DJ Genel Energy PLC: RECOMMENDED CASH ACQUISITION of Capricorn Energy plc by Genel Energy No.9 Limited
Genel Energy PLC (GENL)
Genel Energy PLC: RECOMMENDED CASH ACQUISITION of Capricorn Energy plc by Genel Energy No.9 Limited
02-Jul-2026 / 07:00 GMT/BST
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NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, IN, INTO OR FROM CANADA, AUSTRALIA, JAPAN OR ANY
OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
FOR IMMEDIATE RELEASE
2 July 2026
RECOMMENDED CASH ACQUISITION
of
Capricorn Energy plc ("Capricorn")
by
Genel Energy No.9 Limited ("Bidco")
(a company indirectly owned by Genel Energy plc ("Genel"))
to be effected by means of a scheme of arrangement
under Part 26 of the Companies Act 2006
Summary
-- The boards of Genel, Bidco and Capricorn are pleased to announce that they have reached agreement on the
terms of a recommended cash acquisition of the entire issued and to be issued ordinary share capital of Capricorn
by Bidco (the "Acquisition"). The Acquisition is to be effected by means of a Scottish scheme of arrangement under
Part 26 of the Companies Act (the "Scheme").
-- Under the terms of the Acquisition, each Capricorn Shareholder shall be entitled to receive, in
aggregate:
USUSD4.74 in cash for each Capricorn Share held (the "Acquisition Value").
-- The Acquisition Value comprises, for each Capricorn Share:
-- USUSD3.75 in cash (the "Acquisition Price"); and
-- a special dividend of USUSD0.99, which is intended and expected to be declared prior to the Effective Date
(the "Permitted Dividend").
-- The Sterling equivalent value of the Acquisition Value, being 357 pence per Capricorn Share based on the
Announcement Exchange Rate, represents a premium of approximately:
-- 34 per cent. to the closing price per Capricorn Share of 266 pence on 10 March 2026 (being the day prior
to the start of the Offer Period (the "Undisturbed Date")); and
-- 48 per cent. to the volume weighted average price per Capricorn Share of 241 pence during the three-month
period ended on the Undisturbed Date.
-- The Acquisition Value (assuming the Permitted Dividend is declared and paid in full) implies a value for
the entire issued and to be issued ordinary share capital of Capricorn of approximately USUSD360 million on a fully
diluted basis, which is equivalent to GBP271 million based on the Announcement Exchange Rate.
-- The Acquisition Price payable under the Acquisition is expressed in USUSD. The USUSD denominated Acquisition
Price reflects the underlying characteristics of Capricorn's business activities, which are largely denominated in
USUSD.
-- A facility will be made available under which Capricorn Shareholders will be able to elect (subject to
the terms and conditions of such facility) to receive the cash consideration payable in connection with the
Acquisition Price in Sterling (after, if applicable, deduction of any transaction or dealing costs (including any
taxes) associated with the currency conversion) at the applicable market exchange rate at which the conversion
takes place (the "Foreign Exchange Facility"). The applicable market exchange rate will be fixed on the latest
practicable date prior to the relevant payment date. The amount received by any Capricorn Shareholder validly
electing to be paid their cash consideration payable in connection with the Acquisition Price in Sterling may
therefore be below or above 282 pence per Capricorn Share depending on the applicable market exchange rate that is
applied and the deduction of any transaction or dealing costs (including any taxes) associated with the currency
conversion. Further details of the Foreign Exchange Facility and the election to be made by Capricorn Shareholders
who wish to receive their cash consideration payable in connection with the Acquisition Price in Sterling using the
Foreign Exchange Facility will be set out in the Scheme Document and the applicable Form(s) of Election.
Permitted Dividend
-- As part of the Acquisition, the boards of Genel, Bidco and Capricorn have agreed to the declaration and
payment of the Permitted Dividend. The Permitted Dividend is intended and expected to be declared by the Capricorn
Board prior to the Effective Date, and will only be payable if the Scheme becomes Effective (or, if the Acquisition
is implemented by way of a Takeover Offer and continues to be recommended by the Capricorn Board, the Takeover
Offer becomes or is declared unconditional) to Capricorn Shareholders on the register of members at the Scheme
Record Time (or, if the Acquisition is implemented by way of a Takeover Offer and continues to be recommended by
the Capricorn Board, on the register of members on the date on which the Takeover Offer becomes or is declared
unconditional).
-- Capricorn Shareholders will note that the quantum of the Permitted Dividend represents an aggregate
payment to shareholders of approximately USD75 million. Although subject at the relevant time to compliance with
applicable statutory requirements, the Capricorn Board has concluded, based on analysis carried out prior to the
date of this announcement, that in all reasonable circumstances Capricorn will have available to it sufficient cash
resources to pay the Permitted Dividend in full.
-- However, Capricorn Shareholders should note that the ability of the Capricorn Board lawfully to declare
and pay the Permitted Dividend is subject to various factors outside their control and events may occur that result
in the Capricorn Board concluding that it is no longer able to declare and pay the Permitted Dividend in full. If
certain circumstances as set out in further detail in paragraph 13 of this announcement were to occur, the
Capricorn Directors would consider all options available to them, including whether it is in the best interests of
Capricorn Shareholders to continue to implement the Scheme, which may result in the Scheme not becoming Effective.
If, whether as a result of the Permitted Dividend not being paid in full or otherwise, the Acquisition does not
become Effective, the Permitted Dividend will not be paid.
-- Genel, Bidco and Capricorn have agreed that the Capricorn Board may declare and pay the Permitted
Dividend without any reduction to the Acquisition Price. If, on or after the date of this announcement and prior to
the Effective Date, any dividend, distribution, or other return of value or excess is declared, made, or paid or
becomes payable by Capricorn (other than, or in excess of the amount of, the Permitted Dividend), Bidco reserves
the right to reduce the Acquisition Price payable under the terms of the Acquisition for the Capricorn Shares by an
amount equal to the amount of any such dividend, distribution or other return of value or excess. In such
circumstances, the Capricorn Shareholders shall be entitled to retain any such dividend, distribution, or other
return of value declared, made, or paid.
-- If declared, the Permitted Dividend will be paid to Capricorn Shareholders in Sterling, with the amount
paid to Capricorn Shareholders being the Sterling equivalent of USUSD0.99 per Capricorn Share based on the prevailing
exchange rate on the latest practicable date for fixing such rate prior to the relevant payment date.
-- If declared, the Permitted Dividend will be paid not more than 14 days after the Effective Date and in
the manner to be specified in the Scheme Document. Further details are set out in paragraph 13 of this
announcement.
Timetable and conditions
-- It is intended that the Acquisition shall be effected by means of a Scottish Court-approved scheme of
arrangement between Capricorn and Capricorn Shareholders under Part 26 of the Companies Act although Bidco reserves
the right to implement the Acquisition by means of a Takeover Offer (subject to Panel consent and the terms of the
Co-operation Agreement).
-- The Acquisition is conditional on the approval of Capricorn Shareholders and subject to the further
Conditions and terms set out in Appendix I to this announcement (which shall be set out in full in the Scheme
Document).
-- The Acquisition shall be put to Capricorn Shareholders at the Court Meeting and at the General Meeting.
In order to become Effective, the Scheme must be approved by a majority in number of the Capricorn Shareholders
voting at the Court Meeting, either in person or by proxy, representing at least 75 per cent. in value of the
Capricorn Shares voted. In addition, a special resolution implementing the Scheme must be passed by Capricorn
Shareholders representing at least 75 per cent. of votes cast at the General Meeting.
-- The Scheme Document, containing further information about the Acquisition and notices of the Court
Meeting and the General Meeting, shall be published within 28 days of the date of this announcement.
-- Consistent with Genel's approach to constructive, collaborative and respectful stakeholder relationships,
Bidco and Genel (in co-operation with Capricorn) have already initiated discussions with the Egyptian Government to
emphasise Bidco and Genel's commitment to Egypt and to developing a good working relationship with the Egyptian
Government. In the context of the importance of developing a good working relationship with the Egyptian
Government, Genel and Bidco will be seeking the consent of EGPC to the Acquisition. Notwithstanding the positive
engagement with the Egyptian Government to date, Capricorn Shareholders' attention is specifically drawn to the
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DJ Genel Energy PLC: RECOMMENDED CASH ACQUISITION of Capricorn Energy plc by Genel Energy No.9 Limited -2-
Egyptian Condition, its importance to Bidco and Genel and the rationale for its inclusion (as set out in more
detail in paragraph 15 below).
-- The Egyptian Condition has been included at Genel's request, for the reasons stated above and to take
account of the particular circumstances of the Acquisition following negotiation between Genel and Capricorn.
-- Capricorn Shareholders and Genel Shareholders should note that Genel intends to seek the Panel's consent
to invoke the Egyptian Condition in accordance with Rule 13.5(a) of the Takeover Code if the Egyptian Condition is
not satisfied or capable of being satisfied by the Long-stop Date. A decision by the Panel whether to permit Genel
to invoke a Condition would be judged by the Panel by reference to the facts at the time that the relevant
circumstances arise, including the views of the Capricorn Directors at the time.
-- It is expected that the Scheme will become Effective (subject to the satisfaction of the Conditions)
during the second half of 2026.
Capricorn recommendation
-- The Capricorn Directors, who have been so advised by Canaccord Genuity as to the financial terms of the
Acquisition, consider the terms of the Acquisition to be fair and reasonable. In providing its advice to the
Capricorn Directors, Canaccord Genuity has taken into account the commercial assessments of the Capricorn
Directors. Canaccord Genuity is providing independent financial advice to the Capricorn Directors for the purposes
of Rule 3 of the Code.
-- Accordingly, the Capricorn Directors intend to recommend unanimously that Capricorn Shareholders vote in
favour of the Scheme at the Court Meeting and the resolutions to be proposed at the General Meeting, as the
Capricorn Director who holds Capricorn Shares has irrevocably undertaken to do in respect of his own beneficial
holdings of 4,395 Capricorn Shares representing, in aggregate, approximately 0.006 per cent. of the share capital
of Capricorn in issue on 1 July 2026 (being the latest practicable date prior to this announcement).
-- Bidco has also received irrevocable undertakings to vote in favour of the Scheme at the Court Meeting and
the resolutions to be proposed at the General Meeting from Palliser Capital (UK) Ltd, Newtyn Management, LLC, Kite
Lake Capital Management (UK) LLP, and Madison Avenue Partners, LP in respect of a total of 27,749,043 Capricorn
Shares representing, in aggregate, approximately 39.3% of Capricorn's issued share capital.
-- Bidco has therefore received irrevocable undertakings in respect of a total of 27,753,438 Capricorn
Shares representing, in aggregate, approximately 39.3% of Capricorn's share capital in issue on 1 July 2026 (being
the latest practicable date prior to this announcement).
Further details of these irrevocable undertakings, including the circumstances in which they cease to be binding, are
set out in Appendix III to this announcement.
Background to and reasons for the Acquisition
-- Genel's strategy is to build a business with resilient diversified cash flows that deliver sustainable
value to shareholders. The Genel Board and Genel management are resolute in their belief that this can best be
achieved through strategic acquisitions which add substantial high-quality producing assets to its existing
portfolio.
-- Genel's existing production base consists of its 25% non-operated working interest in the Tawke PSC,
located in the Kurdistan Region of Iraq, which generates significant free cash flow from production averaging
17,520 bopd for the full year of 2025 (20,000 bopd exit rate in December 2025) and industry leading operating costs
of around USD4/bbl. It is comprised of two very high-quality fields, Tawke and Peshkabir, which in combination
represent a world class licence.
-- Genel has been seeking to acquire new production assets in preferred geographies that it has identified
to build-out a significant and diverse strategic footprint.
-- Egypt was identified as one of Genel's focus countries to expand its footprint and Genel has tracked and
evaluated numerous opportunities in the country.
-- After conducting a detailed review of Capricorn's assets and operations, the Genel Board and Genel
management have determined that an acquisition of the Egyptian Western Desert portfolio represents an attractive
strategic pillar to its business. The combined business is a larger, more diversified MENA-focused exploration &
production company with a strong, resilient production base from a number of significant oil and gas fields. The
cash generation from the baseline production business is significant, with an expectation that 2P reserves will be
replaced and increased from the extensive portfolio of further resource opportunities.
-- More specifically, key benefits include:
- Scale and diversification:
- The Acquisition will create an independent energy company of scale in the MENA region with a
strong, low leverage balance sheet, significant production, reserves and resource upside.
- The Enlarged Group will hold a geographically diversified production base, with pro-forma 2P
reserves of 117 mmboe and production of 41,003 bopd (combined December 2025 exit rate) (split evenly
between Kurdistan and Egypt).
- The addition of the Egyptian portfolio to Genel's existing Kurdistan production adds material
production of both oil and gas in a new country, with a well-established regulatory regime, stable
contracts and attractive fiscal terms. This represents a significant step towards its targeted
diversification of resilient, sustainable cash generation.
- Reserves and Resources growth:
- The resources and potential resources of the Enlarged Group offers significant opportunity for
reserves replacement and growth in Egypt and Kurdistan, as well as the build-out of a further production
hub in Oman and/or Somaliland.
- The Enlarged Group will have the financial capability and appetite to allocate capital to
derisking the potential asset base in an efficient and timely manner in order to maximise value delivery to
its shareholders.
- The Enlarged Group is well positioned to pursue further value-accretive M&A within Egypt and the
MENA region more generally.
- Complementary technical capabilities:
- Genel has extensive experience across its operated and non-operated assets in MENA and Africa
throughout its 20+ year history in the region, as well as experience from senior staff in other
jurisdictions. Its team has experience in delivering complex projects on time and on budget, with key
features being pace of development and maximisation of capital efficiency.
- It has developed a deep understanding of the technical, commercial and stakeholder dynamics that
characterise operating in government-partnered upstream environments. Genel's experienced technical and
operational teams are well placed to work constructively with Capricorn's partner Cheiron, and with EGPC
and BAPETCo, to support the continued development and optimisation of the Egyptian portfolio.
- The Enlarged Group will benefit from the skill sets of both management teams, with Genel's track
record of reservoir management, production optimisation and non-operated asset stewardship providing a
complementary platform to Capricorn's existing technical engagement with its Egyptian partners.
- Together, the Enlarged Group will be better positioned to accelerate development activity across
all Egyptian concessions, working with EGPC to develop the appropriate subsurface and operational activity
set to commercialise both the currently estimated remaining 2P reserves and the significant contingent
resource base that remains to be converted into 2P reserves.
Information on Genel and Bidco
Bidco
Bidco is a limited company registered in England and Wales and incorporated on 19 May 2026. Bidco is a wholly owned
indirect subsidiary of Genel. Bidco was formed for the purposes of the Acquisition and has not traded since its date of
incorporation, nor has it entered into any obligations other than in connection with the Acquisition. Further details
in relation to Bidco will be contained in the Scheme Document.
Genel
Genel is a socially responsible oil producer, with a portfolio of production and exploration assets, including
production assets in the Kurdistan Region of Iraq and exploration licences in Oman and Somaliland.
Genel's strategy comprises three objectives designed to build a business with resilient and diversified cash flows that
deliver sustainable value to shareholders, and with the aim of restarting the payment of a regular dividend: (i) a
strong balance sheet, (ii) diversified and resilient cash generation, and (iii) investment in new cash flows.
The Genel business is a resilient, cash-generative platform with significant unvalued potential. For the financial year
ended 31 December 2025, Genel generated 17,520 bopd in working interest production, with an EBITDAX of USUSD43 million
(2024: USUSD1 million).
Genel Shares are listed on the Official List and admitted to trading on the Main Market of the London Stock Exchange.
Information on Capricorn
Capricorn, a Scottish public limited company, headquartered in Edinburgh, is an independent energy company which has
been listed on the Main Market of the London Stock Exchange for more than 30 years.
Currently, Capricorn's core operations are in Egypt's Western Desert, where it holds a portfolio of onshore development
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DJ Genel Energy PLC: RECOMMENDED CASH ACQUISITION of Capricorn Energy plc by Genel Energy No.9 Limited -3-
and production assets. In May 2025, Capricorn agreed with EGPC to consolidate eight of its 50:50 jointly owned
concessions into a single, integrated licence with enhanced commercial terms, providing a platform for future growth.
On 30 March 2026, Capricorn announced that it had received formal parliamentary ratification of this agreement.
In addition to maximising value from its assets in Egypt, from 2023 onwards Capricorn has been focused on streamlining
operations, reducing costs and has returned around USD600 million to shareholders.
Furthermore, Capricorn has a stated strategy to explore new value-accretive opportunities, in Egypt, the UK North Sea
and the broader MENA region.
Commenting on the Acquisition, Randy Neely, Chief Executive Officer of Capricorn, said:
"Since my appointment three years ago, the team has delivered strongly against our strategic priorities - returning
approximately USUSD600 million to shareholders, reducing costs, and maximising value from our Egyptian asset base through
the recently signed merged concession, establishing a sustainable long-term business. However, Capricorn requires
greater scale to materially improve trading liquidity. We believe the transaction with Genel crystallises the value
created by Capricorn while providing shareholders with a clear and efficient exit."
Commenting on the Acquisition, Paul Weir, Chief Executive Officer of Genel, said:
"Today we announce a landmark transaction to acquire a leading oil and gas portfolio in Egypt - a move that delivers
our strategic intent, reshapes our company's growth trajectory, diversifies our portfolio of oil and gas fields and
begins our role as a partner in Egypt's energy future. The acquisition of Capricorn Energy and its portfolio brings
high-quality assets, material reserves, and a talented local workforce that together create immediate scale and
opportunity for further onward investment and growth. By applying our technical and operational capabilities to these
assets, we will work with the operator to accelerate production optimisation, replace reserves, reduce unit costs, and
capture significant near-term cash flow while preserving optionality for future development.
Equally important, this transaction commences the start of a relationship with and commitment to Egypt and its
communities. We will work closely with government partners and host communities to ensure safe, environmentally
responsible operations and to maximise local content and job creation.
For our shareholders, the acquisition is expected to realise accretive cash flow and returns over the coming years. For
our employees and those joining from the Capricorn team, it creates new opportunities to grow and to apply best
practices across a larger, more diversified asset base.
We enter this next chapter of further value creation with resolve and determination. Delivering on the promise of this
transaction will require a high degree of expertise, rigorous execution, transparent engagement with stakeholders, and
an unwavering commitment to safety and sustainability. I am confident that we will realise the full potential of these
assets and create sustainable value for all our stakeholders."
This summary should be read in conjunction with the full text of this announcement. The Acquisition shall be subject to
the Conditions and further terms set out in Appendix I to this announcement and to the full terms and conditions which
shall be set out in the Scheme Document. Appendix II to this announcement contains the sources of information and bases
of calculations of certain information contained in this announcement, Appendix III contains a summary of the
irrevocable undertakings received in relation to this Acquisition and Appendix IV contains definitions of certain
expressions used in this summary and in this announcement.
Enquiries:
Genel +44 20 7659 5100
Paul Weir
Chief Executive Officer
Luke Clements
Chief Financial Officer
PJT Partners (UK) Limited, financial adviser to Bidco and Genel +44 20 3650 1100
Ben Monaghan
Jonathan Hall
Marc de Robillard
Genel Analyst/Investor Enquiries +44 20 7659 5100
Chief Financial Officer
Luke Clements
Vigo Communications, PR adviser to Genel +44 20 7830 9700
Patrick d'Ancona
Capricorn +44 131 475 3000
Randy Neely Chief Executive
Nathan Piper
Commercial Director
Canaccord Genuity Limited, financial adviser and Rule 3 adviser to Capricorn +44 20 7523 8000
Henry Fitzgerald-O'Connor
George Grainger
Moelis, financial adviser to Capricorn
+44 20 7634 3500
Chris Raff
Ali Hassen
Camarco, PR adviser to Capricorn
Georgia Edmonds +44 20 3757 4980
Violet Wilson
Fergus Young
Linklaters LLP are retained as legal advisers to Genel and Bidco.
Ashurst Perkins Coie UK LLP are retained as legal advisers to Capricorn.
Inside Information
The information contained within this announcement is deemed by Genel and Capricorn to constitute inside information as stipulated under the Market Abuse Regulation (EU) no. 596/2014 (as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018). On the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.
The person responsible for arranging the release of this announcement on behalf of Genel is Chandni Karania, Company Secretary and on behalf of Capricorn is Paul Ervine, Company Secretary.
Important Notices
PJT Partners (UK) Limited ("PJT Partners"), which is authorised and regulated by the Financial Conduct Authority in the United Kingdom, is acting exclusively as financial adviser to Bidco and Genel and no one else in connection with the Acquisition and will not be responsible to anyone other than Bidco and Genel for providing the protections afforded to clients of PJT Partners nor for providing advice in connection with the Acquisition. Neither PJT Partners nor any of its subsidiaries, branches or affiliates nor any of their respective directors, officers, employees, agents or representatives owes or accepts any duty, liability or responsibility (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of PJT Partners in connection with the Acquisition, any statement contained herein or otherwise.
Canaccord Genuity, which is authorised and regulated by the Financial Conduct Authority in the United Kingdom, is acting exclusively as financial adviser and Rule 3 adviser to Capricorn and no one else in connection with the Acquisition and will not be responsible to anyone other than Capricorn for providing the protections afforded to clients of Canaccord Genuity nor for providing advice in relation to the Acquisition or any other matters referred to in this Announcement. Neither Canaccord Genuity nor any of its affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Canaccord Genuity in connection with this Announcement, any statement contained herein or otherwise.
Moelis, which is regulated by the Financial Conduct Authority in the United Kingdom, is acting exclusively as financial adviser to Capricorn and no one else in connection with the Acquisition and other matters set out in this announcement and will not be responsible to anyone other than Capricorn for providing the protections afforded to clients of Moelis, or for providing advice in connection with the Acquisition or any matter referred to herein. Neither Moelis nor any of its affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Moelis in connection with this announcement, any statement contained herein or otherwise.
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DJ Genel Energy PLC: RECOMMENDED CASH ACQUISITION of Capricorn Energy plc by Genel Energy No.9 Limited -4-
Jefferies, which is authorised and regulated in the UK by the FCA, is acting exclusively as sponsor to Genel and no-one else in connection with the Transfer. In connection with such matters, Jefferies, its affiliates and their respective directors, officers, employees and agents will not regard any other person as their client in relation to the Transfer and will not be responsible to any person other than Bidco and Genel for providing the protections afforded to clients of Jefferies or for the giving of advice in relation to the contents of this announcement, the Transfer or any transaction, arrangement or other matter referred to herein. Apart from the responsibilities and liabilities, if any, which may be imposed upon Jefferies by the FSMA or the regulatory regime established thereunder, or under the regulatory regime of any jurisdiction where the exclusion of liability under the relevant regulatory regime would be illegal, void or unenforceable, Jefferies accepts no responsibility whatsoever or makes any representation or warranty, express or implied, concerning the contents of this announcement, including its accuracy, completeness or verification, or concerning any other statement made or purported to be made by Jefferies or on its behalf, in connection with Genel or the Transfer, and nothing in this document is, or shall be relied upon as a promise or representation in this respect, whether as to the past or future. Jefferies accordingly disclaims, to the fullest extent permitted by law, all and any responsibility and liability whether arising in tort, contract or otherwise (save as referred to herein) which it might otherwise have in respect of this document or any such statement.
This announcement is for information purposes only and does not constitute an offer to sell or an invitation to purchase any securities or the solicitation of an offer to buy any securities, pursuant to the Acquisition or otherwise.
The Acquisition shall be made solely by means of the Scheme Document which, together with the Forms of Proxy, shall contain the full terms and conditions of the Acquisition, including details of how to vote in respect of the Acquisition.
This announcement has been prepared for the purpose of complying with English law, Scots law and the Code and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws of jurisdictions outside England and Wales, and Scotland.
Capricorn shall prepare the Scheme Document to be distributed to Capricorn Shareholders. Capricorn and Bidco urge Capricorn Shareholders to read the Scheme Document when it becomes available because it shall contain important information relating to the Acquisition.
This announcement does not constitute a prospectus or prospectus exemption document.
Overseas Shareholders
The release, publication or distribution of this announcement in or into certain jurisdictions other than the United Kingdom may be restricted by law. Persons who are not resident in the United Kingdom or who are subject to other jurisdictions should inform themselves of, and observe, any applicable requirements.
Unless otherwise determined by Bidco or required by the Code, and permitted by applicable law and regulation, the Acquisition shall not be made available, directly or indirectly, in, into or from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction and no person may vote in favour of the Acquisition by any such use, means, instrumentality or form within a Restricted Jurisdiction or any other jurisdiction if to do so would constitute a violation of the laws of that jurisdiction. Accordingly, copies of this announcement and all documents relating to the Acquisition are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in, into or from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction, and persons receiving this announcement and all documents relating to the Acquisition (including custodians, nominees and trustees) must not mail or otherwise distribute or send them in, into or from such jurisdictions where to do so would violate the laws in that jurisdiction.
The availability of the Acquisition to Capricorn Shareholders who are not resident in the United Kingdom may be affected by the laws of the relevant jurisdictions in which they are resident. Persons who are not resident in the United Kingdom should inform themselves of, and observe, any applicable requirements.
The Acquisition shall be subject to the applicable requirements of the Code, the Panel, the London Stock Exchange and the Financial Conduct Authority.
Additional information for US investors
The Acquisition relates to shares of a Scottish company listed on the Official List of the London Stock Exchange and is proposed to be effected by means of a scheme of arrangement under Scots law. A transaction effected by means of a scheme of arrangement is not subject to the tender offer rules or the proxy solicitation rules under the US Exchange Act.
Accordingly, the Acquisition is subject to the disclosure and procedural requirements applicable in the United Kingdom to schemes of arrangement which differ from the disclosure and procedural requirements of United States tender offer and proxy solicitation rules.
However, if in the future Bidco were to elect to implement the Acquisition by means of a takeover offer, such takeover offer would be made in compliance with all applicable United States laws and regulations, including, without limitation, to the extent applicable and subject to any applicable exemptions, Section 14(e) of the US Exchange Act and Regulation 14E thereunder. Such a takeover would be made in the United States by Bidco and no one else.
In accordance with normal United Kingdom practice, Bidco or its nominees, or its brokers (acting as agents), may from time to time make certain purchases of, or arrangements to purchase, shares or other securities of Capricorn outside the US, other than pursuant to the Acquisition, until the date on which the Acquisition and/or the Scheme becomes Effective, lapses or is otherwise withdrawn. These purchases may occur either in the open market at prevailing prices or in private transactions at negotiated prices. Any information about such purchases or arrangements to purchase shall be disclosed as required in the UK, shall be reported to a Regulatory Information Service and shall be available on the London Stock Exchange website at www.londonstockexchange.com.
The receipt of consideration by a US holder for the transfer of its Capricorn Shares pursuant to the Scheme shall be a taxable transaction for United States federal income tax purposes. Each Capricorn Shareholder is urged to consult their independent professional adviser immediately regarding the tax consequences of the Acquisition applicable to them, including under applicable United States federal, state and local, as well as overseas and other, tax laws.
Financial information relating to Capricorn included in this announcement and the Scheme Document has been or shall have been prepared in accordance with accounting standards applicable in the United Kingdom and may not be comparable to financial information of US companies or companies whose financial statements are prepared in accordance with generally accepted accounting principles in the United States ("US GAAP"). US GAAP differs in certain significant respects from accounting standards applicable in the United Kingdom. None of the financial information in this announcement has been audited in accordance with auditing standards generally accepted in the United States or the auditing standards of the Public Company Accounting Oversight Board (United States).
Bidco is organised under the laws of England and Wales and Capricorn is organised under Scots law. Some or all of the officers and directors of Bidco and Capricorn, respectively, are residents of countries other than the United States. In addition, most of the assets of Bidco and Capricorn are located outside the United States. As a result, it may be difficult for US shareholders of Capricorn to effect service of process within the United States upon Bidco or Capricorn or their respective officers or directors or to enforce against them a judgment of a US court predicated upon the federal or state securities laws of the United States, including judgments based upon the civil liability provisions of the US federal securities laws. US holders of Capricorn Shares may not be able to sue a non-US company or its officers or directors in a non-US court for violations of US securities laws. Further, it may be difficult to compel a non-US company and its affiliates to subject themselves to a US court's jurisdiction or judgment.
Forward looking statements
This announcement (including information incorporated by reference in this announcement), oral statements made regarding the Acquisition, and other information published by Capricorn, Bidco or any member of the Genel Group contain statements which are, or may be deemed to be, "forward looking statements". Such forward looking statements are prospective in nature and are not based on historical facts, but rather on current expectations and on numerous assumptions regarding the business strategies and the environment in which Genel, any member of the Genel Group or the Enlarged Group shall operate in the future and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by those statements.
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The forward-looking statements contained in this announcement relate to Genel, any member of the Genel Group or the Enlarged Group's future prospects, developments and business strategies, the expected timing and scope of the Acquisition and other statements other than historical facts. In some cases, these forward looking statements can be identified by the use of forward looking terminology, including the terms "believes", "estimates", "will look to", "would look to", "plans", "prepares", "anticipates", "expects", "is expected to", "is subject to", "budget", "scheduled", "forecasts", "synergy", "strategy", "goal", "cost-saving", "projects", "intends", "may", "will", "shall" or "should" or their negatives or other variations or comparable terminology. Forward-looking statements may include statements relating to the following: (i) future capital expenditures, expenses, revenues, earnings, synergies, economic performance, indebtedness, financial condition, dividend policy, losses and future prospects; (ii) business and management strategies and the expansion and growth of Genel's, any member of the Genel Group's or Capricorn's operations and potential synergies resulting from the Acquisition; and (iii) the effects of global economic conditions and governmental regulation on Genel's, any member of the Genel Group's or Capricorn's business.
By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that shall occur in the future. These events and circumstances include changes in the global, political, economic, business, competitive, market and regulatory forces, future exchange and interest rates, changes in tax rates, future business combinations or disposals, and any epidemic, pandemic or disease outbreak. If any one or more of these risks or uncertainties materialises or if any one or more of the assumptions prove incorrect, actual results may differ materially from those expected, estimated or projected. Such forward looking statements should therefore be construed in the light of such factors.
Neither Capricorn, Bidco or any of Genel or any member of the Genel Group, nor any of their respective associates or directors, officers or advisers, provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this announcement shall actually occur. Given these risks and uncertainties, potential investors should not place any reliance on forward looking statements.
Specifically, statements of estimated cost savings and synergies relate to future actions and circumstances which, by their nature, involve risks, uncertainties and contingencies. As a result, the cost savings and synergies referred to may not be achieved, may be achieved later or sooner than estimated, or those achieved could be materially different from those estimated. Due to the scale of the Enlarged Group, there may be additional changes to the Enlarged Group's operations. As a result, and given the fact that the changes relate to the future, the resulting cost synergies may be materially greater or less than those estimated.
The forward-looking statements speak only at the date of this announcement. All subsequent oral or written forward-looking statements attributable to any member of the Genel Group or Capricorn Group, or any of their respective associates, directors, officers, employees or advisers, are expressly qualified in their entirety by the cautionary statement above.
Capricorn, the Genel Group and Bidco expressly disclaim any obligation to update such statements other than as required by law or by the rules of any competent regulatory authority, whether as a result of new information, future events or otherwise.
No profit forecasts or estimates
No statement in this announcement is intended as a profit forecast or estimate for any period and no statement in this announcement should be interpreted to mean that earnings or earnings per share for Genel or Capricorn, as appropriate, for the current or future financial years would necessarily match or exceed the historical published earnings or earnings per share for Genel or Capricorn, as appropriate.
Disclosure requirements of the Code
Under Rule 8.3(a) of the Code, any person who is interested in 1 per cent. or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 p.m. (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 p.m. (London time) on the 10th business day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1 per cent. or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s), save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 p.m. (London time) on the business day following the date of the relevant dealing.
If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they shall be deemed to be a single person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).
Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Panel's website at http:// www.thetakeoverpanel.org.uk/, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit on +44 (0) 20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.
Electronic communications
Please be aware that addresses, electronic addresses and certain information provided by Capricorn Shareholders, persons with information rights and other relevant persons for the receipt of communications from Capricorn may be provided to Bidco during the Offer Period as requested under Section 4 of Appendix 4 of the Code to comply with Rule 2.11(c) of the Code.
Publication on website and availability of hard copies
A copy of this announcement shall be made available subject to certain restrictions relating to persons resident in Restricted Jurisdictions on Genel's and Capricorn's websites at https://genelenergy.com/offer/ and https:// www.capricornenergy.com/investors/ respectively by no later than 12 noon (London time) on 3 July 2026. For the avoidance of doubt, the contents of these websites are not incorporated into and do not form part of this announcement.
You may request a hard copy of this announcement by contacting Equiniti, Highdown House, Yeoman Way, Worthing, West Sussex, BN99 6DA or on 0371 384 2660. You may also request that all future documents, announcements and information to be sent to you in relation to the Acquisition should be in hard copy form.
Rounding
Certain figures included in this announcement have been subjected to rounding adjustments. Accordingly, figures shown for the same category presented in different tables may vary slightly and figures shown as totals in certain tables may not be an arithmetic aggregation of the figures that precede them.
Rule 2.9 Disclosure
In accordance with Rule 2.9 of the Code, as at the close of business on 1 July 2026, Capricorn confirms that it had in issue 70,558,339 ordinary shares with par value of 799 / 122 pence per share, each carrying one vote. The International Securities Identification Number (ISIN) for Capricorn ordinary shares is GB00BNKT5L33. Capricorn's legal entity identifier is 213800ZJEUQ8ZOC9AL24 and Genel's legal entity identifier is 549300IVCJDWC3LR8F94.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, IN, INTO OR FROM CANADA, AUSTRALIA, JAPAN OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
FOR IMMEDIATE RELEASE
2 July 2026
RECOMMENDED CASH ACQUISITION
of
Capricorn Energy plc ("Capricorn") by
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Genel Energy No.9 Limited ("Bidco") (a company indirectly owned by Genel Energy plc ("Genel")) to be effected by means of a scheme of arrangement under Part 26 of the Companies Act 2006
1. Introduction
The boards of Genel, Bidco and Capricorn are pleased to announce that they have reached agreement on the terms of a recommended cash acquisition of the entire issued and to be issued ordinary share capital of Capricorn by Bidco (the " Acquisition"). The Acquisition is to be effected by means of a Scottish scheme of arrangement under Part 26 of the Companies Act (the "Scheme").
2. The Acquisition
Under the terms of the Acquisition, which shall be subject to the Conditions and further terms set out in Appendix I to this announcement and to be set out in the Scheme Document, Capricorn Shareholders shall be entitled to receive, in aggregate:
-- USUSD4.74 in cash for each Capricorn Share held (the "Acquisition Value").
The Acquisition Value comprises, for each Capricorn Share:
-- USUSD3.75 in cash (the "Acquisition Price"); and
-- a special dividend of USUSD0.99, which is intended and expected to be declared prior to the Effective Date(the "Permitted Dividend").
The Sterling equivalent value of the Acquisition Value, being 357 pence per Capricorn Share based on the Announcement Exchange Rate, represents a premium of approximately:
-- 34 per cent. to the closing price per Capricorn Share of 266 pence on 10 March 2026 (being the day priorto the start of the Offer Period (the "Undisturbed Date")); and
-- 48 per cent. to the volume weighted average price per Capricorn Share of 241 pence during the three-monthperiod ended on the Undisturbed Date.
The Acquisition Value (assuming the Permitted Dividend is declared and paid in full) implies a value for the entire issued and to be issued ordinary share capital of Capricorn of approximately USUSD360 million on a fully diluted basis, which is equivalent to GBP271 million based on the Announcement Exchange Rate.
The Acquisition Price payable under the Acquisition is expressed in USUSD. The USUSD denominated Acquisition Price reflects the underlying characteristics of Capricorn's business activities, which are largely denominated in USUSD.
A facility will be made available under which Capricorn Shareholders will be able to elect (subject to the terms and conditions of such facility) to receive the cash consideration payable in connection with the Acquisition Price in Sterling (after, if applicable, deduction of any transaction or dealing costs (including any taxes) associated with the currency conversion) at the applicable market exchange rate at which the conversion takes place (the "Foreign Exchange Facility"). The applicable market exchange rate will be fixed on the latest practicable date prior to the relevant payment date. The amount received by any Capricorn Shareholder validly electing to be paid their cash consideration payable in connection with the Acquisition Price in Sterling may therefore be below or above 282 pence per Capricorn Share depending on the applicable market exchange rate that is applied and the deduction of any transaction or dealing costs (including any taxes) associated with the currency conversion. Further details of the Foreign Exchange Facility and the election to be made by Capricorn Shareholders who wish to receive their cash consideration payable in connection with the Acquisition Price in Sterling using the Foreign Exchange Facility will be set out in the Scheme Document and the applicable Form(s) of Election.
It is expected that the Scheme Document shall be published within 28 days of the announcement, that the Court Meeting and the General Meeting shall be convened as soon as practicable thereafter and that the Scheme shall become Effective during the second half of 2026.
3. Background to and reasons for the Acquisition
Genel's strategy is to build a business with resilient diversified cash flows that deliver sustainable value to shareholders. The Genel Board and Genel management are resolute in their belief that this can best be achieved through strategic acquisitions which add substantial high-quality producing assets to its existing portfolio.
Genel's existing production base consists of its 25% non-operated working interest in the Tawke PSC, located in the Kurdistan Region of Iraq, which generates significant free cash flow from production averaging 17,520 bopd for the full year of 2025 (20,000 bopd exit rate in December 2025) and industry leading operating costs of around USD4/bbl. It is comprised of two very high-quality fields, Tawke and Peshkabir, which in combination represent a world class licence.
Genel has been seeking to acquire new production assets in preferred geographies that it has identified to build-out a significant and diverse strategic footprint.
Egypt was identified as one of Genel's focus countries to expand its footprint and Genel has tracked and evaluated numerous opportunities in the country.
After conducting a detailed review of Capricorn's assets and operations, the Genel Board and Genel management have determined that an acquisition of the Egyptian Western Desert portfolio represents an attractive strategic pillar to its business. The combined business is a larger, more diversified MENA-focused exploration & production company with a strong, resilient production base from a number of significant oil and gas fields. The cash generation from the baseline production business is significant, with an expectation that 2P reserves will be replaced and increased from the extensive portfolio of further resource opportunities.
-- More specifically, key benefits include:? Scale and diversification:? The Acquisition will create an independent energy company of scale in the MENA region with astrong, low leverage balance sheet, significant production, reserves and resource upside. - The Enlarged Group will hold a geographically diversified production base, with pro-forma 2Preserves of 117 mmboe and production of 41,003 bopd (combined December 2025 exit rate) (split evenlybetween Kurdistan and Egypt). - The addition of the Egyptian portfolio to Genel's existing Kurdistan production adds materialproduction of both oil and gas in a new country, with a well-established regulatory regime, stablecontracts and attractive fiscal terms. This represents a significant step towards its targeteddiversification of resilient, sustainable cash generation.
- Reserves and Resources growth:? The resources and potential resources of the Enlarged Group offers significant opportunity forreserves replacement and growth in Egypt and Kurdistan, as well as the build-out of a further productionhub in Oman and/or Somaliland. - The Enlarged Group will have the financial capability and appetite to allocate capital toderisking the potential asset base in an efficient and timely manner in order to maximise value delivery toits shareholders. - The Enlarged Group is well positioned to pursue further value-accretive M&A within Egypt and theMENA region more generally.
- Complementary technical capabilities:? Genel has extensive experience across its operated and non-operated assets in MENA and Africathroughout its 20+ year history in the region, as well as experience from senior staff in otherjurisdictions. Its team has experience in delivering complex projects on time and on budget, with keyfeatures being pace of development and maximisation of capital efficiency. - It has developed a deep understanding of the technical, commercial and stakeholder dynamics thatcharacterise operating in government-partnered upstream environments. Genel's experienced technical andoperational teams are well placed to work constructively with Capricorn's partner Cheiron, and with EGPCand BAPETCo, to support the continued development and optimisation of the Egyptian portfolio. - The Enlarged Group will benefit from the skill sets of both management teams, with Genel's trackrecord of reservoir management, production optimisation and non-operated asset stewardship providing acomplementary platform to Capricorn's existing technical engagement with its Egyptian partners. - Together, the Enlarged Group will be better positioned to accelerate development activity acrossall Egyptian concessions, working with EGPC to develop the appropriate subsurface and operational activityset to commercialise both the currently estimated remaining 2P reserves and the significant contingentresource base that remains to be converted into 2P reserves.
4. Recommendation
The Capricorn Directors, who have been so advised by Canaccord Genuity as to the financial terms of the Acquisition, consider the terms of the Acquisition to be fair and reasonable. In providing its advice to the Capricorn Directors, Canaccord Genuity has taken into account the commercial assessments of the Capricorn Directors. Canaccord Genuity is providing independent financial advice to the Capricorn Directors for the purposes of Rule 3 of the Code.
Accordingly, the Capricorn Directors intend to recommend unanimously that Capricorn Shareholders vote in favour of the Scheme at the Court Meeting and the resolutions to be proposed at the General Meeting, as the Capricorn Director who holds Capricorn Shares has irrevocably undertaken to do in respect of his own beneficial holdings of 4,395 Capricorn Shares representing, in aggregate, approximately 0.006 per cent. of the share capital of Capricorn in issue on 1 July 2026 (being the latest practicable date prior to this announcement).
5. Irrevocable undertakings
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Bidco has received an irrevocable undertaking from the Capricorn Director who holds Capricorn Shares to vote in favour of the Scheme at the Court Meeting and the resolutions to be proposed at the General Meeting, in respect of a total of 4,395 Capricorn Shares, representing approximately 0.006 per cent. of the share capital of Capricorn in issue on 1 July 2026 (being the latest practicable date prior to this announcement). Further details of this irrevocable undertaking, including the circumstances in which it shall cease to be binding, are set out in Appendix III to this announcement.
Bidco has also received irrevocable undertakings to vote in favour of the Scheme at the Court Meeting and the resolutions to be proposed at the General Meeting from Palliser Capital (UK) Ltd, Newtyn Management, LLC, Kite Lake Capital Management (UK) LLP, and Madison Avenue Partners, LP in respect of a total of 27,749,043 Capricorn Shares representing, in aggregate, approximately 39.3% of Capricorn's issued share capital.
The irrevocable undertakings given by Capricorn Shareholders prevent such Capricorn Shareholders from selling all or any part of their Capricorn Shares or from acquiring further Capricorn Shares. The irrevocable undertaking from the Capricorn Director who holds Capricorn Shares remains binding in the event that a higher competing offer is made for Capricorn, whilst the irrevocable undertakings from the other Capricorn Shareholders remain binding in the event a higher competing offer is made unless the competing offer represents an improvement of 6.5 per cent. or greater in respect of the Acquisition Value (including the Permitted Dividend).
Bidco has therefore received irrevocable undertakings in respect of a total of 27,753,438 Capricorn Shares representing, in aggregate, approximately 39.3% of Capricorn's issued share capital.
Further details of these irrevocable undertakings are set out in Appendix III to this announcement.
6. Background to and reasons for the recommendation
Background
In February 2023, Capricorn initiated a strategic reset focused on returning capital to Capricorn Shareholders, exiting non-core exploration assets, reducing G&A costs and maximising the value of the Egypt asset base. Through the efforts of the management team, these objectives have been largely achieved.
A key milestone of maximising the value of the Egyptian concessions came in May this year, when Capricorn announced the signing of a consolidated and amended concession agreement covering eight of its Egyptian Western Desert concession agreements in which it has a 50% participating interest.
By virtue of the consolidation, Capricorn has established a pathway to a sustainable business in Egypt with the new concession structure and terms. Accordingly, Capricorn is incentivised to invest and optimise production across the asset base. As an immediate benefit of the agreement, as set out in its Annual Results to 31 December 2025, the licence extensions enabled Capricorn to book an additional 20.2 mmboe of 2P reserves across the merged concession.
The Capricorn Board recognises that maintaining current production levels will require significant capital investment over several years, which Capricorn could finance from cash-flow generated by the Egyptian business. However, as a non-operator, Capricorn lacks full control over the pace of investment and is reliant on timely collections from EGPC, exposing it to risks in the medium term. These risks are concentrated for Capricorn, where its Egyptian asset portfolio represents its sole source of revenue generation. Moreover, whilst Capricorn is enjoying the benefits of regular payments of revenues and current elevated commodity prices, regional instability highlights the risk inherent in a business that lacks geographic diversification.
Although the Capricorn Board remains confident in the ability of the management team to deliver shareholder value, it recognises that realising the full value of the new merged concession agreement may require a larger corporate group with additional revenue streams and greater flexibility to direct capital.
A secondary focus has been to maximise value from its legacy UK North Sea position, primarily through the effective utilisation of its UK tax losses. Capricorn has been actively assessing potential transactions in the UK North Sea and submitted a number of proposals. Currently, none of these proposals have progressed towards an executable transaction, and there is no certainty that management can create value from its UK business.
Separately, the Capricorn Board recognises the challenges that small and mid-cap London listed exploration & production companies have faced over recent years in attracting new investors. In particular, the Capricorn Board is aware that the low trading liquidity in Capricorn's shares relative to peer companies can act as a deterrent to potential new investors and limits the ability of current Capricorn Shareholders to monetise their positions efficiently.
Given the above, the Capricorn Board has been open to considering credible options for maximising shareholder value. Whilst the management team has engaged with third parties interested in acquiring Capricorn's principal assets or its entire share capital, none of these discussions yielded a proposal comparable in terms to the Acquisition.
Assessment of the Acquisition
In March this year, Capricorn announced that it had received multiple unsolicited non-binding proposals from the Cafani Group regarding a possible cash offer for Capricorn. The Cafani Group has been given several extensions to the deadline by which time it was required to confirm its intentions regarding making a firm offer for Capricorn.
In the intervening period Capricorn received approaches from several other parties regarding possible offers for Capricorn and granted due diligence access as required under the Takeover Code.
One interested party was Genel and, after a series of interactions and negotiations, the Capricorn Board received a proposal from Genel with an Acquisition Value for Capricorn of USUSD360 million. This Acquisition represents a meaningfully superior proposal relative to other credible proposals received by Capricorn and, accordingly, the Capricorn Board intends to recommend the Acquisition to its shareholders.
In addition, the Capricorn Board notes that the acquisition structure proposed by Genel includes the declaration of a dividend to shareholders of approximately USD75 million, which represents a significant portion of its cash balance of USD129 million as at 31 May 2026. The amount of the Permitted Dividend is substantially in excess of the amount of any dividend Capricorn would be able to declare if it were required to retain sufficient liquidity and working capital to maintain current production levels over several years, as well as to hedge against any material delay or reduction in collections from EGPC or other unplanned cessation of operations on a standalone basis. Further information on the Capricorn Board's assessment of Capricorn's ability to pay the Permitted Dividend is set out in paragraph 13 below.
Whilst the Capricorn Board remains confident that Capricorn has a credible path to growing shareholder value as an independent business, the Capricorn Board believes that the Acquisition Value provides Capricorn Shareholders with an opportunity for immediate realisation of future value potential in cash at an attractive premium of:
-- 34 per cent. to the closing price per Capricorn Share of 266 pence on the Undisturbed Date; and
-- 48 per cent. to the volume weighted average price per Capricorn Share of 241 pence during the three-monthperiod ended on the Undisturbed Date.
Additionally, the Capricorn Board has received feedback from certain Capricorn Shareholders that it has consulted with prior to this announcement. This feedback has been supportive, as reflected by Genel having procured irrevocable undertakings in support of the Acquisition from Capricorn Shareholders whose Capricorn Shares represent approximately 39.3 per cent. of Capricorn's existing ordinary share capital.
7. Information on Genel and Bidco
Bidco
Bidco is a limited company registered in England and Wales and incorporated on 19 May 2026. Bidco is a wholly owned indirect subsidiary of Genel. Bidco was formed for the purposes of the Acquisition and has not traded since its date of incorporation, nor has it entered into any obligations other than in connection with the Acquisition. Further details in relation to Bidco will be contained in the Scheme Document.
Genel
Genel is a socially responsible oil producer, with a portfolio of production and exploration assets, including production assets in the Kurdistan Region of Iraq and exploration licences in Oman and Somaliland.
Genel's strategy comprises three objectives designed to build a business with resilient and diversified cash flows that deliver sustainable value to shareholders, and with the aim of restarting the payment of a regular dividend: (i) a strong balance sheet; (ii) diversified and resilient cash generation; and (iii) investment in new cash flows.
The Genel business is a resilient, cash-generative platform with significant unvalued potential. For the financial year ended 31 December 2025, Genel generated 17,520 bopd in working interest production, with an EBITDAX of USUSD43 million (2024: USUSD1 million).
Genel Shares are listed on the Official List and admitted to trading on the Main Market of the London Stock Exchange.
8. Information on Capricorn
Capricorn, a Scottish public limited company headquartered in Edinburgh, is an independent energy company which has been listed on the Main Market of the London Stock Exchange for more than 30 years.
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Capricorn's recent presence in the North Sea focused around significant exploration activity and the development of two material development projects, being Catcher and Kraken, which both began production in 2017. These interests were subsequently sold in November 2021. Capricorn continued to maintain its business in the UK North Sea, through the drilling of the Jaws and Diadem exploration wells in 2022, and since then has focused on business development activities in the region.
Currently, Capricorn's core operations are in Egypt's Western Desert, where it holds a portfolio of onshore development and production assets. In May 2025, Capricorn agreed with EGPC to consolidate eight of its 50:50 jointly owned concessions into a single, integrated licence with enhanced commercial terms, providing a platform for future growth. On 30 March 2026, Capricorn announced that it had received formal parliamentary ratification of this agreement.
In addition to maximising value from its assets in Egypt, from 2023 onwards Capricorn has been focused on streamlining operations, reducing costs and has returned around USD600 million to shareholders.
Furthermore, Capricorn has a stated strategy to explore new value-accretive opportunities, in Egypt, the UK North Sea and the broader MENA region.
As announced on 26 March 2026, for the year ended 31 December 2025, Capricorn's production was 20,024 boepd (40% liquids), generating revenues of USD134 million at an average realised oil price of USD68.4/bbl and gas price of USD3.1/mscf. Capricorn's average total production costs in the same period were USD5.4/boe and net cash generated from Egypt oil and gas production was USD81 million, with overall Capricorn Group net cash of USD103 million, comprising USD133 million cash and USD30 million debt.
9. Directors, management, employees, research and development and locations
Genel's strategic plans for Capricorn
Genel's strategy is to build a business with resilient, diversified, cash flows that deliver sustainable value for shareholders. This requires that Genel establishes a geographically diverse footprint to avoid complete reliance on any one producing location. It also requires optimal production of existing 2P reserves, as well as acquisition, appraisal and subsequent production and monetisation of contingent, discovered and potential resources. Genel considers this Acquisition, and the resulting Enlarged Group, to be a significant step in delivery of this strategy.
The activity set, timetable and resources that the Enlarged Group requires to pursue this strategy and deliver shareholder value will be dependent on a number of factors, many of which are external to the Enlarged Group and difficult to anticipate. As is common in Genel's industry, when oil price is high and conditions are suitable for investment, activity is increased to maximise value delivery. At times when external conditions are less favourable, that activity is reduced (whilst taking into account various other factors, including any commitments made to regulators).
The geopolitical situation in the Middle East remains extremely complex, with both Kurdistan and Egypt impacted, in different ways, by the ongoing security challenges. At this point in time, it is not clear whether these challenges will be resolved quickly or extended for some time to come.
Prior to this announcement, and consistent with market practice, Genel completed a period of confirmatory due diligence on Capricorn. This process has informed Genel's initial view on the capability of the Enlarged Group and Genel's preliminary plans for the integration of Capricorn through a transition plan. However, external uncertainties remain and while the transition process will begin immediately upon completion of the Acquisition, the eventual structure of the Enlarged Group will be driven, to some extent, by as yet uncertain external considerations.
Over the coming months, and accepting that regulatory commitments will have to be met, the Genel Board will carefully consider the external environment and its impact on capital availability and the potential returns from invested capital when assessing the appropriate activity plan and necessary resource levels going forward.
Following the Scheme becoming Effective, Genel intends to conduct, together with the management team, a more detailed review of Capricorn's business, operations and capabilities, and expects that the review will be completed within approximately six months from the Effective Date.
The review will inform Genel's plans for the Enlarged Group, with particular focus on:
-- the operating model and organisational design of the Enlarged Group;
-- the integration of the Enlarged Group's portfolio across the Kurdistan Region of Iraq, Egypt, Oman andSomaliland;
-- the anticipated work programmes for each of these areas, taking account of external factors, not leastassumptions on oil price, as well as the optimal use of the Enlarged Group's available capital; and
-- the realisation of the possible cost synergies and operational efficiencies identified during diligence,particularly in relation to corporate, support and administrative functions, as well as through the rationalisationof systems, infrastructure and third-party contracts.
Employees and management
Genel attaches great importance to the skills, knowledge and experience of Capricorn's management and employees. Genel recognises, however, that some reorganisation and reduction of employees within the Enlarged Group is inevitable following completion of the Acquisition and that the post-completion review referenced above will consider employees of both Genel and Capricorn. Based on the work undertaken to date, Genel expects that the integration of the two businesses is likely to result in a material reduction in the overall number of employees of the Capricorn Group, particularly within corporate, support and administrative functions.
As a general rule, Genel expects that those with skills, knowledge and experience specific to the Enlarged Group and the assets therein are likely to be viewed differently to those with more generic skills. This is particularly true for personnel working in, or closest to, the field and the regulatory bodies. Consistent with its longstanding approach of recognising the value of, and retaining, local talent and expertise, Genel also intends to continue to support and promote positive local content outcomes in Egypt, recognising the critical business importance of maintaining and developing in-country capability, employment and stakeholder relationships. As part of the post-completion review referenced above, Genel intends to review the roles of employees within the Enlarged Group, including senior management, to determine the optimal size, shape and indeed location of the new organisation.
To support the post-completion review, Genel is in the process of developing a formal and wide-ranging integration plan that includes a number of key workstreams relating to the resourcing needs of the Enlarged Group. Preliminary transition planning carried out to date has confirmed that there is likely to be some overlap between the two businesses and that there is the potential to generate cost savings for the Enlarged Group through corporate and administrative efficiencies. In particular, in the event of a delisting of Capricorn Shares and re-registration of Capricorn as a private limited company (as further described in paragraph 16 below), a number of corporate and support functions, including certain functions relating to Capricorn's status as a public listed company, will likely require a reduced workforce. In addition, consistent with its own internal efficiency drives, Genel expects that there will be a significant reduction in IT costs and other aspects of the combined G&A budget through the rationalisation of systems, infrastructure and third-party contracts across the Enlarged Group.
In line with its corporate values of Integrity, Accountability, Respect, Collaboration and Ingenuity, Genel intends to approach integration in an open and transparent manner with the aim of treating everyone involved in a respectful manner, while maintaining operational momentum and retaining and motivating the best talent across the Enlarged Group. The finalisation and implementation of any restructuring, integration, and workforce reductions shall be subject to detailed and comprehensive planning, and to appropriate engagement with stakeholders, including affected employees and any appropriate employee representative bodies, in accordance with the legal obligations of the Enlarged Group. Genel shall commence this engagement process in good time before any final decision is taken to implement any job reductions, so as to ensure that relevant legal obligations are complied with.
It is intended that, upon completion of the Acquisition, each of the non-executive members of the Capricorn Board shall resign from their office as a director of Capricorn and receive cash payments in lieu of notice.
Existing rights and pension scheme
Following completion of the Acquisition, the existing employment rights, including pension rights, of the management and employees of Capricorn shall be fully observed. Genel's plans for Capricorn do not include the application of any material change in the employment of, or in the conditions of employment of Capricorn employees, unless otherwise agreed with the relevant employee.
Capricorn does not operate any defined benefit pension schemes.
Locations, headquarters and research and development
As part of the post-completion review, Genel will assess the office footprint of the Enlarged Group, including Capricorn's headquarters in Edinburgh, having regard to access to key stakeholders, operational requirements and the locations from which existing teams work.
It is intended that immediately following completion of the Acquisition, the Enlarged Group will be headquartered in London.
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July 02, 2026 02:00 ET (06:00 GMT)
