share options	0.1
At 31 December 2024	0.9

The Company does not have a limited amount of authorised share capital.

On 27 April 2023, the Company announced a share buyback programme of up to $25m, which commenced in May 2023. A total of

3,435,774 shares were repurchased throughout 2024 (2023: 7,143,720). The total value of the ordinary shares purchased was £5.6m

($7.2m) (2023: £14.2m ($16.9m)), with a $0.3m (2023: $0.4m) reduction in share capital and a reduction of $0.1m (2023: $1.0m) to

retained earnings after stamp duty and costs.

On 28 March 2024, Capricorn announced the proposal to return approximately $50m to shareholders via a special dividend.

The return was paid to shareholders on 7 June 2024. The return of cash to shareholders of 43 pence per eligible ordinary share totalled

£39.3m. The total return to shareholders, after exchange differences from the date of conversion from US dollar to GBP and associated

costs, was $50.1m. Accompanying the return, the Company undertook a share consolidation which, together with the share repurchases

reduced the number of ordinary shares issued to 70.6m at 31 December 2024.

During 2023, the Company paid dividends to shareholders of approximately $450m and $100m to shareholders in May and October

respectively (see note 7.2). The US dollar amounts were converted into GBP ahead of each dividend. Exchange movements from the

date of conversion to the date of payment reduced the US dollar equivalent of the dividends to $541.1m. Accompanying each return, the

Company undertook a share consolidation which, together with the share repurchases reduced the number of ordinary shares issued to

93.8m at 31 December 2023.

The share premium cancellation of $495.4m was confirmed by the Court of Session on 27 January 2023 and consequently registered

with the Registrar of Companies on 31 January 2023.

a) Shares held by ESOP Trust

The cost of shares held by the ESOP Trust at 31 December 2024 was $5.0m (2023: $5.1m). The number of shares held by the Trust at

31 December 2024 was 1,829,160 (2023: 1,008,584) and the market value of these shares was £5.4m ($6.7m) (2023: £1.7m ($2.2m)).

During 2024, the Group purchased 4,339,148 (2023: 7,364,197) shares at a cost of $10.3m (2023: $20.4m). During 2024, 125,743 shares

were created on share consolidation (2023: 1,856,663).

During 2023, the Group sold 404,973 shares at price of $0.9m; 4,159,174 shares vested and 25,000 shares were transferred from the

ESOP Trust to the SIP Trust.

113

Capricorn Energy PLC

Annual Report and Accounts 2024

Strategic Report Corporate Governance Financial Statements Additional Information

SECTION 7 – CAPITAL STRUCTURE AND OTHER DISCLOSURES CONTINUED

7.1 Issued capital and reserves continued

b) Shares held by SIP Trust

The cost of shares held by the SIP Trust at 31 December 2024 was $1.7m (2023: $1.2m). The number of shares held by the Trust at

31 December 2024 was 141,047 (2023: 124,693) and the market value of these shares was £0.4m ($0.5m) (2023: £0.2m ($0.3m)).

In 2024, the cost of SIP shares purchased was $0.6m (2023: $nil).

c) Foreign currency translation

Unrealised foreign exchange gains and losses arising on consolidation of non-US dollar functional currency subsidiary undertakings are

taken directly to reserves. Foreign exchange differences arising on intra-group loans are not eliminated on consolidation; this reflects the

exposure to currency fluctuations where the subsidiaries involved have differing functional currencies. These intra-group loans are not

considered to be an investment in a foreign operation.

d) Merger and capital reserves

Capital reserves of $46.2m (2023: $45.9m) include amounts arising on various Group acquisitions and transactions and the capital redemption

reserve arising from the 2013-2014 share repurchase programme. Capital reserves of $4.6m, $0.4m and $0.3m arose on the share repurchase

programme which ran from April to July 2022, May to December 2023 and from January to November 2024 respectively. $6.1m of capital

reserves relates directly to Capricorn Energy PLC, the Company.

7.2 Return of cash to shareholders

In 2024, Capricorn announced the proposed return of approximately $50m (2023: $568m) to shareholders via a special dividend. The

2024 return of 4 3 pence per eligible ordinary share totalled £3 9 .3m and was paid to shareholders on 7 June 2024. After exchange

differences and associated costs, the total return was $50.1m.

In 2023, a first return of cash to shareholders of 115 pence per eligible ordinary share totalling £359.1m was paid to shareholders on

15 May 2023. A second return of cash to shareholders of 56 pence per eligible ordinary share totalling £79.3m was paid to shareholders

on 20 October 2023. The total return to shareholders, after exchange differences and associated costs, was $560.0m

7.3 Capital management

The objective of the Group’s capital management structure is to ensure that there remains sufficient liquidity within the Group to carry

out committed work programme requirements. The Group monitors the long-term cash flow requirements of the business in order

to assess the requirement for changes to the capital structure to meet that objective and to maintain flexibility. The Group is subject to

biannual forecast liquidity tests as part of the Senior and Junior Debt Facilities. The Group has complied with the capital requirements

of these tests at all times during the year, other than a breach for the delayed payment of deferred consideration due on past business

combinations which was settled in May 2024. The Board has made clear that no further investment will be made from the Group into the

Egypt business, which must generate its own cash flows to fund future work programmes and debt repayments.

Capricorn manages the capital structure and makes adjustments to it in light of changes to economic conditions. To maintain or adjust the

capital structure, Capricorn may repurchase shares, make a special dividend payment to shareholders, return capital, issue new shares for

cash, repay debt, put in place new debt facilities or undertake other such restructuring activities as appropriate. No significant changes

were made in the objectives, policies or processes during the year ended 31 December 2024, other than the funding of the Egypt

business noted above.

Capital and net funds, including lease liabilities, was as follows:

	At	At
	31 December	31 December
	2024	2023
	$m	$m
Loans and borrowings	99.3	111.8
Lease liabilities	6.1	7. 4
Less cash and cash equivalents	(123.4)	(189.5)
Net funds	(18.0)	(70.3)
Equity	349.3	406.5
Capital and net funds	331.3	336.2
Gearing ratio	–	–

7.4 Guarantees

It is normal practice for the Group to issue guarantees in respect of obligations during the ordinary course of business. Guarantees are

issued from a number of bilateral unsecured lines.

The Group has provided the following guarantees at 31 December 2024:

– various guarantees for the Group’s operational commitments for the current year of $19.8m (2023: $27.6m); and

– Parent company guarantees for the Group’s obligations under joint operating agreements and other contracts.

Under the terms of the facilities entered into in connection with the Group’s Egypt assets, Capricorn Egypt Limited and Cheiron Oil & Gas

Limited, as borrowers, jointly and severally guarantee performance of their obligations to each lender. This includes an undertaking to pay

each lender whenever another obligor does not pay any amount, as if it was the principal obligor. As a result, Capricorn Egypt Limited and

Capricorn Egypt (Holding) Limited have provided guarantees in respect of the obligations owed to the lenders by Capricorn Egypt and the

joint venture counterparty, Cheiron. A similar joint and several arrangement covers the deferred consideration due to Shell.

114

Capricorn Energy PLC

Annual Report and Accounts 2024

SECTION 7 – CAPITAL STRUCTURE AND OTHER DISCLOSURES CONTINUED

7.5 Auditors’ remuneration

	Year ended	Year ended
	31 December	31 December
	2024	2023
	$’000	$’000
Fees payable to the Group’s external auditors (including associate firms) for:
Audit fees:
Auditing of the Financial Statements of the Group and the Company	726	485
Auditing of the Financial Statements of subsidiaries	238	261
	964	746
Non-audit fees:
Audit-related assurance services	134	141
Other assurance services relating to corporate finance transactions	–	629
Other non-audit services not included above	6	–
	140	770
Total fees	1,104	1,516

The Group has a policy in place for the award of non-audit work to the auditors which requires Audit Committee approval (see the Audit

Committee Report on page 44). Non-audit fees incurred in the year were permissible services under the Financial Reporting Council

Ethical Standard, including services required by law and regulations.

The split of audit fees to non-audit fees payable to the auditors is as follows:

2024 Fees to the auditors 2023 Fees to the auditors

Non-audit fee

$140,000

Audit fee

$964,000

Non-audit fee

$770,000

Audit fee

$746,000

115

Capricorn Energy PLC

Annual Report and Accounts 2024

Strategic Report Corporate Governance Financial Statements Additional Information

COMPANY BALANCE SHEET

AS AT 31 DECEMBER 2024

Note

2024

2023

(restated)

Non-current assets

Investments in subsidiaries 8.2 382.8 334.1

Long-term intercompany receivables 8.3 5.1 5.7

387.9 339.8

Current assets

Cash and cash equivalents 8.4 76.0 48.0

Other receivables 8.5 7.4 78.0

83.4 126.0

Total assets 471.3 465.8

Current liabilities

Bank overdraft 8.4 0.7 0.2

Lease liability 1.0 0.6

Trade and other payables 8.6 76.5 49.0

78.2 49.8

Non-current liabilities

Lease liability 8.7 5.1 5.7

5.1 5.7

Total liabilities 83.3 55.5

Net assets 388.0 410.3

Equity

Called-up share capital 7.1 7.3 7.6

Share premium 7.1 0.9 0.8

Shares held by ESOP/SIP Trusts 7.1a,b (6.7) (6.3)

Capital reserves 7.1d 6.1 5.8

Retained earnings:

At 1 January 402.4 753.7

Profit/(Loss) for the year 43.9 (260.7)

Other movements in retained earnings (65.9) (90.6)

380.4 402.4

Total equity 388.0 410.3

The Financial Statements on pages 115 to 123 were approved by the Board of Directors on 27 March 2025 and signed on its behalf by:

Randy Neely

Chief Executive

116

Capricorn Energy PLC

Annual Report and Accounts 2024

COMPANY STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2024

Note

2024

2023

(restated)

Cash flows from operating activities:

Profit/(Loss) before taxation 43.9 (260.7)

Share-based payments charge/(reversal) 0.7 (2.2)

(Reversal of impairment)/Impairment of investment in subsidiary (47.5) 268.3

Loan waiver 0.3 –

Finance income (7.2) (26.6)

Finance costs 6.6 1.1

Provision against receivable – 4.4

Other receivables movement 1.0 0.4

Trade and other payables movement 0.1 (2.0)

Net cash used in operating activities (2.1) (17.3)

Cash flows from investing activities:

Loans to group undertakings – (617. 5)

Repayments of loans to group undertakings 73.2 577.1

Interest received and other finance income 4.2 9.6

Net cash flows from/(used in) investing activities 77.4 (30.8)

Cash flows from financing activities:

Return of cash to shareholders (50.1) (542.1)

Share repurchase (7.3) (18.9)

Other interest and charges (0.2) (0.3)

Cost of shares purchased 7.1a,b (10.9) (19.5)

Proceeds from issue of shares 0.2 0.8

Lease payments (0.9) (1.2)

Drawdown on financing from group undertakings 64.5 48.0

Repayment of financing from group undertakings (43.0) –

Net cash flows used in financing activities (47.7) (533.2)

Net increase/(decrease) in cash and cash equivalents 27.6 (581.3)

Foreign exchange differences (0.1) (1.0)

Opening cash and cash equivalents at beginning of year 47.8 630.1

Closing cash and cash equivalents including bank overdraft 8.4 75.3 47.8

117

Capricorn Energy PLC

Annual Report and Accounts 2024

Strategic Report Corporate Governance Financial Statements Additional Information

COMPANY STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2024

Equity share

capital and share

premium

Shares held

by ESOP/

SIP Trusts

Merger

and capital

reserves

Retained

earnings

Total

equity

At 1 January 2023 503.4 (15.3) 5.4 753.7 1,247.2

Loss for the year – – – (260.7) (260.7)

Total comprehensive expense – – – (260.7) (260.7)

Return of cash to shareholders – – – (541.1) (541.1)

Share premium cancelled (495.4) – – 495.4 –

Share-based payments – – – 2.5 2.5

Exercise of employee share options 0.8 – – –

0.8

Share repurchase (0.4) – 0.4 (18.9)

Cost of shares purchased – (19.5) – – (19.5)

Cost of shares vesting – 28.5 – (28.5) –

At 31 December 2023 8.4 (6.3) 5.8 402.4 410.3

Profit for the year – – – 43.9 43.9

Total comprehensive income – – – 43.9 43.9

Return of cash to shareholders – – – (50.1) (50.1)

Share-based payments – – – 1.9 1.9

Exercise of employee share options 0.1 0.1 – – 0.2

Share repurchase (0.3) – 0.3 (7.3) (7.3)

Cost of shares purchased – (10.9) – – (10.9)

Cost of shares vesting – 10.4 – (10.4) –

At 31 December 2024 8.2 (6.7) 6.1 380.4 388.0

(18.9)

118

Capricorn Energy PLC

Annual Report and Accounts 2024

SECTION 8 – NOTES TO THE COMPANY FINANCIAL STATEMENTS

This section contains the notes to the Company Financial Statements.

The issued capital and reserves of the Company are largely consistent with the

Capricorn Energy PLC Group Financial Statements, as per note 7.1.

Key estimates and assumptions in this section:

Reversal of impairment on investments in subsidiaries

The Company’s investment in Capricorn Oil Limited has been reviewed for indicators of impairment and impairment reversal by

comparison against the fair value of intangible exploration/appraisal assets, property, plant & equipment – development/producing assets

and working capital, including cash and cash equivalents and intercompany receivables, held within the Capricorn Oil Limited sub-group.

The fair value of oil and gas assets is calculated using the same assumptions as noted in section 2, other than noted below, and includes

the valuation of the Egypt business based on expected terms resulting from the concession modernisation discussions. Given that

production from the Egypt concessions immediately adds to the net assets of the subsidiary through an increase in receivables, the nine

month delay to collections assumption has been removed in testing the investment in subsidiary for impairment.

8.1 Basis of preparation

The Financial Statements of Capricorn Energy PLC have been prepared in accordance with UK-adopted international accounting

standards and with the requirements of the Companies Act 2006 as applicable to companies reporting under those standards.

The Company applies accounting policies consistent with those applied by the Group. To the extent that an accounting policy is relevant

to both Group and Company Financial Statements, refer to the Group Financial Statements for disclosure of the accounting policy.

Material policies that apply to the Company only are included as appropriate.

Capricorn has used the exemption granted under S408 of the Companies Act 2006 that allows for the non-disclosure of the Income

Statement of the Parent company.

Restatement of comparatives

Prior year comparative information in the Company Balance Sheet and Cash Flow Statement has been restated to separately disclose

amounts receivable and payable to subsidiary undertakings. In the Balance Sheet, a net $29.8m receivable was previously disclosed

within trade and other receivables (note 8.5) which is now presented as a current receivable of $77.8m and a current payable of $48.0m

within trade and other receivables (note 8.5) and trade and other payables (note 8.6) respectively. Movements in the 2023 cash flow

statement have also been updated to reflect inflows and outflows relating to intercompany loans and these have been reclassified

from investing to financing activities where appropriate. The volume of cash moved between Capricorn Energy PLC and its subsidiary

Capricorn Oil Limited reflects the loaning of funds from the Company to its subsidiary to be placed on deposit before returning to the

parent prior to the return of cash to shareholders. The net amounts previously disclosed within investing cash inflows of $7.6m is now

presented as $617.5m cash outflows and $577.1m cash inflows in investing activities and $48.0m cash inflows within financing activities.

8.2 Investments in subsidiaries

Accounting policy

The Company’s investments in subsidiaries are carried at cost less provisions resulting from impairment. In testing for impairment

the carrying value of the investment is compared to its recoverable amount, being its fair value less costs of disposal. The fair value

includes the discounted future net cash flows of oil and gas assets held by the subsidiary, using estimated cash flow projections

over the licence period.

Discounted future net cash flows are calculated using an estimated short-term oil price based on the forward curve and long-term

oil price of $65/bbl escalated at 2% per annum (2023: $60/bbl unescalated), escalation for costs of 4.0% (2023: 3.0%) and a discount

rate of 15% (2023: 15%). Full details on the assumptions used for valuing oil and gas assets can be found in section 2.

119

Capricorn Energy PLC

Annual Report and Accounts 2024

Strategic Report Corporate Governance Financial Statements Additional Information

SECTION 8 – NOTES TO THE COMPANY FINANCIAL STATEMENTS CONTINUED

8.2 Investments in subsidiaries continued

Subsidiary

undertakings

Total

Cost

At 1 January 2023 3,718.6 3,718.6

Additions 4.6 4.6

At 31 December 2023 3,723.2 3,723.2

Additions 1.2 1.2

At 31 December 2024 3,724.4 3,724.4

Impairment

At 1 January 2023 3,120.8 3,120.8

Impairment charge 268.3 268.3

At 31 December 2023 3,389.1 3,389.1

Reversal of impairment (47.5) (47.5)

At 31 December 2024 3,341.6 3,341.6

Net book value

At 31 December 2022 597. 8 597. 8

At 31 December 2023 334.1 334.1

At 31 December 2024 382.8 382.8

Additions during the year of $1.2m (2023: $4.6m) relate to the Company’s investment in Capricorn Oil Limited. These represent share

awards made by the Company to the employees of Capricorn Energy Holdings Limited (a principal subsidiary of Capricorn Oil Limited).

The carrying value of investments in subsidiaries at 31 December 2024 and 2023 represents the Company’s investment in Capricorn Oil

Limited. Investments in Capricorn Senegal (Holding) Limited and Capricorn Energy Investments Limited are carried at nominal values.

The investment in Cairn UK Holdings Limited was fully impaired in earlier years.

At the year end, investments in subsidiaries were reviewed for indicators of impairment and impairment reversal and impairment tests

conducted where an indicator of impairment reversal was identified. The recoverable value of the assets of Capricorn Oil Limited used

in the impairment test is based on the fair value of the producing assets adjusted by the deferred consideration payment and trade

payables and receivables, other long-term receivables, market value of tangible assets held by its subsidiaries, cash and cash equivalents

held and inter-company receivables and payables.

At 31 December 2024, previous impairments of the Company’s investment in Capricorn Oil Limited were reversed reflecting the

increased value of Egypt assets under the proposed revised concession terms that management expect a market participant would

consider in determining fair value. A total impairment reversal of $47.5m was recorded.

At 31 December 2023, the Company’s investment in Capricorn Oil Limited was impaired to reflect the fair value or value in use of the

underlying assets of the Capricorn Oil Group. In 2023, a charge of $268.3m was made to the Company’s Income Statement.

120

Capricorn Energy PLC

Annual Report and Accounts 2024

SECTION 8 – NOTES TO THE COMPANY FINANCIAL STATEMENTS CONTINUED

8.2 Investments in subsidiaries continued

The Company’s subsidiaries as at the balance sheet date are set out below. The Company holds 100% of the voting rights and beneficial

interests in the ordinary shares of the following companies:

Direct holdings

Business

Country of

incorporation

Country of

operation Registered office address

Cairn UK Holdings Limited Holding company Scotland Scotland 50 Lothian Road, Edinburgh, EH3 9BY

Capricorn Energy

Investments Limited

Investment Scotland Scotland 50 Lothian Road, Edinburgh, EH3 9BY

Capricorn Energy DMCC Management

company

United Arab

Emirates

United Arab

Emirates

One JLT building, One Business Centre

Level 5, Office 5

Capricorn Oil Limited Holding company Scotland Scotland 50 Lothian Road, Edinburgh, EH3 9BY

Capricorn Senegal (Holding) Limited Holding company England Scotland Connect House 133-137 Alexandra Road,

Wimbledon, London, SW19 7JY

Indirect holdings

Business

Country of

incorporation

Country of

operation Registered office address

Agora Oil and Gas (UK) Limited Exploration Scotland UK 50 Lothian Road, Edinburgh, EH3 9BY

Capricorn Americas Limited

Holding company Scotland Scotland 50 Lothian Road, Edinburgh, EH3 9BY

Capricorn Côte d’Ivoire Limited

Exploration Scotland Côte d’Ivoire 50 Lothian Road, Edinburgh, EH3 9BY

Capricorn Egypt (Holding) Limited Holding company England UK Connect House 133-137 Alexandra Road,

Wimbledon, London, SW19 7JY

Capricorn Egypt Limited Exploration England Egypt Connect House 133-137 Alexandra Road,

Wimbledon, London, SW19 7JY

Capricorn Energy Holdings Limited Holding company Scotland Scotland 50 Lothian Road, Edinburgh, EH3 9BY

Capricorn Energy Mexico

S. de R.L. de C.V.

Exploration Mexico Mexico Avenida Paseo de la Reforma 295, Piso 10,

Oficina 1903, Colonia Cuauhtémoc, Mexico

Capricorn Energy UK Limited Exploration England UK Connect House 133-137 Alexandra Road,

Wimbledon, London, SW19 7JY

Capricorn Exploration and

Development Company Limited

Exploration Scotland Morocco 50 Lothian Road, Edinburgh, EH3 9BY

Capricorn Low Carbon

Solutions Limited

Carbon trading England UK Connect House 133-137 Alexandra Road,

Wimbledon, London, SW19 7JY

Capricorn Mauritania Limited Exploration Scotland Mauritania 50 Lothian Road, Edinburgh, EH3 9BY

Capricorn Nicaragua BV Exploration The Netherlands Non-trading 50 Lothian Road, Edinburgh, EH3 9BY

Capricorn Offshore Exploration

Limited

Exploration Scotland Israel 50 Lothian Road, Edinburgh, EH3 9BY

Capricorn Petroleum Limited

Holding company Scotland Scotland 50 Lothian Road, Edinburgh, EH3 9BY

Capricorn Resources

Management Limited

Royalty interest Scotland Mongolia 50 Lothian Road, Edinburgh, EH3 9BY

Capricorn Senegal Limited Exploration Scotland Senegal 50 Lothian Road, Edinburgh, EH3 9BY

Capricorn Suriname BV Exploration The Netherlands Suriname 50 Lothian Road, Edinburgh, EH3 9BY

(1) Exempt from audit under Section 479a of the Companies Act.

(2) Exempt from audit under Section 480 of the Companies Act.

(3) Dissolved in 2025.

121

Capricorn Energy PLC

Annual Report and Accounts 2024

Strategic Report Corporate Governance Financial Statements Additional Information

SECTION 8 – NOTES TO THE COMPANY FINANCIAL STATEMENTS CONTINUED

8.3 Long-term intercompany receivables

31 December

2024

31 December

2023

Long-term intercompany receivables 5.1 5.7

5.1 5.7

Long-term intercompany receivables include amounts due from Capricorn Energy Holdings Limited of $5.1m (2023: $5.7m).

8.4 Cash and cash equivalents

31 December

2024

31 December

2023

Cash at bank 3.3 –

Money market funds 72.7 48.0

Cash and cash equivalent 76.0 48.0

Bank overdraft (0.7) (0.2)

Net cash balance for cash flow purposes 75.3 47.8

At 31 December 2024, $3.2m (2023: $5.0m) of cash and cash equivalents are restricted and not available for immediate ordinary

business use. See note 3.1 for details on the placing of surplus funds on deposit and money market funds.

8.5 Other receivables

31 December

2024

31 December

2023

(restated)

Other receivables 0.3 1.1

Amounts receivable from subsidiary undertakings 7.1 76.9

7.4 78.0

8.6 Trade and other payables

31 December

2024

31 December

2023

(restated)

Trade and other payables 0.1 0.1

Amounts payable to subsidiary undertakings 75.4 48.0

Accruals 1.0 0.9

76.5 49.0

The amounts payable to subsidiary undertakings are unsecured and repayable on demand and will be settled in cash. No guarantees

have been given.

8.7 Financial instruments

Set out below is the comparison by category of carrying amounts and fair values of all the Company’s financial instruments that are

carried in the financial statements. The fair value of financial assets and liabilities has been calculated by discounting the expected future

cash flows at prevailing interest rates.

Financial assets

Carrying amount and fair value

31 December

2024

31 December

2023

(restated)

Financial assets at amortised cost

Cash and cash equivalents 76.0 48.0

Other receivables – amounts receivable from subsidiary undertakings 7.1 76.9

Other receivables 0.3 1.1

Long-term intercompany receivables 5.1 5.7

88.5 131.7

For all financial assets held at amortised cost, their carrying amount is considered to be the same as their fair value.

122

Capricorn Energy PLC

Annual Report and Accounts 2024

SECTION 8 – NOTES TO THE COMPANY FINANCIAL STATEMENTS CONTINUED

8.7 Financial instruments continued

Maturity analysis of financial assets

The expected financial maturity of the Company’s financial assets at 31 December 2024 is as follows:

<1 year

1–2 years

2–5 years

>5 years

Financial assets at amortised cost

Cash and cash equivalents 76.0 – – –

Other receivables – amounts receivable from subsidiary undertakings 7.1 – – –

Other receivables – other 0.3 – – –

Long-term intercompany receivables – 1.0 2.7 1.4

83.4 1.0 2.7 1.4

The expected financial maturity of the Company’s financial assets at 31 December 2023 was as follows:

<1 year

(restated)

1–2 years

2–5 years

>5 years

Financial assets at amortised cost

Cash and cash equivalents 48.0 – – –

Other receivables – amounts receivable from subsidiary undertakings 76.9 – – –

Other receivables – other 1.1 – – –

Long-term intercompany receivables – 1.0 2.9 1.8

126.0 1.0 2.9 1.8

Financial liabilities

Carrying amount and fair value

31 December

2024

31 December

2023

(restated)

Financial liabilities at amortised cost

Trade and other payables 0.1 0.1

Bank overdraft 0.7 0.2

Amounts payables to subsidiary undertakings 75.4 48.0

Accruals 0.9 0.7

Lease liability 6.1 6.3

83.2 55.5

Maturity analysis of financial liabilities

The expected financial maturity of the Company’s financial liabilities at 31 December 2024 is as follows:

<1 year

1–2 years

2–5 years

>5 years

Financial liabilities at amortised cost

Trade and other payables 0.1 – – –

Bank overdraft 0.7 – – –

Amounts payable to subsidiary undertakings 75.4 – – –

Accruals 0.9 – – –

Lease liability 1.0 1.0 2.7 1.4

78.1 1.0 2.7 1.4

The expected financial maturity of the Company’s financial liabilities at 31 December 2023 was as follows:

<1 year

(restated)

1–2 years

2–5 years

>5 years

Financial liabilities at amortised cost

Trade and other payables 0.1 – – –

Bank overdraft 0.2 – – –

Amounts payable to subsidiary undertakings 48.0 – – –

Accruals 0.7 – – –

Lease liability 0.6 1.0 3.0 1.7

49.6 1.0 3.0 1.7

Financial risk management: risk and objectives

The Company’s financial risk management policies and objectives are consistent with those of the Group detailed in note 3.9.

The Company is not exposed to material foreign currency exchange rate risk.

123

Capricorn Energy PLC

Annual Report and Accounts 2024

Strategic Report Corporate Governance Financial Statements Additional Information

SECTION 8 – NOTES TO THE COMPANY FINANCIAL STATEMENTS CONTINUED

8.8 Capital management

Capital and net debt/(funds) were made up as follows:

31 December

2024

31 December

2023

(restated)

Continuing operations

Amounts payable to subsidiary undertakings 75.4 48.0

Lease liability 6.1 6.3

Less cash and cash equivalents (75.3) (47.8)

Net debt 6.2 6.5

Equity 388.0 410.3

Capital and net funds 394.2 416.8

Gearing ratio 1.6% 1.6%

8.9 Related party transactions

The Company’s subsidiaries are listed in note 8.2. The following table provides the Company’s balances, which are outstanding with

subsidiary undertakings at the balance sheet date:

31 December

2024

31 December

2023

(restated)

Amounts payable to subsidiary undertakings (75.4) (48.0)

Amounts receivable from subsidiary undertakings 12.2 82.6

(63.2) 34.6

The amounts outstanding are unsecured, repayable on demand and will be settled in cash.

The following table provides the Company’s transactions with subsidiary undertakings recorded in the loss for the year:

Year ended

31 December

2024

Year ended

31 December

2023

Amounts invoiced to subsidiaries 2.6 1.1

Amounts invoiced by subsidiaries 0.2 4.1

Directors’ remuneration

The remuneration of the Directors of the Company is set out below. Further information about individual Directors’ remuneration is

provided in the audited section of the Directors’ remuneration report on pages 53 to 66.

Year ended

31 December

2024

Year ended

31 December

2023

Emoluments 1.9 2.1

Share-based payments – 0.1

1.9 2.2

Pension contributions of $0.1m (2023: $0.1m) were made on behalf of Directors in 2024.

No LTIP share awards to Directors vested during 2024 or 2023. Share-based payments disclosed above represent the market value

at the vesting date of these awards in that year.

A stand-alone agreement and 228,175 shares were awarded to a Director in February 2023; 153,159 shares lapsed in July 2023, the

remaining of 75,016 shares were exercised at £1.87 in July 2023.

Other transactions

During the year, the Company did not make any purchases in the ordinary course of business from an entity under common control

(2023: $nil).

124

Capricorn Energy PLC

Annual Report and Accounts 2024

LICENCE LIST

AS AT 31 DECEMBER 2024

Country Asset name Licence/Concession Block(s) Operator % CE interest

Egypt ALAM EL SHAWISH WEST ALAM EL SHAWISH AL ASSIL, AL BARQ, AL KARAM,

AL MAGD, BAHGA

CHEIRON (20%) 20

Egypt BADR EL DIN BADR EL DIN BED-19, BED-20 CHEIRON (50%) 50

Egypt BED 2-17 BED 2-17 BED-2, BED-17 CHEIRON (50%) 50

Egypt BED-3 BED-3 BED-3 CHEIRON (50%) 50

Egypt NORTH ALAM EL SHAWISH NORTH ALAM EL SHAWISH NAES-1 CHEIRON (50%) 50

Egypt NORTH EAST ABU GHARADIG NEAG EXTENSION NEAG-1, NEAG-2, NEAG-3, NEAG-5 CHEIRON (26%) 26

Egypt NORTH EAST ABU GHARADIG NEAG TIBA JG, JD, SHEIBA CHEIRON (26%) 26

Egypt NORTH MATRUH NORTH MATRUH NORTH MATRUH-1 TEEN CHEIRON (50%) 50

Egypt NORTH UM BARAKA NORTH UM BARAKA NORTH UM BARAKA, NUMB-1 CHEIRON (50%) 50

Egypt OBAIYED OBAIYED OBAIYED CHEIRON (50%) 50

Egypt SITRA SITRA SITRA CHEIRON (50%) 50

Egypt SOUTH EAST HORUS SOUTH EAST HORUS SOUTH EAST HORUS CHEIRON (50%) 50

Egypt WEST EL FAYIUM WEST EL FAYIUM WEST EL FAYIUM CHEIRON (50%) 50

125

Capricorn Energy PLC

Annual Report and Accounts 2024

Strategic Report Corporate Governance Financial Statements Additional Information

GROUP RESERVES AND RESOURCES

AS AT 31 DECEMBER 2024

Reserves

The Group 2P reserves decreased by 5.2 mmboe during the year from 20.8 mmboe at year end 2023 to 15.6 mmboe at year end 2024

on an entitlement interest basis. This was principally due to Egyptian production of 3.6 mmboe and downward revisions in undeveloped

reserves due to lower drilling activity in expiring licences. EGPC pays income taxes on our behalf and the 2P reserves at year end 2024 is

17.9 mmboe on a before tax net entitlement basis.

Group proven plus probable oil and gas reserves (2P)

Working Interest (WI) Entitlement Interest (EI)

Oil

mmbbls

Gas

bcf

boe

mmboe

Oil

mmbbls

Gas

bcf

boe

mmboe

At 1 January 2024 20.1 166.3 49.8 8.4 69.3 20.8

Technical revisions 1.6 (13.2) (0.8) – (8.9) (1.6)

Production (3.8) (27. 2) (8.7) (1.4) (12.1) (3.6)

At 31 December 2024 17.8 125.9 40.3 7.0 48.3 15.6

Year end 2024 reserves are based on the Competent Person’s Report compiled for Capricorn by GLJ Ltd and prepared in accordance with

the latest Society of Petroleum Engineers Petroleum Resources Management System (SPE PRMS) approved definitions of reserves and

resources. GLJ based their evaluation on information and data provided by Capricorn.

All 2P reserves are located within the Western Desert assets in Egypt.

Sensitivity analysis with different hydrocarbon and carbon emission prices

Total Group 2P Reserves

mmboe

IEA’s World Energy Outlook 2024 Stated Policies Scenario (STEPS) 40.2 15.3

IEA’s World Energy Outlook 2024 Announced Pledges Scenario (APS) 40.0 15.4

IEA’s World Energy Outlook 2024 Net Zero Emissions by 2050 Scenario (NZE) 38.2 15.4

Subdivision of 2P reserves

By country

Egypt 100

Within 20 lowest ranking countries from Transparency International’s Corruption Perception Index –

Group contingent oil and gas resources (2C development unclarified)

mmboe

At 1 January 2024 9.8

Revisions 11.6

31 December 2024 21.4

Contingent resources are based on the Competent Person’s Report compiled for Capricorn by GLJ Ltd and prepared in accordance with

the latest SPE PRMS definitions. The year end 2024 contingent resources include the extension of all concessions through to the end of

2040 by 15 years. All contingent resources are located within the Western Desert assets in Egypt.

126

Capricorn Energy PLC

Annual Report and Accounts 2024

GLOSSARY

The following are the main terms and abbreviations used in this report:

2C Denotes best estimate scenario of contingent resources

2P Proved plus probable reserves, denotes best estimate

scenario

AESW Alam El Shawish West

AGM Annual General Meeting

AQI Audit Quality Inspection

ASA Administrative Services Agreement

Bapetco Badr Petroleum Company

bbl Barrel

BCF Billion cubic feet

BED Badr El Din

boe Barrels of oil equivalent

boepd Barrels of oil equivalent per day

bopd Barrels of oil per day

bps Basis point

CCUS Carbon capture, utilisation and storage

CEO Chief Executive Officer

CFO Chief Financial Officer

Carbon dioxide

COO Chief Operating Officer

EGP Egyptian pound

EGPC Egyptian General Petroleum Corporation

EVP Executive Vice President

FTSE The Financial Times Stock Exchange

GBP British pound sterling

HSSE Health, safety, security and environment

IAS International Accounting Standards

IEA International Energy Agency

IEA APS International Energy Agency’s Announced Pledges Scenario

IEA STEPS International Energy Agency’s Stated Policies Scenario

IEA NZE International Energy Agency’s Net Zero Emissions Scenario

ISAs International Standards on Auditing

ISO International Organization for Standardization

IT Information Technology

LLP Limited liability partnerships

LTIF Lost time injury frequency

LTIP Long-term incentive plan

m Million

mscf Thousand standard cubic feet

mmscf/d Million standard cubic feet per day

N/A Not applicable

NEAG North East Abu Gharadig

NUMB North Um Baraka

PLC Public limited company

RCR Reserves conversion ratio

SECR Streamlined Energy and Carbon Reporting

SEH South East Horus

SIP Share incentive plan

SPE PRMS Society of Petroleum Engineers Petroleum Resource

Management System

tCO

e Tonnes of carbon dioxide equivalent

TRIR Total recordable injury rate

WAEP Weighted average exercise price

WAGP Weighted average grant price

WEF West El Fayium

127

Capricorn Energy PLC

Annual Report and Accounts 2024

Strategic Report Corporate Governance Financial Statements Additional Information

COMPANY INFORMATION

Financial Adviser and Corporate Broker

Merrill Lynch International

(BofA Securities)

2 King Edward Street

London

EC1A 1HQ

Corporate Broker

Canaccord Genuity Limited

88 Wood Street 10th Floor

London

EC2V 7QR

Secretary

Paul Ervine

Solicitors

Shepherd and Wedderburn LLP

1 Exchange Crescent

Conference Square

Edinburgh

EH3 8UL

Independent auditors

PricewaterhouseCoopers LLP

144 Morrison Street

Edinburgh

EH3 8EB

Registrars

Equiniti

Highdown House

Yeoman Way

Worthing

West Sussex

BN99 3HH

Shareholder helpline number

T: +44 (0)371 384 2660

Shareview dealing helpline number

T: +44 (0)345 603 7037

For deaf and speech impaired customers,

Equiniti welcome calls via Relay UK.

Please see www.relayuk.bt.com for more

information.

www.shareview.co.uk

128

Capricorn Energy PLC

Annual Report and Accounts 2024

NOTES

CBP030148

Printed by a Carbon Neutral Operation (certified:

CarbonQuota) under the PAS2060 standard.

Printed on material from well-managed, FSC

™

certified forests and other controlled sources. This

publication was printed by an FSC

™

certified printer

that holds an ISO 14001 certification.

100% of the inks used are HP Indigo ElectroInk

which complies with RoHS legislation and meets

the chemical requirements of the Nordic Ecolabel

(Nordic Swan) for printing companies, 95% of

press chemicals are recycled for further use and,

on average 99% of any waste associated with this

production will be recycled and the remaining 1%

used to generate energy.

The paper is Carbon Balanced with World Land

Trust, an international conservation charity, who

offset carbon emissions through the purchase

and preservation of high conservation value land.

Through protecting standing forests, under threat of

clearance, carbon is locked-in, that would otherwise

be released.

Head office

50 Lothian Road

Edinburgh

EH3 9BY

T: +44 131 475 3000

E: pr@capricornenergy.com

www.capricornenergy.com

www.capricornenergy.com/investors/annual-report-2024/

Capricorn Energy PLC Annual Report and Accounts 2024