TIDMSDX
RNS Number : 3937I
SDX Energy Inc.
26 November 2018
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.
26 November 2018
SDX ENERGY INC
("SDX" or the "Company")
SDX ENERGY INC. ANNOUNCES ITS FINANCIAL AND OPERATING RESULTS
FOR THE THIRD QUARTER AND NINE MONTHS TO SEPTEMBER 30, 2018
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 Nine months ended
September 30 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:
o US$31.3 million netback/gross profit for the period;
o 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;
o US$10.9 million of DD&A;
o US$3.8 million of G&A; and
o 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;
o 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
o 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;
o 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 240km(2) 3D seismic programme in Gharb Centre;
o 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 170km(2) 3D
seismic programme;
o US$7.3 million in North West Gemsa for the AASE-25, AASE-27
and Al-Ola-4 discovery wells;
o 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;
o US$1.2 million in South Ramadan relating to the SRM-3 well
which is currently drilling; and
o 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;
o North West Gemsa 2,472 boe/d (Gross - 4,944 boe/d)
o Meseda 802 bbl/d (Gross - 4,207 bbl/d)
o 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;
o North West Gemsa 2,496 boe/d (Gross - 4,992 boe/d)
o Meseda 998 bbl/d (Gross - 5,234 bbl/d)
o 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 km(2) 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)
o 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.
o Workover programme to complete in Q4 2018, however no further
drilling is planned.
o 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)
o 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.
o Workover programme to complete in Q4 2018, however no further
drilling planned.
o 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)
o 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.
o 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.
o 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 km(2) 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)
o 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.
o 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 240km(2) 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 240km(2) 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 km(2) 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
Three months Nine months
Prior ended September ended September
quarter 30 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).
For further information:
SDX Energy Inc.
Paul Welch
President and Chief Executive Mark Reid
Officer Chief Financial Officer
Tel: +44 203 219 5640 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/David van Erp
Tel: +44 207 448 0200
Celicourt (PR)
Mark Antelme/Jimmy Lea/Ollie Mills
Tel: +44 207 520 9260
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.
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
QRTLLFVRLSLVFIT
(END) Dow Jones Newswires
November 26, 2018 02:00 ET (07:00 GMT)
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