SDX Energy Barely Touched By Covid-19 With Stellar First Half Results

(Alliance News) - SDX Energy PLC on Thursday reported strong results for the first half of 2020 thanks to strong production results at the South Disouq operation in Egypt.

The oil & gas exploration and production company focused on North Africa said its net revenue for the half year ended June 30 increased to USD22.0 million from USD15.5 million a year prior.

Production sat at 6,980 barrels of oil equivalent per day, up 97% year on year. This was due to strong production levels coming from South Disouq which continued to perform ahead of expectations at a gross production of 4,825 barrels of oil equivalent per day.

SDX Energy is currently working towards connecting a second well at South Disouq, called SD-12X, to its processing plant with production expected to start in the first quarter of next year. The company said that based on well test data, once connected the well will produce 10-12 million standard cubic feet per day of gas.

The stellar performance at South Disouq was partly offset by lower production in Morocco due to Covid-19 shutdowns and lower production in West Gharib due to increased water cut and lower oil service fee realisations.

Operating expenses were USD1.7 million higher at USD4.7 million, compared to last year's USD3.0 million, due to South Disouq starting up in November last year.

Cash generation is expected to continue strongly in the second half of this year as approximately 90% of the company's cash flows are expected to be generated from fixed-price gas businesses, the company said.

SDX Energy said: "The company continues to assess the optimum use of its capital, whether that be investment into new projects or returning cash to shareholders.

"At present it is felt that continued investment into new projects is the optimum use of the company's capital, however this will be assessed on an ongoing basis."

SDX Energy shares were up 5.9% at 17.20 pence each on Thursday afternoon in London.

By Greg Roxburgh; gregroxburgh@alliancenews.com

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