Norwegian oil company outbids rival with $396 million offer for Egypt-focused producer

DNO’s proposal values Capricorn approximately $36 million above the $360 million offered by Genel Energy.

Capricorn’s board withdrew its recommendation for the Genel transaction and unanimously backed DNO.

The reversal came two weeks after Capricorn shareholders approved the Genel deal on August 18.

Genel said it was considering its position and would make another announcement when appropriate.

DNO offers approximately 10% more

Under the official acquisition terms⁠, Capricorn shareholders are expected to receive $5.214 per share.

That consists of $4.224 in cash from DNO and an expected $0.99 special dividend from Capricorn.

The offer is approximately 10% higher than Genel’s $4.74-per-share proposal.

It also represents a 45% premium to Capricorn’s closing share price on March 10, before public speculation about a transaction began.

The acquisition is expected to be completed during the first half of 2027.

It still requires approval from Capricorn shareholders, regulators and a court. DNO does not yet own Capricorn or its Egyptian assets.

DNO is buying an established Egyptian business

Capricorn was formerly known as Cairn Energy and spent decades investing in oil and gas assets across several regions.

Its current producing operations are concentrated in Egypt’s Western Desert.

The company produced approximately 20,024 barrels of oil equivalent per day in 2025 and generated $134 million in Egyptian oil and gas revenue. It ended the year with $103 million in group net cash.

Its Egyptian interests are managed through Badr El Din Petroleum Company, a joint operating company involving the state-owned Egyptian General Petroleum Corporation, Capricorn and Egyptian energy company Cheiron.

Buying Capricorn gives DNO producing assets, an experienced local team and established government relationships.

The Norwegian company would otherwise have to begin with licensing rounds, exploration and years of development before obtaining similar production.

Egypt becomes DNO’s third principal region

DNO already operates in the North Sea and the Kurdistan Region of Iraq. It has identified Egypt as its proposed third principal region.

The company said it intends to invest in Capricorn’s portfolio, participate in new Egyptian licensing rounds and consider additional acquisitions.

DNO eventually wants to acquire operated assets in the country, although Capricorn’s existing production is managed through the Badr El Din joint venture.

The acquisition is therefore an entry point rather than the conclusion of DNO’s Egyptian expansion.

Egypt is trying to reverse declining production

Egypt has been courting international producers after declining oil and gas output increased its need for energy imports.

The country also accumulated billions of dollars in debts owed to foreign energy companies, discouraging drilling and delaying some investments.

The government has since reduced those arrears sharply and accelerated payments to oil companies.

Egypt is also pursuing an extensive well-drilling programme and offering new acreage to international producers.

Those efforts explain the attraction of Capricorn’s position. Its Western Desert assets offer immediate production in a market where the government wants companies to invest more.

DNO and Genel’s complicated relationship

The contest is unusual because DNO and Genel are already commercial partners in Iraqi Kurdistan.

DNO has separately attempted to acquire Genel, but its earlier proposal was rejected.

Genel’s purchase of Capricorn would have provided it with production outside Kurdistan and an entry into Egypt.

DNO’s higher proposal now threatens to deny Genel that diversification while giving DNO the Egyptian platform for itself.

Capricorn’s board has chosen the more valuable offer, but the takeover is not complete. Genel could revise its proposal, withdraw or pursue any contractual rights available under its original agreement.