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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Sdx Energy | TSXV:SDX | TSX Venture | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.37 | 0.33 | 0.37 | 0 | 01:00:00 |
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
Corporate and financial
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. |
Operational highlights
Egypt
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 |
Morocco
Outlook:
Egypt
Morocco (75% working interest)
Corporate
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.
Copyright 2019 Canada NewsWire
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