TIDMSDX
RNS Number : 7110E
SDX Energy PLC
08 July 2019
THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED BY
SDX TO CONSTITUTE INSIDE INFORMATION AS STIPULATED UNDER THE MARKET
ABUSE REGULATION (EU) NO. 596/2014 ("MAR"). ON THE PUBLICATION OF
THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE ("RIS"),
THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC
DOMAIN.
8 July 2019
SDX ENERGY PLC
("SDX" or the "Company")
OPERATIONAL AND CORPORATE UPDATE
Highlights
-- Development of South Disouq (SDX 55% working interest and
operator) continues on schedule and on budget, with factory
acceptance tests for the central processing facility ("CPF") and
compressor, the first of three project milestones, now successfully
completed.
-- Both pieces of equipment are now commencing the process of
being shipped to Egypt with a view to arriving on site at South
Disouq in mid-August and on schedule for first gas in Q4'19.
-- Interpretation of the South Disouq 3D seismic continues to
refine our understanding of prospectivity in the concession. Upon
completion of this interpretation and partner discussions, a
decision will be made on future drilling.
-- Planning for the 12-well drilling campaign in Morocco (SDX
75% working interest and operator) has commenced with long lead
items ordered, all key contracts finalised and drilling expected to
commence in Q4 2019. The programme will be targeting 15 bcf of
gross unrisked prospective resources.
-- Gross production for six months to 30 June 2019 in line with FY 2019 guidance:
o Meseda and Rabul: 4,300 bbl/d
o NW Gemsa: 3,900 boe/d
o Morocco: 6.0 MMscf/d
-- Cash at 30 June 2019 (unaudited) of US$11.0 million (31 March
2019: US$11.4 million) together with the undrawn US$10 million EBRD
facility fully funds SDX for all existing and planned
activities.
-- The Board has provided Mark Reid, CFO and Interim CEO, with a
mandate to deliver first gas at South Disouq during Q4'19 and to
successfully execute the Moroccan drilling campaign commencing in
Q4'19. To support the execution of this mandate, Mr. Reid has
established an experienced Executive Committee which will meet
monthly, consisting of the heads of Subsurface & Operations,
Facilities and Finance and the Country Managers of Egypt and
Morocco. A further update on the CEO position will be provided in
due course.
Mark Reid, CFO and Interim CEO of SDX, commented:
"SDX continues to focus on the successful delivery of its key
operational targets at the South Disouq development in Egypt and
the upcoming Morocco drilling campaign.
We are pleased to report that good progress has been made on
these initiatives and both remain on schedule and on budget. Once
the South Disouq 3D has been interpreted, and after partner
discussions, we will assess the potential for a drilling campaign
and update the market in due course.
Our cashflow and receivables collections remain strong and I am
pleased to report that all of our existing and planned activities
are fully funded from current cash, near-term cash flows and the
undrawn EBRD facility. I look forward to providing further updates
on our activities during the second half of 2019."
South Disouq
-- The first of the three key South Disouq project milestones,
the CPF and compressor fabrication in Abu Dhabi and Houston, is now
complete and the factory acceptance tests passed.
-- The 12" export line to the Egyptian national grid is 100%
completed and tested, as are two of the four 6" flowlines from the
discovery wells to the CPF.
-- Preparations for the second key project milestone, the
shipping of the CPF skids from Abu Dhabi and compressor from
Houston to Egypt, have commenced and arrival on-site is anticipated
in mid-August 2019, subject to satisfactory customs clearance in
Egypt.
-- The third key South Disouq project milestone, first gas, is
expected in Q4 2019 in line with previous guidance, subject to
successful assembly, testing and commissioning of the CPF.
-- Following a ramp up phase, a gross plateau production rate of
c.50 MMscfe/d is being targeted in Q1 2020.
-- 3D seismic interpretation is ongoing. During H2'19, the
Company will review the final results of the 3D interpretation,
undertake partner discussions on a potential drilling campaign and
complete an assessment of drilling risk and capital allocation.
Upon conclusion of these activities, a decision will be made on a
2020 drilling campaign.
Morocco
-- Planning for the 12-well drilling campaign in Morocco (SDX
75% working interest and operator) targeting 15 bcf of gross
unrisked prospective resources has commenced. Long lead items have
been ordered with the drilling rig and all other key contracts
finalised.
-- The campaign is expected to commence in Q4 2019 and is
targeting sufficient reserves to satisfy existing customers'
forecast demand, as well as testing new play-opening areas of
prospectivity across the portfolio.
Other Portfolio Assets
-- In Meseda (SDX 50% working interest and joint operator), the
Company successfully drilled the Rabul-7 development well which was
brought on stream at a stabilised rate of 415 bbl/d of oil. A
further development well is planned in H2'19 which, if successful,
will provide further support to the Company's reiterated guidance
of 4,000-4,200 bbl/d gross.
-- In North West Gemsa (SDX 50% working interest), the ongoing
workover program is supporting the unchanged 2019 gross production
guidance of 3,000-3,200 boe/d.
Production update
-- The Company's H1'19 production and FY19 production guidance is shown below:
Gross Production
Asset Six months FY19 Guidance
ended 30 June
2019
--------------- -----------------------
NW Gemsa - WI c.3,900 boe/d 3,000 - 3,200 boe/d
50%
--------------- -----------------------
Meseda - WI 50% c.4,300 bbl/d 4,000 - 4,200 bbl/d
--------------- -----------------------
South Disouq N/A First gas by Q4'19.
- WI 55% c.50 MMscfe/d plateau
by Q1'20
--------------- -----------------------
Morocco - WI c.6.0 MMscf/d* 6.0 - 6.5 MMscf/d
75% 2019 annual average
rate
--------------- -----------------------
* Reflects stabilised consumption from four out of eight
customers. Remaining four customers consumed low volumes of gas in
H1'19 and are expected to increase consumption in H2'19
Financial and Corporate
-- Cash at 30 June 2019 (unaudited) is c.US$11.0 million (31
March 2019: US$11.4 million) with the US$10 million EBRD facility
remaining undrawn.
-- FY 2019 Capex guidance is unchanged as follows;
o South Disouq US$35.5 million (gross)/US$19.5 million (net)
o Meseda/Rabul US$5.4 million (gross)/US$2.7 million (net)
o North West Gemsa US$4.0 million (gross)/US$2.0 million
(net)
o Morocco US$14.0 million (gross)/US$12.0 million (net)
-- Continued reduction in Egyptian receivables to US$7.1 million
(unaudited) as at 30 June 2019 (US$14.8 million as at 31 December
2018) with a further US$2.6 million received 2 July 2019.
-- SDX remains fully funded for all existing and planned activities.
-- Corporate reorganisation completed in May 2019, with
re-domiciliation from Canada to the UK, and delisting from
TSX-V.
About SDX
SDX is an international oil and gas exploration, production and
development company, headquartered in London, England, UK, with a
principal focus on North Africa. In Egypt, SDX has a working
interest in two producing assets (50% North West Gemsa & 50%
Meseda) located onshore in the Eastern Desert, adjacent to the Gulf
of Suez. In Morocco, SDX has a 75% working interest in the Sebou
concession, situated in the Gharb Basin. These producing assets are
characterized by exceptionally low operating costs, making them
particularly resilient in a low oil price environment. SDX's
portfolio also includes high impact exploration opportunities in
both Egypt and Morocco.
For further information, please see the Company's website at
www.sdxenergy.com or the Company's filed documents at
www.sedar.com.
Competent Persons Statement
In accordance with the guidelines of the AIM Market of the
London Stock Exchange the technical information contained in the
announcement has been reviewed and approved by Rob Cook, VP
Subsurface of SDX. Dr. Cook, has over 25 years of oil and gas
industry experience, is the qualified person as defined in the
London Stock Exchange's Guidance Note for Mining and Oil and Gas
companies. Dr. Cook holds a BSc in Geochemistry and a PhD in
Sedimentology from the University of Reading, UK. He is a Chartered
Geologist with the Geological Society of London (Geol Soc) and a
Certified Professional Geologist (CPG-11983) with the American
Institute of Professional Geologists (AIPG).
For further information:
SDX Energy Plc
Mark Reid
Chief Financial Officer and Interim
Chief Executive Officer
Tel: +44 203 219 5640
Stifel Nicolaus Europe Limited (Nominated Adviser and Joint Broker)
Callum Stewart
Nicholas Rhodes
Ashton Clanfield
Tel: +44 (0) 20 7710 7600
Cantor Fitzgerald Europe (Joint Broker)
David Porter
Tel: +44 207 7894 7000
GMP FirstEnergy (Joint Broker)
Jonathan Wright
Tel: +44 207 448 0200
Celicourt (PR)
Mark Antelme/Jimmy Lea/Ollie Mills
Tel: +44 207 520 9260
Glossary
"bbl" stock tank barrel
"bcf" billion cubic feet
------------------------------
"boepd" & "boe/d" barrels of oil equivalent per
day
------------------------------
"bopd" & "bbl/d" barrels of oil per day
------------------------------
"mcf" thousands of cubic feet
------------------------------
"MMscf/d" million standard cubic feet
per day
------------------------------
"MMscfe/d" million standard cubic feet
equivalent per day
------------------------------
Forward--Looking Information
Certain statements contained in this press release may
constitute "forward--looking information" 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 information. In particular statements regarding the
Company's plans, the timing of completion of the South Disouq CPF,
timing of completion of the export pipelines and well tie-ins,
production targets, future drilling, ESP replacement, field
facility upgrades, well workovers, and the timing and costs
thereof, as well as capital expenditures, operational expenditures,
the Company's 2019 outlook, should all be regarded as
forward-looking information.
The forward-looking information contained in this document is
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 information 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; receipt of necessary permits; the sufficiency of
budgeted capital expenditures in carrying out planned activities;
the timing of and the Company's ability to obtain regulatory and
statutory approvals in connection with the Company's plans and the
availability and cost of labor and services.
All timing given in this announcement, unless stated otherwise
is indicative and while the Company endeavors to provide accurate
timing to the market, it cautions that due to the nature of its
operations and reliance on third parties this is subject to change
often at little or no notice. If there is a delay or change to any
of the timings indicated in this announcement, the Company shall
update the market without delay.
Forward-looking information is 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; permitting risks; 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
Management's Discussion & Analysis for the three months ended
March 31, 2019, which can be found on SDX's SEDAR profile at
www.sedar.com, for a description of additional risks and
uncertainties associated with SDX's business, including its
exploration activities.
The forward--looking information contained in this press release
is as of the date hereof and SDX does not undertake any obligation
to update publicly or to revise any of the included
forward--looking information, except as required by applicable law.
The forward--looking information contained herein is expressly
qualified by this cautionary statement.
Oil and Gas Advisory
Estimates of reserves been made assuming the development of each
property in which the estimate is made will actually occur, without
regard to the likely availability to the Company of funding
required for development of such reserves.
Certain disclosure in this news release constitute "anticipated
results" for the purposes of National Instrument 51-101 - Standards
for Oil and Gas Activities of the Canadian Securities
Administrators because the disclosure in question may, in the
opinion of a reasonable person, indicate the potential value or
quantities of resources in respect of the Company's resources or a
portion of its resources. Without limitation, the anticipated
results disclosed in this news release include estimates of volume,
flow rate, production rates, porosity and pay thickness
attributable to the resources of the Company. Such estimates have
been prepared by management of the Company and have not been
prepared or reviewed by an independent qualified reserves evaluator
or auditor. Anticipated results are subject to certain risks and
uncertainties, including those described above and various
geological, technical, operational, engineering, commercial and
technical risks. In addition, the geotechnical analysis and
engineering to be conducted in respect of such resources is not
complete. Such risks and uncertainties may cause the anticipated
results disclosed herein to be inaccurate. Actual results may vary,
perhaps materially.
Prospective Resources
The prospective resource estimates disclosed herein have been
prepared by an independent qualified reserves evaluator, ERC
Equipoise Limited, in accordance with the Canadian Oil and Gas
Evaluation Handbook. The prospective resources disclosed herein
have an effective date of 1(st) January 2019. Prospective resources
are those quantities of gas, estimated as of given date, to be
potentially recoverable from undiscovered accumulations through
future development projects. As prospective resources, there is no
certainty that any portion of the resources will be discovered. The
chance that an exploration project will result in a discovery is
referred to as the "chance of discovery" as defined by the
management of the Company. There is no certainty that it will be
commercially viable to produce any portion of the resources
discussed herein; though any discovery that is commercially viable
would be tied back to the Company's pipeline in Morocco and then
connected to customers' facilities within 9 to 12 months of
discovery. Based upon the economic analysis undertaken on any
discovery, management has attributed an associated chance of
development of 100%. Anticipated results are subject to certain
risks and uncertainties, including various geological, technical,
operational, engineering, commercial and technical risks. In
addition, the geotechnical analysis and engineering to be conducted
in respect of such resources is not complete. Such risks and
uncertainties may cause the anticipated results disclosed herein to
be inaccurate. Actual results may vary, perhaps materially.
There are uncertainties associated with the volume estimates of
the prospective resources disclosed herein, due to the level of
information available on prospective resources, but ranges are
defined based on data from the Company's nearby existing analogous
wells. Some of the risk and uncertainties are outlined below:
-- Petrophysical parameters of the sand/reservoir;
-- Fluid composition, especially heavy end hydrocarbons;
-- Accurate estimation of reservoir conditions (pressure and temperature);
-- Reservoir drive mechanism;
-- Potential well deliverability; and
-- The thickness and lateral extent of the reservoir section,
currently based on 3D seismic data.
Use of the term "boe" or the term "MMscf" may be misleading,
particularly if used in isolation. A "boe" conversion ratio of 6
Mcf: 1 bbl and a "Mcf" conversion ratio of 1bbl: 6 Mcf are based on
an energy equivalency conversion method primarily applicable at the
burner tip and does not represent a value equivalency at the
wellhead.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
UPDGMGGNLKVGLZM
(END) Dow Jones Newswires
July 08, 2019 02:00 ET (06:00 GMT)
Sdx Energy (LSE:SDX)
Historical Stock Chart
From Jun 2024 to Jul 2024
Sdx Energy (LSE:SDX)
Historical Stock Chart
From Jul 2023 to Jul 2024