SDX Swings To Annual Loss On Impairment Charges, Lower Oil Prices

(Alliance News) - SDX Energy Inc said Tuesday it swung to a loss for 2019 as revenue dipped amid rising costs and impairment charges.

The North Africa-focused oil & gas company reported a pretax loss of USD12.4 million compared to a profit of USD7.1 million.

Exploration and evaluation costs rose to USD11.4 million from USD5.7 million, while impairment expenses increased to USD8.3 million from USD3.5 million, which comes from the non-core North West Gemsa and South Ramadan assets, and 3D seismic data in the South Disouq concession that will not be drilled before licence expiry.

Earnings before interest, taxes, depreciation, amortisation and exploration was USD34.2 million, down from USD34.3 million, now netback that fell to USD39.3 million from USD41.7 million.

SDX's net realised average oil price for 2019 was USD55.93 per barrel, down from USD62.43 the prior year, while net revenue dropped to USD53.2 million from USD53.7 million.

Operationally, SDX produced 4,062 barrels of oil equivalent per day for 2019, up from 3,574 barrels the year before.

Looking ahead, SDX has set its production guidance for 2020 within 6,750 to 7,000 boe per day, a 66% to 72% rise from 2019.

"2019 was a year of significant operational progress for SDX. Production increased by 14% in the year, and on an individual asset basis it either exceeded or was at the upper end of our 2019 guidance," said Chief Executive Officer Mark Reid.

"Looking ahead, we see significant challenges in the industry, not least in the downward revision in both oil prices and equity valuations and the uncertainty caused by Covid-19. However, we feel it important to note that, after the restart of operations at our three Moroccan customers that are temporarily closed due to Covid-19 issues, we expect that with a Brent planning price of USD35 per barrel approximately 90% of 2020 and over 95% of 2021 forecast cash flows will come from our fixed price gas businesses, insulating us from much of the impact of falling oil price," Reid added.

Shares in SDX Energy were down 7.5% at 12.72 pence on Tuesday in London.

By Dayo Laniyan; dayolaniyan@alliancenews.com

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