SDX Energy Reports Q2 Revenue Growth

- August 28th, 2018

International oil and gas exploration, production and development company,  SDX Energy is headquartered in London, with a principal focus on North Africa. In Egypt, SDX has a working interest in two producing assets both located onshore in the Eastern Desert, adjacent to the Gulf of Suez. 

SDX Energy Inc. (TSXV:SDX,LSE:SDX), the North Africa focused oil and gas company, has released its financial and operating results for the three and six month periods that ended June 30, 2018.

International oil and gas exploration, production and development company,  SDX Energy is headquartered in London, with a principal focus on North Africa. In Egypt, SDX has a working interest in two producing assets both located onshore in the Eastern Desert, adjacent to the Gulf of Suez.

As quoted from the press release:

The main components of SDX’s comprehensive income of US$1.0 million for the six months ended June 30, 2018 are:

  • US$19.3 million netback/gross profit for the period;
  • US$5.3 million of E&E write down predominantly relating to two sub-commercial exploration wells in Morocco and one sub-commercial exploration well in Egypt;
  • US$6.2 million of DD&A;
  • US$2.8 million of G&A; and
  • US$3.1 million of Corporate Income Tax expense.

Netback for the six months to June 30, 2018 was US$19.3 million, up from US$13.0 million for the six months to June 30, 2017. The increase in netback was due to;

  • The Circle Acquisition completing on January 27, 2017, therefore H1 2017 results only included five months of ‘Circle’ activity whereas the H2 2018 results included six months; and
  • H1 2018 also benefited from improved oil prices impacting SDX’s Egyptian producing assets and higher realised gas pricing in Morocco due to a contract price increase and favourable currency movement.

Cash position of US$25.2 million as at June 30, 2018 was US$0.6 million lower than the US$25.8 million at December 31, 2017 and US$2.4 million lower than the US$27.6 million reported at June 30, 2017. However the company’s strong netback, improving receivables position and US$10 million equity placing in September 2017 have enabled it to invest approximately US$45 million of capital expenditure in the 12 months to June 30, 2018. This expenditure included 14 wells in Egypt and 9 wells in Morocco, which did not materially reduce SDX’s cash balance over this period.

The company further improved its available liquidity when it announced on July 18, 2018 that it had secured a three year, US$10 million credit facility with the European Bank for Reconstruction and Development. This Facility, which also has an additional US$10 million accordion feature, will be used for drilling costs and customer connections in Morocco. Interest on drawings from the facility will be charged at US$ Libor plus 4.0 percent for drawings up to US$5 million and US$ Libor plus 4.5 percent on all drawings if drawings are greater than US$5 million.

Click here to read the full press release

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