TIDMSDX
RNS Number : 2544R
SDX Energy PLC
05 March 2021
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.
5 March 2021
SDX ENERGY PLC ("SDX" or the "Company")
WEST GHARIB PRODUCTION SERVICES AGREEMENT EXTED FOR 10 YEARS TO
2031
SDX Energy Plc (AIM: SDX), the MENA-focused oil and gas company,
is pleased to announce that it has received final approval from the
Egyptian authorities to extend the Production Services Agreements
governing its producing Meseda and Rabul oil fields in its West
Gharib concession in Egypt until 9 November 2031.
Mark Reid, CEO of SDX, commented:
"We are very pleased to have secured this ten-year extension to
the Production Services Agreement which we estimate increases SDX's
share of reserves in our core West Gharib oil asset, certified at
2.2 million barrels in our 31 December 2019 CPR, by 60%. With a
breakeven price of approximately US$20 Brent and to take advantage
of the current strong oil price, we plan to commence in Q2 of this
year, a drilling programme of up to twelve wells over the next
three years with the goal of growing gross production back to
around 3,000bbl/d. This drilling programme is in line with the
capex guidance provided to the Market in our 26(th) January 2021
update.
We would like to thank our partners The General Petroleum
Company, a wholly owned subsidiary of the Egyptian General
Petroleum Corporation, and Dublin Petroleum Limited for their
valuable co-operation in agreeing this extension."
The key terms of the extension, in which SDX has a 50% working
interest, are as follows:
-- A commitment, irrespective of Brent price, to drill six
development wells by 31 December 2022 and one water injection
well;
-- If Brent reaches US$55 for twelve consecutive months during
the extension period, four further development wells will be
drilled during the extension period;
-- If Brent reaches US$60 for twelve consecutive months during
the extension period, two further development wells will be drilled
during the extension period;
-- Payment of a deferred signature bonus of US$2.0 million (SDX
share US$1.0 million). US$1.0 million of this deferred bonus will
be paid in monthly installments in the next 12 months and the
remaining US$1.0 million will be paid in two installments of US$0.5
million each, on 31 December 2022 and 31 December 2023; and
-- A further contingent bonus of up to US$2.0 million (SDX share
US$1.0 million) would be payable if Brent reaches the following
price points;
-- US$75 for a period of six months - a further US$0.5 million is payable
-- US$80 for a period of six months - a further US$0.5 million is payable
-- US$85 for a period of six months - a further US$1.0 million is payable
About SDX
SDX is an international oil and gas exploration, production and
development company, headquartered in London, United Kingdom, with
a principal focus on MENA. In Egypt, SDX has a working interest in
two producing assets: a 55% operated interest in the South Disouq
gas field in the Nile Delta and a 50% non-operated interest in the
West Gharib concession, which is located onshore in the Eastern
Desert, adjacent to the Gulf of Suez. In Morocco, SDX has a 75%
working interest in five development/production concessions, all
situated in the Gharb Basin. The producing assets in Morocco are
characterised by attractive gas prices and exceptionally low
operating costs. SDX has a strong weighting of fixed price gas
assets in its portfolio with low operating costs and attractive
margins throughout, providing resilience in a low commodity 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, COGE and National Instrument 51-101, 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 and 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 Executive Officer
Tel: +44 203 219 5640
Stifel Nicolaus Europe Limited (Nominated Adviser and Joint Broker)
Callum Stewart
Jason Grossman
Ashton Clanfield
Tel: +44 (0) 20 7710 7600
Peel Hunt LLP (Joint Broker)
Richard Crichton
David McKeown
Tel: +44 (0) 207 418 8900
Camarco (PR)
Billy Clegg/Owen Roberts/Violet Wilson
Tel: +44 (0) 203 757 4980
Glossary
"bbl/d" barrels of oil 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 forecast production from West Gharib and the proposed
drilling campaign of up to twelve wells, 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
the Principal Risks & Uncertainties section of SDX's Annual
Report for the year ended 31 December 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.
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
Certain disclosures in this news release constitute "anticipated
results" for the purposes of National Instrument 51-101 - Standards
of Disclosure for Oil and Gas Activities ("NI 51-101") 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 Company management 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.
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 1 bbl: 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.
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END
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