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.
LONDON, Nov. 26, 2018 /CNW/ - SDX Energy Inc. (TSXV, AIM:
SDX), the North Africa focused oil
and gas company, is pleased to announce its unaudited financial and
operating results for the three and nine months ended September 30, 2018. All dollar values are
expressed in United States dollars
net to the Company unless otherwise stated.
Highlights – three and nine months ended September 30, 2018
Corporate and Financial
- SDX's key financial metrics for the three and nine months ended
September 30, 2018 and 2017 are as
follows:
|
Three months
ended
September
30
|
Nine months
ended
September
30
|
US$ millions
except per unit amounts
|
2018
|
2017
|
2018
|
2017
|
Net
Revenues
|
15.4
|
10.1
|
39.8
|
28.2
|
Netback(1)
|
12.0
|
7.5
|
31.3
|
20.4
|
Net realized
average oil/service fees - US$/barrel
|
66.38
|
45.61
|
63.69
|
44.20
|
Net realized
average Morocco gas price - US$/mcf
|
11.05
|
9.53
|
10.52
|
9.43
|
Netback –
US$/boe
|
33.62
|
23.54
|
33.18
|
22.82
|
EBITDAX(1)
(2)
|
11.0
|
5.4
|
27.2
|
12.6
|
Exploration &
eval'n expense
|
(0.2)
|
(0.1)
|
(5.5)
|
(0.2)
|
Depletion,
depreciation and amortization
|
(4.7)
|
(4.6)
|
(10.9)
|
(13.1)
|
(Loss)/gain on
acquisition
|
-
|
4.8
|
(0.2)
|
34.2
|
Total
comprehensive income
|
3.2
|
4.4
|
4.1
|
30.9
|
Net cash generated
from operating activities
|
9.2
|
4.3
|
22.7
|
10.0
|
Cash and cash
equivalents
|
18.7
|
30.5
|
18.7
|
30.5
|
Note:
|
(1)
|
Refer to the
"Non-IFRS Measures" section of this release below for details of
Netback and EBITDAX.
|
(2)
|
EBITDAX for Q3 2018
and 2017 and nine months to September 30, 2018 and 2017 includes
US$1.5 million and US$1.0 million and US$3.7 million and US$2.6
million respectively of 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.
|
- The above financial metrics for the three and nine months ended
September 30, 2018 and 2017 reflect
the impact of the acquisition of the Egyptian and Moroccan
businesses of Circle Oil plc (the "Circle Acquisition") from
January 27, 2017 for consideration of
US$28.1 million.
- The main components of SDX's comprehensive income of
US$4.1 million for the nine months
ended September 30, 2018 are:
-
- US$31.3 million netback/gross
profit for the period;
- US$5.5 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$10.9 million of DD&A;
- US$3.8 million of G&A;
and
- US$5.2 million of corporate
income tax expense.
- Netback for the nine months to September
30, 2018 was US$31.3 million,
up from US$20.4 million for the nine
months to September 30, 2017. The
increase in netback was due to;
-
- The Circle acquisition completing on January 27, 2017, therefore nine months to
September 30, 2017 results only
included eight months of 'Circle' activity versus a full nine
months to September 30, 2018 results;
and
- The nine months to September 30,
2018 also benefited from improved oil prices impacting SDX's
Egyptian producing assets, higher realised gas pricing in
Morocco due to a contract price
increase, and favourable currency movement and improved production
in the Meseda concession.
- Cash position of US$18.7 million
as at September 30, 2018 was
US$7.1 million lower than the
US$25.8 million at December 31, 2017 reflecting the impact of the
capital investment programme discussed below, which has led to
production growth and strong operating cashflow in the period.
- US$35.7 million of capital
expenditure has been invested into the business during the nine
months ended September 30, 2018. The
main elements of this were;
-
- US$16.3 million in Morocco - US$12.1
million for the now completed nine-well drilling programme
and customer connection projects and US$4.2
million for the mobilisation and acquisition costs for the
240km2 3D seismic programme in Gharb Centre;
- US$9.2 million on South Disouq -
US$8.4 million for the drilling
programme, including the Ibn Yunus-1X, SD-4X and SD-3X discovery
wells and the sub-commercial Kelvin-1X well and US$0.8 million for the mobilisation of equipment
for the 170km2 3D seismic programme;
- US$7.3 million in North West
Gemsa for the AASE-25, AASE-27 and Al-Ola-4 discovery wells;
- US$1.1 million in Meseda for the
Rabul-5, Rabul-4, MSD-16 and MSD-15 discovery wells and the ongoing
ESP replacement programme;
- US$1.2 million in South Ramadan
relating to the SRM-3 well which is currently drilling; and
- US$0.6 million relating to new
office equipment in Cairo and
additional technical software.
- The Company further improved its available liquidity when it
announced on July 18, 2018 that it
had secured a three year, US$10.0
million Credit Facility (the "Facility") with the European
Bank for Reconstruction and Development. This Facility, which
has an additional US$10.0 million
accordion feature, can be used for drilling costs and customer
connections in Morocco. Interest
on drawings from the Facility will be charged at US$ Libor plus
4.0% for drawings up to US$5.0
million and US$ Libor plus 4.5% on all drawings, if drawings
are greater than US$5.0
million. As at September 30,
2018, the Facility remains undrawn.
Operational Highlights
- The Company's entitlement share of production from its
operations for the nine months ended September 30, 2018 was 3,889 boe/d (Gross – 9,971
boe/d) split as follows;
-
- North West Gemsa 2,472 boe/d (Gross - 4,944 boe/d)
- Meseda 802 bbl/d (Gross – 4,207 bbl/d)
- Morocco 615 boe/d (Gross - 820
boe/d)
- As a result of the ongoing development drilling and workover
programme in North West Gemsa and Meseda, production has increased
with actual entitlement production on November 23, for Egypt and Morocco amounting to 4,156 boe/d (Gross –
11,109 boe/d) split as follows;
-
- North West Gemsa 2,496 boe/d (Gross – 4,992 boe/d)
- Meseda 998 bbl/d (Gross – 5,234 bbl/d)
- Morocco 662 boe/d (Gross – 883
boe/d)
Egypt
- In North West Gemsa (SDX 50% working interest and
non-operator), a seven well workover programme was undertaken and
three new infill wells, AASE-25, AASE-27 and Al Ola-4 were
successfully completed. AASE-25 was targeting an un-swept area of
the field in the Rahmi sand and encountered 32 feet of net light
crude oil bearing pay in this section. The well was subsequently
completed as a producer in the Rahmi and is currently producing
approximately 810 boe/d of light crude oil. AASE-27 was also
targeting an un-swept area of the field in the Rahmi and
encountered 13.5 feet of net light crude oil bearing pay. The well
was completed as a producer in the Rahmi and is currently producing
approximately 260 boe/d of light crude oil. Al Ola-4 was drilled as
a replacement well in the Rahmi after the original well failed due
to a mechanical problem. Al Ola-4 encountered 14 feet of net light
crude oil bearing Rahmi section and, on test, flowed 1,011 boe/d.
It is currently producing approximately 1,340 boe/d of light crude
oil. The results of these wells and the ongoing workover programme
are expected to result in an average field production rate for the
year of approximately 4,400 boe/d of light crude oil (SDX net:
2,200 boe/d) in line with Company guidance.
- In Meseda (SDX 50% working interest and non-operator), an ESP
replacement programme is underway and four wells have been
successfully completed; Rabul-5, Rabul-4, MSD-16 and MSD-15.
Rabul-5 encountered 151 feet of net heavy crude oil pay, with an
average porosity of 18% across the Yusr and Bakr formations and
Rabul-4 encountered 43 feet of net heavy crude oil pay also across
the Yusr and Bakr, with an average porosity of 16%. Both wells were
completed and placed on production with Rabul-5 currently producing
approximately 1,500 bbl/d of heavy crude oil and Rabul-4 producing
approximately 400 bbl/d of heavy crude oil. MSD-16 was drilled as a
crestal infill producer in a newly available area of the field 100
meters from the concession boundary after an agreement was reached
with the offset operator to reduce the boundary stand-off limits.
The well encountered 176 feet of net heavy crude oil pay in the ASL
reservoir section with an average porosity of 22%. The well was
completed as a producer in the ASL using an ESP pump to provide
artificial lift and is currently producing approximately 1,000
bbl/d of heavy crude oil. A second lease line development well,
MSD-15, was successfully completed after encountering 226 feet of
net heavy crude oil pay in the ASL section and is currently
producing approximately 1,200 bbl/d using an ESP to provide
artificial lift. Post period end, the Rabul-2 well was recompleted
with incremental production of approximately 1,000 bbl/d of heavy
crude oil now coming from this well. The results of these wells and
the ongoing workover programme are expected to result in an average
field production rate for the year of approximately 3,800 bbl/d of
heavy crude oil (SDX net: 732 bbl/d) in line with Company
guidance.
- In South Disouq (SDX 55% working interest and operator), the
Company announced on April 12, 2018
that a gas discovery had been made at its Ibn Yunus-1X exploration
well. The well was drilled to a TD of 9,068 feet and encountered
101 feet of net conventional natural gas pay in the Abu Madi
horizon, with average porosity in the pay section of 28.5%. The
well came in on prognosis but with a reservoir section that was of
better quality and thicker than pre-drill expectations. On
May 18, 2018, the well successfully
flow tested conventional natural gas at a stabilised rate of 39.3
MMscf/d on a 32/64" choke. This flow rate exceeded initial
expectations and was limited by the surface facilities in place.
The well was subsequently completed in the Kafr El Sheik section
and then suspended for future production.
- The Kelvin-1X exploration well was spud on May 8, 2018 and drilled to a total depth of 8,075
feet, encountering 606 net feet of high quality reservoir interval
in the Abu-Madi formation, with an average porosity of 21%.
However, the sands had low gas saturation and were not deemed to be
commercial. The well was subsequently plugged and abandoned.
- The SD-4X appraisal well was spud on June 4, 2018 and drilled to a total depth of
7,806 feet and encountered 89 feet of net conventional natural gas
pay in the Abu Madi horizon, with an average porosity in the pay
section of 24%. The well came in on prognosis with a reservoir
section of similar quality but thicker than the original SD-1X
discovery well. The well was completed in the Abu Madi section and
tested at a maximum rate of 30.4 MMscf/d during an eight-hour clean
up period. The well was then shut in for eight hours, during which
time no pressure decline was observed. Following this, the well was
flowed at varying choke sizes for two successive 12-hour periods at
average rates of 5.4 MMscf/d and 8.6 MMscf/d respectively, and then
one extended flow period of 24-hours at an average rate of 10.5
MMscf/d. The well was then suspended for future production.
- The SD-3X appraisal well was spud on July 5, 2018, drilled to a total depth of 7,842
feet, and encountered 32.6 feet of net conventional natural gas pay
in the Abu Madi and Kafr el Sheik horizons, with an average
porosity in the pay sections of 21.7%. The well was completed as a
producer in the Abu Madi horizon and tested at a flow rate of 16.1
MMscf/d of conventional natural gas. In order to optimise the
potential recovery from the SD-3X well, the Abu Madi horizon will
be completed and produced initially before re-entering the well to
complete and produce the Kafr el Sheik horizon. The well will be
connected to the infrastructure located adjacent to the original
SD-1X discovery.
- Whilst both SDX and its partner IPR have submitted the
development lease application for South Disouq to the authorities,
and have agreed to a gas price of US$2.85/mcf, the expected timing of obtaining
final regulatory approvals and an update to the design of the
central processing facility to accommodate the higher than expected
levels of condensate and liquids in the gas, means that first
production is now expected to commence in H1 2019. The Company is
targeting an initial gross plateau production rate of conventional
natural gas of between 50-60 MMscf/d from the three development
wells in the SD-1X discovery structure and the Ibn Yunus
discovery.
- At South Ramadan (SDX 12.75% working interest and
non-operator), the SRM-3 appraisal well was spud on June 14, 2018. The well is targeting undrained
light oil volumes up-dip of one of the previous producing wells in
the field. The well encountered drilling problems and post period
end had to be side-tracked. As at date of writing, it is expected
that drilling operations will be completed in the next six to eight
weeks and the Company's overall financial exposure to the
concession commitment is expected to remain at approximately
US$3.0 million. The SRM-3 well is the
last remaining commitment well on the South Ramadan concession and,
based on the results of this well, the Company will decide how best
to optimise its position in the licence.
Morocco
- The Company's Moroccan acreage consists of three concessions;
Sebou, Lalla Mimouna Nord and Gharb Centre, all of which are
located in the Gharb Basin in northern Morocco (SDX 75% working interest and
operator). Sebou and Lalla Mimouna
were obtained as part of the Circle acquisition and Gharb Centre
was acquired directly from the Moroccan State on July 11, 2017.
- In September 2017, the Company
began a nine-well drilling programme covering six
appraisal/development wells in Sebou, one appraisal/development
well in Gharb Centre, and two exploration wells in Lalla
Mimouna.
- The results of the nine-well programme saw the Company achieve
seven successful wells, including the LNB-1 and LMS-1 exploration
wells in the Lalla Mimouna concession.
- As a result of the success in LNB-1 and LMS-1, a two year
extension to the Lalla Mimouna Nord permit was granted, extending
its validity from July 2018 to
July 2020.
- The Company's 240 km2 3D acquisition programme in
the Gharb Centre permit has been successfully completed, with the
acquired data now in the processing phase. Interpretation is
expected to start late 2018/early 2019 and the Company is pleased
to advise that it expects the total cost for the acquisition,
processing, and interpretation of the 3D to be approximately
US$6.0 million as previously
guided.
- Gross production in Morocco
for the nine months to September 30,
2018 was approximately 5.2 MMscf/d or (867 boe/d) of
conventional natural gas 3.9 MMscf/d or (645 boe/d) net to SDX.
During the quarter, the Company entered into gas sales agreements
with the following customers, Peugeot, Setexam, Extralait, and GPC
Kenitra. Gas sales to Peugeot have commenced on a test basis, with
sales expected to commence to the remainder of the new customers in
late November 2018. In addition, post
period end, gas sales agreements were signed with Citic Dicastal
and Omnium Plastic.
- With the gas sales contracts already signed, SDX has achieved
its previously guided contracted volumes of 8-10 MMscf/d of
conventional natural gas as at December 31,
2018. However, due to a longer than expected start-up phase
with one of its customers, actual gas sales at December 31, 2018 are expected to be just below 8
MMscf/d.
Outlook:
Egypt
- North West Gemsa (50% Working Interest and non-operator)
-
- Targeting FY 2018 gross production of approximately 4,400 boe/d
of light crude oil, in line with Company guidance provided at the
start of the year.
- Workover programme to complete in Q4 2018, however no further
drilling is planned.
- SDX's share of North West Gemsa FY 2018 capex is expected to be
approximately US$8.0 million with
approximately US$0.6 million of this
to be incurred in Q4 2018.
- Meseda (50% Working Interest and non-operator)
-
- Targeting FY 2018 gross production of 3,800 bbl/d of heavy
crude oil, approximately 700 bbl/d higher than 2017's level, and in
line with Company guidance provided at the start of the year.
- Workover programme to complete in Q4 2018, however no further
drilling planned.
- SDX's share of Meseda FY 2018 capex is expected to be
approximately US$1.8 million with
approximately US$0.7 million of this
to be incurred in Q4 2018.
- South Disouq (55% Working Interest and operator)
-
- Obtain remaining regulatory approvals and complete construction
of South Disouq processing facility, well tie-ins and a
10-kilometre pipeline connecting the processing facility to the
main export line.
- First gas is targeted during H1 2019 at an initial gross
plateau production rate of between 50-60 MMscf/d of conventional
natural gas from the three development wells in the SD-1X discovery
structure and the Ibn Yunus discovery.
- SDX's share of South Disouq FY 2018 capex is expected to be
approximately US$11.5 million with
approximately US$2.3 million to be
incurred in Q4 2018 to complete the 170 km2 3D
acquisition programme. SDX's US$15
million share of the capex for the processing facility, well
tie-ins and a 10-kilometre pipeline to the main export line will be
incurred during H1 2019.
- South Ramadan (12.75% Working Interest and non-operator)
-
- The SRM-3 well is the last remaining commitment well on the
South Ramadan concession and based upon the results of this well,
the Company will decide how best to optimise its position in the
licence.
- Gross South Ramadan capex FY 2018 is expected to be
approximately US$23.5 million (SDX
net: US$3.0 million). Approximately
US$2.0 million of this capex is still
to be incurred in Q4 2018.
Morocco (75% Working
Interest and operator)
- Given the recent drilling success, 2018 gross production is
targeted to increase in line with new customer tie-ins with the
Company targeting gross production of 8-10 MMscf/d of conventional
natural gas during H1 2019.
- SDX's nine-well Moroccan drilling programme completed on
May 7, 2018 with the LMS-1 discovery.
The Company is now planning for the mobilisation of equipment for a
further drilling campaign in 2019, during which the LNB-1 and LMS-1
wells in Lalla Mimouna will be re-tested, with the remainder of the
programme's targets coming from the recently acquired Gharb Centre
3D seismic.
- The Company will complete the processing and interpretation of
the 240km2 of 3D seismic in its Gharb Centre by late
2018/early 2019.
- SDX's share of Morocco FY 2018 capex is expected to be
approximately US$18.0 million with
approximately US$1.8 million relating
to the completion of the 240km2 Gharb Centre 3D seismic
to be incurred in Q4 2018.
Corporate
- Continue to minimise costs and crystallise synergies from the
Circle Oil acquisition; and
- As part of the Company's strategy, SDX continues to review and
explore opportunities to expand the asset base in the North Africa region, including through new
licencing rounds and acquisitions.
Paul Welch, President
& CEO of SDX Energy, commented:
"The third quarter of 2018 has been one of the best financial
periods in the Company's history, with net revenues up 50%
from the same quarter last year. This was achieved by a
strong operational performance across our North African
portfolio.
In Egypt, we have
successfully completed a seven well workover programme at North
West Gemsa and expect to achieve average field production of
c.4,400 boe/d of light crude oil (SDX net: 2,200 boe/d), in line
with Company guidance. At Meseda, the successful ongoing
drilling and ESP replacement programmes puts us on track to meet
our 2018 guidance of c.3,800 bbl/d of heavy crude oil (SDX
net: 732 bbl/d). We made substantial progress at South Disouq
during the quarter, and beyond, with a number of important
operational milestones achieved including submitting the
development lease application to the authorities and agreeing to a
gas price of US$2.85/mcf.
However, given important design updates to the central processing
facility and the expected timing of obtaining final regulatory
approvals, the Company now expects first production of 50-60
MMscf/d of conventional natural gas to be achieved at
South Disouq during H1 2019.
In Morocco, the 240
km2 3D acquisition programme in the Gharb Centre permit
has been successfully completed. The total cost for the
project is expected to be in line with previous guidance,
approximately US$6.0 million, with
the acquired data now in the processing phase. In addition,
we are very pleased that, with the gas sales contracts currently
signed, we have achieved our previous guidance of 8-10
MMscf/d of conventional natural gas as at December 31, 2018. However, due to a delay
in the start- up phase with one of these customers, our actual
sales are likely to be just below 8 MMscf/d of conventional natural
gas at year end.
We continue to see organic growth opportunities across our
portfolio in addition to inorganic growth via acquisition or new
licensing rounds that will enable us to enhance our scale and
generate value for shareholders. We look forward to updating the
market on these developments as appropriate."
KEY FINANCIAL & OPERATING HIGHLIGHTS
Unaudited interim consolidated financial statements with
Management's Discussion and Analysis for Q3 2018 are now available
on the Company's website at www.sdxenergy.com and on SEDAR at
www.sedar.com.
Financial
Statements
|
|
|
|
|
|
|
Prior
quarter
|
Three months
ended
September 30
|
Nine months
ended
September 30
|
US$000s except per
unit amounts
|
|
2018
|
2017
|
2018
|
2017
|
FINANCIAL
|
|
|
|
|
|
Gross
revenues
|
18,123
|
21,444
|
13,977
|
54,332
|
38,521
|
Royalties
|
(4,651)
|
(6,037)
|
(3,853)
|
(14,493)
|
(10,360)
|
Net
revenues
|
13,472
|
15,407
|
10,124
|
39,839
|
28,161
|
Direct operating
expense
|
(3,168)
|
(3,380)
|
(2,672)
|
(8,542)
|
(7,728)
|
Netback
|
10,304
|
12,027
|
7,452
|
31,297
|
20,433
|
EBITDAX
|
8,585
|
10,995
|
5,405
|
27,203
|
12,643
|
Total comprehensive
income
|
640
|
3,169
|
4,408
|
4,140
|
30,941
|
per share – basic
|
0.003
|
0.015
|
0.023
|
0.020
|
0.174
|
Cash, end of
period
|
25,234
|
18,713
|
30,469
|
18,713
|
30,469
|
Working capital
(excluding cash)
|
11,121
|
14,477
|
27,928
|
14,477
|
27,928
|
Capital
expenditures
|
14,742
|
11,017
|
3,423
|
35,707
|
5,738
|
Total
assets
|
143,176
|
146,239
|
138,898
|
146,239
|
138,898
|
Shareholders'
equity
|
116,246
|
119,848
|
116,981
|
119,848
|
116,981
|
Common shares
outstanding (000's)
|
204,493
|
204,706
|
204,459
|
204,706
|
204,459
|
|
|
|
|
|
|
OPERATIONAL
|
|
|
|
|
|
NW Gemsa oil sales
(bbl/d)
|
1,665
|
1,987
|
1,893
|
1,721
|
1,741
|
Block-H Meseda
production service fee (bbl/d)
|
706
|
802
|
551
|
690
|
606
|
Morocco gas sales
(boe/d)
|
656
|
615
|
611
|
645
|
568
|
Other products sales
(boe/d)
|
403
|
485
|
384
|
399
|
365
|
Total oil sales
and production service fee boe/d
|
3,430
|
3,889
|
3,439
|
3,455
|
3,280
|
Realized oil price
(US$/bbl)
|
68.41
|
70.76
|
48.28
|
67.71
|
47.46
|
Realized service fee
(US$/bbl)
|
54.37
|
55.50
|
36.41
|
53.65
|
34.84
|
Realized oil sales
and production service fees ($/bbl)
|
64.23
|
66.38
|
45.61
|
63.69
|
44.20
|
Realized Morocco gas
price (US$/mcf)
|
10.51
|
11.05
|
9.53
|
10.52
|
9.43
|
Royalties
($/bbl)
|
14.90
|
16.88
|
12.17
|
15.36
|
11.57
|
Operating costs
($/bbl)
|
10.15
|
9.45
|
8.44
|
9.06
|
8.63
|
Netback
($/bbl)
|
33.00
|
33.62
|
23.54
|
33.18
|
22.82
|
|
|
|
|
|
|
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 Rharb 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 website of the Company
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 Paul Welch, Chief Executive Officer of SDX. Mr.
Welch, who has over 30 years of experience, is the qualified person
as defined in the London Stock Exchange's Guidance Note for Mining
and Oil and Gas companies. Mr. Welch holds a BS and MS in Petroleum
Engineering from the Colorado School of
Mines in Golden, CO. USA
and an MBA in Finance from SMU in
Dallas, TX USA and is a member of
the Society of Petroleum Engineers (SPE).
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as such term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Glossary
"bbl"
|
stock tank
barrel
|
"boepd" &
"boe/d"
|
barrels of oil
equivalent per day
|
"bopd" &
"bbl/d"
|
barrels of oil per
day
|
"DD&A"
|
depreciation,
depletion and amortisation
|
"E&E"
|
exploration and
evaluation
|
"ESP"
|
electrical
submersible pump
|
"G&A"
|
general and
administrative
|
"MCF"
|
thousands of cubic
feet
|
"MMscf/d"
|
million standard
cubic feet per day
|
"LIBOR"
|
London interbank
offer rate
|
"TD"
|
total
depth
|
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 use of proceeds from the Facility; the timing of
first gas at South Disouq; the Company's plans, production targets,
volume targets, drilling, gas sales, production start-up dates,
seismic work, testing and the timing and costs thereof; capital
expenditures; operational expenditures; and the Company's
outlook and corporate strategy, 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 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 and nine
months ended September 30, 2018,
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 recognized 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 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
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 note 20 to the
Interim Consolidated Financial Statements.
EBITDAX is a non-IFRS measure that represents earnings before
interest, tax, depreciation, amortization, exploration expense and
impairment. EBITDAX is calculated by taking operating income/(loss)
and adjusted for the add back of depreciation and amortization,
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, amortization and
impairments. EBITDAX may not be comparable to similar measures used
by other companies. See EBITDAX reconciliation to operating
income/(loss) in note 20 to the Interim Consolidated Financial
Statements.
Oil and Gas Advisory
Certain disclosure in this news release constitute "anticipated
results" for the purposes of National Instrument 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 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.
Use of the term "boe" may be misleading, particularly if used in
isolation. A "boe" conversion ratio of 6 Mcf: 1 bbl is based on an
energy equivalency conversion method primarily applicable at the
burner tip and does not represent a value equivalency at the
wellhead.
SOURCE SDX Energy Inc.