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(Alliance News) - SDX Energy PLC's shares fell on Tuesday after it said it has lowered its production guidance for 2022, as 2021 production comes in within guidance.
The Middle East & North Africa-focused oil and gas company said that production for 2021 had come at the higher end of guidance at 5,886 barrels of oil equivalent per day, which was relatively flat on the previous year, at 1.2% lower than 5,970 barrels in 2020.
However SDX said it was cutting production guidance for 2022 by a range of 40% to 44%, at a range of 3,300 to 3,550 boepd.
The company's share price was down 12% to 8.55 pence each in London on Tuesday morning.
The lower levels will mostly be due to SDX's decision to dispose of 33% of its working interest in the South Disouq concession for USD5.5 million. SDX currently has a WI of 55% in South Disouq, which brought in the bulk of its production at 4,465 boepd for the year. It will retain the remaining 67% of pre-transaction interest. SDX said the disposal lowers its risk exposure, as two new explorations wells will be drilled at the site this year.
Production will also be lower as a result of SDX not immediately renewing an expired customer contract in Morocco, as it waits to see how future gas supply and pricing will develop before a new contract is signed.
Lower than expected production from its West Gharib interest is expected to correct itself this year, as new wells grow production in the second half and into 2023.
Capital expenditure for 2022 is fully funded and is expected within a range of GBP21.5 million to GBP23.0 million, with more wells to be drilled at all three sites during the year. Capex for 2021 was USD27.7 million.
SDX said it will initiate a share buyback from of up to USD3.0 million of the proceeds from the South Disouq disposal, at some point the second half of 2022. The remainder will be used for investment in innovation and growing its portfolio.
By Elizabeth Winter; elizabethwinter@alliancenews.com
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