TIDMSDX
RNS Number : 9411H
SDX Energy Inc.
24 August 2016
SDX ENERGY INC
SECOND QUARTER AND HALF YEAR 2016 FINANCIAL AND OPERATING
RESULTS
Further progress with Egypt focused, high margin growth
opportunity
London, England - August 24, 2016, SDX Energy Inc. ("SDX" or the
"Company") (TSXV, AIM: SDX) announces its 2016 Second Quarter and
Half Year 2016 Financial and Operating Results (the "Quarter", "Q2
2016", "Half Year" or "6 months to June 30, 2016").
Second Quarter and Half Year 2016 Highlights:
Corporate and Financial
-- Completed successful US$11.0 million ("MM") placing raising
c.US$10.2MM after costs (of which US$1.0MM was received in July
2016) and obtained dual listing on AIM market of London Stock
Exchange plc ("AIM");
-- Key financial metrics for the 3 and 6 months ended June 30, 2016 and 2015 are:
Three months Six months
ended June ended June
30 30
------------------------------ --------------- ---------------
US$ million except 2016 2015 2016 2015
per unit amounts
------------------------------ ------- ------ ------- ------
Net Revenues 2.5 2.9 4.6 5.7
------------------------------ ------- ------ ------- ------
Netback 1.2 1.9 2.3 4.0
------------------------------ ------- ------ ------- ------
Net realized average
oil price - US$/barrel 31.80 40.72 28.01 39.10
------------------------------ ------- ------ ------- ------
Net cash (used in)/generated
from operating activities (1.0) (4.0) 0.8 (2.1)
------------------------------ ------- ------ ------- ------
Total comprehensive
(loss)/income (25.2) 1.1 (26.0) 1.9
------------------------------ ------- ------ ------- ------
-- Comprehensive loss in 3 and 6 months ended June 30, 2016 due
to write down of US$(24.7) MM in the Bakassi West, Cameroon
exploration asset as a result of decision to withdraw from
concession;
-- Invested US$6.5MM of capital expenditure into business;
-- As at June 30, 2016 cash on hand of US$6.9MM and zero debt.
Operational Highlights
-- During Q2 2016 average daily oil sales and production service
fees equated to 1,170 barrels of oil per day ("BOP/D") and average
daily natural gas and natural gas liquids production equated to 136
barrels of oil equivalent per day ("BOEP/D") (to be invoiced at a
future date to optimize Concession terms);
-- During the 6 months to June 30, 2016 average daily oil sales
and production service fees equated to 1,211 BOP/D and average
daily natural gas and natural gas liquids production equated to 145
BOEP/D (to be invoiced at a future date to optimize Concession
terms);
-- Completion of successful workover programs during the Quarter
at North West Gemsa and Meseda resulted in exit production rate at
June 30, 2016 of 1,550 BOEP/D;
-- In North West Gemsa, completed successful development well,
Al Amir SE-24, which tested at 1,714 BOP/D with 3.06 million
standard cubic feet per day ("MMSCFD") in May 2016. In addition,
completed 5 workovers in the Al Amir SE and Geyad fields which
focussed on wellbore maintenance;
-- In Meseda, completed an 8 well workover program which
included tubing string replacements, well bore cleanouts and
perforation adds. Completed strategic initiative focussed on
development optimization and increasing production. Facilities
optimization studies now underway;
-- Completed 3D seismic acquisition in South Disouq ahead of
schedule and under budget. Seismic data processing is currently
underway;
-- Completed technical review of prospectivity at South Ramadan
development concession and an evaluation of project economics is
currently underway;
Subsequent to period end:
-- SDX entered into a Deed of Assignment and Termination
relating to Bakassi West, Cameroon. On July 31, 2016 all rights,
interests, obligations and liabilities under the PSC were assigned
to SoftRock Cameroon, the only member of the original partnership
that has elected to remain in the concession; and
-- Completed fast-track processing cube for South Disouq 3D on
July 19, 2016. Preliminary prospect locations are currently being
evaluated.
2016 Guidance and Outlook:
-- Continue with well workover program at North West Gemsa;
-- Initiate redevelopment and waterflood program at Meseda;
-- Complete 3D seismic processing and interpretation for South
Disouq. Conclude well location assessment and drill carried
exploration well before year end;
-- Continue to minimise costs post business combination; and
-- Continue to explore opportunities to expand the asset base in
Egypt and in the Middle East and North Africa ("MENA").
Paul Welch, President & CEO of SDX Energy, commented:
"Having successfully raised new funds and completed our dual
listing on AIM, we are now well placed to maximize the potential
across our portfolio of Egyptian assets. We are set to carry out an
active work program on Meseda, which we expect to result in a
material increase in our net production. North West Gemsa is set to
continue delivering high margin barrels and, concurrently, we are
progressing our exciting exploration asset at South Disouq and look
forward to completing the processing and interpretation of the 3D
seismic survey ahead of a carried well later this year.
We have a solid financial position which is underpinned by
high-margin production that enables us to generate positive free
cash flow down to US$15 oil. This, combined with an active, and
potentially transformational work program, gives us a high degree
of confidence about the future."
Interim Consolidated
Balance sheet (Unaudited)
As At As At
June December
(thousands of United 30, 2016 31, 2015
States dollars)
----------------------------- ---------- ----------
Assets
Cash and cash equivalents 6,949 8,170
Trade and other receivables 8,480 6,678
Inventory 1,188 1,188
----------------------------- ---------- ----------
Current assets 16,617 16,036
Investments 2,818 2,106
Property, plant and
equipment 17,731 18,401
Intangible exploration
and evaluation assets 10,065 23,473
----------------------------- ---------- ----------
Non-current assets 30,614 43,980
Total Assets 47,231 60,016
----------------------------- ---------- ----------
Liabilities
Trade and other payables 7,743 3,556
Current income taxes 642 928
----------------------------- ---------- ----------
Current liabilities 8,385 4,484
Deferred income taxes 286 286
----------------------------- ---------- ----------
Non-current liabilities 286 286
Total Liabilities 8,671 4,770
----------------------------- ---------- ----------
Equity
Share capital 39,315 30,148
Warrants 99 99
Contributed surplus 5,369 5,175
Other comprehensive
loss (1,154) (1,154)
Retained Earnings (5,069) 20,978
----------------------------- ---------- ----------
Equity 38,560 55,246
----------------------------- ---------- ----------
Equity and Liabilities 47,231 60,016
----------------------------- ---------- ----------
Interim Consolidated Statement of
Comprehensive (Loss)/Income (Unaudited)
Three months Six months
ended June ended June
30 30
(thousands of United 2016 2015 2016 2015
States dollars, except
per share data)
------------------------------ --------- ------- ------------ -------
Revenue, net of royalties 2,521 2,900 4,631 5,715
------------------------------ --------- ------- ------------ -------
Revenue 2,521 2,900 4,631 5,715
Direct operating expense 1,290 1,004 2,289 1,675
Exploration and evaluation
expense 24,883 - 24,883 -
Depletion, depreciation
and amortization 845 436 1,662 887
Stock based compensation 100 146 194 323
Equity in income of
associate (365) (357) (712) (637)
General and administrative
expenses 912 639 1,772 1,173
------------------------------ --------- ------- ------------ -------
Operating (Loss)/Income (25,144) 1,032 (25,457) 2,294
Net finance expense/(income) (267) (227) 97 (436)
------------------------------ --------- ------- ------------ -------
(Loss)/Income before
income taxes (24,877) 1,259 (25,554) 2,730
Current income tax expense 287 264 493 766
Deferred income tax
(credit)/expense - (72) - (89)
------------------------------ --------- ------- ------------ -------
Total Current and Deferred
income tax expense 287 192 493 677
Net (Loss)/Income (25,164) 1,067 (26,047) 2,053
Other comprehensive
loss/(income)
Foreign exchange - (44) - 165
------------------------------ --------- ------- ------------ -------
Total comprehensive
(loss)/income for the
period (25,164) 1,111 (26,047) 1,888
------------------------------ --------- ------- ------------ -------
Net (loss)/income per
share
Basic $(0.455) $0.019 $(0.560) $0.036
Diluted $(0.455) $0.017 $(0.560) $0.032
------------------------------ --------- ------- ------------ -------
Interim Consolidated Statement of Changes
In Equity (Unaudited)
Six months ended
June 30
(thousands of United States dollars) 2016 2015
--------------------------------------- ---------- -------
Share Capital
Balance, beginning of period 30,148 24,512
Private placement - secondary 9,968 -
listing on the London Stock Exchange
AIM
Share issue costs (801) -
--------------------------------------- ---------- -------
Balance, end of period 39,315 24,512
Warrants
Balance, beginning of period 99 99
--------------------------------------- ---------- -------
Balance, end of period 99 99
Contributed Surplus
Balance, beginning of period 5,175 4,414
Share based payments for the
period 194 323
--------------------------------------- ---------- -------
Balance, end of period 5,369 4,737
Accumulated Other Comprehensive
Loss
Balance, beginning of period (1,154) (507)
Foreign currency translation
adjustment for the period - (165)
--------------------------------------- ---------- -------
Balance, end of period (1,154) (672)
Retained Earnings
Balance, beginning of period 20,978 10,931
Net (Loss)/Income for the period (26,047) 2,053
--------------------------------------- ---------- -------
Balance, end of period (5,069) 12,984
Total Equity 38,560 41,660
--------------------------------------- ---------- -------
Interim Consolidated Statement
of Cash Flows (Unaudited)
Three months Six months
ended June ended June
30 30
(thousands of United States 2016 2015 2016 2015
dollars)
--------------------------------- --------- --------- --------- ---------
Cash flows (used in)/from
operating activities
Income before income taxes (24,877) 1,259 (25,554) 2,730
Adjustments for:
Depletion, depreciation
and amortization 845 436 1,662 887
Exploration expense 24,883 - 24,883 -
Finance costs 7 18 83 67
Stock-based compensation 100 146 194 323
Equity in income of associate (365) (357) (712) (637)
--------------------------------- --------- --------- --------- ---------
Operating cash flow before
working capital movements 593 1,502 556 3,370
(Increase) / decrease
in trade and other receivables (2,762) (928) (1,785) 12
Increase / (decrease)
in trade and other payables 1,596 (443) 2,449 (1,379)
--------------------------------- --------- --------- --------- ---------
Cash (used in)/generated
from operating activities (573) 131 1,220 2,003
Income taxes paid (383) (4,096) (383) (4,096)
--------------------------------- --------- --------- --------- ---------
Net cash (used in)/from
operating activities (956) (3,965) 837 (2,093)
Cash flows used in investing
activities:
Property, plant and equipment
expenditures (15) (821) (15) (959)
Exploration and evaluation
expenditures (10,019) (784) (10,937) (959)
Dividends received - 966 - 966
--------------------------------- --------- --------- --------- ---------
Net cash used in investing
activities (10,034) (639) (10,952) (952)
Cash flows from/(used
in) financing activities:
Repayment of debentures - (2,052) - (2,052)
Private Placement on London
Stock Exchange AIM 9,167 - 9,167 -
Finance costs paid (8) (15) (101) (63)
--------------------------------- --------- --------- --------- ---------
Net cash from/(used in)
financing activities 9,159 (2,067) 9,066 (2,115)
Change in cash and cash
equivalents (1,831) (6,671) (1,049) (5,160)
Effect of foreign exchange
on cash and cash equivalents 109 77 (172) (313)
Cash and cash equivalents,
beginning of period 8,671 19,056 8,170 17,935
--------------------------------- --------- --------- --------- ---------
Cash and cash equivalents,
end of period 6,949 12,462 6,949 12,462
--------------------------------- --------- --------- --------- ---------
KEY FINANCIAL & OPERATING HIGHLIGHTS
Unaudited interim consolidated financial statements with
Management's Discussion and Analysis for Q2 2016 are now available
on the Company's website at www.sdxenergy.com and on SEDAR at
www.sedar.com.
Three months Six months
Unaudited Interim ended June ended June
Financial Statements 30 30
Prior
$000s except per Quarter
unit amounts (1) 2016 2015 2016 2015
------------------------------- ---------- -------- --------- --------
FINANCIAL
-------------------------------
Gross Revenues 2,789 3,384 2,900 6,173 5,715
Royalties (679) (863) - (1,542) -
---------- ---------
Net Revenues 2,110 2,521 2,900 4,631 5,715
Operating costs (999) (1,290) (1,004) (2,289) (1,675)
---------- ---------
Netback (2) 1,111 1,231 1,896 2,342 4,040
Total comprehensive
income / (loss) (883) (25,164) 1,111 (26,047) 1,888
per share (0.02) (0.45) 0.02 (0.56) 0.04
Funds from operations (37) 593 1,502 556 3,370
per share (0.00) 0.01 0.03 0.01 0.06
Cash, end of period 8,671 6,949 12,462 6,949 12,462
Working capital
(excl. cash) (3,257) 1,283 1,172 1,283 1,172
Capital expenditures 5,819 6,475 1,605 12,294 1,918
Total assets 64,907 47,231 44,333 47,231 44,333
Shareholders' equity 54,457 38,560 41,660 38,560 41,660
Common shares outstanding
(000's) 37,642 75,934 56,348 75,934 56,348
------------------------------- --------- ---------- -------- --------- --------
OPERATIONAL
------------------------------- --------- ---------- -------- --------- --------
Oil sales (bbl/d) 606 554 - 580 -
Production Service
Fee (bbl/d) 646 616 783 631 807
--------- ---------- -------- --------- --------
Total boe/d 1,252 1,170 783 1,211 807
Brent Oil Price
($/bbl) 33.73 45.54 61.72 39.63 57.77
West Gharib Oil
Price ($/bbl) 25.65 30.38 49.42 27.96 47.52
Net realized price
($/bbl) 24.46 31.80 40.72 28.01 39.10
Royalties ($/bbl) 5.96 8.11 - 7.00 -
Operating costs
($/bbl) 8.77 12.12 14.09 10.38 11.46
Netback ($/bbl) 9.73 11.57 26.63 10.63 27.64
------------------------------- --------- ---------- -------- --------- --------
(1) Denotes the three
months ended March
31, 2016.
(2) Netback is a non-GAAP measure that
represents sales net of all operating
expenses and government royalties. Management
believes that netback is a useful supplemental
measure to analyze operating performance
and provide an indication of the results
generated by the Company's principal business
activities prior to the consideration
of other income and expenses. Management
considers netbacks an important measure
as it demonstrates the Company's profitability
relative to current commodity prices.
Netback may not be comparable to similar
measures used by other companies.
Three months Six months
Proforma Combined ended June ended June
Business 30 30
Prior
$000s except per Quarter
unit amounts (1) 2016 2015 2016 2015
------------------------------- ---------- -------- --------- --------
FINANCIAL
-------------------------------
Gross Revenues 2,789 3,384 6,659 6,173 13,839
Royalties (679) (863) (1,976) (1,542) (3,722)
---------- ---------
Net Revenues 2,110 2,521 4,683 4,631 10,117
Operating costs (999) (1,290) (668) (2,289) (2,090)
---------- ---------
Netback (2) 1,111 1,231 4,015 2,342 8,027
Total comprehensive
income / (loss) (883) (25,164) 1,341 (26,047) 1,602
per share (0.02) (0.45) 0.02 (0.56) 0.03
Funds from operations (37) 593 2,269 556 4,419
per share (0.00) 0.01 0.04 0.01 0.08
Cash, end of period 8,671 6,949 12,957 6,949 12,957
Working capital
(excl. cash) (3,257) 1,283 3,515 1,283 3,515
Capital expenditures 5,819 6,475 1,875 12,294 2,376
Total assets 64,907 47,231 44,333 47,231 44,333
Shareholders' equity 54,457 38,560 41,660 38,560 41,660
Common shares outstanding
(000's) 37,642 75,934 56,348 75,934 56,348
------------------------------- --------- ---------- -------- --------- --------
OPERATIONAL
--------- ---------- -------- --------- --------
Oil sales (bbl/d) 606 554 719 580 855
Production Service
Fee (bbl/d) 646 616 783 631 807
------------------------------- --------- ---------- -------- --------- --------
Total boe/d 1,252 1,170 1,502 1,211 1,662
Brent Oil Price
($/bbl) 33.73 45.54 61.72 39.63 57.77
West Gharib Oil
Price ($/bbl) 25.65 30.38 49.42 27.96 47.52
Net realized price
($/bbl) 24.46 31.80 48.73 28.01 45.98
Royalties ($/bbl) 5.96 8.11 14.46 7.00 12.37
Operating costs
($/bbl) 8.77 12.12 4.89 10.38 6.95
Netback ($/bbl) 9.73 11.57 29.38 10.63 26.66
------------------------------- --------- ---------- -------- --------- --------
(1) Denotes the three
months ended March
31, 2016
(2) Netback is a non-GAAP measure that
represents sales net of all operating
expenses and government royalties. Management
believes that netback is a useful supplemental
measure to analyze operating performance
and provide an indication of the results
generated by the Company's principal business
activities prior to the consideration
of other income and expenses. Management
considers netbacks an important measure
as it demonstrates the Company's profitability
relative to current commodity prices.
Netback may not be comparable to similar
measures used by other companies.
About SDX
SDX is an international oil and gas exploration, production and
development company, headquartered in London, England, UK, with a
principal focus on Egypt. In Egypt, SDX has an interest in two
production concessions: North West Gemsa and West Gharib (Meseda)
both located in the Eastern Desert. SDX's portfolio also consists
of South Ramadan, a development asset in the Gulf of Suez; South
Disouq, an exploration asset in the Nile Delta. For further
information, please see the website of the Company at
www.sdxenergy.com or the Company's filed documents at
www.sedar.com.
For further information:
SDX Energy Inc.
Paul Welch
President and Chief Executive Mark Reid
Officer Chief Financial Officer
Tel: +44 203 219 5640 Tel: +44 203 219 5640
Cantor Fitzgerald Europe
(Nominated Adviser & Joint
Broker)
Sarah Wharry/Craig Francis
Tel: +44 207 7894 7000
FirstEnergy Capital LLP
(Joint Broker)
Jonathan Wright/David
van Erp
Tel: +44 207 448 0200
Celicourt (PR)
Mark Antelme/ Joanna Boon
Tel: +44 207 520 9260
Advisory
Forward-Looking Statements
Certain statements contained in this press release constitute
"forward-looking statements" as such term is used in applicable
Canadian securities laws. Any statements that express or involve
discussions with respect to predictions, expectations, beliefs,
plans, projections, objectives, assumptions or future events or are
not statements of historical fact should be viewed as
forward-looking statements. In particular, statements concerning
the completion of and anticipated results from the workover
programs at Meseda and North West Gemsa; the exploration plans for
the Company's asset at South Disouq, including the completion of
the 3D seismic processing and interpretation, well location
assessment and the drilling of a carried exploration well; and the
expected results of the business combination between the Company
and Madison PetroGas Ltd., which was completed on October 1, 2015,
should be viewed as forward-looking statements.
The forward-looking statements contained in this document are
based on certain assumptions and although management considers
these assumptions to be reasonable based on information currently
available to them, undue reliance should not be placed on the
forward-looking statements because SDX can give no assurances that
they may prove to be correct. This includes, but is not limited to,
assumptions related to, among other things, commodity prices and
interest and foreign exchange rates; planned synergies, capital
efficiencies and cost-savings; applicable tax laws; future
production rates; the sufficiency of budgeted capital expenditures
in carrying out planned activities; and the availability and cost
of labour and services.
By their very nature, forward-looking statements are subject to
certain risks and uncertainties (both general and specific) that
could cause actual events or outcomes to differ materially from
those anticipated or implied by such forward-looking statements.
Such risks and other factors include, but are not limited to
political, social and other risks inherent in daily operations for
the Company, risks associated with the industries in which the
Company operates, such as: operational risks; delays or changes in
plans with respect to growth projects or capital expenditures;
costs and expenses; health, safety and environmental risks;
commodity price, interest rate and exchange rate fluctuations;
environmental risks; competition; failure to realize the
anticipated benefits of the Transaction and to successfully
integrate the Parties; ability to access sufficient capital from
internal and external sources; and changes in legislation,
including but not limited to tax laws and environmental
regulations. Readers are cautioned that the foregoing list of risk
factors is not exhaustive and are advised to reference SDX's Annual
Information Form for the year ended December 31, 2015 for a
description of additional risks and uncertainties associated with
SDX's business, including its exploration activities, which can be
found on SDX's SEDAR profile at www.sedar.com.
The forward-looking statements contained in this press release
are made as of the date hereof and SDX does not undertake any
obligation to update publicly or to revise any of the included
forward-looking statements, except as required by applicable law.
The forward-looking statements contained herein are expressly
qualified by this cautionary statement.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR UOVSRNAAWUAR
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