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, UK, March 22, 2019 /CNW/ - SDX Energy Inc. (TSXV,
AIM: SDX), the North
Africa-focused oil and gas company, is pleased to announce
its financial and operating results for the three months and year
ended December 31, 2018 (with
full-year results prepared on an audited basis). The
Company's full annual audited financial statements (the "Annual
Consolidated Financial Statements") and annual report have been
published on the Company website at www.sdxenergy.com and on SEDAR
at www.sedar.com. All monetary values are expressed in United States dollars net to the Company
unless otherwise stated.
Reserves
- As at December 31, 2018, the
Company's working interest share of audited 2P reserves was 13.1
mmboe(1). The Company's 2P reserves estimate has
been audited in accordance with the COGE Handbook by ERC Equipoise
Limited, an independent qualified reserves evaluator and
auditor.
Corporate and financial
- SDX's key financial metrics for the three and twelve months
ended December 31, 2018 and 2017
are:
|
Three months
ended
December
31
|
Twelve months
ended
December 31
(audited)
|
US$ million,
except per unit amounts
|
2018
|
2017
|
2018
|
2017
|
Net
revenues
|
13.8
|
11.0
|
53.7
|
39.2
|
Netback(2)
|
10.4
|
8.5
|
41.7
|
28.9
|
Net realized
average oil price/service fees -
US$/barrel
|
59.07
|
54.39
|
62.43
|
46.70
|
Net realized
average Morocco gas price -
US$/mcf
|
9.78
|
9.72
|
10.33
|
9.51
|
Netback –
US$/boe
|
28.94
|
28.26
|
32.01
|
24.47
|
EBITDAX(2)
(3)
|
7.1
|
8.0
|
34.3
|
21.4
|
Exploration &
evaluation expense ("E&E")
|
(0.2)
|
-
|
(5.7)
|
(0.2)
|
Depletion,
depreciation and amortization
("DD&A")
|
(6.3)
|
(4.8)
|
(17.3)
|
(17.8)
|
Impairment
expense
|
(3.5)
|
-
|
(3.5)
|
-
|
(Loss)/gain on
acquisition
|
-
|
(4.7)
|
(0.2)
|
29.6
|
Total
comprehensive (loss)/income
|
(4.0)
|
(3.4)
|
0.1
|
28.3
|
Net cash generated
from operating activities
|
8.9
|
15.1
|
36.2
|
21.6
|
Cash and cash
equivalents
|
17.4
|
25.8
|
17.4
|
25.8
|
Note:
|
|
(1)
|
Using a conversion
ratio of 5.8 Mcf:1 boe.
|
(2)
|
Refer to the
"Non-IFRS Measures" section of this release below and the Company's
MD&A for the three and twelve months ended December 31, 2018
and 2017 for details of netback and EBITDAX.
|
(3)
|
EBITDAX for Q4 2018
and 2017 and twelve months to December 31, 2018 and 2017 includes
US$1.4 million and US$0.9 million, and US$5.0 million and US$3.6
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 twelve months
ended December 31, 2018 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$0.1 million for the twelve months
ended December 31, 2018 are:
-
- US$41.7 million netback;
- US$5.7 million of E&E, of
which US$5.1 million related to two
sub-commercial wells in Morocco
and one sub-commercial well in Egypt;
- US$17.3 million of DD&A;
- US$3.5 million impairment on
North West Gemsa as a result of the recent reduction in Brent crude
oil price forecasts reducing the asset's economic life;
- US$4.8 million of G&A;
and
- US$2.5 million of transaction
costs covering M&A activities and the proposed re-domicile of
the Company from Canada to the
UK.
- Netback for the twelve months ended December 31, 2018 was US$41.7 million, up from US$28.9 million for the twelve months to
December 31, 2017. This increase has
been driven by 2018 production increasing to 3,574 boe/d from 3,237
boe/d in 2017, and 2018 realized average prices increasing to
US$62.43/bbl and US$10.33/mcf respectively for natural gas liquids
and Moroccan natural gas, compared to US$46.70/bbl and US$9.51/mcf in 2017.
- The cash position of US$17.4
million as at December 31,
2018 is US$8.4 million lower
than the US$25.8 million as at
December 31, 2017. This cash
movement reflects strong 2018 operating cashflows of US$36.2 million (2017: US$21.6 million) as a result of improving
netbacks and a US$13.4 million
reduction in predominantly Egyptian receivables, which enabled the
Company to fund the US$44.0 million
capital investment program discussed below. In addition, the
Company's three year, US$10.0 million
credit facility established in July
2018 with the European Bank for Reconstruction and
Development ("EBRD"), remains undrawn.
- US$44.0 million of capital
expenditure has been invested into the business during the twelve
months ended December 31, 2018. This
comprised of:
-
- US$20.3 million in Morocco, comprising US$13.9 million for the now completed nine-well
drilling program and customer connection projects, and US$6.4 million relating to the 240km2
3D seismic program in Gharb Centre;
- US$10.6 million for the South
Disouq drilling program, including US$8.5
million for the drilling of the Ibn Yunus-1X, SD-4X and
SD-3X discovery wells and the sub-commercial Kelvin-1X well, and
US$2.1 million for the equipment
mobilization and start of data collection for the 170km2
3D seismic program;
- US$7.9 million in North West
Gemsa for the AASE-25, AASE-27 and Al-Ola-4 development wells and
the ongoing well workover program;
- US$1.9 million in Meseda for the
Rabul-5, Rabul-4, MSD-16 and MSD-15 development wells and the
ongoing electrical submersible pump ("ESP") replacement
program;
- US$2.6 million in South Ramadan
for the SRM-3 well drilled in the year, the results of which are
currently being assessed; and
- US$0.7 million relating to new
office equipment in Cairo and
additional technical software.
- Trade and other receivables have reduced to US$24.3 million as at December 31, 2018, (2017: US$37.7 million), a 36% reduction. A further
US$7.65 million reduction has been
achieved post-year end as a result of an agreed offset of trade
receivables due from the State against costs due to State
contractors used on the South Disouq development project.
Operational highlights
- The Company's entitlement share of production from its
operations for the year ended December 31,
2018 was 3,574 boe/d (gross – 9,100 boe/d) split as
follows:
-
- North West Gemsa 2,194 boe/d (gross - 4,388 boe/d)
- Meseda 734 bbl/d (gross – 3,851 bbl/d)
- Morocco 646 boe/d (gross - 861
boe/d)
- As a result of the ongoing workover program in Meseda and the
new customer connections in Morocco, post-period end production has
increased in both of these concessions. Production in North West
Gemsa is currently below budget due to three wells being offline
for pump replacements and other workovers. It is expected
that these wells will come back on stream during Q2 and Q3 adding
500-750 boe/d to gross production. As at March 21, 2019, actual entitlement production for
Egypt and Morocco amounted to 3,408 boe/d (gross – 9,064
boe/d) split as follows:
-
- North West Gemsa 1,797 boe/d (gross – 3,598 boe/d)
- Meseda 848 bbl/d (gross – 4,449 bbl/d)
- Morocco 763 boe/d (gross –
1,017 boe/d)
Egypt
- In North West Gemsa (SDX 50% working interest and
non-operator), a three-well infill drilling program was undertaken
together with a seven-well workover program. The three new infill
wells, AASE-25, AASE-27 and Al Ola-4, were all successfully drilled
and completed as new producers. 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
because of a mechanical problem. Al Ola-4 encountered 14 feet of
net light crude oil-bearing in the Rahmi section and, on test,
flowed 1,011 boe/d. It is currently producing approximately 894
boe/d of light crude oil. The results of these wells and the
ongoing workover program resulted in an average field production
rate for the year of approximately 4,388 (SDX net: 2,194 boe/d),
which was in line with the Company's 2018 guidance.
- In Meseda (SDX 50% working interest and joint operator), an ESP
replacement program was undertaken during the year and four
development wells were successfully drilled and 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 formations,
with an average porosity of 16%. Both wells were completed and
placed on production with Rabul-5 currently producing approximately
500 bbl/d of heavy crude oil and Rabul-4 producing approximately
250 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 1,100
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 300 bbl/d using an ESP to provide
artificial lift. The Rabul-2R well was completed during Q4 2018,
accessing additional volumes in the original Rabul-2 area, with
incremental production of approximately 150 bbl/d of heavy crude
oil from this well. The results of these wells and the ongoing
workover program resulted in an average field production rate for
the year of 3,851 bbl/d of heavy crude oil (SDX net: 734 bbl/d)
which was in line with the Company's 2018 guidance.
- In South Disouq (SDX 55% working interest and operator), the
Company completed four wells during the year, three of which were
conventional natural gas discoveries in the Abu Madi and Kafr el
Sheik horizons. Details and test results from the wells are
shown below:
Date
|
Name
|
Result
|
Net pay
|
Porosity
|
Rate
|
April 12,
2018
|
Ibn Yunus-
1X
|
Conventional
natural
gas
discovery
|
101 ft
|
28.5%
|
39.3
MMscf/d
|
May 22,
2018
|
Kelvin -1X
|
Uncommercial
discovery
|
n/a - low
gas
saturation
|
21.0%
|
Not tested
|
June 18,
2018
|
SD-4X
|
Conventional
natural
gas
discovery
|
89 ft
|
24.0%
|
30.4
MMscf/d
|
July 23,
2018
|
SD-3X
|
Conventional
natural
gas
discovery
|
33 ft
|
21.7%
|
16.1
MMscf/d
|
- During H1 2019, SDX will complete construction of the central
processing facility, the 10 km export pipeline, and the tie-ins for
the above three discoveries and the initial SD-1X discovery well,
which was drilled in 2017. First gas is targeted for mid-2019, at a
gross plateau production rate of between 50 and 60 MMscf/d, with
the conventional natural gas being sold to the Egyptian National
Gas Holding Company ("EGAS") at a price of US$2.85/Mcf.
- Prospect inventory for future drilling is expected to increase
with the interpretation of the recently acquired 170 km2
of 3D seismic in the southern section of the concession. The
Company is planning to drill two further exploration wells in 2019,
with multiple additional conventional gas prospects and a
conventional oil prospect already identified for drilling in future
periods.
- At South Ramadan (SDX 12.75% working interest and
non-operator), the SRM-3 appraisal well was spud on June 14, 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 Company continues to review technical data from the
well result and will provide further updates to the market in due
course.
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.
- During 2018, the Company completed a nine-well drilling
program, starting in September 2017,
which covered six appraisal/development wells in Sebou, one
appraisal/development well in Gharb Centre, and two exploration
wells in Lalla Mimouna Nord.
- Out of the nine wells drilled, seven were successful, including
the LNB-1 and LMS-1 exploration wells in Lalla Mimouna Nord, which resulted in a two-year
extension being granted to the concession, extending its validity
from July 2018 to July 2020 with no additional work
commitments.
- In Q3 2018, the Company successfully completed the acquisition
and processing of a 240 km2 3D seismic acquisition
program in Gharb Centre and began an initial interpretation in
advance of a proposed 12-well drilling campaign to take place
between Q3 2019 and Q2 2020.
- During the year, the Company began selling natural gas to the
following new customers: Peugeot, Extralait, and GPC Kenitra. In
addition, post-period end, natural gas sales to another new
customer, Setexam, began and natural gas sales agreements were
signed with Citic Dicastal and Omnium Plastic.
- Post-period end, on February 7,
2019, the Company announced the acquisition of the Lalla
Mimouna Sud and Moulay Bouchta Ouest concessions from the
Government of Morocco.
- 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 km2 of
new 3D seismic, and drill one exploration well within the first 3.5
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 km2 of 3D seismic and drill one exploration
well within the first three-year period. The 3D seismic commitment
was met as part of the recent Gharb Centre 240 km2 3D
seismic acquisition program described above.
Outlook:
Egypt
- North West Gemsa (50% working interest)
-
- Targeting gross average 2019 production of 3,400-3,600
boe/d.
- As the field is now fully developed, gross capex in 2019 is
expected to be approximately US$4
million (US$2 million net to
SDX) consisting of up to 10 well workovers and infrastructure
maintenance, but no additional new wells.
- Meseda (50% working interest)
-
- Targeting gross average 2019 production of 4,000-4,200
bbl/d.
- The operator plans to drill two wells in H1 2019, one in Rabul,
which will continue to develop the discovery area, and one
development location in the Meseda field. In addition, two water
injection wells are currently planned, one in Rabul and one in
Meseda.
- The operator also plans to replace up to five ESPs in the wider
Meseda area and upgrade water handling capabilities at the field
facilities.
- Gross capex in 2019 is expected to be approximately
US$8 million (US$4 million net to SDX of which US$1.6 million relates to the two planned wells
and the two water injection wells and US$2.4
million relates to ESP replacements and the facilities
upgrade).
- South Disouq (55% working interest)
-
- During H1 2019, SDX will complete construction of the central
processing facility, the 10 km export pipeline and the tie-ins for
the four existing production wells.
- First gas is targeted for mid-2019, at a gross plateau
production rate of between 50 and 60 MMscf/d, with the conventional
natural gas being sold to the State ("EGAS") at a price of
US$2.85/Mcf.
- Prospect inventory for future drilling is expected to increase
with the interpretation of the recently acquired 170 km2
of 3D seismic in the southern section of the concession.
- The Company is planning to drill two further exploration wells
in 2019, with multiple additional conventional gas prospects and a
conventional oil prospect identified for future drilling from the
existing seismic.
- Gross capex in 2019 is expected to be approximately
US$40.0 million (US$22.0 million net to SDX, of which
approximately US$18.5 million relates
to the South Disouq development activities and US$3.5 million relates to the two planned
exploration wells). Post-period end, the Company has offset
US$7.65 million of its accounts
receivable due from EGPC against costs incurred with Egyptian State
contractors on the South Disouq development.
- South Ramadan (12.75% working interest)
-
- The Company continues to review technical data from the
recently announced SRM-3 well result and will provide further
updates to the market in due course.
Morocco (75% working
interest)
- SDX is targeting gross production of 9-11 MMscf/d of
conventional natural gas sales by the end of 2019.
- The Company's 240 km2 3D seismic acquisition program
in Gharb Centre has now been processed and an initial
interpretation is completed. The data quality is excellent and, as
a result, multiple leads and prospects have been identified. An
inversion of the dataset will now take place after which a ranking
and selection exercise will be undertaken to determine prospects
for the proposed 12-well drilling campaign to take place between Q3
2019 and Q2 2020.
- Planning for the drilling campaign has now begun, with three
wells expected to be drilled during 2019.
- During this campaign, the LNB-1 and LMS-1 discoveries in
Lalla Mimouna Nord, originally
drilled in 2018, will be appraised, and another similar prospect in
the area will be drilled. The remainder of the program's targets
will come from the recently acquired Gharb Centre 3D seismic.
- The 2019 total gross capex is expected to be approximately
US$10.0 million with SDX's share
being approximately US$8.0 million.
Out of this US$8.0 million,
US$6.0 million relates to the three
planned wells and US$2.0 million
relates to the Company's share of facilities and field maintenance
capex.
Corporate
- Subject to shareholder and court approval, the Company plans to
relocate its corporate residence from Canada to the UK, with a group reorganisation,
and delist from the TSX-V. It is expected that this process will be
completed in Q2 2019 and will result in meaningful annual savings
in administrative costs, management time, and a more tax efficient
corporate structure.
- 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.
Paul Welch, President &
CEO of SDX Energy, commented:
"During 2018, we achieved strong operational success
across our portfolio, significantly grew our annual cash flows,
achieved our Egyptian production targets and began to grow our
Moroccan business meaningfully. Thus making 2018 another successful
year for the Company.
In Egypt, we completed our
drilling program at South Disouq, with an 80% success rate, and
stand poised to achieve first gas from the concession in mid-2019.
At Meseda and North West Gemsa we achieved seven discoveries
from seven wells drilled and undertook successful ESP
replacement/workover programs in both concessions. We also
reduced our trade and other receivables by 36% (US$13.4 million), during the course of the year,
allowing us to significantly increase our investment program
without requiring any external funding. This increase has
continued post-period end, with a further US$7.65 million of trade receivables in
Egypt being offset against costs
from State contractors used on the South Disouq development
project.
In Morocco, we completed our
highly successful drilling campaign in-country, amassing seven
discoveries from nine wells. We also acquired and processed a 240
km2 3D seismic program at our Gharb Centre licence,
which has yielded further drilling targets for our 12-well drilling
campaign, expected to begin in Q3 2019. We also signed gas
sales agreements with several new customers, all of which are
expected to be highly beneficial to the value of our business in
the future.
Our focus remains on realizing value for shareholders through
low-cost, high-margin production across our current portfolio.
We are looking forward to another exciting year in 2019 and
will keep all our shareholders updated throughout the
period."
KEY FINANCIAL & OPERATING HIGHLIGHTS
Audited consolidated financial statements with Management's
Discussion and Analysis for the three and twelve months ended
December 31, 2018 are now available
on the Company's website at www.sdxenergy.com and on SEDAR at
www.sedar.com.
|
Prior
Quarter
|
Three
months
ended December
31
|
Twelve months
ended
December
31
|
$000s except per
unit amounts
|
|
2018
|
2017
|
2018
|
2017
|
FINANCIAL
|
|
|
|
|
|
Gross
revenues
|
21,444
|
18,725
|
13,972
|
73,055
|
52,493
|
Royalties
|
(6,037)
|
(4,885)
|
(2,968)
|
(19,376)
|
(13,327)
|
Net
revenues
|
15,407
|
13,840
|
11,004
|
53,679
|
39,166
|
Operating
costs
|
(3,380)
|
(3,392)
|
(2,526)
|
(11,934)
|
(10,254)
|
Netback (1)
|
12,027
|
10,448
|
8,478
|
41,745
|
28,912
|
EBITDAX
(1)
|
10,955
|
7,103
|
7,959
|
34,306
|
21,401
|
Total comprehensive
income/(loss)
|
3,169
|
(4,029)
|
(2,621)
|
112
|
28,307
|
Net income/(loss) per
share - basic
|
0.015
|
(0.020)
|
(0.010)
|
0.001
|
0.156
|
Cash, end of
period
|
18,713
|
17,345
|
25,844
|
17,345
|
25,844
|
Working capital
(excluding cash)
|
14,477
|
12,064
|
20,881
|
12,064
|
20,881
|
Capital
expenditures
|
11,017
|
8,316
|
15,302
|
44,023
|
21,040
|
Total
assets
|
146,239
|
138,107
|
141,057
|
138,107
|
141,057
|
Shareholders'
equity
|
119,848
|
116,039
|
114,619
|
116,039
|
114,619
|
Common shares
outstanding (000's)
|
204,706
|
204,723
|
204,493
|
204,723
|
204,493
|
|
|
|
|
|
|
OPERATIONAL
|
|
|
|
|
|
NW Gemsa oil sales
(bbl/d)
|
1,987
|
1,808
|
1,710
|
1,743
|
1,733
|
Block-H Meseda
production service fee (bbl/d)
|
802
|
864
|
561
|
734
|
595
|
Morocco gas sales
(boe/d)
|
615
|
648
|
680
|
646
|
596
|
Other products sales
(boe/d)
|
485
|
604
|
310
|
451
|
313
|
Total sales
volumes (boe/d)
|
3,889
|
3,924
|
3,261
|
3,574
|
3,237
|
|
|
|
|
|
|
Realized oil price
(US$/bbl)
|
70.76
|
62.77
|
57.77
|
66.42
|
50.02
|
Realized service fee
(US$/bbl)
|
55.50
|
51.34
|
44.11
|
52.96
|
37.05
|
Realized oil sales
price and service fees ($/bbl)
|
66.38
|
59.07
|
54.39
|
62.43
|
46.70
|
|
|
|
|
|
|
Realized Morocco gas
price (US$/mcf)
|
11.05
|
9.78
|
9.72
|
10.33
|
9.51
|
Royalties
($/bbl)
|
16.88
|
13.53
|
9.89
|
14.86
|
11.28
|
Operating costs
($/bbl)
|
9.45
|
9.40
|
8.42
|
9.15
|
8.68
|
Netback
($/bbl) (1)
|
33.62
|
28.94
|
28.26
|
32.01
|
24.47
|
|
|
|
|
|
|
(1)
|
Refer to the
"Non-IFRS Measures" section of this release below and the Company's
MD&A for the three and twelve months ended December 31, 2018
and 2017 for details of netback and EBITDAX.
|
Consolidated
Balance Sheet
|
|
|
|
|
|
(US$'000s)
|
As at December 31,
2018
|
As at December 31,
2017
|
|
|
|
Assets
|
|
|
Cash and cash
equivalents
|
17,345
|
25,844
|
Trade and other
receivables
|
24,324
|
37,656
|
Inventory
|
5,236
|
5,157
|
Current
assets
|
46,905
|
68,657
|
|
|
|
Investments
|
3,394
|
2,724
|
Property, plant and
equipment
|
48,680
|
54,445
|
Exploration and
evaluation assets
|
39,128
|
15,231
|
Non-current
assets
|
91,202
|
72,400
|
|
|
|
Total
assets
|
138,107
|
141,057
|
|
|
|
Liabilities
|
|
|
Trade and other
payables
|
14,418
|
19,459
|
Deferred
income
|
495
|
495
|
Decommissioning
liability
|
1,125
|
1,063
|
Current income
taxes
|
1,458
|
915
|
Current
liabilities
|
17,496
|
21,932
|
|
|
|
Deferred
income
|
240
|
737
|
Decommissioning
liability
|
4,042
|
3,479
|
Deferred income
taxes
|
290
|
290
|
Non-current
liabilities
|
4,572
|
4,506
|
|
|
|
Total
liabilities
|
22,068
|
26,438
|
|
|
|
Equity
|
|
|
Share
capital
|
88,899
|
88,785
|
Contributed
surplus
|
6,860
|
5,666
|
Accumulated other
comprehensive loss
|
(917)
|
(917)
|
Retained
earnings
|
21,197
|
21,085
|
|
|
|
Total
equity
|
116,039
|
114,619
|
|
|
|
Equity and
liabilities
|
138,107
|
141,057
|
Consolidated
Statement of Comprehensive Income
|
|
|
|
|
Twelve months ended
December 31
|
(US$'000s)
|
2018
|
2017
|
|
|
|
Revenue, net of
royalties
|
53,679
|
39,166
|
Revenue
|
|
|
|
|
|
Direct operating
expense
|
(11,934)
|
(10,254)
|
Gross
profit
|
41,745
|
28,912
|
|
|
|
Exploration and
evaluation expense
|
(5,744)
|
(187)
|
Depletion,
depreciation and amortisation
|
(17,268)
|
(17,824)
|
Impairment
expense
|
(3,520)
|
-
|
Stock-based
compensation
|
(1,194)
|
(538)
|
Share of profit from
joint venture
|
1,195
|
1,022
|
Bad debt
expense
|
(123)
|
-
|
Release of historic
operational tax provision
|
300
|
-
|
(Inventory
write-off)/reversal of inventory provision
|
(370)
|
798
|
Gain on sale of
office asset
|
23
|
-
|
General and
administrative expenses
|
|
|
- Ongoing general and
administrative expenses
|
(4,815)
|
(6,420)
|
- Transaction
costs
|
(2,455)
|
(2,373)
|
|
|
|
Operating
income
|
7,774
|
3,390
|
|
|
|
Net finance
expense
|
(542)
|
(129)
|
Foreign exchange
gain
|
75
|
29
|
(Loss)/gain on
acquisition
|
(174)
|
29,558
|
Income before income
taxes
|
7,133
|
32,848
|
|
|
|
Current income tax
expense
|
(7,021)
|
(4,541)
|
Deferred income tax
expense
|
-
|
-
|
Total current and
deferred income tax expense
|
(7,021)
|
(4,541)
|
|
|
|
Total
comprehensive income for the period
|
112
|
28,307
|
|
|
|
Net income per
share
|
|
|
Basic
|
$0.001
|
$0.153
|
Diluted
|
$0.001
|
$0.151
|
Consolidated
Statement of Changes in Equity
|
|
|
|
|
|
|
Twelve months ended
December 31
|
(US$'000s)
|
2018
|
2017
|
|
|
|
Share
capital
|
|
|
Balance, beginning of
period
|
88,785
|
40,275
|
Issuance of common
shares
|
114
|
49,589
|
Share issue
costs
|
-
|
(1,079)
|
Balance, end of
period
|
88,899
|
88,785
|
|
|
|
Contributed
surplus
|
|
|
Balance, beginning of
period
|
5,666
|
5,128
|
Stock-based
compensation for the period
|
1,194
|
538
|
Balance, end of
period
|
6,860
|
5,666
|
|
|
|
Accumulated other
comprehensive loss
|
|
|
Balance, beginning of
period
|
(917)
|
(917)
|
Balance, end of
period
|
(917)
|
(917)
|
|
|
|
Retained
earnings/(accumulated loss)
|
|
|
Balance, beginning of
period
|
21,085
|
(7,222)
|
Total comprehensive
income for the period
|
112
|
28,307
|
Balance, end of
period
|
21,197
|
21,085
|
|
|
|
Total
equity
|
116,039
|
114,619
|
Consolidated
Statement of Cash Flows
|
|
|
|
Twelve months ended
December 31
|
(US$'000s)
|
2018
|
2017
|
|
|
|
Cash flows
generated from/(used in) operating activities
|
|
|
Income before income
taxes
|
7,133
|
32,848
|
|
|
|
Adjustments
for:
|
|
|
Depletion,
depreciation and amortization
|
17,268
|
17,824
|
Exploration and
evaluation expense
|
5,103
|
187
|
Impairment
expense
|
3,520
|
-
|
Finance
expense
|
542
|
129
|
Stock-based
compensation
|
1,194
|
538
|
Loss/(gain) on
acquisition
|
174
|
(29,558)
|
Foreign exchange
loss/(gain)
|
368
|
(141)
|
Gain on sale of
office asset
|
(23)
|
-
|
Bad debt
expense
|
123
|
-
|
Release of historic
operational tax provision
|
(300)
|
-
|
Inventory
write-off/(reversal of inventory provision)
|
370
|
(798)
|
Amortisation of
deferred income
|
(497)
|
(380)
|
Tax paid by
state
|
(5,036)
|
(3,551)
|
Share of profit from
joint venture
|
(1,195)
|
(1,022)
|
Operating cash flow
before working capital movements
|
28,744
|
16,076
|
|
|
|
Decrease in trade and
other receivables
|
11,195
|
4,871
|
Increase in trade and
other payables
|
330
|
2,988
|
Increase in
inventory
|
(2,801)
|
(1,951)
|
Payments for
decommissioning
|
(140)
|
(4)
|
Cash generated from
operating activities
|
37,328
|
21,980
|
|
|
|
Income taxes
paid
|
(1,091)
|
(364)
|
Net cash generated
from operating activities
|
36,237
|
21,616
|
|
|
|
Cash flows (used
in)/generated from investing activities:
|
|
|
Property, plant and
equipment expenditures
|
(21,945)
|
(21,132)
|
Exploration and
evaluation expenditures
|
(22,865)
|
(3,785)
|
Dividends
received
|
525
|
760
|
Acquisition of
subsidiaries
|
-
|
(28,056)
|
Cash balance acquired
during the period
|
-
|
3,108
|
Net cash used in
investing activities
|
(44,285)
|
(49,105)
|
|
|
|
Cash flows
generated from/(used in) financing activities:
|
|
|
Issuance of common
shares
|
114
|
48,510
|
Finance costs
paid
|
(197)
|
(43)
|
Net cash (used
in)/generated from financing activities
|
(83)
|
48,467
|
|
|
|
(Decrease)/increase in cash and cash
equivalents
|
(8,131)
|
20,978
|
|
|
|
Effect of foreign
exchange on cash and cash equivalents
|
(368)
|
141
|
|
|
|
Cash and cash
equivalents, beginning of period
|
25,844
|
4,725
|
|
|
|
Cash and cash
equivalents, end of period
|
17,345
|
25,844
|
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 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).
Standard
The estimates of reserves and resources contained in this
announcement have been prepared in accordance with the Canadian
National Instrument 51-101 (NI 51-101) and the Canadian Oil and Gas
Evaluation (COGE) Handbook.
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
"2P
reserves"
|
proved and probable
reserves
|
"bbl"
|
stock tank
barrel
|
"boepd" &
"boe/d"
|
barrels of oil
equivalent per day
|
"bopd" &
"bbl/d"
|
barrels of oil per
day
|
"Bcf"
|
billion standard
cubic feet
|
"mmboe"
|
millions of barrels
of oil equivalent
|
"mcf"
|
thousands of cubic
feet
|
"MMscf/d"
|
million standard
cubic feet 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 central
processing facility, 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 and the Company's 2019 outlook, the Company's
plans to re-domicile to the UK and the timing thereof 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,
statutory and shareholder approvals in connection with the
Company's plans to re-domicile to the UK 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 twelve
months ended December 31, 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 the Company's
MD&A for the three and twelve months ended December 31, 2018 and 2017.
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 the Company's MD&A for the three and twelve
months ended December 31, 2018 and
2017.
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.
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.
SOURCE SDX Energy Inc.