DNO has reached an agreement to acquire Capricorn Energy in a recommended all-cash transaction valuing the London-listed energy company at approximately $396 million on a fully diluted basis, giving DNO a major entry into Egypt and topping the competing offer from Genel Energy.
Under the proposed transaction, Capricorn shareholders would receive total value of $5.214 per share.
That consists of $4.224 per share in cash from DNO and a planned special dividend of $0.99 per share to be declared by Capricorn before the transaction becomes effective.
Based on the exchange rate used in the announcement, the total consideration is equivalent to approximately 384 pence per Capricorn share.
That represents a premium of about 45% to Capricorn’s March 10 closing price of 266 pence, immediately before the start of its offer period, and about 60% to the company’s three-month volume-weighted average price through that date.
The DNO proposal also exceeds the previously agreed acquisition by Genel Energy.
DNO’s offer is $0.474 per share higher and represents an approximately 10% premium to the acquisition value Genel offered. On a constant-currency basis, DNO’s proposal increases Capricorn’s implied value by approximately $36 million.
Capricorn’s board now intends to unanimously recommend the DNO transaction after receiving advice from Canaccord Genuity that the financial terms are fair and reasonable.
The development creates an unusual situation because Capricorn shareholders had already approved the Genel transaction at meetings held on August 18.
However, although the Genel offer has not formally lapsed, Capricorn’s directors do not currently intend to ask the court to sanction that scheme or declare the associated special dividend while recommending DNO’s superior proposal.
DNO sees Capricorn primarily as a strategic entry into Egypt.
Capricorn’s core operations are in Egypt’s Western Desert, where it owns a portfolio of onshore development and production assets. DNO plans to establish Egypt as a third core operating region alongside the North Sea and the Kurdistan Region of Iraq.
The Norwegian energy company plans to expand the Egyptian business through investment in Capricorn’s existing portfolio, additional exploration and development activity, participation in future licensing rounds and further acquisitions.
Capricorn’s Egyptian assets are operated through Badr El Din Petroleum Company, a joint operating company owned by the Egyptian General Petroleum Corporation, Cheiron and Capricorn.
DNO believes the existing portfolio and in-country operating team provide a platform from which it can expand further across the Western Desert and potentially move into operated positions over time.
Capricorn produced approximately 20,024 barrels of oil equivalent per day in 2025, with about 40% of that production consisting of liquids.
The company generated $134 million of revenue during the year, with an average realized oil price of $68.40 per barrel and an average gas price of $3.10 per thousand cubic feet. Net cash generated from Egyptian oil and gas production reached $81 million.
The acquisition would meaningfully expand DNO’s production and reserve base.
DNO reported 390.1 million barrels of oil equivalent of 2P net reserves and 301.6 million barrels of 2C resources at the end of 2025.
On a pro forma basis following the Capricorn transaction, the enlarged company would have approximately 443.3 million barrels of 2P reserves, 383 million barrels of 2C resources and average net production of approximately 156,939 barrels of oil equivalent per day.
The deal would also diversify DNO geographically across three distinct producing regions with different geology, fiscal structures, partner arrangements and cash flow profiles, reducing the company’s dependence on any single operating area.
The planned $0.99-per-share special dividend represents an aggregate payment of approximately $75 million to Capricorn shareholders.
The dividend is expected to be declared before completion and paid only if the DNO transaction becomes effective.
The acquisition remains subject to Capricorn shareholder approval, court approval and other conditions, including Egyptian regulatory consent.
The companies expect the transaction to become effective during the fourth quarter of 2026 or first quarter of 2027.
KEY QUOTES:
“We are pleased to recommend this higher all cash offer from DNO. It maximises the value created by the Capricorn team and importantly increases the return for shareholders.”
Randy Neely, Chief Executive Officer Of Capricorn Energy
“Capricorn will add another business with scale, cashflow and growability to our existing operations in Kurdistan and the North Sea. With three core areas, each with its own geology, geography and geopolitics, DNO will be a more diversified and stronger company.”
Bijan Mossavar-Rahmani, Executive Chairman Of DNO
