TIDMSDX
RNS Number : 8362J
SDX Energy PLC
22 August 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.
22 August 2019
SDX ENERGY PLC ("SDX" or the "Company")
ANNOUNCES ITS FINANCIAL AND OPERATING RESULTS FOR THE THREE AND
SIX MONTHSED 30 JUNE 2019
SDX Energy Plc (AIM: SDX), the North Africa-focused oil and gas
company, announces its financial and operating results for the
three and six months ended 30 June 2019. All monetary values are
expressed in United States dollars net to the Company unless
otherwise stated.
Summary
Operations
-- H1 2019 production of 3,539 boe/d, net to SDX, an increase of
9% from H1 2018 due to successful drilling in Meseda and increased
gas sales in Morocco. Q2 2019 production of 3,366 boe/d (net) was
9% lower than Q1 2019, primarily the result of an increased water
cut in North West Gemsa.
Egypt
-- Construction of the South Disouq central processing facility
("CPF"), pipeline, and well tie-ins continued in H1 2019 with first
gas expected in Q4 2019. The CPF has cleared customs in Alexandria
and is en route to site at South Disouq, thus achieving the second
of the three key project milestones. The final milestone of first
gas in Q4 2019 remains on track, subject to the successful
installation and hook-up of the CPF, which is scheduled to begin
later in August, with the Company aiming for a gross plateau
production rate of c.50 MMscfe/d by Q1 2020.
-- Discussions continue with our partner relating to the
potential exploration drilling programme in South Disouq. A further
update will be provided when agreement on the drilling programme is
reached.
-- In Meseda, following successful drilling of the Rabul-7
development well, a further development well, MSD-19, was spud in
early August, and the Company will announce the result of this well
in due course. The Company maintains its existing gross production
guidance of 4,000-4,200 bbl/d.
-- In North West Gemsa, 2019 gross production guidance is
maintained at 3,000-3,200 boe/d, with well workovers slowing the
rate of natural field decline.
Morocco
-- Planning for the drilling of 12 wells in Morocco is at an
advanced stage, with the campaign targeted to begin in Q4 2019 and
complete in H1 2020. All long lead items have been ordered and all
key contracts finalised. The programme will be targeting 15bcf of
gross unrisked prospective resources.
-- Morocco gas customers added in late 2018/early 2019 continue
to stabilise consumption rates, underpinning 2019 sales guidance of
an annual average gross rate of 6.0-6.5 MMscf/d.
-- The drilling campaign in Morocco will target sufficient
reserves to satisfy existing customers' forecast demands and test
new play opening areas of prospectivity across the portfolio.
Financial
-- H1 2019 net revenues of US$25 million are 4% higher than in
H1 2018, with higher production compensating for lower net realised
average oil/service fees of US$57/boe, compared to US$62/boe in H1
2018.
-- H1 2019 netback of US$18 million was lower than the US$19
million achieved in H1 2018, mainly because of increased workover
opex activity in H1 2019 and a greater allocation of costs to opex
in H1 2019. These costs were allocated to capex/drilling campaigns
in Morocco and NW Gemsa in H1 2018.
-- Operating cash flow before capex in H1 2019 remained robust
at US$13 million (H1 2018: US$20 million (which was higher as a
result of the unwinding of a larger Egyptian Petroleum Company
("EGPC") debtor in the period)), supporting US$19 million of capex
invested in the period (H1 2018: US$22 million). Of this US$19
million, US$12 million related to the South Disouq CPF, pipeline
and well tie-ins and 3D seismic, US$3 million for customer
connections and 3D seismic in Morocco, US$3 million for workovers
in Meseda and North West Gemsa and US$1 million for drilling and
completion costs at South Ramadan.
-- The Company's drilling and development activities set out
above are fully funded from expected future cash flows and its
existing sources of liquidity.
-- Cash at 30 June 2019 was US$11 million, with the US$10
million EBRD facility remaining undrawn.
Mark Reid, CFO and Interim CEO of SDX, commented:
"The Company continues to make good progress toward achieving
its three medium-term strategic objectives of securing first gas at
South Disouq in Q4 2019, executing an efficient and successful
12-well drilling campaign in Morocco in 2019/20, and continuing
with our potential exploration drilling campaign in South Disouq in
2020.
Production and capex from our operations remains within our
guided ranges and we look forward to updating the market on the
results of our drilling activities in Meseda and Morocco in the
coming months. Our cashflow generation, liquidity position, and
balance sheet remain strong and continue to provide us with the
necessary funding to complete all of these medium-term strategic
objectives.
Achieving first gas at South Disouq in Q4 will be transformative
for the Company, as we will benefit from our 55% share of the
expected production plateau of 50 MMscfe/d from Q1 2020."
Corporate and financial
-- SDX's key financial metrics for the three and six months ended 30 June 2019 and 2018 are:
Three months Six months ended
ended 30 June
30 June
US$ million, except per unit 2019 2018 2019 2018
amounts
------- ------ ---------- -------
Net revenues 12.7 13.5 25.4 24.4
------- ------ ---------- -------
Netback(1) 9.1 10.3 18.5 19.3
------- ------ ---------- -------
Net realised average oil/service
fees - US$/barrel 60.62 64.23 57.44 61.97
------- ------ ---------- -------
Net realised average Morocco
gas price - US$/mcf 10.31 10.51 10.28 10.27
------- ------ ---------- -------
Netback - US$/boe 29.84 33.00 28.80 32.91
------- ------ ---------- -------
EBITDAX(1) (2) 7.3 8.6 15.1 16.2
------- ------ ---------- -------
Exploration & evaluation expense
("E&E") (0.4) (2.1) (0.6) (5.3)
------- ------ ---------- -------
Depletion, depreciation, and
amortisation ("DD&A") (6.0) (3.7) (11.9) (6.2)
------- ------ ---------- -------
Total comprehensive(loss)/income (0.5) 0.6 (0.4) 1.0
------- ------ ---------- -------
Net cash generated from operating
activities 5.8 9.4 12.8 20.3
------- ------ ---------- -------
Cash and cash equivalents 11.2 25.2 11.2 25.2
------- ------ ---------- -------
Note:
(1) Refer to the "Non-IFRS Measures" section of this release
below for details of Netback and EBITDAX.
(2) EBITDAX for each period presented includes non-cash revenue
relating to the grossing up of Egyptian Corporate Tax on the North
West Gemsa PSC, which is paid by the Egyptian State on behalf of
the Company (Q2 2019: US$0.9 million, Q2 2018: US$1.2 million, H1
2019: US$1.9 million, H1 2018: US$2.2 million)
-- The main components of SDX's comprehensive loss of US$(0.4)
million for the six months ended 30 June 2019 are:
o US$18.5 million netback;
o US$11.9 million of DD&A;
o US$3.3 million of G&A; and
o US$1.1 million of transaction costs covering the re-domicile
of the Company from Canada to the UK, the Company's capital
reduction to improve our ability to pay dividends, and other
business development activities.
-- Netback for the six months ended 30 June 2019 was US$18.5
million, down from US$19.3 million for the six months to 30 June
2018. This decrease has mainly been driven by a 7% reduction in H1
2019 realised average oil prices in Egypt to US$57.44/bbl from
US$61.97/bbl in H1 2018, higher opex resulting from increased
workover activity in H1 2019, and a greater allocation of costs to
opex in the period. These costs were allocated to capex/drilling
campaigns in Morocco and NW Gemsa in H1 2018. These factors were
partly offset by increased production at Meseda and in Morocco.
-- The cash position of US$11.2 million as at 30 June 2019 is
broadly unchanged from the US$11.4m as at 31 March 2019 and US$6.1
million lower than the US$17.3 million as at 31 December 2018.
-- The main components of this H1 2019 cash movement are:
operating cash flows of US$14.1 million, which includes a US$3.0
million improvement in working capital predominantly due to the
continued reduction in Egyptian receivables, an Egyptian
corporation tax payment of US$1.3 and the US$19.3 million capital
investment programme discussed below. The Company's three-year,
US$10.0 million credit facility established in July 2018 with the
EBRD remains undrawn.
-- US$19.3 million of capital expenditure has been invested into
the business during the six months ended 30 June 2019. This is
comprised of:
o US$12.4 million for the South Disouq development, comprising
US$9.8 million for the CPF, pipeline and well tie-ins, and US$2.6
million for the 170km(2) 3D seismic programme;
o US$1.9 million in North West Gemsa for the ongoing well
workover programme;
o US$1.1 million in Meseda for the ongoing electrical
submersible pump ("ESP") and sucker rod pump replacement
programmes;
o US$1.4 million in South Ramadan for the SRM-3 well and
development project, the results of which are currently being
assessed; and
o US$2.5 million in Morocco, comprising US$2.1 million for
customer connections, facilities and studies, and US$0.4 million
relating to the 240km(2) 3D seismic programme in Gharb Centre.
-- Trade and other receivables have reduced to US$21.8 million
as at 30 June 2019, down from US$24.3 million as at 31 December
2018. This reduction is predominantly a result of the continued
recovery of trade receivables which were due from the Egyptian
State and offset against costs owing to Egyptian State contractors
used on the South Disouq development project.
-- Post period end, the Company has collected a further US$5.7
million of trade receivables of which US$3.9 million was collected
from EGPC and US$1.8 million was collected from third-party gas
customers in Morocco. Out of the US$3.9 million from EGPC, US$0.4
million was offset against South Disouq drilling and development
costs and amounts owing to joint venture partners.
Operational highlights
-- The Company's entitlement share of production from its
operations for the six months ended 30 June 2019 was 3,539 boe/d
(gross - 9,250 boe/d) split as follows:
o North West Gemsa 1,972 boe/d (gross - 3,944 boe/d)
o Meseda 822 bbl/d (gross - 4,313 bbl/d)
o Morocco 745 boe/d (gross - 993 boe/d)
Egypt
-- In South Disouq (SDX 55% working interest and operator), the
Company was awarded a 25-year development lease on 1 July 2019
covering the Ibn Yunus development area, which together with the
25-year South Disouq development lease granted on 2 January 2019
comprises the South Disouq development project. Gas sales
agreements have been signed for both development leases, with
pricing of US$2.85/Mcf.
-- Development of the South Disouq CPF, pipeline and well
tie-ins continued during H1 2019, with the 12" export line to the
Egyptian national grid now 100% completed and tested, alongside
three of the four 6" flowlines from the discovery wells to the CPF.
The CPF and the compressor both passed factory acceptance tests and
the CPF has cleared Customs in Alexandria and is en route to site
at South Disouq. The installation and hook-up of the CPF is
scheduled to commence later in August and production is expected to
start up in Q4 2019. After a ramp up phase, an initial gross
plateau production rate of c.50 MMscfe/d of conventional natural
gas is being targeted.
-- Interpretation of South Disouq's 170 km(2) 3D seismic survey
that was completed in February 2019 continues, alongside the
re-processing of 300 km(2) 3D seismic data acquired in 2016. During
H2 2019, the Company will review the final results of the composite
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 future drilling campaign.
-- In Meseda (SDX 50% working interest and joint operator), the
Company completed the Rabul-7 development well, which is
contributing c.400 bbl/d gross to production, and participated in
the workover of five wells during Q2 2019 across the Rabul
(Rabul-2, Rabul-2R) and Meseda (MSD-8, MSD-11 and FADL N-1) fields.
The two Rabul wells were recompleted in additional producing
horizons, the MSD-8 well had an ESP replacement, and the MSD-11 and
FADL N-1 wells had sucker rod pump replacements. These workovers
were part of a wider programme, following on from the four wells
worked over in Q1 2019. During Q1 2019, the MSD-4 well was
converted to a water injector, with the planned Rabul water
injection well deferred pending the results of a subsurface study.
The above activities were all part of the 2019 budgeted capital
expenditure programme supporting the 2019 annual production
guidance of 4,000-4,200 bbl/d.
-- In the remainder of 2019, the partners will complete the
drilling of a further development well, MSD-19, which spud in early
August. The Company will announce the result of this well in due
course.
-- In North West Gemsa (SDX 50% working interest and
non-operator), five workovers were carried out in Q2 2019. The
AASE-25, AASE-18 and AASE-5 wells had ESPs installed, the AASE-6
well had its completion string replaced and the Geyad-1 was
re-entered to replace the ESP and the results of this operation are
currently being reviewed. One well was worked over in Q1 2019.
-- At South Ramadan (SDX 12.75% working interest and
non-operator), the SRM-3 appraisal well was spud on 14 June 2018
and reached a target depth of 15,635 feet. The operator reported
encountering 75 feet of net conventional oil pay in the Matulla
section (primary target), 20 feet of net conventional oil pay in
the Brown Limestone formation, and a further 15 feet of net
conventional oil pay in the Sudr section. The well was completed
and operations continue on the flowline upgrade/replacement so that
the well can be flow-tested. Based on the results of the flow-test,
the Company will decide how best to optimise its position in the
licence.
Morocco
-- The Company's Moroccan acreage (SDX 75% working interest and
operator) consists of five concessions, all of which are located in
the Gharb Basin in northern Morocco: Sebou, Lalla Mimouna Nord,
Gharb Centre, Lalla Mimouna Sud, and Moulay Bouchta Ouest, with the
latter two secured by the Company during H1 2019.
-- In 2018, the Company began selling natural gas to the
following new customers: Peugeot, Extralait, and GPC Kenitra.
During H1 2019, natural gas sales began to three additional
customers: Setexam, Citic Dicastal and Omnium Plastic.
-- The six new customers have been increasing their consumption
rates during H1 2019, with several expected to reach stabilised
rates during the second half of the year. H1 2019 gross production
was 6.0MMscf/d, a 15% increase from the 2018 rate of
5.2MMscf/d.
-- The Moulay Bouchta Ouest exploration concession has been
awarded to SDX for a period of eight years, with a commitment to
reprocess 150 km of 2D seismic data, acquire 100 km(2) of new 3D
seismic, and drill one exploration well within the first three and
a half-year period.
-- The Lalla Mimouna Sud exploration concession has been
re-awarded to SDX for a period of eight years, with a commitment to
acquire 50 km(2) of 3D seismic and drill one exploration well
within the first three-year period.
-- None of these commitments are expected to require funding in the next 12 months.
2019 production and Capex guidance:
-- The Company's H1 2019 production, FY19 production guidance,
and FY19 Capex guidance are shown below:
Gross production Capex (net to
SDX)
Asset Six months FY19 Guidance FY19 Guidance
ended 30 June
2019
--------------- ----------------------- ----------------
NW Gemsa - WI 3,944 boe/d 3,000 - 3,200 boe/d US$2.0 million
50%
--------------- ----------------------- ----------------
Meseda - WI 50% 4,313 bbl/d 4,000 - 4,200 bbl/d US$2.7 million
--------------- ----------------------- ----------------
South Disouq N/A First gas by Q4'19. US$19.5 million
- WI 55% c.50 MMscfe/d plateau
by Q1'20
--------------- ----------------------- ----------------
Morocco - WI 6.0 MMscf/d* 6.0 - 6.5 MMscf/d US$12.0 million
75% 2019 annual average
rate
--------------- ----------------------- ----------------
* Reflects stabilised consumption from four out of eight
customers. The remaining four customers consumed low volumes of gas
in H1 2019 and are expected to increase consumption in H2 2019.
-- Capex guidance is unchanged and comprises:
o North West Gemsa: US$4.0 million (US$2.0 million net to SDX)
consisting of up to 10 well workovers and infrastructure
maintenance.
o Meseda: US$5.4 million (US$2.7 million net to SDX) for two
development wells, ESP replacements and facilities upgrades.
o South Disouq: US$35.5 million (US$19.5 million net to SDX). Of
the Company's share, approximately US$17.0 million relates to South
Disouq development activities and US$2.5 million relates to long
lead items and drilling preparations for two potential exploration
wells in 2020. To date in 2019, the Company has offset US$13.9
million of its accounts receivable due from the EGPC against costs
incurred with Egyptian State contractors on the South Disouq
development. The Company expects to use future accounts receivable
offsets amounting to US$3.2 million to fund its remaining US$4.0
million share of capex to first gas.
o Morocco: US$14.0 million (US$12.0 million net to SDX). Out of
this US$12.0 million, US$3.4 million relates to long lead items for
the 12 wells and US$6.0 million relates to the drilling costs for
up to four wells expected to be drilled by the end of 2019. The
remaining US$2.6 million relates to the Company's share of
facilities and field maintenance capex.
Corporate
-- 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.
-- Completed capital reduction exercise in June 2019 to improve
the ability to pay dividends in the future when the Company deems
it prudent to do so.
-- As part of the Company's strategy, it continues to review and
explore opportunities to expand the asset base in the North Africa
region, including new licencing rounds and acquisitions.
KEY FINANCIAL & OPERATING HIGHLIGHTS
Unaudited interim condensed consolidated financial statements
with Management's Discussion and Analysis for the three and six
months ended 30 June 2019 are now available on the Company's
website at www.sdxenergy.com and on SEDAR at www.sedar.com.
Three months ended Six months ended
Prior Quarter 30 June 30 June
----------------------------------- -------------- --------------------- -------------------
$000s except per unit amounts 2019 2018 2019 2018
----------------------------------- -------------- --------- --------- --------
FINANCIAL
----------------------------------- -------------- --------- --------- --------
Gross revenues 16,690 16,491 18,123 33,181 32,887
Royalties (4,009) (3,759) (4,651) (7,768) (8,455)
Net revenues 12,681 12,732 13,472 25,413 24,432
Operating costs (3,374) (3,589) (3,168) (6,963) (5,162)
Netback (1) 9,307 9,143 10,304 18,450 19,270
EBITDAX (1) 7,808 7,307 8,585 15,116 16,208
Total comprehensive income/(loss) 132 (489) 640 (354) 971
Net income/(loss) per share
- basic 0.001 (0.002) 0.003 (0.002) 0.005
Cash, end of period 11,354 11,195 25,234 11,195 25,234
Working capital (excluding
cash) 10,069 6,409 11,121 6,409 11,121
Capital expenditures 13,041 8,777 14,742 21,818 24,690
Total assets 137,630 140,122 143,419 140,122 143,419
Shareholders' equity 116,491 115,346 116,246 115,346 116,246
Common shares outstanding
(000's) 204,723 204,723 204,493 204,723 204,493
OPERATIONAL
--------- --------- --------
NW Gemsa oil sales (bbl/d) 1,586 1,326 1,665 1,455 1,586
Block-H Meseda production
service fee (bbl/d) 826 818 706 822 633
Morocco gas sales (boe/d) 761 729 656 745 660
Other products sales (boe/d) 542 493 403 517 355
----------------------------------- -------------- ---------- --------- --------- --------
Total sales volumes (boe/d) 3,715 3,366 3,430 3,539 3,234
----------------------------------- -------------- --------- --------- --------
Realised oil price (US$/bbl) 58.22 64.98 68.41 61,32 65.77
Realised service fee (US$/bbl) 47.58 53.56 54.37 50.57 52.45
----------------------------------- -------------- --------- --------- --------
Realised oil sales price
and service fees ($/bbl) 54.58 60.62 64.23 57.44 61.97
----------------------------------- -------------- --------- --------- --------
Realised Morocco gas price
(US$/mcf) 10.26 10.31 10.51 10.28 10.27
Royalties ($/boe) 11.99 12.27 14.90 12.12 14.44
Operating costs ($/boe) 10.09 11.72 10.15 10.87 8.82
Netback ($/boe) (1) 27.84 29.84 33.00 28.80 32.91
----------------------------------- -------------- --------- --------- --------
(1) Refer to the "Non-IFRS Measures" section of this release
below and the Company's MD&A for the three and six months ended
30 June 2019 and 2018 for details of netback and EBITDAX.
Consolidated Balance
Sheet
(US$'000s) As at 30 June 2019 As at 31 December
2018
--------------- ------- ---- --- --- ----------------------------------------------------------------- -------------------------------------------------
Assets
Cash and cash equivalents 11,195 17,345
Trade and other receivables 21,764 24,324
Inventory 3,741 5,236
--------------- ------- ---- --- --- ----------------------------------------------------------------- -------------------------------------------------
Current assets 36,700 46,905
Investments 3,479 3,394
Property, plant and 41,652 48,680
equipment
Exploration and evaluation 56,374 39,128
assets
Right-of-use 1,917 -
assets
------------------------ ---- --- --- -------------------------------------------------
Non-current assets 103,422 91,202
Total assets 140,122 138,107
------------------------ ---- --- --- -------------------------------------------------
Liabilities
Trade and other payables 16,018 14,418
Deferred income 491 495
Decommissioning liability 1,125 1,125
Current income taxes 938 1,458
Lease liability 524 -
------------------------ ---- --- --- ----------------------------------------------------------------- -------------------------------------------------
Current liabilities 19,096 17,496
Deferred income - 240
Decommissioning liability 4,080 4,042
Deferred income taxes 290 290
Lease liability 1,310 -
------------------------ ---- --- --- -------------------------------------------------
Non-current liabilities 5,680 4,572
Total liabilities 24,776 22,068
------------------------ ---- --- --- -------------------------------------------------
Equity
Share capital 2,593 88,899
Share-based payment reserve 6,521 6,860
Accumulated other comprehensive (917) (917)
loss
Merger reserve 37,034 -
Retained earnings 70,115 21,197
Total equity 115,346 116,039
------------------------ ---- --- --- -------------------------------------------------
Equity and liabilities 140,122 138,107
------------------------ ---- --- --- -------------------------------------------------
Interim Consolidated Statement of
Comprehensive Income
Three months Six months ended
ended 30 June 30 June
(US$'000s) 2019 2018 2019 2018
------------------- --- --- --- ----------------------- --------------------- --------------------- -----------------------------------------------
Revenue, net of
royalties 12,732 13,472 25,413 24,432
------------------------- --- --- ----------------------- --------------------- --------------------- -----------------------------------------------
Direct operating
expense (3,589) (3,168) (6,963) (5,162)
Gross profit 9,143 10,304 18,450 19,270
Exploration and evaluation
expense (380) (2,064) (615) (5,314)
Depletion, depreciation,
and amortisation (6,047) (3,657) (11,945) (6,190)
Share-based compensation 658 (324) 339 (656)
Share of profit from joint
venture 355 292 724 526
Release of historic operational
tax provision - 300 - 300
Inventory write-off - (490) - (490)
Gain on sale of office
asset - 23 - 23
General and administrative
expenses
- Ongoing general and
administrative
expenses (2,083) (1,520) (3,293) (2,765)
- Transaction
costs (766) - (1,104) -
-------------------- --- --- --- ----------------------- --------------------- --------------------- -----------------------------------------------
Operating
income 880 2,864 2,556 4,704
Net finance expense (105) (33) (246) (54)
Foreign exchange
gain (18) (452) (5) (438)
Loss on acquisition - - - (174)
Income before income
taxes 757 2,379 2,305 4,038
Current income tax
expense (1,246) (1,739) (2,659) (3,067)
Deferred income tax - - - -
expense
-------------------------- --- ---
Total current and deferred
income tax expense (1,246) (1,739) (2,659) (3,067)
Total comprehensive (loss)/income
for the period (489) 640 (354) 971
------------------------------------ --------------------- -----------------------------------------------
Net (loss)/income
per share
Basic $(0.002) $0.003 $(0.002) $0.005
Diluted $(0.002) $0.003 $(0.002) $0.005
------------------- --- --- --- --------------------- -----------------------------------------------
Consolidated Statement of Changes in
Equity
Six months ended 30 June
(US$'000s) 2019 2018
----------------------------------- --------------------------------- ----------------------------------
Share capital
Balance, beginning
of period 88,899 88,785
Share-for-share
exchange - old (88,899) -
Share-for-share
exchange - new 51,865 -
Capital reduction (49,272) -
Balance, end of period 2,593 88,785
Share-based payment reserve
Balance, beginning of
period 6,860 5,666
Share-based compensation for
the period (339) 656
-------------------------------------- --------------------------------- ----------------------------------
Balance, end of period 6,521 6,322
Accumulated other comprehensive
loss
Balance, beginning of
period (917) (917)
Balance, end of period (917) (917)
Merger reserve
Balance, beginning of period - -
Share-for-share exchange 37,034 -
-------------------------------------- --------------------------------- ----------------------------------
Balance, end of period 37,034 -
Retained earnings
Balance, beginning of
period 21,197 21,085
Capital reduction 49,272 -
Total comprehensive (loss)/income for
the period (354) 971
--------------------------------------- --------------------------------- ----------------------------------
Balance, end of period 70,115 22,056
Total equity 115,346 116,246
------------------------------------ ----------------------------------
Consolidated Statement
of Cash Flows
Three months ended 30 Six months ended 30
June June
(US$'000s) 2019 2018 2019 2018
-------------------- ---------------------------------- ----------------------------------------- ---------------------------------- ------------------------------------
Cash flows generated
from/(used
in) operating
activities
Income before income
taxes 757 2,379 2,305 4,038
Adjustments for:
Depletion,
depreciation,
and amortisation 6,047 3,657 11,945 6,190
Exploration and
evaluation
expense - 1,783 - 5,033
Finance expense 105 33 246 54
Share-based
compensation (658) 324 (339) 656
Loss on acquisition - - - 174
Foreign exchange
loss/(gain) (73) 269 (190) (58)
Gain on sale
of office asset - (23) - (23)
Release of historic
operational
tax provision - (300) - (300)
Inventory write-off - 490 - 490
Amortisation of
deferred
income (122) (365) (243) (489)
Tax paid by state (921) (1,192) (1,901) (2,167)
Share of profit from
joint venture (355) (292) (724) (526)
---------------------- ---------------------------------- ----------------------------------------- ---------------------------------- ------------------------------------
Operating cash flow
before
working capital
movements 4,780 6,763 11,099 13,072
(Increase)/decrease in
trade
and other receivables (112) 1,070 2,317 8,342
Increase in trade and
other
payables 2,701 2,819 1,543 778
Payments for inventory (227) (180) (854) (769)
Cash generated from
operating activities 7,142 10,472 14,105 21,423
Income taxes
paid (1,303) (1,091) (1,303) (1,091)
--------------------- ----------------------------------------- ---------------------------------- ------------------------------------
Net cash generated from
operating
activities 5,839 9,381 12,802 20,332
Cash flows generated
from/(used
in) investing
activities:
Property, plant, and
equipment
expenditures (3,007) (7,726) (4,811) (13,203)
Exploration and
evaluation
expenditures (3,430) (5,946) (14,494) (8,311)
Dividends received 639 525 639 525
Net cash used in
investing
activities (5,798) (13,147) (18,666) (20,989)
Cash flows used in
financing activities:
Payments of lease
liabilities (243) - (418) -
Finance costs (30) (8) (58) (11)
paid
--------------------- ---------------------------------- ----------------------------------------- ---------------------------------- ------------------------------------
Net cash used in (273) (8) (476) (11)
financing
activities
Decrease in cash and
cash equivalents (232) (3,774) (6,340) (668)
Effect of foreign
exchange
on cash and cash
equivalents 73 (269) 190 58
Cash and cash
equivalents,
beginning of period 11,354 29,277 17,345 25,844
----------------------- ---------------------------------- ----------------------------------------- ---------------------------------- ------------------------------------
Cash and cash
equivalents,
end of period 11,195 25,234 11,195 25,234
---------------------- ----------------------------------------- ------------------------------------
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
characterised 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: +44 208 434 2754
Glossary
"bbl" stock tank barrel
"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, the timing of completion of the export pipelines and well
tie-ins, production targets, future drilling, seismic work, new gas
sales customers, ESP replacement, field facility upgrades, well
workovers, and the timing and costs thereof, as well as capital
expenditures, operational expenditures, the reduction in Egyptian
receivables, prospective opportunities, and business development
activity, 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
and the availability and cost of labour and services.
All timing given in this announcement, unless stated otherwise
is indicative and while the Company endeavours 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; the 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 refer to
SDX's Management's Discussion & Analysis for the three and six
months ended 30 June 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.
Non-IFRS Measures
This news release contains the terms "Netback," and "EBITDAX",
which are not recognised measures under IFRS and may not be
comparable to similar measures presented by other issuers. The
Company uses these measures to help evaluate its performance.
Netback is a non-IFRS measure that represents sales net of all
operating expenses and government royalties. Management believes
that netback is a useful supplemental measure to analyse 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
netback 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. See
Netback reconciliation to operating income/(loss) in the Company's
Interim Consolidated Financial Statements for the three and six
months ended 30 June 2019 and 2018.
EBITDAX is a non-IFRS measure that represents earnings before
interest, tax, depreciation, amortisation, exploration expense and
impairment. EBITDAX is calculated by taking operating income/(loss)
and adjusted for the add-back of depreciation and amortisation,
exploration expense and impairment of property, plant and equipment
(if applicable). EBITDAX is presented in order for the users of the
financial statements to understand the cash profitability of the
Company, which excludes the impact of costs attributable to
exploration activity, which tend to be one-off in nature, and the
non-cash costs relating to depreciation, amortisation and
impairments. EBITDAX may not be comparable to similar measures used
by other companies. See EBITDAX reconciliation to operating
income/(loss) in the Company's Interim Consolidated Financial
Statements for the three and six months ended 30 June 2019 and
2018.
Oil and Gas Advisory
Estimates of reserves have 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 the 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 January 2019. Prospective resources are
those quantities of gas, estimated as of the 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
IR UARNRKWAWUAR
(END) Dow Jones Newswires
August 22, 2019 02:00 ET (06:00 GMT)
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